Economic and political analysis-Window on culture-Media criticism

Thursday, June 18, 2009

Reforms hide private agenda

Today I listened to more Geithner testimony about regulatory reform. I won't get into the specifics of Geithner's proposals at this point. Like Geithner's ill-fated TALF plan, a proposal where private funds would be backed by government resources to buy up toxic debt, the proposed regulatory changes might be jettisoned and save me the work of analyzing the plan in detail and explaining why it won't work. Easier it is to simply wait and hope that Congress will do the right thing, and protect the regulatory environment from private sector--the Fed is a private corporation!--control.

It wasn't an absence of laws and regulatory bodies that contributed to the crisis--although changes in the law had favored greater abuses of credit in private money transactions. Instead an absence of enforcement of existing laws--"on the books"--led to systemic--and still unfolding--damage. De-regulatory steps like eviscerating the SEC enforcement and repealing Glass Steagal weren't the sole source of the crisis, but many hardcore partisans like Larry Kudlow refuse to blame de-regulation.

As I write, criticism of Obama's proposed regulatory reforms expands. To leave the Federal Reserve with new regulatory powers is completely insane in my view. I can't honestly see how Geithner and other financial industry insiders can craft a solution to a problem to which their ineptitude contributed--a fact that I dispensed here six months ago that only now seems to be making its way into the mass media.

The Chairman of the Federal Reserve is a Presidential appointee and serves as his agent. So in this sense Team Obama/Geithner could expect more authority and control over who the Fed chooses to regulate with its new powers. Theoretically this would be a coup for greater Executive branch authority.

I'm pleased to see the mass media openly criticizing the President's plan. At least the media seems to be covering opinions that opposed to any enhancement of Fed power, based on a broader trend which is anti-Wall Street greed. Even Larry Kudlow has turned quite cynical towards authorizing more power to the Fed.

As President Obama has said, transparency is vital to any structural reform of the financial system, so the more analysis of proposed solutions that's disseminated to the public, the better.

Recently Obama did seek to make secret logs of White House visitors (source), in what's becoming a disturbing new trend towards secrecy continued from the Bush years. As is becoming his mark, Obama promises the world and so we don't know if he's just saying he wants transparency when in fact he does the opposite.

Of course it sounds good when the President appears to be on your side, the little guy's...your side. But is he? Or are all the smooth promises just meant to cover up deeper and darker motives, like establishing more power for the Executive branch, or rewarding the financial interests who received so much help from government?

The Federal Reserve has extended a $12 trillion backdoor bailout to financial industry players through Fed programs initiated since last Fall, in what could be a huge ripoff many times larger than TARP. American taxpayers are on the hook for the Fed's debts, as well as the interest on the bonds sold by the Fed.

These bailouts could well be the best example of disaster capitalism, a theory I've explained many times here. The idea is that public services are led to fail, then the solution privatized. Rather than address the underlying causes of the crisis, government outsources functions seen as its traditional responsibility--often by granting huge no-bid contracts to companies with close ties to the overseeing political administration.

Giving the privately-owned Fed more powers amounts to a massive privatization of our financial system, which could lead to profit opportunities in overseeing the sale of more public debt. The interest on the debt ultimately comes from you, the taxpayer, in the form of income tax payments. The more debt that's issued, the more taxes will have to be paid not only eventually to pay it back, but on the interest as well.

Media Agenda

Media criticism is central to this blog as all too often the mass media establishment fails at its purpose to inform. Uninformed, the American people can't possibly know wrong from right. Nor can they be expected to understand any of the details, when the main media choices are Nancy Grace and celebrity gossip. both of which have received a broadening portion of the cable broadcast spectrum.

True, providing real news is more expensive. And yes, news divisions don't turn a profit in the conglomerates into which they've been merged, so naturally they're inclined to soften coverage and weaken investigative journalism, lest it threaten any sponsorship deals. Cross-marketing became the standard bearer--if it could not make money, then at least traditional news could help media divisions sell books or DVDs. In the age of bigger media, content not enhancing the conglomerates' bottom line appeared superfluous.

