Watch the man behind the curtain, I’ve been noticing a lot of political things being said while the opposite is enacted. It just happens that House Speaker Pelosi and Senate Majority Leader Harry Reid play their games really well, if you like that kind of slimy leadership.

Who thought voting these types of politicians into our Congress was a good idea anyway? Don’t you like things being above board?

If you were an entrepreneur and had to appoint a board of directors to become an S Corporation, are you going to consider people that tell you what you want to hear or those that will tell you the truth? Would it do your corporation any good for those directors to bulldoze ideas into policy at the expense of relationships, real solutions, ethics and quite frankly, the very viability of the company.

Your Board of Directors are supposed to be seasoned business people that have an ethical obligation to direct your company down a successful path, giving honest opinions regarding new or tried and true business strategies, techniques and investment decisions.

Pelosi mentioning she has an ethical house doesn’t mean it’s true, her stating something that might sound good doesn’t mean it’s really so. It’s a non-accountable lie, as the game is played. If our media was doing their job ethically we would be inundated with unaccountable lies. You can readily find evidence that actions or motives are opposite of what she said but technically, if confronted she was only mistaken because she “may” have believed what she said. Unaccountable lies, like placebos, do work sometimes.

As Senator Lamar Alexander laid out his request to the President of scrapping the proposed plan and start fresh with a clean sheet of paper in a non-partisan manner with economically sound alternatives to incorporate, Pelosi and Reid couldn’t even look at him as he spoke. The two mostly just stared straight ahead until the speech was finished. That was a clear indication of contempt and disrespect, not behavior one would hope for the caliber of their positions. The president’s behavior wasn’t very presidential either, while the whole forum explicitly showed the distasteful ploys of not playing nice, I fully expected the three, at any moment would pick up their bat and ball and go home, which they eventually did.

Pelosi’s stance on the healthcare freight train could also be construed as dogmatic pretense. A recurring suspicion regurgitated in the pit of my stomach as her, Reid’s and Obama’s speeches choreographed with a blatant disregard to the opposition was unbecomingly focused on who could out dramatize each other’s stories of suffering, I suppose an attempt proving the right to healthcare as opposed to a privilege.

I couldn’t even listen to Reid’s speech, I was so disgusted. 

If you believe that healthcare is a right, then it must follow that you ultimately believe that irresponsible people have the right to be a burden on the responsible. Or that irresponsible people have the right to infringe on the rights of someone else. Why? If someone overeats, smokes too much, drinks too much, doesn’t exercise, practices unsafe intimate interactions, drives carelessly, puts minimum or no effort into their upward mobility in the business world etc. has the right to make someone else pay for their poor choices then the people that have to pay have their rights revoked.

Another argument is, if healthcare is a right then certainly other things not deemed as rights (governmental handouts) would be considerably more essential to life than healthcare such as water, food, housing, clothing, a job, a car to get to that job etc.

For the lawmakers that pretend to be going forth with a gift for the American people because they deserve it is farcical, nothing more than a power grab. It was unnecessary and unfair for the Democrats to write up the bills while blocking any Republican participation in the first place. They wrote what they wanted to ram through congress and over a year into it claim they’re giving one more shot at bipartisanship after a Scott Brown wrench was thrown in.

The President sat at the table and whined, basically saying the Republicans kept throwing those good ideas at me and I’ve already rejected those good ideas so I’m just going to call them “talking points”. The President having to remind us he is the president and reminding John McCain that the election is over is just tactless. Who is the arrogant one still in campaign mode?

Let’s not even focus on the egregiously economic drain the massive healthcare proposition currently debated would have on an already overly spent deficit. Let’s instead focus on the fact they couldn’t even implement and procure a solvent Medicaid and Medicare system in the first place, nor Social Security program for that matter. All those brilliant economists in government and as consultants couldn’t even devise a self sufficient plan for all those New Deals. Medicare was discussed for over two decades before being signed into law in 1965.  Probably since its inception they knew the programs could never be sustainable, even when the public found out the trouble these programs were in they haven’t been able to come up with solutions to fix the existing noose around the economy’s neck. Yet they want to deliver us another new deal. They would have had more credibility and subsequently more support by fixing what they already had in place.

Remember socialism isn’t for the socialists, it’s for everyone else, the socialists, progressives and federal employees all have primo healthcare plans (Cadillac plans) while pretending to throw us a bone,  they want to redistribute your wealth not theirs.

In an interview on Sunday, Mr. Obama said he did not regret pursuing health care in the first year of his presidency, even though he intends to place a higher priority on job creation this year.

Mr. President, I don’t think I’m alone on this one, but I regret you didn’t focus on job creation as your first order of business; instead you let it slide for year two and pursued everything but.

Photographer: Darren Robertson

By MATT TAIBBI
Rolling Stone  July 9, 2009

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who’s Who of Goldman Sachs graduates.

By now, most of us know the major players. As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup – which in turn got a $300 billion taxpayer bailout from Paulson. There’s John Thain, the rear end in a top hat chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain’s sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden parachute payments as his bank was self-destructing. There’s Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York – which, incidentally, is now in charge of overseeing Goldman – not to mention …

But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain – an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

The bank’s unprecedented reach and power have enabled it to turn all of America into a giant pump-and-dump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere – high gas prices, rising consumer-credit rates, half-eaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you’re losing, it’s going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it’s going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth – pure profit for rich individuals.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They’ve been pulling this same stunt over and over since the 1920s – and now they’re preparing to do it again, creating what may be the biggest and most audacious bubble yet.

If you want to understand how we got into this financial crisis, you have to first understand where all the money went – and in order to understand that, you need to understand what Goldman has already gotten away with. It is a history exactly five bubbles long – including last year’s strange and seemingly inexplicable spike in the price of oil. There were a lot of losers in each of those bubbles, and in the bailout that followed. But Goldman wasn’t one of them.

IF AMERICA IS NOW CIRCLING THE DRAIN, GOLDMAN SACHS HAS FOUND A WAY TO BE THAT DRAIN.

BUBBLE #1 – THE GREAT DEPRESSION

Goldman wasn’t always a too-big-to-fail Wall Street behemoth, the ruthless face of kill-or-be-killed capitalism on steroids – just almost always. The bank was actually founded in 1869 by a German immigrant named Marcus Goldman, who built it up with his son-in-law Samuel Sachs. They were pioneers in the use of commercial paper, which is just a fancy way of saying they made money lending out short-term IOUs to small-time vendors in downtown Manhattan.

You can probably guess the basic plotline of Goldman’s first 100 years in business: plucky, immigrant-led investment bank beats the odds, pulls itself up by its bootstraps, makes sh#%loads of money. In that ancient history there’s really only one episode that bears scrutiny now, in light of more recent events: Goldman’s disastrous foray into the speculative mania of pre-crash Wall Street in the late 1920s.

This great Hindenburg of financial history has a few features that might sound familiar. Back then, the main financial tool used to bilk investors was called an “investment trust.” Similar to modern mutual funds, the trusts took the cash of investors large and small and (theoretically, at least) invested it in a smorgasbord of Wall Street securities, though the securities and amounts were often kept hidden from the public. So a regular guy could invest $10 or $100 in a trust and feel like he was a big player. Much as in the 1990s, when new vehicles like day trading and e-trading attracted reams of new suckers from the sticks who wanted to feel like big shots, investment trusts roped a new generation of regular-guy investors into the speculation game.

Beginning a pattern that would repeat itself over and over again, Goldman got into the investment-trust game late, then jumped in with both feet and went hog-wild. The first effort was the Goldman Sachs Trading Corporation; the bank issued a million shares at $100 apiece, bought all those shares with its own money and then sold 90 percent of them to the hungry public at $104. The trading corporation then relentlessly bought shares in itself, bidding the price up further and further. Eventually it dumped part of its holdings and sponsored a new trust, the Shenandoah Corporation, issuing millions more in shares in that fund – which in turn sponsored yet another trust called the Blue Ridge Corporation. In this way, each investment trust served as a front for an endless investment pyramid: Goldman hiding behind Goldman hiding behind Goldman. Of the 7,250,000 initial shares of Blue Ridge, 6,250,000 were actually owned by Shenandoah – which, of course, was in large part owned by Goldman Trading.

The end result (ask yourself if this sounds familiar) was a daisy chain of borrowed money, one exquisitely vulnerable to a decline in performance anywhere along the line; The basic idea isn’t hard to follow. You take a dollar and borrow nine against it; then you take that $10 fund and borrow $90; then you take your $100 fund and, so long as the public is still lending, borrow and invest $900. If the last fund in the line starts to lose value, you no longer have the money to pay back your investors, and everyone gets massacred.

In a chapter from The Great Crash, 1929 titled “In Goldman Sachs We Trust,” the famed economist John Kenneth Galbraith held up the Blue Ridge and Shenandoah trusts as classic examples of the insanity of leverage-based investment. The trusts, he wrote, were a major cause of the market’s historic crash; in today’s dollars, the losses the bank suffered totaled $475 billion. “It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity,” Galbraith observed, sounding like Keith Olbermann in an ascot. “If there must be madness, something may be said for having it on a heroic scale.”

BUBBLE #2 – TECH STOCKS

Fast-Forward about 65 years. Goldman not only survived the crash that wiped out so many of the investors it duped, it went on to become the chief underwriter to the country’s wealthiest and most powerful corporations. Thanks to Sidney Weinberg, who rose from the rank of janitor’s assistant to head the firm, Goldman became the pioneer of the initial public offering, one of the principal and most lucrative means by which companies raise money. During the 1970s and 1980s, Goldman may not have been the planet-eating Death Star of political influence it is today, but it was a top-drawer firm that had a reputation for attracting the very smartest talent on the Street.

It also, oddly enough, had a reputation for relatively solid ethics and a patient approach to investment that shunned the fast buck; its executives were trained to adopt the firm’s mantra, “long-term greedy.” One former Goldman banker who left the firm in the early Nineties recalls seeing his superiors give up a very profitable deal on the grounds that it was a long-term loser. “We gave back money to ‘grownup’ corporate clients who had made bad deals with us,” he says. “Everything we did was legal and fair – but ‘long-term greedy’ said we didn’t want to make such a profit at the clients’ collective expense that we spoiled the marketplace.”

But then, something happened. It’s hard to say what it was exactly; it might have been the fact that Goldman’s co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. While the American media fell in love with the story line of a pair of baby-boomer, Sixties-child, Fleetwood Mac yuppies nesting in the White House, it also nursed an undisguised crush on Rubin, who was hyped as without a doubt the smartest person ever to walk the face of the Earth, with Newton, Einstein, Mozart and Kant running far behind.

Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliche that whatever Rubin thought was best for the economy – a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline THE COMMITTEE TO SAVE THE WORLD. And “what Rubin thought,” mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. During his tenure at Treasury, the Clinton White House made a series of moves that would have drastic consequences for the global economy – beginning with Rubin’s complete and total failure to regulate his old firm during its first mad dash for obscene short-term profits.

The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren’t much more than pot-fueled ideas scrawled on napkins by up-too-late bong-smokers were taken public via IPOs, hyped in the media and sold to the public for megamillions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.

It sounds obvious now, but what the average investor didn’t know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system – one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. While Goldman’s later pattern would be to capitalize on changes in the regulatory environment, its key innovation in the Internet years was to abandon its own industry’s standards of quality control.

“Since the Depression, there were strict underwriting guidelines that Wall Street adhered to when taking a company public,” says one prominent hedge-fund manager. “The company had to be in business for a minimum of five years, and it had to show profitability for three consecutive years. But Wall Street took these guidelines and threw them in the trash.” Goldman completed the snow job by pumping up the sham stocks: “Their analysts were out there saying Bullshit.com is worth $100 a share.”

The problem was, nobody told investors that the rules had changed. “Everyone on the inside knew,” the manager says. “Bob Rubin sure as hell knew what the underwriting standards were. They’d been intact since the 1930s.”

Jay Ritter, a professor of finance at the University of Florida who specializes in IPOs, says banks like Goldman knew full well that many of the public offerings they were touting would never make a dime. “In the early Eighties, the major underwriters insisted on three years of profitability. Then it was one year, then it was a quarter. By the time of the Internet bubble, they were not even requiring profitability in the foreseeable future.”

Goldman has denied that it changed its underwriting standards during the Internet years, but its own statistics belie the claim. Just as it did with the investment trust in the 1920s, Goldman started slow and finished crazy in the Internet years. After it took a little-known company with weak financials called Yahoo! public in 1996, once the tech boom had already begun, Goldman quickly became the IPO king of the Internet era. Of the 24 companies it took public in 1997, a third were losing money at the time of the IPO. In 1999, at the height of the boom, it took 47 companies public, including stillborns like Webvan and eToys, investment offerings that were in many ways the modern equivalents of Blue Ridge and Shenandoah. The following year, it underwrote 18 companies in the first four months, 14 of which were money losers at the time. As a leading underwriter of Internet stocks during the boom, Goldman provided profits far more volatile than those of its competitors: In 1999, the average Goldman IPO leapt 281 percent above its offering price, compared to the Wall Street average of 181 percent.

How did Goldman achieve such extraordinary results? One answer is that they used a practice called “laddering,” which is just a fancy way of saying they manipulated the share price of new offerings. Here’s how it works: Say you’re Goldman Sachs, and Bullshit.com comes to you and asks you to take their company public. You agree on the usual terms: You’ll price the stock, determine how many shares should be released and take the Bullshit.com CEO on a “road show” to schmooze investors, all in exchange for a substantial fee (typically six to seven percent of the amount raised). You then promise your best clients the right to buy big chunks of the IPO at the low offering price – let’s say Bullshit.com’s starting share price is $15 – in exchange for a promise that they will buy more shares later on the open market. That seemingly simple demand gives you inside knowledge of the IPO’s future, knowledge that wasn’t disclosed to the day-trader schmucks who only had the prospectus to go by: You know that certain of your clients who bought X amount of shares at $15 are also going to buy Y more shares at $20 or $25, virtually guaranteeing that the price is going to go to $25 and beyond. In this way, Goldman could artificially jack up the new company’s price, which of course was to the bank’s benefit – a six percent fee of a $500 million IPO is serious money.

Goldman was repeatedly sued by shareholders for engaging in laddering in a variety of Internet IPOs, including Webvan and NetZero. The deceptive practices also caught the attention of Nichol as Maier, the syndicate manager of Cramer & Co., the hedge fund run at the time by the now-famous chattering television rear end in a top hat Jim Cramer, himself a Goldman alum. Maier told the SEC that while working for Cramer between 1996 and 1998, he was repeatedly forced to engage in laddering practices during IPO deals with Goldman.

“Goldman, from what I witnessed, they were the worst perpetrator,” Maier said. “They totally fueled the bubble. And it’s specifically that kind of behavior that has caused the market crash. They built these stocks upon an illegal foundation – manipulated up – and ultimately, it really was the small person who ended up buying in.” In 2005, Goldman agreed to pay $40 million for its laddering violations – a puny penalty relative to the enormous profits it made. (Goldman, which has denied wrongdoing in all of the cases it has settled, refused to respond to questions for this story.)

Another practice Goldman engaged in during the Internet boom was “spinning,” better known as bribery. Here the investment bank would offer the executives of the newly public company shares at extra-low prices, in exchange for future underwriting business. Banks that engaged in spinning would then undervalue the initial offering price – ensuring that those “hot” opening price shares it had handed out to insiders would be more likely to rise quickly, supplying bigger first-day rewards for the chosen few. So instead of Bullshit.com opening at $20, the bank would approach the Bullshit.com CEO and offer him a million shares of his own company at $18 in exchange for future business – effectively robbing all of Bullshit’s new shareholders by diverting cash that should have gone to the company’s bottom line into the private bank account of the company’s CEO.

In one case, Goldman allegedly gave a multimillion-dollar special offering to eBay CEO Meg Whitman, who later joined Goldman’s board, in exchange for future i-banking business. According to a report by the House Financial Services Committee in 2002, Goldman gave special stock offerings to executives in 21 companies that it took public, including Yahoo! co-founder Jerry Yang and two of the great slithering villains of the financial-scandal age – Tyco’s Dennis Kozlowski and Enron’s Ken Lay. Goldman angrily denounced the report as “an egregious distortion of the facts” – shortly before paying $110 million to settle an investigation into spinning and other manipulations launched by New York state regulators. “The spinning of hot IPO shares was not a harmless corporate perk,” then-attorney general Eliot Spitzer said at the time. “Instead, it was an integral part of a fraudulent scheme to win new investment-banking business.”

Such practices conspired to turn the Internet bubble into one of the greatest financial disasters in world history: Some $5 trillion of wealth was wiped out on the NASDAQ alone. But the real problem wasn’t the money that was lost by shareholders, it was the money gained by investment bankers, who received hefty bonuses for tampering with the market. Instead of teaching Wall Street a lesson that bubbles always deflate, the Internet years demonstrated to bankers that in the age of freely flowing capital and publicly owned financial companies, bubbles are incredibly easy to inflate, and individual bonuses are actually bigger when the mania and the irrationality are greater.

GOLDMAN SCAMMED HOUSING INVESTORS BY BETTING AGAINST ITS OWN CRAPPY MORTGAGES.

Nowhere was this truer than at Goldman. Between 1999 and 2002, the firm paid out $28.5 billion in compensation and benefits – an average of roughly $350,000 a year per employee. Those numbers are important because the key legacy of the Internet boom is that the economy is now driven in large part by the pursuit of the enormous salaries and bonuses that such bubbles make possible. Goldman’s mantra of “long-term greedy” vanished into thin air as the game became about getting your check before the melon hit the pavement.

The market was no longer a rationally managed place to grow real, profitable businesses: It was a huge ocean of Someone Else’s Money where bankers hauled in vast sums through whatever means necessary and tried to convert that money into bonuses and payouts as quickly as possible. If you laddered and spun 50 Internet IPOs that went bust within a year, so what? By the time the Securities and Exchange Commission got around to fining your firm $110 million, the yacht you bought with your IPO bonuses was already six years old. Besides, you were probably out of Goldman by then, running the U.S. Treasury or maybe the state of New Jersey. (One of the truly comic moments in the history of America’s recent financial collapse came when Gov. Jon Corzine of New Jersey, who ran Goldman from 1994 to 1999 and left with $320 million in IPO-fattened stock, insisted in 2002 that “I’ve never even heard the term ‘laddering’ before.”)

For a bank that paid out $7 billion a year in salaries, $110 million fines issued half a decade late were something far less than a deterrent – they were a joke. Once the Internet bubble burst, Goldman had no incentive to reassess its new, profit-driven strategy; it just searched around for another bubble to inflate. As it turns out, it had one ready, thanks in large part to Rubin.

BUBBLE #3 – THE HOUSING CRAZE

Goldman’s role in the sweeping disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren’t in IPOs but in mortgages. By now almost everyone knows that for decades mortgage dealers insisted that home buyers be able to produce a down payment of 10 percent or more, show a steady income and good credit rating, and possess a real first and last name. Then, at the dawn of the new millennium, they suddenly threw all that poo poo out the window and started writing mortgages on the backs of napkins to cocktail waitresses and ex-cons carrying five bucks and a Snickers bar.

None of that would have been possible without investment bankers like Goldman, who created vehicles to package those lovely mortgages and sell them en masse to unsuspecting insurance companies and pension funds. This created a mass market for toxic debt that would never have existed before; in the old days, no bank would have wanted to keep some addict ex-con’s mortgage on its books, knowing how likely it was to fail. You can’t write these mortgages, in other words, unless you can sell them to someone who doesn’t know what they are.
Goldman used two methods to hide the mess they were selling. First, they bundled hundreds of different mortgages into instruments called Collateralized Debt Obligations. Then they sold investors on the idea that, because a bunch of those mortgages would turn out to be OK, there was no reason to worry so much about the lovely ones: The CDO, as a whole, was sound. Thus, junk-rated mortgages were turned into AAA-rated investments. Second, to hedge its own bets, Goldman got companies like AIG to provide insurance – known as credit-default swaps – on the CDOs. The swaps were essentially a racetrack bet between AIG and Goldman: Goldman is betting the ex-cons will default, AIG is betting they won’t.

There was only one problem with the deals: All of the wheeling and dealing represented exactly the kind of dangerous speculation that federal regulators are supposed to rein in. Derivatives like CDOs and credit swaps had already caused a series of serious financial calamities: Procter & Gamble and Gibson Greetings both lost fortunes, and Orange County, California, was forced to default in 1994. A report that year by the Government Accountability Office recommended that such financial instruments be tightly regulated – and in 1998, the head of the Commodity Futures Trading Commission, a woman named Brooksley Born, agreed. That May, she circulated a letter to business leaders and the Clinton administration suggesting that banks be required to provide greater disclosure in derivatives trades, and maintain reserves to cushion against losses.

More regulation wasn’t exactly what Goldman had in mind. “The banks go crazy – they want it stopped,” says Michael Greenberger, who worked for Born as director of trading and markets at the CFTC and is now a law professor at the University of Maryland. “Greenspan, Summers, Rubin and [SEC chief Arthur] Levitt want it stopped.”

Clinton’s reigning economic foursome – “especially Rubin,” according to Greenberger – called Born in for a meeting and pleaded their case. She refused to back down, however, and continued to push for more regulation of the derivatives. Then, in June 1998, Rubin went public to denounce her move, eventually recommending that Congress strip the CFTC of its regulatory authority. In 2000, on its last day in session, Congress passed the now-notorious Commodity Futures Modernization Act, which had been inserted into an 1l,000-page spending bill at the last minute, with almost no debate on the floor of the Senate. Banks were now free to trade default swaps with impunity.

But the story didn’t end there. AIG, a major purveyor of default swaps, approached the New York State Insurance Department in 2000 and asked whether default swaps would be regulated as insurance. At the time, the office was run by one Neil Levin, a former Goldman vice president, who decided against regulating the swaps. Now freed to underwrite as many housing-based securities and buy as much credit-default protection as it wanted, Goldman went berserk with lending lust. By the peak of the housing boom in 2006, Goldman was underwriting $76.5 billion worth of mortgage-backed securities – a third of which were subprime – much of it to institutional investors like pensions and insurance companies. And in these massive issues of real estate were vast swamps of crap.

Take one $494 million issue that year, GSAMP Trust 2006-S3. Many of the mortgages belonged to second-mortgage borrowers, and the average equity they had in their homes was 0.71 percent. Moreover, 58 percent of the loans included little or no documentation – no names of the borrowers, no addresses of the homes, just zip codes. Yet both of the major ratings agencies, Moody’s and Standard & Poor’s, rated 93 percent of the issue as investment grade. Moody’s projected that less than 10 percent of the loans would default. In reality, 18 percent of the mortgages were in default within 18 months.

Not that Goldman was personally at any risk. The bank might be taking all these hideous, completely irresponsible mortgages from beneath-gangster-status firms like Countrywide and selling them off to municipalities and pensioners – old people, for God’s sake – pretending the whole time that it wasn’t grade-D horseshit. But even as it was doing so, it was taking short positions in the same market, in essence betting against the same crap it was selling. Even worse, Goldman bragged about it in public. “The mortgage sector continues to be challenged,” David Viniar, the bank’s chief financial officer, boasted in 2007. “As a result, we took significant markdowns on our long inventory positions …. However, our risk bias in that market was to be short, and that net short position was profitable.” In other words, the mortgages it was selling were for chumps. The real money was in betting against those same mortgages.

“That’s how audacious these a#%holes are,” says one hedge-fund manager. “At least with other banks, you could say that they were just dumb – they believed what they were selling, and it blew them up. Goldman knew what it was doing.” I ask the manager how it could be that selling something to customers that you’re actually betting against – particularly when you know more about the weaknesses of those products than the customer – doesn’t amount to securities fraud.

“It’s exactly securities fraud,” he says. “It’s the heart of securities fraud.”

Eventually, lots of aggrieved investors agreed. In a virtual repeat of the Internet IPO craze, Goldman was hit with a wave of lawsuits after the collapse of the housing bubble, many of which accused the bank of withholding pertinent information about the quality of the mortgages it issued. New York state regulators are suing Goldman and 25 other underwriters for selling bundles of crappy Countrywide mortgages to city and state pension funds, which lost as much as $100 million in the investments. Massachusetts also investigated Goldman for similar misdeeds, acting on behalf of 714 mortgage holders who got stuck ho1ding predatory loans. But once again, Goldman got off virtually scot-free, staving off prosecution by agreeing to pay a paltry $60 million – about what the bank’s CDO division made in a day and a half during the real estate boom.

The effects of the housing bubble are well known – it led more or less directly to the collapse of Bear Stearns, Lehman Brothers and AIG, whose toxic portfolio of credit swaps was in significant part composed of the insurance that banks like Goldman bought against their own housing portfolios. In fact, at least $13 billion of the taxpayer money given to AIG in the bailout ultimately went to Goldman, meaning that the bank made out on the housing bubble twice: It hosed the investors who bought their horsesh*t CDOs by betting against its own crappy product, then it turned around and hosed the taxpayer by making him payoff those same bets.

And once again, while the world was crashing down all around the bank, Goldman made sure it was doing just fine in the compensation department. In 2006, the firm’s payroll jumped to $16.5 billion – an average of $622,000 per employee. As a Goldman spokesman explained, “We work very hard here.”

But the best was yet to come. While the collapse of the housing bubble sent most of the financial world fleeing for the exits, or to jail, Goldman boldly doubled down – and almost single-handedly created yet another bubble, one the world still barely knows the firm had anything to do with.

BUBBLE #4 – $4 A GALLON

By the beginning of 2008, the financial world was in turmoil. Wall Street had spent the past two and a half decades producing one scandal after another, which didn’t leave much to sell that wasn’t tainted. The terms junk bond, IPO, subprime mortgage and other once-hot financial fare were now firmly associated in the public’s mind with scams; the terms credit swaps and CDOs were about to join them. The credit markets were in crisis, and the mantra that had sustained the fantasy economy throughout the Bush years – the notion that housing prices never go down – was now a fully exploded myth, leaving the Street clamoring for a new bullshit paradigm to sling.

Where to go? With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market – stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a “flight to commodities.” Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008.

That summer, as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be “very helpful in the short term,” while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.

GOLDMAN TURNED A SLEEPY OIL MARKET INTO A GIANT BETTING PARLOR – SPIKING PRICES AT THE PUMP.

But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling – which, in classic economic terms, should have brought prices at the pump down.

So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help – there were other players in the physical-commodities market – but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures – agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. The commodities market was designed in large part to help farmers: A grower concerned about future price drops could enter into a contract to sell his corn at a certain price for delivery later on, which made him worry less about building up stores of his crop. When no one was buying corn, the farmer could sell to a middleman known as a “traditional speculator,” who would store the grain and sell it later, when demand returned. That way, someone was always there to buy from the farmer, even when the market temporarily had no need for his crops.