Perhaps more threatening than dumbing down coverage is the consolidation of media control by corporations under Right-wing leadership.
Oddly, the Right-wing moguls who control the majority of channels posing as news today aren't as concerned with profits as they should be. Perhaps the ultimate goal is to totally destroy whatever credibility the news has, and in so doing complete the self-destructive task of dumbing down America, so the average person knows little more than a serf might in medieval times.

With the Internet, the control of information appears elusive. Hard to drop information into the Memory Hole, Orwell's repository for all which the government doesn't wish its citizens to learn. Orwell's fantastically premonitory Memory Hole concept fits perfectly with the suppression of digitally stored information in the present day, beyond 1984 but well into the Age of Computers.

Look no farther than Iran, which has been having a mini-revolution bolstered by constant twitters, cell phone camera postings to youtube, and a broad host of realtime reporting technical innovations. This began actually during the '99 protest against the IMF in Seattle, where police claims no rubber bullets were used were instantly discredited with realtime video of spent rubber bullets on Seattle streets.

In Iran's case, Islamic traditionalists appear to be trying to deny coverage of massive protests as they happen. To drop things in the Memory Hole they can't be occurring realtime, and as widely distributed as they are, contradicting the State's version of reality.

In time we can see how history is reconstructed, judging on how much truth disappears, and how beneficial redefining history is to those in control. Americans do seem particularly vulnerable to forgetting their recent past, with the most recent example being Vietnam (a war whose outcome has been radically revised by those on the Right) where rationale people conclude the US would never again be locked in a land-war in Asia.

Odd how Vietnam-era terms like police action were locked in the past and never reappeared in the corporate media's lexicon. It's as if all the counter-culture associated with resistance to war within the media degenerated into pro-war Right-wing banter. Also interesting is how many radically pro-war voices have elected to forget their strong support for the war. And even more tellingly, the talking heads like Krauthammer who spouted off about the dire threat from Iraq still reign supreme on Fox, America's #1 source of news. Rather than play any clips of how wrong these Right-wingers were, most networks drop those past mistakes into the Memory Hole.

Far worse than these examples of bad press are the dark motives behind dumbing down coverage. In the past years, I've documented plenty of examples of propaganda, related mostly to the war, and what I've labelled propaganda-by-omission.

Who benefits from dumbed down news? Well, the public at large suffers, as what most people see on TV provides perhaps their greatest source of information about issues like the economy and foreign policy. It probably doesn't come as a surprise that economic and foreign policy are the two areas where the US is weakest today.

Of course these pundits were all wrong about the threat Iraq posed, or the unsubstantiated connection between Iraq and al Qaeda (now that the soul source of intelligence for Bush's 'smoking gun' comments was killed in prison.) Yet they're trumped out before our screens day after day as if they know more, and can give us vital insights into policy decisions that shape our world.

So why exactly are these talking heads so valuable to the networks? They seemed to have gotten it badly worn on Iraq, yet continue to appeal the editors and news directors. I've contributed most of the reason for this bias to Zionism, which is believes that Israel should expand geographically into the West Bank using whatever level of military force it wants.

The pundits re-appearances can be traced not to their remarkable powers of observation and analysis, but rather their selective memory. In a word, they cannot nor will they ever criticize Israel or American foreign policy in the Middle East, although David Gergen does come close every now and then.

With Tel Aviv and the Lobby shaping so much of American mass media coverage, and leaving bias wholly against the Arab side, it's no wonder Americans are fearful of Israel's enemies. 9/11 served as the fait accompli for molding public perception--it launched the anti-Arab crusade we see playing out in two wars today. Had the purposes for the Iraq war been analyzed truthfully, Americans may have gotten a far more accurate picture of the risks of intervention.

Missing link provided by torture

With close to 200,000 troops in battle zones, and the threat of an impending terror strike so looming in the fears of so many, perhaps at no time since World War Two has the coverage of international events been so germane to the functioning of everyday life. And supporters of the war on terror would argue what happened in a cave in Afghanistan threatens our safety and security.