In 1936, however, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Futures Trading Commission – the very same body that would later try and fail to regulate credit swaps – to place limits on speculative trades in commodities. As a result of the CFTC’s oversight, peace and harmony reigned in the commodities markets for more than 50 years.

All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldman-owned commodities-trading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren’t the only ones who needed to hedge their risk against future price drops – Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.

This was complete and utter crap – the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman’s argument. It issued the bank a free pass, called the “Bona Fide Hedging” exemption, allowing Goldman’s subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.

Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil bubble in 2008, when the number of speculators in the market – driven there by fear of the falling dollar and the housing crash – finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers – and that’s likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.

What is even more amazing is that the letter to Goldman, along with most of the other trading exemptions, was handed out more or less in secret. “I was the head of the division of trading and markets, and Brooksley Born was the chair of the CFTC,” says Greenberger, “and neither of us knew this letter was out there.” In fact, the letters only came to light by accident. Last year, a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions.

“I had been invited to a briefing the commission was holding on energy,” the staffer recounts. “And suddenly in the middle of it, they start saying, ‘Yeah, we’ve been issuing these letters for years now.’ I raised my hand and said, ‘Really? You issued a letter? Can I see it?’ And they were like, ‘Duh, duh.’ So we went back and forth, and finally they said, ‘We have to clear it with Goldman Sachs.’ I’m like, ‘What do you mean, you have to clear it with Goldman Sachs?’”

The CFTC cited a rule that prohibited it from releasing any information about a company’s current position in the market. But the staffer’s request was about a letter that had been issued 17 years earlier. It no longer had anything to do with Goldman’s current position. What’s more, Section 7 of the 1936 commodities law gives Congress the right to any information it wants from the commission. Still, in a classic example of how complete Goldman’s capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.

Armed with the semi-secret government exemption, Goldman had become the chief designer of a giant commodities betting parlor. Its Goldman Sachs Commodities Index – which tracks the prices of 24 major commodities but is overwhelmingly weighted toward oil – became the place where pension funds and insurance companies and other institutional investors could make massive long-term bets on commodity prices. Which was all well and good, except for a couple of things. One was that index speculators are mostly “long only” bettors, who seldom if ever take short positions – meaning they only bet on prices to rise. While this kind of behavior is good for a stock market, it’s terrible for commodities, because it continually forces prices upward. “If index speculators took short positions as well as long ones, you’d see them pushing prices both up and down,” says Michael Masters, a hedge-fund manager who has helped expose the role of investment banks in the manipulation of oil prices. “But they only push prices in one direction: up.”

Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. In the beginning of 2008, Arjun Murti, a Goldman analyst, hailed as an “oracle of oil” by The New York Times, predicted a “super spike” in oil prices, forecasting a rise to $200 a barrel. At the time Goldman was heavily invested in oil through its commodities-trading subsidiary, J. Aron; it also owned a stake in a major oil refinery in Kansas, where it warehoused the crude it bought and sold. Even though the supply of oil was keeping pace with demand, Murti continually warned of disruptions to the world oil supply, going so far as to broadcast the fact that he owned two hybrid cars. High prices, the bank insisted, were somehow the fault of the piggish American consumer; in 2005, Goldman analysts insisted that we wouldn’t know when oil prices would fall until we knew “when American consumers will stop buying gas-guzzling sport utility vehicles and instead seek fuel-efficient alternatives.”

But it wasn’t the consumption of real oil that was driving up prices – it was the trade in paper oil. By the summer of 2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that speculators owned more future oil on paper than there was real, physical oil stored in all of the country’s commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present-day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.

In what was by now a painfully familiar pattern, the oil-commodities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. Once again the big losers were ordinary people. The pensioners whose funds invested in this crap got massacred: CalPERS, the California Public Employees’ Retirement System, had $1.1 billion in commodities when the crash came. And the damage didn’t just come from oil. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World.

Now oil prices are rising again: They shot up 20 percent in the month of May and have nearly doubled so far this year. Once again, the problem is not supply or demand. “The highest supply of oil in the last 20 years is now,” says Rep. Bart Stupak, a Democrat from Michigan who serves on the House energy committee. “Demand is at a 10-year low. And yet prices are up.”

Asked why politicians continue to harp on things like drilling or hybrid cars, when supply and demand have nothing to do with the high prices, Stupak shakes his head. “I think they just don’t understand the problem very well,” he says. “You can’t explain it in 30 seconds, so politicians ignore it.

BUBBLE #5 – RIGGING THE BAILOUT

After the oil bubble collapsed last fall, there was no new bubble to keep things humming – this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.

It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers – one of Goldman’s last real competitors – collapse without intervention. (“Goldman’s superhero status was left intact,” says market analyst Eric Salzman, “and an investment-banking competitor, Lehman, goes away.”) The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bankholding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding – most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs – and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.

Converting to a bank-holding company has other benefits as well: Goldman’s primary supervisor is now the New York Fed, whose chairman at the time of its announcement was Stephen Friedman, a former co-chairman of Goldman Sachs. Friedman was technically in violation of Federal Reserve policy by remaining on the board of Goldman even as he was supposedly regulating the bank; in order to rectify the problem, he applied for, and got, a conflict-of-interest waiver from the government. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank-holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Friedman stepped down in May, but the man now in charge of supervising Goldman – New York Fed president William Dudley – is yet another former Goldmanite.

The collective message of all this – the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds – is that when it comes to Goldman Sachs, there isn’t a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege. “In the past it was an implicit advantage,” says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. “Now it’s more of an explicit advantage.”

Once the bailouts were in place, Goldman went right back to business as usual, dreaming up impossibly convoluted schemes to pick the American carcass clean of its loose capital. One of its first moves in the post-bailout era was to quietly push forward the calendar it uses to report its earnings, essentially wiping December 2008 – with its $1.3 billion in pretax losses – off the books. At the same time, the bank announced a highly suspicious $1.8 billion profit for the first quarter of 2009 – which apparently included a large chunk of money funneled to it by taxpayers via the AIG bailout. “They cooked those first-quarter results six ways from Sunday,” says one hedge-fund manager. “They hid the losses in the orphan month and called the bailout money profit.”

Two more numbers stand out from that stunning first-quarter turnaround. The bank paid out an astonishing $4.7 billion in bonuses and compensation in the first three months of this year, an 18 percent increase over the first quarter of 2008. It also raised $5 billion by issuing new shares almost immediately after releasing its first-quarter results. Taken together, the numbers show that Goldman essentially borrowed a $5 billion salary payout for its executives in the middle of the global economic crisis it helped cause, using half-baked accounting to reel in investors, just months after receiving billions in a taxpayer bailout.

Even more amazing, Goldman did it all right before the government announced the results of its new “stress test” for banks seeking to repay TARP money – suggesting that Goldman knew exactly what was coming. The government was trying to carefully orchestrate the repayments in an effort to prevent further trouble at banks that couldn’t pay back the money right away. But Goldman blew off those concerns, brazenly flaunting its insider status. “They seemed to know everything that they needed to do before the stress test came out, unlike everyone else, who had to wait until after,” says Michael Hecht, a managing director of JMP Securities. “The government came out and said, ‘To pay back TARP, you have to issue debt of at least five years that is not insured by FDIC – which Goldman Sachs had already done, a week or two before.”

And here’s the real punch line. After playing an intimate role in four historic bubble catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ, after pawning off thousands of toxic mortgages on pensioners and cities, after helping to drive the price of gas up to $4 a gallon and to push 100 million people around the world into hunger, after securing tens of billions of taxpayer dollars through a series of bailouts overseen by its former CEO, what did Goldman Sachs give back to the people of the United States in 2008?
Fourteen million dollars.

That is what the firm paid in taxes in 2008, an effective tax rate of exactly one, read it, one percent. The bank paid out $10 billion in compensation and benefits that same year and made a profit of more than $2 billion – yet it paid the Treasury less than a third of what it forked over to CEO Lloyd Blankfein, who made $42.9 million last year.

How is this possible? According to Goldman’s annual report, the low taxes are due in large part to changes in the bank’s “geographic earnings mix.” In other words, the bank moved its money around so that most of its earnings took place in foreign countries with low tax rates. Thanks to our completely hosed corporate tax system, companies like Goldman can ship their revenues offshore and defer taxes on those revenues indefinitely, even while they claim deductions upfront on that same untaxed income. This is why any corporation with an at least occasionally sober accountant can usually find a way to zero out its taxes. A GAO report, in fact, found that between 1998 and 2005, roughly two-thirds of all corporations operating in the U.S. paid no taxes at all.

This should be a pitchfork-level outrage – but somehow, when Goldman released its post-bailout tax profile, hardly anyone said a word. One of the few to remark on the obscenity was Rep. Lloyd Doggett, a Democrat from Texas who serves on the House Ways and Means Committee. “With the right hand out begging for bailout money,” he said, “the left is hiding it offshore.”

BUBBLE #6 – GLOBAL WARMING

Fast-Forward to today. It’s early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs – its employees paid some $981,000 to his campaign – sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.

AS ENVISIONED BY GOLDMAN, THE FIGHT TO STOP GLOBAL WARMING WILL BECOME A “CARBON MARKET” WORTH $1 TRILLION A YEAR.

Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm’s co-head of finance) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits – a booming trillion-dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade.

The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.

Here’s how it works: If the bill passes; there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy “allocations” or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billions worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.

The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison’s sake, the annual combined revenues of an electricity suppliers in the U.S. total $320 billion.

Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm-shifting legislation, (2) make sure that they’re the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank’s environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson’s report argued that “voluntary action alone cannot solve the climate-change problem.” A few years later, the bank’s carbon chief, Ken Newcombe, insisted that cap-and-trade alone won’t be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that ‘Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, “We’re not making those investments to lose money.”

The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?

“Oh, it’ll dwarf it,” says a former staffer on the House energy committee.

Well, you might say, who cares? If cap-and-trade succeeds, won’t we all be saved from the catastrophe of global warming? Maybe – but cap-and-trade, as envisioned by Goldman, is really just a carbon tax structured so that private interests collect the revenues. Instead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private tax-collection scheme. This is worse than the bailout: It allows the bank to seize taxpayer money before it’s even collected.

“If it’s going to be a tax, I would prefer that Washington set the tax and collect it,” says Michael Masters, the hedge fund director who spoke out against oil-futures speculation. “But we’re saying that Wall Street can set the tax, and Wall Street can collect the tax. That’s the last thing in the world I want. It’s just asinine.”

Cap-and-trade is going to happen. Or, if it doesn’t, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees – while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.

It’s not always easy to accept the reality of what we now routinely allow these people to get away with; there’s a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can’t really register the fact that you’re no longer a citizen of a thriving first-world democracy, that you’re no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.

But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It’s a gangster state, running on gangster economics, and even prices can’t be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can’t stop it, but we should at least know where it’s all going.

We have a long history of being manipulated by our governments, whether it was with semantics (changing the name of something we didn’t buy into) or on scientific speculation to down right lies. This article lists many of the treacherous examples used to gain power, grow government by falsely convincing us there was or is impending danger only government can fix by regulations, more government entities and spending. Governments don’t have money, when they’ve taxed us to the point we object, they know they have to scare it out of us.

This news report from 1865 is as credible as the current “Global Warming” science but really proves we do have climate and it does change, in fact the geologists pointed out evidence of tropical flora in Greenland before it froze over (considerably warmer than now), thus the reason for emigration. The article also gives a timeline account as far back as the year 860 for other incidents of severe cold weather and its effects. Most notably the following excerpt shows weather extremes; “The annals of history show that from time to time since the advent of man into the world, remarkable ridged winters and torrid summers have upset the calculations of learned Geologists and ruffled the equanimity of the inhabitants of the temperate zones.”

If anything the grand scale of reverse engineering science has done since the advent of man proves how little is actually known let alone predicted, even in present day as proven with the recent man caused global warming alarm. It seems to me that what we are really witnessing is a great deal longer natural phase than anyone cares to admit. Why wouldn’t it have simply been deducted as a gradual retreat from the glacial ice age where segments of cooling  and warming activity is also intrinsically part of the process? We are still withdrawing from a glacial era as evidence that glaciers are still a part of our landscape.

We are increasingly attacked with regulations on all the basic resources we need to survive because there is no faith in our individual ability of self regulation, impending danger from scare tactics is just the vehicle to save us from ourselves. The United States Government was originally intended to make the rules of the game and level the playing field according to the wishes of the people it serves. Federal Government was supposed to protect our nation from other nations and make sure states don’t infringe on another states rights. They were also in charge of posts and roads, for every new law they pass is an opportunity to tax through fines and fees, now they can tax the very air we breathe.

New York Times article from 1985

PROSPECTS OF ANOTHER GLACIAL PERIOD; Geologists Think the World May Be Frozen Up Again. 

February 24, 1895, Wednesday

Page 6, 759 words

“The researches of Geologists have proved the existence in Greenland and other arctic lands of fossil palms and other tropical plants, which show that these regions were once covered with a rich vegetation, which only equatorial climes can now produce.”

“Is this kingdom of ice and snow again extending it’s way to the equator?”