In the perception of the mass media, the cause and effect link between 9/11 and al Qaeda is firmly established. If for instance, OBL couldn't be held directly responsible for 9/11, the entire rationale for war in Afghanistan could be undermined. Likewise, if we questioned why the bin Laden's FBI most wanted poster makes no mention of 9/11, or that the Taliban had actually offered him up shortly after 9/11, we might have the preconception that we knew who did it rudely contradicted.

Under Bush, patriotism devolved into simply following orders, obediently, as the wars created by 9/11 were deemed to be different, more vital to the national security interest than past interventions. We, the American people, weren't supposed to question the rationale for war, even if the Downing Street memos indicated that intelligence was being fit to policy--i.e., Iraq was guilty and we could prove it, with or without the evidence.

Now into the next President's terms, we're supposed to "look to the future and not the past," a phrase which could have come from the mouth of Orwell's Great Leader's as Obama's. Coincidentally, we're supposed to forget the torture, all that jive about confessions, even as Uighurs find themselves planted homes in Bermuda or tropical prisons in Palau. I think we're down to 60-70 or so people--all victims of torture--from Guantanamo who will actually face prosecution.

Confessions obtained through torture are notoriously unreliable. Torture victims simply say what their interrogators want to hear. To argue that we need to torture, the so-called 24 excuse simply doesn't hold water (no pun intended.) Now if we knew that the torture victim held some indispensable foreknowledge of an impending terror event, perhaps torturing them would work. But the whole point about any police action--which if the 9/11 investigation were accurately classified, would be a joke--is that the police don't know who's guilty. And if suspects are tortured, they might falsely indict people just to get the torture to stop.

Now as I've documented extensively here, the FBI had to send clean teams to Guantanamo because previous interrogations and the so-called intelligence they provided were procured by torture, making them inadmissible in any Court, despite Bush administration attempts to redefine the prisoners as enemy combatants without rights.

Left over from the Cheney/Obama torture debate is this well-documented post from TVNewsLies. See also Joe Conason's "We Tortured to Justify War" from salon.com.

Torture is the ultimate method for redefining truth--it doesn't matter how guilty the innocent are if they admit their guilt and support the official explanation--and contribute to labeling of appropriate villains. Dated but excellent is George Monbiot's Torture is at the Heart of America's War on Terror.

Along these lines is John Hatch's great article, "Torture and 9/11 in ICH.

Very little of the truths exposed in those articles has made the mass media. If the true extent of the torture were known, and the questionable results, the American people would reevaluate the rationale for the Afghan war--Afghanistan as a haven for terrorists involved in 9/11. If the torture victims were determined not to have done what they'd confessed to, just who did do 9/11 then?

The failure to try anyone for 9/11--surely others were involved other than those who died--leads to the idea that the post-9/11 interventions are unnecessary and may in fact be pursuing the wrong suspects, if indeed finding the right suspects, arresting, and trying them for the 9/11 crime were the intent.

Big money politics

Troubling indeed is the the amount industry spends to lobby in Washington. These numbers have climbed quickly and now reach tens of millions. For firms who may have billions in contracts at stake, or can avoid competitive pressures by channeling regulatory standards in their favor, lobbying makes good sense. The public loses in a zero sum game where the biggest winners pay to play.

Obama's presidential campaign took in $750 million, a record. He was the top recipient of corporate giving from AIG, a company that became dependent on Obama-approved bailouts to rescue itself, or at least prolong its ugly deconstruction.

The financial services industry was Obama's leading source of corporate campaign donations. The process of deduction establishes the premise that a quid pro quo must exist wherein the politician works in the interest of the companies who donate to their campaigns. Otherwise corporation and other lobbyist groups would have little reason to lobby, much less on the scale they do.

The system hasn't changed since Bush's day. Look at Enron, Bush's #1 corporate donor to see just how much Bush would later do to forestall adequate regulatory oversight, enabling Kenneth Lay and other Enron insiders to avoid legal accountability.

Good or bad, we've befallen to this concept of the benevolent dictator, with the Bush ineptitude followed by Obama's tyranny of good intentions and the assertion of the nanny state.

On the systemic level, little differs between successive regimes. Both seek more authority. Big spending, and with it bigger government, continues. Obama doesn't seem able to blame Bush for the big spending, at least until he admits that military spending has gotten out of hand. (Obama did bring up cost savings from leaving Iraq when the how to pay for it question arose recently. As I wrote in "War Spending is the 800 lb. Gorilla," we can't continue to spend as we are without addressing the trillion or so we are spending on wars and "defense.")

The point isn't who's in charge; it's more about whether Obama will bring any change to the system or will try to bolster his own authority, a la Bush. Under the new paradigm, what the President decides becomes de facto law. This is ruling by fiat, the right of kings and emperors to dictate what is acceptable and what isn't, no matter how irrational. We saw this behavior in Nero and other insane Roman rulers, who could do as they pleased. The Emperor's will is the law, they might have said then.

I was under the impression that these here United States weren't meant to be governed by fiat. Yes, Obama's decisions are better than Bush's. But that isn't the point. Our country wasn't meant to be run by the President. Nor were we ever to be the world's policeman or the sole judge, jury, and executioner of anyone who opposes our will, or happens to be considered acceptable collateral damage.

There've been many discussions of American empire, with several influential books like Ruppert's Crossing the Rubicon, or Chalmers Johnson's well-written Nemesis: The Last Days of the American Empire and more recent The Bases of Empire which details the 800 plus bases the US military has.

Ultimately the effectiveness of foreign policy and military intervention rests in how clearly goals are set. If our goal is to eliminate terrorists, we will be incapable of ending all terror and thus on a permanent and doomed mission. If our foreign policy intends to create client states for our military hardware, and perhaps bust the budget, starving the beast, we've certainly committed the US on that course.

Many conservatives believe that the choice between spending on so-called social programs and our "defense" needs to be forced. While bankrupting government might not seem to successful a philosophy, it would in fact shrink government down to the size of a bathtub and drown it, to borrow Grover Norquist's comment. The third rail of American politics--Social Security and Medicare--might collapse, denying the Democratic party the largest source of political popularity.

Some conservatives might be wishing for a collapse of government finances, but then again that might only bring more taxes. I've always supported lower government spending, and have detailed the problems inherent in trying to stimulate the economy considering the size of our debt. At some point, government spending loses its effectiveness as recipients become less competitive.

The more government props up industries with the most political pull--the auto, financial services--the weaker the private sector gets. While decreasing regulation is good for small business, in the Credit Bubble Burst we see the importance of being cautious in making changes to the legal and regulatory environments.

Americans need to stay cognizant of the relationship between lobbyists seeking to gut the law and change regulations in order to benefit select corporate interests at the expense of the public and market stability. If we're properly informed by our mass media, Americans can make collective determinations about how best to regulate financial entities and spend our public resources.

Odd how Reagan's great de-regulatory experiment might in the end result in bigger government, as the consequences of inadequate regulations like the Credit Bubble Burst of 2008 make their long-term impact on the American economy.

More Links

See this brief post about Torture at Guantanamo and the false confessions it generated.

For dealing with thought crimes like Phil Dick's Minority Report, see this March article about "preventative detention" by Ted Rall.

Another slightly dated but highly worthy piece is this Tomgram: Ira Chernus, GWOT, R.I.P. posting.

Chernus writes:
"Without a 'war' to wage, this administration cannot so easily claim, as its predecessor did, extraordinary powers for the president. It won't be able to use the argument 'we're at war' to justify poking holes in the Constitution, or to get a mindless rubber-stamp for its national security policies from Congress and the public..."
How much of our security needs are actually driven by the political calculations behind managing public perception? How much of the defining of the terrorist threat was designed to seed popular support for the long war, one neither justified nor in our best strategic interest?


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