“Great masses of ice are frequently observed by navigators in far more southerly position during the summer months in the Atlantic than was the case a few years ago, and the effect of these icebergs is to materially reduce the temperature in Scandinavia and Iceland. The latter island in late years has suffered so severely that corn no longer ripens there, and the inhabitants, in fear of approaching famine, and a still colder climate, are emigrating to North America.”

Other Ice Age Predictions

September, 1958 The coming Ice Age: A true scientific detective story

January 1970 Colder Winters Held Dawn of New Ice Age:  Scientists See Ice Age In the Future (pay for article)

June, 1974 Science: Another Ice Age?  This article shows the normal weather for different regions the weather was reversed and still remained opposite from other regions.

The full story about DDT

As with the DDT scenario regulations banning the use of this pesticide resulted from an investigation and hearings that omitted pertinent information, thus rendering the verdict based on bias not scientific fact. It is the governments job to write regulation and enforce the rules not perform job security and expansion measures. It is all of our individual responsibility to make sure government is doing it’s intended job, it was the media’s original purpose and the reason they were granted ”freedom of the press” to inform us regarding the comings, goings and doings of the government. We can’t just sit down and shut up as Obama requests, we would be remiss of our duty if we did that. It was the Government that went overboard with the DDT production and use. Banning DDT remains controversial to this day and the governmental decision to ban DDT is responsible for millions of Malaria deaths since.

DDT – Properties, History, Environmental impact, Impact on human health

Read more: DDT – Properties, History, Environmental impact, Impact on human health http://encyclopedia.stateuniversity.com/pages/5635/DDT.html#ixzz0eyvWPHL6

The E.P.A. was established in 1970, signed into law from the Nixon Administration and was granted the power to write laws and enforce them. The EPA’s evolved service has been to offer us up polluted science to scare us into submission using all natural resources against us. It is a major conflict of interest for government to be running any organisation that governs both research and lawmaking. The EPA is only one example of the far reaching tentacles of government control. All of the science generated for the following list of acts the EPA has produced is left suspect, knowing there is a paycheck associated with every regulation.

Air

• 1955 – Air Pollution Control Act PL 84-159
• 1963 – Clean Air Act PL 88-206
• 1965 – Motor Vehicle Air Pollution Control Act PL 89-272
• 1966 – Clean Air Act Amendments PL 89-675
• 1967 – Air Quality Act PL 90-148
• 1969 – National Environmental Policy Act PL 91-190
• 1970 – Clean Air Act Extension PL 91-604
• 1976 – Toxic Substances Control Act PL 94-469
• 1977 – Clean Air Act Amendments PL 95-95
• 1990 – Clean Air Act Amendments PL 101-549

Water

• 1948 – Water Pollution Control Act PL 80-845
• 1965 – Water Quality Act PL 89-234
• 1966 – Clean Waters Restoration Act PL 89-753
• 1969 – National Environmental Policy Act PL 91-190
• 1970 – Water Quality Improvement Act PL 91-224
• 1972 – Federal Water Pollution Control Amendments of 1972 PL 92-500
• 1974 – Safe Drinking Water Act PL 93-523
• 1976 – Toxic Substances Control Act PL 94-469
• 1977 – Clean Water Act PL 95-217
• 1987 – Water Quality Act PL 100-4
• 1996 – Safe Drinking Water Act Amendments of 1996 PL 104-182

 Land

• 1947 – Federal Insecticide, Fungicide, and Rodenticide Act
• 1964 – Wilderness Act PL 88-577
• 1968 – Scenic Rivers Preservation Act PL 90-542
• 1969 – National Environmental Policy Act PL 91-190
• 1970 – Wilderness Act PL 91-504
• 1977 – Surface Mining Control and Reclamation Act PL 95-87
• 1978 – Wilderness Act PL 98-625
• 1980 – Alaska Land Protection Act PL 96-487
• 1994 – California Desert Protection Act PL 103-433
• 1996 – Food Quality Protection Act

Endangered species

• 1946 – Coordination Act PL 79-732
• 1966 – Endangered Species Preservation Act PL 89-669
• 1969 – Endangered Species Conservation Act PL 91-135
• 1972 – Marine Mammal Protection Act PL 92-522
• 1973 – Endangered Species Act PL 93-205

Hazardous waste

• 1965 – Solid Waste Disposal Act PL 89-272
• 1969 – National Environmental Policy Act PL 91-190
• 1970 – Resource Recovery Act PL 91-512
• 1976 – Resource Conservation and Recovery Act PL 94-580
• 1980 – Comprehensive Environmental Response, Compensation, and Liability Act (“Superfund”) PL 96-510
• 1982 – Nuclear Waste Repository Act PL 97-425
• 1984 – Hazardous and Solid Wastes Amendments Act PL 98-616
• 1986 – Superfund Amendments and Reauthorization Act PL 99-499
• 2002 – Small Business Liability Relief and Brownfields Revitalization Act (“Brownfields Law”) PL 107-118

Although few and far between, it’s a good thing for us there are those like Senator Inhofe that has been fighting against AGW and Alaska Republican Lisa Murkowski, who was elected to Senate GOP leadership last year and holds a key post on the Energy and Natural Resources Committee. She is trying to have a bill passed as efforts to block the Obama administration from regulating greenhouse gases under the Clean Air Act. Murkowski will have the opportunity this week to offer an amendment to limit EPA’s ability to regulate greenhouse gases. Her options include an amendment to prohibit EPA from regulating greenhouse gas emissions from power plants and other stationary sources. The senator insists that unwieldy EPA regulations would cripple the U.S. economy.

The latest news is a Q & A session between the BBC and Professor Phil Jones, the director of the Climatic Research Unit (CRU) at the University of East Anglia (UEA), which has been at the centre of the row over hacked (I presume “leaked”) e-mails.

A – Do you agree that according to the global temperature record used by the IPCC, the rates of global warming from 1860-1880, 1910-1940 and 1975-1998 were identical?
An initial point to make is that in the responses to these questions I’ve assumed that when you talk about the global temperature record, you mean the record that combines the estimates from land regions with those from the marine regions of the world. CRU produces the land component, with the Met Office Hadley Centre producing the marine component.

Temperature data for the period 1860-1880 are more uncertain, because of sparser coverage, than for later periods in the 20th Century. The 1860-1880 period is also only 21 years in length. As for the two periods 1910-40 and 1975-1998 the warming rates are not statistically significantly different (see numbers below).

I have also included the trend over the period 1975 to 2009, which has a very similar trend to the period 1975-1998.

So, in answer to the question, the warming rates for all 4 periods are similar and not statistically significantly different from each other.

Here are the trends and significance for each period:

Period                 Length      Trend (Degrees C per decade)    Significance
1860-1880        21                0.163                                             Yes
1910-1940        31                0.15                                               Yes
1975-1998        24               0.166                                             Yes
1975-2009       35               0.161                                             Yes

B - Do you agree that from 1995 to the present there has been no statistically-significant global warming
Yes, but only just. I also calculated the trend for the period 1995 to 2009. This trend (0.12C per decade) is positive, but not significant at the 95% significance level. The positive trend is quite close to the significance level. Achieving statistical significance in scientific terms is much more likely for longer periods, and much less likely for shorter periods.

Those that saw all the red flags would have known all along that the truth eventually gets out. Since anthropogenic global warming was the whole reason everyone was going crazy green what do we do about the EPA and the IPCC? The fraudulent companies should get dismantled all revenue, grants be revoked and dispersed among the skeptics for pain, anguish and suffering.

 
By MATT TAIBBI
Rolling Stone — Posted Mar 19, 2009 12:49 PM

It’s over — we’re officially, royally f#%$d.  No empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country’s heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That’s $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG’s 2008 losses).

So it’s time to admit it: We’re fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we’re still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company’s CEO, actually compared it to catching a cold: “The marketplace is a pretty crummy place to be right now,” he said. “When the world catches pneumonia, we get it too.” In a pathetic attempt at name-dropping, he even whined that AIG was being “consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet’s investment portfolio down.”

Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else’s financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its “pneumonia” was making colossal, world-sinking $500 billion bets with money it didn’t have, in a toxic and completely unregulated derivatives market.

Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.

People are pissed off about this financial crisis, and about this bailout, but they’re not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d’état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

 
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — “our partners in the government,” as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

I. PATIENT ZERO
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people’s money would make his dick bigger.

That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington’s deregulation of the Wall Street casino. “It’s all about the regulatory environment,” says a government source involved with the AIG bailout. “These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that.”

The mess Cassano created had its roots in an investment boom fueled in part by a relatively new type of financial instrument called a collateralized-debt obligation. A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.

The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up. Say $100 is supposed to come into the box every month. Even in an apocalypse, when $90 in payments might default, you’ll still get $10. What the inventors of the CDO did is divide up the box into groups of investors and put that $10 into its own level, or “tranche.” They then convinced ratings agencies like Moody’s and S&P to give that top tranche the highest AAA rating — meaning it has close to zero credit risk.

Suddenly, thanks to this financial seal of approval, banks had a way to turn their shittiest mortgages and other financial waste into investment-grade paper and sell them to institutional investors like pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered higher rates of return than truly safe products like Treasury bills, it was a win-win: Banks made a fortune selling CDOs, and big investors made much more holding them.

 
The problem was, none of this was based on reality. “The banks knew they were selling crap,” says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. ”They had some back room somewhere where a bunch of Indian guys who’d been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years,” says one young trader who sold CDOs for a major investment bank. “It was nuts.”

Now that even the crappiest mortgages could be sold to conservative investors, the CDOs spurred a massive explosion of irresponsible and predatory lending. In fact, there was such a crush to underwrite CDOs that it became hard to find enough subprime mortgages — read: enough unemployed meth dealers willing to buy million-dollar homes for no money down — to fill them all. As banks and investors of all kinds took on more and more in CDOs and similar instruments, they needed some way to hedge their massive bets — some kind of insurance policy, in case the housing bubble burst and all that debt went south at the same time. This was particularly true for investment banks, many of which got stuck holding or “warehousing” CDOs when they wrote more than they could sell. And that’s were Joe Cassano came in.

Known for his boldness and arrogance, Cassano took over as chief of AIGFP in 2001. He was the favorite of Maurice “Hank” Greenberg, the head of AIG, who admired the younger man’s hard-driving ways, even if neither he nor his successors fully understood exactly what it was that Cassano did. According to a source familiar with AIG’s internal operations, Cassano basically told senior management, “You know insurance, I know investments, so you do what you do, and I’ll do what I do — leave me alone.” Given a free hand within the company, Cassano set out from his offices in London to sell a lucrative form of “insurance” to all those investors holding lots of CDOs. His tool of choice was another new financial instrument known as a credit-default swap, or CDS.

 
The CDS was popularized by J.P. Morgan, in particular by a group of young, creative bankers who would later become known as the “Morgan Mafia,” as many of them would go on to assume influential positions in the finance world. In 1994, in between booze and games of tennis at a resort in Boca Raton, Florida, the Morgan gang plotted a way to help boost the bank’s returns. One of their goals was to find a way to lend more money, while working around regulations that required them to keep a set amount of cash in reserve to back those loans. What they came up with was an early version of the credit-default swap.

In its simplest form, a CDS is just a bet on an outcome. Say Bank A writes a million-dollar mortgage to the Pope for a town house in the West Village. Bank A wants to hedge its mortgage risk in case the Pope can’t make his monthly payments, so it buys CDS protection from Bank B, wherein it agrees to pay Bank B a premium of $1,000 a month for five years. In return, Bank B agrees to pay Bank A the full million-dollar value of the Pope’s mortgage if he defaults. In theory, Bank A is covered if the Pope goes on a meth binge and loses his job.

When Morgan presented their plans for credit swaps to regulators in the late Nineties, they argued that if they bought CDS protection for enough of the investments in their portfolio, they had effectively moved the risk off their books. Therefore, they argued, they should be allowed to lend more, without keeping more cash in reserve. A whole host of regulators — from the Federal Reserve to the Office of the Comptroller of the Currency — accepted the argument, and Morgan was allowed to put more money on the street.

What Cassano did was to transform the credit swaps that Morgan popularized into the world’s largest bet on the housing boom. In theory, at least, there’s nothing wrong with buying a CDS to insure your investments. Investors paid a premium to AIGFP, and in return the company promised to pick up the tab if the mortgage-backed CDOs went bust. But as Cassano went on a selling spree, the deals he made differed from traditional insurance in several significant ways. First, the party selling CDS protection didn’t have to post any money upfront. When a $100 corporate bond is sold, for example, someone has to show 100 actual dollars. But when you sell a $100 CDS guarantee, you don’t have to show a dime. So Cassano could sell investment banks billions in guarantees without having any single asset to back it up.

 
Secondly, Cassano was selling so-called “naked” CDS deals. In a “naked” CDS, neither party actually holds the underlying loan. In other words, Bank B not only sells CDS protection to Bank A for its mortgage on the Pope — it turns around and sells protection to Bank C for the very same mortgage. This could go on ad nauseam: You could have Banks D through Z also betting on Bank A’s mortgage. Unlike traditional insurance, Cassano was offering investors an opportunity to bet that someone else’s house would burn down, or take out a term life policy on the guy with AIDS down the street. It was no different from gambling, the Wall Street version of a bunch of frat brothers betting on Jay Feely to make a field goal. Cassano was taking book for every bank that bet short on the housing market, but he didn’t have the cash to pay off if the kick went wide.

 
In a span of only seven years, Cassano sold some $500 billion worth of CDS protection, with at least $64 billion of that tied to the subprime mortgage market. AIG didn’t have even a fraction of that amount of cash on hand to cover its bets, but neither did it expect it would ever need any reserves. So long as defaults on the underlying securities remained a highly unlikely proposition, AIG was essentially collecting huge and steadily climbing premiums by selling insurance for the disaster it thought would never come.

 
Initially, at least, the revenues were enormous: AIGFP’s returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary’s 400 employees were paid a total of $3.5 billion; Cassano himself pocketed at least $280 million in compensation. Everyone made their money — and then it all went to shit.

II. THE REGULATORS
Cassano’s outrageous gamble wouldn’t have been possible had he not had the good fortune to take over AIGFP just as Sen. Phil Gramm — a grinning, laissez-faire ideologue from Texas — had finished engineering the most dramatic deregulation of the financial industry since Emperor Hien Tsung invented paper money in 806 A.D. For years, Washington had kept a watchful eye on the nation’s banks. Ever since the Great Depression, commercial banks — those that kept money on deposit for individuals and businesses — had not been allowed to double as investment banks, which raise money by issuing and selling securities. The Glass-Steagall Act, passed during the Depression, also prevented banks of any kind from getting into the insurance business.

But in the late Nineties, a few years before Cassano took over AIGFP, all that changed. The Democrats, tired of getting slaughtered in the fundraising arena by Republicans, decided to throw off their old reliance on unions and interest groups and become more “business-friendly.” Wall Street responded by flooding Washington with money, buying allies in both parties. In the 10-year period beginning in 1998, financial companies spent $1.7 billion on federal campaign contributions and another $3.4 billion on lobbyists. They quickly got what they paid for. In 1999, Gramm co-sponsored a bill that repealed key aspects of the Glass-Steagall Act, smoothing the way for the creation of financial megafirms like Citigroup. The move did away with the built-in protections afforded by smaller banks. In the old days, a local banker knew the people whose loans were on his balance sheet: He wasn’t going to give a million-dollar mortgage to a homeless meth addict, since he would have to keep that loan on his books. But a giant merged bank might write that loan and then sell it off to some fool in China, and who cared?

The very next year, Gramm compounded the problem by writing a sweeping new law called the Commodity Futures Modernization Act that made it impossible to regulate credit swaps as either gambling or securities. Commercial banks — which, thanks to Gramm, were now competing directly with investment banks for customers — were driven to buy credit swaps to loosen capital in search of higher yields. “By ruling that credit-default swaps were not gaming and not a security, the way was cleared for the growth of the market,” said Eric Dinallo, head of the New York State Insurance Department.

The blanket exemption meant that Joe Cassano could now sell as many CDS contracts as he wanted, building up as huge a position as he wanted, without anyone in government saying a word. “You have to remember, investment banks aren’t in the business of making huge directional bets,” says the government source involved in the AIG bailout. When investment banks write CDS deals, they hedge them. But insurance companies don’t have to hedge. And that’s what AIG did. “They just bet massively long on the housing market,” says the source. “Billions and billions.”

In the biggest joke of all, Cassano’s wheeling and dealing was regulated by the Office of Thrift Supervision, an agency that would prove to be defiantly uninterested in keeping watch over his operations. How a behemoth like AIG came to be regulated by the little-known and relatively small OTS is yet another triumph of the deregulatory instinct. Under another law passed in 1999, certain kinds of holding companies could choose the OTS as their regulator, provided they owned one or more thrifts (better known as savings-and-loans). Because the OTS was viewed as more compliant than the Fed or the Securities and Exchange Commission, companies rushed to reclassify themselves as thrifts. In 1999, AIG purchased a thrift in Delaware and managed to get approval for OTS regulation of its entire operation.

Making matters even more hilarious, AIGFP — a London-based subsidiary of an American insurance company — ought to have been regulated by one of Europe’s more stringent regulators, like Britain’s Financial Services Authority. But the OTS managed to convince the Europeans that it had the muscle to regulate these giant companies. By 2007, the EU had conferred legitimacy to OTS supervision of three mammoth firms — GE, AIG and Ameriprise.

That same year, as the subprime crisis was exploding, the Government Accountability Office criticized the OTS, noting a “disparity between the size of the agency and the diverse firms it oversees.” Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff — and this despite the fact that it was the primary regulator for the world’s largest insurer!

“There’s this notion that the regulators couldn’t do anything to stop AIG,” says a government official who was present during the bailout. “That’s bullshit. What you have to understand is that these regulators have ultimate power. They can send you a letter and say, ‘You don’t exist anymore,’ and that’s basically that. They don’t even really need due process. The OTS could have said, ‘We’re going to pull your charter; we’re going to pull your license; we’re going to sue you.’ And getting sued by your primary regulator is the kiss of death.”

When AIG finally blew up, the OTS regulator ostensibly in charge of overseeing the insurance giant — a guy named C.K. Lee — basically admitted that he had blown it. His mistake, Lee said, was that he believed all those credit swaps in Cassano’s portfolio were “fairly benign products.” Why? Because the company told him so. “The judgment the company was making was that there was no big credit risk,” he explained. (Lee now works as Midwest region director of the OTS; the agency declined to make him available for an interview.)

In early March, after the latest bailout of AIG, Treasury Secretary Timothy Geithner took what seemed to be a thinly veiled shot at the OTS, calling AIG a “huge, complex global insurance company attached to a very complicated investment bank/hedge fund that was allowed to build up without any adult supervision.” But even without that “adult supervision,” AIG might have been OK had it not been for a complete lack of internal controls. For six months before its meltdown, according to insiders, the company had been searching for a full-time chief financial officer and a chief risk-assessment officer, but never got around to hiring either. That meant that the 18th-largest company in the world had no one checking to make sure its balance sheet was safe and no one keeping track of how much cash and assets the firm had on hand. The situation was so bad that when outside consultants were called in a few weeks before the bailout, senior executives were unable to answer even the most basic questions about their company — like, for instance, how much exposure the firm had to the residential-mortgage market.

III. THE CRASH
Ironically, when reality finally caught up to Cassano, it wasn’t because the housing market crapped but because of AIG itself. Before 2005, the company’s debt was rated triple-A, meaning he didn’t need to post much cash to sell CDS protection: The solid creditworthiness of AIG’s name was guarantee enough. But the company’s crummy accounting practices eventually caused its credit rating to be downgraded, triggering clauses in the CDS contracts that forced Cassano to post substantially more collateral to back his deals.

By the fall of 2007, it was evident that AIGFP’s portfolio had turned poisonous, but like every good Wall Street huckster, Cassano schemed to keep his insane, Earth-swallowing gamble hidden from public view. That August, balls bulging, he announced to investors on a conference call that “it is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions.” As he spoke, his CDS portfolio was racking up $352 million in losses. When the growing credit crunch prompted senior AIG executives to re-examine its liabilities, a company accountant named Joseph St. Denis became “gravely concerned” about the CDS deals and their potential for mass destruction. Cassano responded by personally forcing the poor sap out of the firm, telling him he was “deliberately excluded” from the financial review for fear that he might “pollute the process.”

The following February, when AIG posted $11.5 billion in annual losses, it announced the resignation of Cassano as head of AIGFP, saying an auditor had found a “material weakness” in the CDS portfolio. But amazingly, the company not only allowed Cassano to keep $34 million in bonuses, it kept him on as a consultant for $1 million a month. In fact, Cassano remained on the payroll and kept collecting his monthly million through the end of September 2008, even after taxpayers had been forced to hand AIG $85 billion to patch up his f#%k-ups. When asked in October why the company still retained Cassano at his $1 million-a-month rate despite his role in the probable downfall of Western civilization, CEO Martin Sullivan told Congress with a straight face that AIG wanted to “retain the 20-year knowledge that Mr. Cassano had.” (Cassano, who is apparently hiding out in his lavish town house near Harrods in London, could not be reached for comment.)

What sank AIG in the end was another credit downgrade. Cassano had written so many CDS deals that when the company was facing another downgrade to its credit rating last September, from AA to A, it needed to post billions in collateral — not only more cash than it had on its balance sheet but more cash than it could raise even if it sold off every single one of its liquid assets. Even so, management dithered for days, not believing the company was in serious trouble. AIG was a dried-up prune, sapped of any real value, and its top executives didn’t even know it.

On the weekend of September 13th, AIG’s senior leaders were summoned to the offices of the New York Federal Reserve. Regulators from Dinallo’s insurance office were there, as was Geithner, then chief of the New York Fed. Treasury Secretary Hank Paulson, who spent most of the weekend preoccupied with the collapse of Lehman Brothers, came in and out. Also present, for reasons that would emerge later, was Lloyd Blankfein, CEO of Goldman Sachs. The only relevant government office that wasn’t represented was the regulator that should have been there all along: the OTS.

“We sat down with Paulson, Geithner and Dinallo,” says a person present at the negotiations. “I didn’t see the OTS even once.”

On September 14th, according to another person present, Treasury officials presented Blankfein and other bankers in attendance with an absurd proposal: “They basically asked them to spend a day and check to see if they could raise the money privately.” The laughably short time span to complete the mammoth task made the answer a foregone conclusion. At the end of the day, the bankers came back and told the government officials, gee, we checked, but we can’t raise that much. And the bailout was on.

A short time later, it came out that AIG was planning to pay some $90 million in deferred compensation to former executives, and to accelerate the payout of $277 million in bonuses to others — a move the company insisted was necessary to “retain key employees.” When Congress balked, AIG canceled the $90 million in payments.

Then, in January 2009, the company did it again. After all those years letting Cassano run wild, and after already getting caught paying out insane bonuses while on the public till, AIG decided to pay out another $450 million in bonuses. And to whom? To the 400 or so employees in Cassano’s old unit, AIGFP, which is due to go out of business shortly! Yes, that’s right, an average of $1.1 million in taxpayer-backed money apiece, to the very people who spent the past decade or so punching a hole in the fabric of the universe!

“We, uh, needed to keep these highly expert people in their seats,” AIG spokeswoman Christina Pretto says to me in early February.

“But didn’t these ‘highly expert people’ basically destroy your company?” I ask.

Pretto protests, says this isn’t fair. The employees at AIGFP have already taken pay cuts, she says. Not retaining them would dilute the value of the company even further, make it harder to wrap up the unit’s operations in an orderly fashion.

The bonuses are a nice comic touch highlighting one of the more outrageous tangents of the bailout age, namely the fact that, even with the planet in flames, some members of the Wall Street class can’t even get used to the tragedy of having to fly coach. “These people need their trips to Baja, their spa treatments, their hand jobs,” says an official involved in the AIG bailout, a serious look on his face, apparently not even half-kidding. “They don’t function well without them.”

IV. THE POWER GRAB
So that’s the first step in wall street’s power grab: making up things like credit-default swaps and collateralized-debt obligations, financial products so complex and inscrutable that ordinary American dumb people — to say nothing of federal regulators and even the CEOs of major corporations like AIG — are too intimidated to even try to understand them. That, combined with wise political investments, enabled the nation’s top bankers to effectively scrap any meaningful oversight of the financial industry. In 1997 and 1998, the years leading up to the passage of Phil Gramm’s fateful act that gutted Glass-Steagall, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying. Gramm alone — then the chairman of the Senate Banking Committee — collected $2.6 million in only five years. The law passed 90-8 in the Senate, with the support of 38 Democrats, including some names that might surprise you: Joe Biden, John Kerry, Tom Daschle, Dick Durbin, even John Edwards.

The act helped create the too-big-to-fail financial behemoths like Citigroup, AIG and Bank of America — and in turn helped those companies slowly crush their smaller competitors, leaving the major Wall Street firms with even more money and power to lobby for further deregulatory measures. “We’re moving to an oligopolistic situation,” Kenneth Guenther, a top executive with the Independent Community Bankers of America, lamented after the Gramm measure was passed.

The situation worsened in 2004, in an extraordinary move toward deregulation that never even got to a vote. At the time, the European Union was threatening to more strictly regulate the foreign operations of America’s big investment banks if the U.S. didn’t strengthen its own oversight. So the top five investment banks got together on April 28th of that year and — with the helpful assistance of then-Goldman Sachs chief and future Treasury Secretary Hank Paulson — made a pitch to George Bush’s SEC chief at the time, William Donaldson, himself a former investment banker. The banks generously volunteered to submit to new rules restricting them from engaging in excessively risky activity. In exchange, they asked to be released from any lending restrictions. The discussion about the new rules lasted just 55 minutes, and there was not a single representative of a major media outlet there to record the fateful decision.

Donaldson OK’d the proposal, and the new rules were enough to get the EU to drop its threat to regulate the five firms. The only catch was, neither Donaldson nor his successor, Christopher Cox, actually did any regulating of the banks. They named a commission of seven people to oversee the five companies, whose combined assets came to total more than $4 trillion. But in the last year and a half of Cox’s tenure, the group had no director and did not complete a single inspection. Great deal for the banks, which originally complained about being regulated by both Europe and the SEC, and ended up being regulated by no one.

Once the capital requirements were gone, those top five banks went hog-wild, jumping ass-first into the then-raging housing bubble. One of those was Bear Stearns, which used its freedom to drown itself in bad mortgage loans. In the short period between the 2004 change and Bear’s collapse, the firm’s debt-to-equity ratio soared from 12-1 to an insane 33-1. Another culprit was Goldman Sachs, which also had the good fortune, around then, to see its CEO, a bald-headed Frankensteinian goon named Hank Paulson (who received an estimated $200 million tax deferral by joining the government), ascend to Treasury secretary.

Freed from all capital restraints, sitting pretty with its man running the Treasury, Goldman jumped into the housing craze just like everyone else on Wall Street. Although it famously scored an $11 billion coup in 2007 when one of its trading units smartly shorted the housing market, the move didn’t tell the whole story. In truth, Goldman still had a huge exposure come that fateful summer of 2008 — to none other than Joe Cassano.

Goldman Sachs, it turns out, was Cassano’s biggest customer, with $20 billion of exposure in Cassano’s CDS book. Which might explain why Goldman chief Lloyd Blankfein was in the room with ex-Goldmanite Hank Paulson that weekend of September 13th, when the federal government was supposedly bailing out AIG.

When asked why Blankfein was there, one of the government officials who was in the meeting shrugs. “One might say that it’s because Goldman had so much exposure to AIGFP’s portfolio,” he says. “You’ll never prove that, but one might suppose.”

Market analyst Eric Salzman is more blunt. “If AIG went down,” he says, “there was a good chance Goldman would not be able to collect.” The AIG bailout, in effect, was Goldman bailing out Goldman.
Eventually, Paulson went a step further, elevating another ex-Goldmanite named Edward Liddy to run AIG — a company whose bailout money would be coming, in part, from the newly created TARP program, administered by another Goldman banker named Neel Kashkari.

V. REPO MEN
There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs — a company whose average employee still made more than $350,000 last year, even in the midst of a depression — was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That’s the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers’ credit card.

The people who have spent their lives cloistered in this Wall Street community aren’t much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don’t know what the hell LIBOR is or how a REIT works or how to use the word “zero coupon bond” in a sentence without sounding stupid — well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.

That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize ”toxic” risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.

Some aspects of the bailout were secretive to the point of absurdity. In fact, if you look closely at just a few lines in the Federal Reserve’s weekly public disclosures, you can literally see the moment where a big chunk of your money disappeared for good. The H4 report (called “Factors Affecting Reserve Balances”) summarizes the activities of the Fed each week. You can find it online, and it’s pretty much the only thing the Fed ever tells the world about what it does. For the week ending February 18th, the number under the heading “Repurchase Agreements” on the table is zero. It’s a significant number.

Why? In the pre-crisis days, the Fed used to manage the money supply by periodically buying and selling securities on the open market through so-called Repurchase Agreements, or Repos. The Fed would typically dump $25 billion or so in cash onto the market every week, buying up Treasury bills, U.S. securities and even mortgage-backed securities from institutions like Goldman Sachs and J.P. Morgan, who would then “repurchase” them in a short period of time, usually one to seven days. This was the Fed’s primary mechanism for controlling interest rates: Buying up securities gives banks more money to lend, which makes interest rates go down. Selling the securities back to the banks reduces the money available for lending, which makes interest rates go up.
If you look at the weekly H4 reports going back to the summer of 2007, you start to notice something alarming. At the start of the credit crunch, around August of that year, you see the Fed buying a few more Repos than usual — $33 billion or so. By November, as private-bank reserves were dwindling to alarmingly low levels, the Fed started injecting even more cash than usual into the economy: $48 billion. By late December, the number was up to $58 billion; by the following March, around the time of the Bear Stearns rescue, the Repo number had jumped to $77 billion. In the week of May 1st, 2008, the number was $115 billion — “out of control now,” according to one congressional aide. For the rest of 2008, the numbers remained similarly in the stratosphere, the Fed pumping as much as $125 billion of these short-term loans into the economy — until suddenly, at the start of this year, the number drops to nothing. Zero.

The reason the number has dropped to nothing is that the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you’ve never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there’s also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.

While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn’t taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy.

No one knows who’s getting that money or exactly how much of it is disappearing through these new holes in the hull of America’s credit rating. Moreover, no one can really be sure if these new institutions are even temporary at all — or whether they are being set up as permanent, state-aided crutches to Wall Street, designed to systematically suck bad investments off the ledgers of irresponsible lenders.

“They’re supposed to be temporary,” says Paul-Martin Foss, an aide to Rep. Ron Paul. “But we keep getting notices every six months or so that they’re being renewed. They just sort of quietly announce it.”

None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn’t like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go f#%k itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include “deliberations, decisions and actions on monetary policy matters.” The exemption, as Foss notes, “basically includes everything.” According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.

VI. WINNERS AND LOSERS
Stevens isn’t the only person in Congress to be given the finger by the Fed. In January, when Rep. Alan Grayson of Florida asked Federal Reserve vice chairman Donald Kohn where all the money went — only $1.2 trillion had vanished by then — Kohn gave Grayson a classic eye roll, saying he would be “very hesitant” to name names because it might discourage banks from taking the money.

“Has that ever happened?” Grayson asked. “Have people ever said, ‘We will not take your $100 billion because people will find out about it?’”

“Well, we said we would not publish the names of the borrowers, so we have no test of that,” Kohn answered, visibly annoyed with Grayson’s meddling.

Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets — in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were “marked to market” — a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded — Kohn answered, mysteriously, “The ones that have market values are marked to market.” The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively — paying real money for God knows what.

“Well, how much of them don’t have market values?” asked Grayson. “How much of them are worthless?”

“None are worthless,” Kohn snapped.

“Then why don’t you mark them to market?” Grayson demanded.

“Well,” Kohn sighed, “we are marking the ones to market that have market values.”

In essence, the Fed was telling Congress to lay off and let the experts handle things. “It’s like buying a car in a used-car lot without opening the hood, and saying, ‘I think it’s fine,’” says Dan Fuss, an analyst with the investment firm Loomis Sayles. “The salesman says, ‘Don’t worry about it. Trust me.’ It’ll probably get us out of the lot, but how much farther? None of us knows.”

When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what’s happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. “We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion,” says Sen. Bernie Sanders. “It is beyond comprehension.”

Count Sanders among those who don’t buy the argument that Wall Street firms shouldn’t have to face being outed as recipients of public funds, that making this information public might cause investors to panic and dump their holdings in these firms. “I guess if we made that public, they’d go on strike or something,” he muses.

And the Fed isn’t the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn’t — particularly the first $350 billion given out under Bush appointee Hank Paulson.

The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn’t a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.

“Do you believe that?” she says incredulously. “That’s not what we had in mind.”

Another member of Congress, who asked not to be named, offers his own theory about the TARP process. “I think basically if you knew Hank Paulson, you got the money,” he says.

This cozy arrangement created yet another opportunity for big banks to devour market share at the expense of smaller regional lenders. While all the bigwigs at Citi and Goldman and Bank of America who had Paulson on speed-dial got bailed out right away — remember that TARP was originally passed because money had to be lent right now, that day, that minute, to stave off emergency — many small banks are still waiting for help. Five months into the TARP program, some not only haven’t received any funds, they haven’t even gotten a call back about their applications.

“There’s definitely a feeling among community bankers that no one up there cares much if they make it or not,” says Tanya Wheeless, president of the Arizona Bankers Association.

Which, of course, is exactly the opposite of what should be happening, since small, regional banks are far less guilty of the kinds of predatory lending that sank the economy. “They’re not giving out subprime loans or easy credit,” says Wheeless. “At the community level, it’s much more bread-and-butter banking.”

Nonetheless, the lion’s share of the bailout money has gone to the larger, so-called “systemically important” banks. “It’s like Treasury is picking winners and losers,” says one state banking official who asked not to be identified.

This itself is a hugely important political development. In essence, the bailout accelerated the decline of regional community lenders by boosting the political power of their giant national competitors.

Which, when you think about it, is insane: What had brought us to the brink of collapse in the first place was this relentless instinct for building ever-larger megacompanies, passing deregulatory measures to gradually feed all the little fish in the sea to an ever-shrinking pool of Bigger Fish. To fix this problem, the government should have slowly liquidated these monster, too-big-to-fail firms and broken them down to smaller, more manageable companies. Instead, federal regulators closed ranks and used an almost completely secret bailout process to double down on the same faulty, merger-happy thinking that got us here in the first place, creating a constellation of megafirms under government control that are even bigger, more unwieldy and more crammed to the gills with systemic risk.

In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world’s most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.

In other words, it’s AIG’s rip-roaringly shitty business model writ almost inconceivably massive — to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that’s been allowed to build up without adult supervision. How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what the hell is going on? And on the linear spectrum of capitalism to socialism, where exactly are we now? Is there a dictionary word that even describes what we are now? It would be funny, if it weren’t such a nightmare.

VII. YOU DON’T GET IT
The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama’s Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner — himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm — picked a former Goldman lobbyist named Mark Patterson to be his top aide.

In fact, most of Geithner’s early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called “bad bank” that would systemically relieve private lenders of bad assets — the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed’s new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits.

God knows exactly what this does for the taxpayer, but hedge-fund managers sure love the idea. “This is exactly what the financial system needs,” said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, there aren’t many people who don’t run hedge funds who have expressed anything like that kind of enthusiasm for Geithner’s ideas.

As complex as all the finances are, the politics aren’t hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.

The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.

“But wait a minute,” you say to them. “No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what’s left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?“

But before you even finish saying that, they’re rolling their eyes, because You Don’t Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they’re on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.

Good luck with that, America. And enjoy tax season.

[From Issue 1075 — April 2, 2009]

Next I’ll be posting – Part 2

B(1)  All the global warming and green advocates get off the grid and stop driving cars, heating/cooling their homes and using up all that damn electricity (unless they’ve already raped the earth to manufacture some solar panels or wind turbines). They wish to believe all this dastardly consumption is harmful, they can lead the charge by example and show us how its done.

B(2)  All the uber-rich elitists and elitist wannabe’s surrender all their capitalist wealth (we’ll use it to pay down the deficit, then you can have a legit beef of anti-capitalism) then they can hold their breath until they’re blue so we can have some elbow room. The 1% of the earth’s surface we currently occupy is getting a little crowded. Since they brought it up and won’t stop yapping about threatening eugenics, I vote they take themselves out.

B(3)  Instead of trying so hard to transform our Republic, all the progressives, socialists, communists and marxists etc. move to another country where those political philosophies are already operational (turnkey), there’s something for everyone to choose from. What, these philosophies aren’t for you, they’re for everyone else?

There you have it…this plan reduces government, cuts government spending, conserves our resources while keeping our industries intact, removes all the enemies from within and controls population. It’s a good start!

“Turner also notes that alternative energy is needed today, not tomorrow; population growth must be stabilized; land must be conserved; and nuclear weapons must be eliminated around the globe.”

These reviews reveal that during the latter part of his career his value system transformed. Ted exemplified his determination toward the realization of these values with a 1 billion dollar contribution for development of an agency that could fulfill his vision of negating impending threats from humanity on planet earth. The chosen agency to control humanity was an existing parent organization widely perceived as an aid for the human condition, the United Nations. In 1998 two more arms of this expansive enterprise was founded, these were named the United Nations Foundation and The Better World Fund.

For a sound argument against population control read this article written by Walter E. Williams from George Mason University “Population Control Nonsense”. Not many understand the full negative impact China felt from their meddling with family planning. The one child rule led to numerous amendments over the century as the error kept exposing adverse results, even ignoring the millions exterminated for not being the prefered sex. In the end there was a severe female population shortage. When all those male babies grew to the age of marriage they were robbed of the fulfillment of life while encouraging more criminal atrocities on women in the form of organized female abductions and arranged marriages for those with power or money.  This outcome should have been weighed more heavily from population control activists and more appropriately viewed as a major history lesson, an obvious blunder of playing God. Oh…and by the way here is a pat answer for “What percentage of land on earth is dominated by humans?” Answer: 29% of Earth is land mass. Of that 29% humans occupy less than 1% of that area. Of the remaining 28% about 40% is pure wilderness. 14% is true desert and 15% has desert like characteristics. 9% is Antarctica. Most of the remaining 22% are agricultural areas. There may be other areas with a human footprint of some kind but it is insignificant in any relation to global warming.

As found on the UN Foundation site ”About the UN - The UN Foundation, a public charity, was created in 1998 with entrepreneur and philanthropist Ted Turner’s historic $1 billion gift to support UN causes and activities. We are an advocate for the UN and a platform for connecting people, ideas and resources to help the United Nations solve global problems.”

The UN’s very mission is to reduce the growing population under the guise of helping humanity, with that they have cleverly postured themselves, infiltrating each corner of every nation with special focus on convincing the more industrialized countries of their benefit. All these years later it turns out that the conspiracy theorists were not constructing a theory at all but trying to warn of the dangers growing for world dominance. Ted Turner’s ideals and effort was not a solitary one while public protectors have been taking notes, one of these is a British writer Davide Icke, read The Green Genocide Agenda: Saving the Earth by Killing Humans.

I’m hoping readers take the time for engagement in provided links, all the pieces of the puzzle exist, you just have to examine the pieces a little bit then move them into place. Obama has just passed a bill that gives the IMF (International Monetary Fund) more power and control. I don’t know what was discussed at the G-20 summit but this message from IMF’s managing Director Dominique Strauss-Kahn about the 2010 Economic Forum contained a twice reminder that the stimulus measures taken for government is the way to go with the warning of not letting up too soon. He also states that the mounting debt is a secondary issue that can be addressed  any time later. This should be of particular concern for those opposed to generational theft or those that believe in liberty, we are getting our Country’s directives from an outside organization that is against  fiscally responsible measures. The director also warns that the G-20 Countries work more unilaterally and made mention of the US and UK unveiling various taxes and proposals. 

What I surmised the overall gist of this message is a stern warning the “one fits all” solution that was proposed at the summit must be adhered to and that other creative measures to shore up the bleeding frowned upon. If they have to come down there and help, they will so keep spending your nations wealth.

Was the focus of the 2010 Economic Forum really adding rebar to the foundation of the co-ordination of international regulation of the financial institutions, calling  it “Co-ordination of Regulation”? Putting the American economy under international regulation sounds like a factual conspiracy come true to me. When executing a scheme of ill intent away from public scrutiny, it’s highly unlikely and incredulously errant if  safeguards were not established in advance to have been passed the point of no return when those who would have opposed woke up ( that means us). Any nefarious plan has to be implemented under cover, we wouldn’t outright sacrifice our sovereignty for a supposed “better world”. Those in power consistently believe they know more than us how things should evolve. If they face resistance it is due to our ignorance, after all steps were successfully incorporated to confuse the people by making the system as logically complicated as possible. They campaign daily to prove they are better equipped to handle National decisions (even for fabricated events). We have a litany of decisions gone bad within the leadership over the centuries. This is an interview with Dick Morris as he discusses the very point of  G-20 posturing for a one world government.

http://www.youtube.com/watch?v=qW5Jv-TRXh0

It turns out that the conspiracy theorists were right, the planners have been patient, usurping sovereignty one incremental victory at a time. The John Birch Society has been sounding the alarms for 50 or more years. The JBS.org website has a greatly detailed article tying recent events toward the global move process.

I’m having a real difficult time wrapping my head around why our President thinks it okay to raise IMF contributions by 80 billion and why it was hidden in a Defense Bill.  The IMF is an institution of The United Nations and gets their money from quotas, they are the third largest official gold holder in the world.

It is remarkably easy to visualize The Fall of the Republic in this documentary exposing games politics play with our lives. Somehow, we still have the freedom to choose oblivion…lucky us.

With that being said, why do so many infer the cause of each revelation to be associated with global warming? Furthermore, how can the same cause and effect so conveniently be said to be true in the case of lower temperatures?  

The danger of micromanaging as our scientists usually do is that  YOU MISS THE BIG PICTURE! 

Who made these naturally occurring patterns, substances, matter, elements, chemicals or gases bad names? This example shows a definite corruption of the words original meaning, now means negative;

• climate – the composite or generally prevailing weather conditions of a region, as temperature, air pressure, humidity, precipitation, sunshine, cloudiness, and winds, throughout the year, averaged over a series of years.
• acidification – the process of lowering ph, to become more acid.
• C02 – the most elemental life-giving substance on earth.

We do have climate and it does change.

Note for better science communication:

In case you find traces of arsenic (arsenopyrite, definition: mineral) in x,y or z  why not find out the beneficial characteristics instead of playing on words by association with the general public. Arsenic has a negative connotation because we use it as a poison. Arsenic is found naturally occurring, everywhere and even if our acclaimed scientists haven’t bothered to look into the value and purpose does not mean it doesn’t have one within the dynamics of earth’s cycles. Yet you feel free to alarm us with finding its presence somewhere and compel us to take action against it. Yes let’s have government set up an agency, pour billions of money into it for administrative costs, salaries and scientific study to study this mineral called arsenic. Heck, we can even pay that agency to monitor arsenic forever and alert us if it changes.

Here is an article from Proceedings of The National Academy of Sciences of the United States of America (PNAS)  as found through this link.                                                                                                                                                                                       Lets follow this article with some layman analysis: 

I read your opening speech this morning in the Senate Jan 20/2010. Your lip service is extraordinary in claim of understanding, sympathising  and hearing the outcry of American voters in light of the upset in Massachusetts. Your feigned concern for America’s debt and economic crisis is incredibly transparent while marching on you go, blathering the same bull people took umbrage to and have been voicing opposition to the spending for a full years time.

Your service of dissembling while destroying the economy to the best of your ability is not appreciated. Results of 2.8 million jobs lost since the stimulus attempt within the new administration is glaringly apparent that your mindset is dangerous, inappropriate and detrimental. Just as twice before the stimulus had negative impacts to the economy ( the first one supplied by President Bush) has done little more than raising America’s debt and you are pushing a third attempt, I can’t even imagine you’re using the “insane” definition of expecting different results. Point fingers at the Bush administration,  you are pointing at yourself. You were an influential part of that administration that either wrote the bill and/or voted for the useless spending to go in effect.

You and every member of congress that voted for the mass spending while conveniently ignoring or covering up the real issues allowed to corrupt our system and our economics. You are the cause of the corruption.

I think it highly unlikely that congress is this ridiculously naïve, especially through an eighteen year span in the Senate combined with a lifetime of purported dedication fighting for the best interest of Americans. Given your age and amount of experience in your entire career, where is your wisdom? Or is it us you think is incredibly simple and trusting? Why have there been no cuts in government spending, why hasn’t reducing government programs been instituted, why haven’t stricter budgets been the first measures of government? It only takes running a household to know how to tighten your belt in lean times.

Tax cuts would have allowed more people to keep their jobs along with more confidence in spending to keep the economy going. You should have cleaned your own house first. Government caused the economic disaster (with corruption of Fannie May, Freddie Mac, Federal Reserve etc.) forcing us to endure a crippling recession. You further prolonged the recession by adding to it and focussing on everything else but the real issues, if that weren’t enough, compounding it by loading us up with more debt. You are still proposing more debt load by funneling money again into one sector of government (tax money already collected to pay for) that government was responsible for maintaining all along – infrastructure. Was the stimulus supposed to “appear”  to help Americans while actually used to cover up your ineptness? How many times do we pay for the same mistakes? This is what you said that spawned the authorship of this letter;

“How will we reach that goal? We need to do something this year, and we need to do it quickly so we do not miss a construction season, so we can create new opportunities for jobs in building bridges and highways and airports and water projects all across America–investment in our infrastructure that pays off over the long run and creates jobs immediately. That is something we need to do. It will take money to do it.

Fortunately, there is a source. President Bush had his Troubled Asset Relief Program and took hundreds of billions of dollars and loaned them to financial institutions and companies to get through the worst of the recession. Many of those companies are paying us back, some with interest. We wish to take the money that is being paid back there and invest it back into this economy to get it moving forward.”

This sounds to me like something that Democrats and Republicans should agree on. I think we both share the goal of getting out of this recession and begin moving forward, but we need a cooperative, bipartisan effort for that to be achieved. I hope we can find it. I hope we can reach common ground there.”

PS…Don’t you dare vote for Cap-and-Trade!

American Patriot

After reading Senator Inhofe’s speech January 4, 2005, I decided every thing he said is still pertinent today and couldn’t have said it any better so here is a major portion of the speech:

“As I said on the Senate floor on July 28, 2003, “much of the debate over global warming is predicated on fear, rather than science.” I called the threat of catastrophic global warming the “greatest hoax ever perpetrated on the American people,” a statement that, to put it mildly, was not viewed kindly by environmental extremists and their elitist organizations. I also pointed out, in a lengthy committee report, that those same environmental extremists exploit the issue for fundraising purposes, raking in millions of dollars, even using federal taxpayer dollars to finance their campaigns. For these groups, the issue of catastrophic global warming is not just a favored fundraising tool. In truth, it’s more fundamental than that. Put simply, man-induced global warming is an article of religious faith. Therefore contending that its central tenets are flawed is, to them, heresy of the most despicable kind. Furthermore, scientists who challenge its tenets are attacked, sometimes personally, for blindly ignoring the so-called “scientific consensus.” But that’s not all: because of their skeptical views, they are contemptuously dismissed for being “out of the mainstream.” This is, it seems to me, highly ironic: aren’t scientists supposed to be non-conforming and question consensus? Nevertheless, it’s not hard to read between the lines: “skeptic” and “out of the mainstream” are thinly veiled code phrases, meaning anyone who doubts alarmist orthodoxy is, in short, a quack.”

I have insisted all along that the climate change debate should be based on fundamental principles of science, not religion. Ultimately, I hope, it will be decided by hard facts and data-and by serious scientists committed to the principles of sound science. Instead of censoring skeptical viewpoints, as my alarmist friends favor, these scientists must be heard, and I will do my part to make sure that they are heard.

Since my detailed climate change speech in 2003, the so-called “skeptics” continue to speak out. What they are saying, and what they are showing, is devastating to the alarmists. They have amassed additional scientific evidence convincingly refuting the alarmists’ most cherished assumptions and beliefs. New evidence has emerged that further undermines their conclusions, most notably those of the UN’s Intergovernmental Panel on Climate Change-one of the major pillars of authority cited by extremists and climate alarmists.

This evidence has come to light in very interesting times. Just last month, the 10th Conference of the Parties (COP-10) to the Framework Convention on Climate Change convened in Buenos Aires to discuss Kyoto’s implementation and measures to pursue beyond Kyoto. As some of my colleagues know, Kyoto goes into effect on February 16th. I think, with the exception of Russia, an exception that I will explain later, the nations that ratified Kyoto and agreed to submit to its mandates are making a very serious mistake.

In addition, last month, popular author Dr. Michael Crichton, who has questioned the wisdom of those who trumpet a “scientific consensus,” released a new book called “State of Fear,” which is premised on the global warming debate. I’m happy to report that Dr. Crichton’s new book reached #3 on the New York Times bestseller list.

I highly recommend the book to all of my colleagues. Dr. Crichton, a medical doctor and scientist, very cleverly weaves a compelling presentation of the scientific facts of climate change-with ample footnotes and documentation throughout-into a gripping plot. From what I can gather, Dr. Crichton’s book is designed to bring some sanity to the global warming debate. In the “Author’s Message” at the end of the book, he refreshingly states what scientists have suspected for years: “We are also in the midst of a natural warming trend that began about 1850, as we emerged from a 400 year cold spell known as the Little Ice Age.” Dr. Crichton states that, “Nobody knows how much of the present warming trend might be a natural phenomenon,” and, “Nobody knows how much of the present trend might be man-made.” And for those who see impending disaster in the coming century, Dr. Crichton urges calm: “I suspect that people of 2100 will be much richer than we are, consume more energy, have a smaller global population, and enjoy more wilderness than we have today. I don’t think we have to worry about them.”

NEW SCIENCE

Such efforts fly in the face of compelling new scientific evidence that makes a mockery of these lawsuits. By now, most everyone familiar with the climate change debate knows about the hockey stick graph, constructed by Dr. Michael Mann and colleagues, which shows that temperature in the Northern Hemisphere remained relatively stable over 900 years, then spiked upward in the 20th Century. The hockey-stick graph was featured prominently in the IPCC’s Third Assessment Report, published in 2001. The conclusion inferred from the hockey stick is that industrialization, which spawned widespread use of fossil fuels, is causing the planet to warm. I spent considerable time examining this work in my 2003 speech. Because Mann effectively erased the well-known phenomena of the Medieval Warming Period-when, by the way, it was warmer than it is today-and the Little Ice Age, I didn’t find it very credible. I find it even less credible now.

But don’t take my word for it. Just ask Dr. Hans von Storch, a noted German climate researcher, who, along with colleagues, published a devastating finding in the Sept. 30, 2004 issue of the journal Science. As the authors wrote: “We were able to show in a publication in Science that this [hockey stick] graph contains assumptions that are not permissible. Methodologically it is wrong: Rubbish.”

Dr. von Storch and colleagues discovered that the Mann hockey stick had severely underestimated past climate variability. In a commentary on Dr. von Storch’s paper, T. J. Osborn and K. R. Briffa, prominent paleo-climatologists from the University of East Anglia, stressed the importance of the findings. As they wrote, “The message of the study by von Storch et al. is that existing reconstructions of the NH [northern hemisphere] temperature of recent centuries may systematically underestimate the true centennial variability of climate” and, “If the true natural variability of NH [northern hemisphere] temperature is indeed greater than is currently accepted, the extent to which recent warming can be viewed as ‘unusual’ would need to be reassessed.” In other words, in obliterating the Medieval Warming Period and the Little Ice Age, Mann’s hockey stick just doesn’t pass muster.

Dr. von Storch is one of many critics of Michael Mann’s hockey stick. To recount just one example, three geophysicists from the University of Utah, in the April 7, 2004 edition of Geophysical Research Letters, concluded that Mann’s methods used to create his temperature reconstruction were deeply flawed. In fact, their judgment is harsher than that. As they wrote, Mann’s results are “based on using end points in computing changes in an oscillating series” and are ” just bad science.” I repeat: “just bad science.”

THE TSUNAMI AND GLOBAL WARMING

Despite this evidence, alarmism is alive and well. [Chart #2] As you can see behind me, the Washington Post today ran an editorial cartoon that actually blames the Sumatra tsunami on global warming. Are we to believe now that global warming is causing earthquakes? The tsunami, of course, was caused by an earthquake off Sumatra’s coast, deep beneath the sea floor, completely disconnected from whatever the climate was doing at the surface. Regrettably, the tsunami-warming connection is yet another facet of the “State of Fear” alarmists have concocted. As Terence Corcoran of Canada’s Financial Post wrote, “The urge to capitalize on the horror in Asia is just too great for some to resist if it might help their cause…Green Web sites are already filling up with references to tsunami risks associated with global warming.”

To address this, let’s ask some simple questions: Is global warming causing more extreme weather events of greater intensity, and is it causing sea levels to rise? The answer to both is an emphatic ‘no’. [Chart #3] Just look at this chart behind me. It’s titled “Climate Related Disasters in Asia: 1900 to 1990s.” What does it show? It shows the number of such disasters in Asia, and the deaths attributed to them, declining fairly sharply over the last 30 years.

Or let’s take hurricanes. Alarmists linked last year’s hurricanes that devastated parts of Florida to global warming. Nonsense. Credible meteorologists quickly dismissed such claims. Hugh Willoughby, senior scientist at the International Hurricane Research Center of Florida International University stated plainly: “This isn’t a global-warming sort of thing…. It’s a natural cycle.” A team led by the National Oceanic and Atmospheric Administration’s (NOAA) Dr. Christopher Landsea concluded that the relationship of global temperatures to the number of intense land-falling hurricanes is either non-existent or very weak. In this chart [chart #4], you can see that the overall number of hurricanes and the number of the strongest hurricanes fluctuated greatly during the last century, with a great number in the 1940s. In fact, through the last decade, the intensity of these storms has declined somewhat.

What about sea level rise? Alarmists have claimed for years that sea level, because of anthropogenic warming, is rising, with ominous consequences. Based on modeling, the IPCC estimates that sea level will rise 1.8 millimeters annually, or about one-fourteenth of an inch.

[Chart #5] But in a study published this year in Global and Planetary Change, Dr. Nils-Axel Morner of Sweden found that sea level rise hysteria is overblown. In his study, which relied not only on observational records, but also on satellites, he concluded: “There is a total absence of any recent ‘acceleration in sea level rise’ as often claimed by IPCC and related groups.” Yet we still hear of a future world overwhelmed by floods due to global warming. Such claims are completely out of touch with science. As Sweden’s Morner puts it, “there is no fear of massive future flooding as claimed in most global warming scenarios.”

CONCLUSION

What I have outlined today won’t appear in the New York Times. Instead you’ll read much about “consensus” and Kyoto and hand wringing by its editorial writers that unrestricted carbon dioxide emissions from the United States are harming the planet. You’ll read nothing, of course, about how Kyoto-like policies harm Americans, especially the poor and minorities, causing higher energy prices, reduced economic growth, and fewer jobs. After all, that is the real purpose behind Kyoto, as Margot Wallstrom, the EU’s environment minister, said in a revealing moment of candor. To her, Kyoto is about “leveling the playing field” for businesses worldwide-in other words, we can’t compete, so let’s use a feel-good treaty, based on shoddy science, fear, and alarmism, and which will have no perceptible impact on the environment (Chart #6), to restrict America’s economic growth and prosperity. Unfortunately for Ms. Wallstrom and Kyoto’s staunchest advocates, America was wise to the scheme, and it has rejected Kyoto and similar policies convincingly. Whatever Kyoto is about-to some, such as French President Jacques Chirac, it’s about forming “an authentic global governance”-it’s the wrong policy and it won’t work, as many participants in Buenos Aires grudgingly conceded.

Despite the bias, omissions, and distortions by the media and extremist groups, the real story about global warming is being told, and, judging by the welcome success of Michael Crichton’s “State of Fear,” it’s now being told to the American public.

This is the 2007 Senate report that lists some highlights of accomplished Scientists that refute the “Global Warming” alarmism. The report mentions non believer scientists and some tacts they’ve been subjected to like harassment, files deleted from the cop15 manual or not getting other opportunities to publish their papers. The scientists that support AGW climate scare have been intimidating the ones that are against the AGW climate scare and don’t like coming forward.

8250015-Senate-Report-Global-Warming-Claims-Disputed-by-400-Scientists

Debunking the media “consensus” about global warming. Here’s what Senator Inhofe from the US Senate Committee On Environment & Public Works says about that;

“While it may appear to the casual observer that scientists promoting climate fears are in the majority, the evidence continues to reveal this is an illusion. Climate skeptics — the emerging silent majority of scientists — receive much smaller shares of university research funds, foundation funds and government grants and they are not plugged into the well-heeled environmental special interest lobby.” Read the full report.

What was the wild frenzy really about if 400 Scientists came forward to go on the record against AGW in 2007 (imagine the numbers in 2010). I wasn’t the only one smelling something fishy in Denmark.

“The tawdry tale of the top two global warming gurus in the business world goes all the way back to Earth Day, April 17, 1995 when the future author of “An Inconvenient Truth” travelled to Fall River, Massachusetts, to deliver a green sermon at the headquarters of Molten Metal Technology Inc. (MMTI).  MMTI was a firm that proclaimed to have invented a process for recycling metals from waste.  Gore praised the Molten Metal firm as a pioneer in the kind of innovative technology that can save the environment, and make money for investors at the same time.”

“Gore left a few facts out of his speech that day,” wrote EIR.  “First, the firm was run by Strong and a group of Gore intimates, including Peter Knight, the firm’s registered lobbyist, and Gore’s former top Senate aide.”

While Bush had nothing to gain from an emerging environmental fervor, Obama was in the thick of startup oganizations with billions to gain. There’s a history in America that’s littered with attempts to hijack our Democratic Republic to pave the way for socialism. For a quick spread the wealth (socialist) scenario; You have two sons, one is not as socially productive. This son doesn’t assert himself in studying for school or spend time looking for a job. The other son gets better grades and has secured himself a part-time job. You, as the parent compensates for the inequalities by taking the one son’s wages and splitting it between them both. What would eventually happen, would both son’s at some point equally give up doing for themselves? Of course they would, for two entirely different reasons but with the same results.

The most convincing way for a young American to denounce socialism is by telling them that there are other students in his/her class that can’t seem to get their GPA as high so his/her grades are going to be divided equally amongst the class.

Political high stake games are apparent, our Republic stands in the balance. The president follows a year long trillions spending spree like a young adult with an inherited new found wealth, but raises the spending baseline then freezes it there for three years. And we foolishly feel he did something good. In 2009 the EPA’s budget was raised 35% and the spending freeze locks it in for the next three years. According to a fantastically learned gentleman and Pulitzer prize recipient, Charles Krauthammer discusses in his article “The Environmental Shakedown” that the hijacking into socialism attempt in 1970 with OPEC,  and the U.N. calling it a “New International Economic Order.” The difference between that attempt and the current is it’s now proposed as a sacred service of environmentalism. Here’s what he writes about the EPA;

“Since we operate an overwhelmingly carbon-based economy, the EPA will be regulating practically everything. No institution that emits more than 250 tons of CO2 a year will fall outside EPA control. This means over a million building complexes, hospitals, plants, schools, businesses and similar enterprises. (The EPA proposes regulating emissions only above 25,000 tons, but it has no such authority.) Not since the creation of the Internal Revenue Service has a federal agency been given more intrusive power over every aspect of economic life”

Obama’s involvement in the Chicago Climate Exchange - by A War of Illusions- the comments following this article are particularly interesting and revealing.

Obama’s involvement in Chicago Climate Exchange—the rest of the story

Fox News Report re: Obama funding carbon program the third paragraph down gives extra information to this story. 

This excerpt is straight from CCX’s press release;

“Cap and Trade Is Real
“You may be surprised to know that the biggest cap and trade market in the world is here in the United States and in Chicago,” Dr. Richard Sandor told an audience at the Gabelli Cap and Trade Symposium in New York in June. He was referring to the Chicago Climate Exchange (CCX), which launched trading operations in 2003 with 13 charter members including American Electric Power, DuPont, Ford Motor Company, and International Paper. That number has since grown to more than 300 members in several different categories from all sectors and offset projects worldwide.”
You can access the press release on CCX’s website below. Investment Advisor:
08/01/2009
The Green Advisor: Cleaner Air and Cash

More About Barack Obama involvement
Barack Obama was a member of the board of the Chicago Climate Exchange from 1998 to 2001.

A string of people related to global warming for the purpose of enviroprofiteering, scroll down to the second section starting at NJ Gov. Jon Corzine, Hot Air, Obama and You

Philosophy of Richard Sandor
A participant in a meeting between founder Richard Sandor and 40 potential investors described Sandor’s philosophy as follows:

“Richard Sandor believes that the capital markets can solve global warming and make money doing it. He explained his theory on wealth creation, which grew out of the economic situation in the 1960’s. He said that fifty years ago, wealth was concentrated in the manufacturing industry. He explained that the ‘70’s were about commodities and then in the 80’s the market moved into the commoditization of financial products such as interest rates and derivatives. In the 90’s, he said, the commodities of information like Google and Yahoo ruled. What does he say about the 21st century? He believes that wealth will be created in the commoditization of air and water.”
This information can be read on SourceWatch or just google – obama, chicago climate exchange

An Interview with Sandor at Trading Markets.com

I connect the dots like this, they must have thought themselves brilliant, chuckling about the massive opportunity to make themselves and others ugly rich by using the very air we breath as a commodity. The air and all the greenhouse gases therein. As Chicago politics usually goes, there are probably many groups of people set up to be onboard with this windfall. And the brilliance doesn’t stop there, the UN and the World Bank are all set up to operate this new cash cow. Once set up and operating all over the world, how easy would it then be for an unsuspecting bomb gets dropped, just a little too late but lo and behold the innocuous carbon credits suddenly turns into world currency?

If only they can just get that cap-and-trade bill passed through the Senate.

Other links that support my “Connected Dots” that AGW is simply a political money-making scam used to further a massive power grab for an imperialistic world central bank and lead to a one world government.

There is some duplication of content, each article does contain unique information.

Ron Paul Warns of Secret Plans

Obama’s One World Government – by Chuck Norris

Copenhagen: a step closer to a one world government? - by James Delingpole Revealing Quotes From Those Who Know - Note: make sure to read the last paragraph.

U.N. Using Climate to Push One World Government Reforms

Government Wants to Control Your Thermostats

This is an in-depth article – The Financial New Order: Towards a Global Currency and World Government - by Andrew Gavin Marshall

Warning: If you don’t concede to the two-part systematic destruction of American sovereignty, The Part A. -  carefully crafted global warming alarm, working in conjunction with Part B. –  breaking the economic back of America, you will fail to cry out for the government to save us. First they try the power of persuasion, then the persuasion of power by forcing the hand of a power struggle means continuation with both parts by newly invented environmental threats and continually crippling industry by imposing an endless succession of regulations, further vilification of large corporations that sustain us because government cannot overtly take control of those unless they fall into hardship as with the banks, auto industry etc. At the same time we become weaker by their raising our costs into poverty through taxation and job losses, until eventually we have no choice but to become dependent on government for all our needs and remain at their mercy.

Sure there are those in positions of  power and authority that in good conscience speak out against the mishandling and corrupt dealings of a government gone bad, there’s a whole strategy in place to deal with those, name calling, belittling, denying, minimizing, covering up, stated unfounded or cynical. Ask any woman who tries to confront an abusive husband, she gets anything and everything that points to her being the problem. All the people like me are simply dubbed crazy, wacko or conspiracy theorists and written off. This all looks like organized, white collar crime from my perspective.

But…

Make no mistake, the only way to fight and win is to take action early in the game. We all fight together or we all lose together, there is no benefit to wish you had paid more attention when all is already lost. 

I’ll be adding more info to this post as I uncover information.

I came across this interview that a couple of personal questions got asked, with a couple of revealing answers when Presidents Bush and Clinton sat down with Bob Schieffer to have a Q &A  about the Clinton-Bush Haiti Fund for CBS.

It seems to me that if one President’s mother can affectionately refer to another President as a fourth son, they must have some pretty tight ties. What if we should conclude that the Washington Elitists are one big happy family all having the same cause ( job security and government expansion), while perpetuating firestorms between the Democrat and Republican constituents. It’s certainly not a stretch to picture them outwardly bashing each other, then getting together behind closed doors for a beer to snicker about the public gullibility, to compare notes or lay some secret bets.

Hey, the pieces of the puzzle fit, especially when you look back and have a difficult time establishing much differentiation between policies and what they actually accomplished during their terms. Are the special favors one President does for another to finish something that couldn’t quite get done while in office, just favors? Maybe they’re only following club rules, after all it is a pretty exclusive club. Perhaps the only real difference is that each bring something different to the table like personalities and some are just more adept at playing the game.

Imagine that gig, you get paid well, you get treated like a king, live lavishly, never get affected by making poor policy decisions (except for the verbal flack), just blame a subordinate and go golfing. You can also have a heck of a lot of fun setting up your buddies with windfalls, spending the nation’s money, and work from the comfort of your billion dollar clubhouse. After your service is up you get the best retirement plan money can buy and you’re set for life.

President George W. Bush and President Bill Clinton interviewed by CBS News chief Washington correspondent Bob Schieffer.

Schieffer: I think some people would be surprised to see you two sitting here together. But a very good source of mine told me, as a matter of fact, that you all often talked while you were president, Mr. Bush, and that you actually developed a very special relationship. Do you think of yourselves now as friends?

Bush: Yeah I do.

Clinton: Me too.

Schieffer: And did you talk often?

Bush: I don’t know about often but I did, I called him. He didn’t call me because he knows how busy a president is. I called him and we chatted on occasion.

Clinton: I was always pleased when he called me. I’d try, I make it a practice never to bother the president. I don’t call President Obama either. I don’t think it’s, you know, they’ve got plenty to do. But I, we have developed a very honest, good friendship. And we’ve made our disagreements respectful and we’ve had a good time doing it.

Bush: My mother calls me my fourth brother – calls him my fourth brother.

Schieffer: Is that right?

Clinton: The black sheep of family.

(laughter)

Read the entire interview

This post goes right in-line with another post I wrote called Divided we fall Read more!