the
POLICY
IS SU III E
THE POLICY OF THE WORLD MARCH 2011 http://www.diginow.net
HER E COMES R AIN AGAIN
March 2011
Coalition Powers 25 in general
2
United States France Britain Canada Italy
The POLICY
“To protect Libyan civilians!” The same protection was offered to the millions of Bosnians, Somalians, Koreans, Vietnamese, Afghans and Iraqis who have been killed by their ‘protectors’ over the last seventy years.
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JAPON ARMY ATTENDS COALITION POWERS TO HIT LIBYA ALTHOUGH HUGE DEVESTATION IN THEIR COUNTRY BY RECENT EARTHQUAKE !
4
The POLICY March 2011
5
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Will banksters get away with it? Wall Street crime goes deeper: The system means prosecutors fail to jail corporate criminals. Danny Schechter Hats off to Matt Taibbi for staying on the Wall Street
First, many of those who might be charged with fi-
Third, the industry promulgated economic theories
crime beat, asking in his most recent report in Roll-
nancial crimes and fraud invested in lobbying and
and ideologies that won the backing of the econom-
ing Stone: “Why Isn’t Wall Street in Jail?”
political donations to insure that tough regulations
ics profession which largely did not see the crisis
and enforcement were neutered before the housing
coming, making those who favored a crackdown
bubble they promoted took off.
on fraud appear unfashionable and out of date.
After hundreds of bankers were jailed in the wake
As economist James Galbraith testified to Con-
of the Savings and Loan crisis, financial fraudsters
gress: “…the study of financial fraud received little
True enough, but that’s only part of the story. The
pushed for weakened regulations, guaranteeing
attention. Practically no research institutes exist;
Daily Kos called his investigation a “depressing
that their colleagues wouldn’t be jailed in when the
collaboration between economists and criminolo-
read” perhaps because it suggests that the Obama
next crisis hit.
gists is rare; in the leading departments there are
“Financial crooks,” he argues, “brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.”
few specialists and very few students. Economists
Administration is not doing what it should to reign in financial crime. Many of the lawyers he calls on
In effect, their deregulation strategy also deliber-
have soft-pedaled the role of fraud in every crisis
to act come from big corporate law firms and buy
ately “decriminalised” the environment to make
they examined, including the Savings & Loan deba-
into their worldview.
sure that practices that led to high profits and low
cle, the Russian transition, the Asian meltdown and
accountability would be permissible and permitted.
the dot.com bubble. They continue to do so now.”
March 2011
Kos should be more depressed by the failure of the
6
What was once illegal soon became “legal”. Fourth, prominent members of the financial ser-
progressive community to focus on these issues, and not pressing the government to do the right
No enforcement
vices industry were appointed to top positions in the government agencies that should have cracked
thing.
The POLICY
The cops and watchdogs were taken off the beat.
down on financial crime, but instead looked the
There is much more to this story. It’s also more
Anticipating and then dissolving restraints, they
other way. The foxes were indeed guarding the
about institutions than individuals, more about a
engineered a low-risk crime scene in the way the
chicken coop guiding institutions that tolerated if
captured system that enables and covers up crime
Pentagon systematically prepares its battlefields.
not enabled an environment of criminality.
and, then, deflects attention away from the deeper
This permitted illicit practices, to be encouraged by
problem.
CEOs in a variety of control frauds to keep profits
Alan Greenspan and Ben Bernanke were repeat-
up so that the executives could extract more rev-
edly warned by underlings at the Federal Reserve
Ten problems
enue.
Bank about pervasive predatory practices in the
You could see that when television host Bill Mahrer
Today’s proposed Republican cutbacks of the fund-
to do nothing. Now Greenspan acknowledges per-
pressed Taibbi to name the biggest Wall Street
ing of regulatory bodies aims to undercut recently
vasive fraud but decries the lack of enforcement
crooks, on his weekly political comedy show,
passed financial reforms. One Commissioner of the
while Bernanke wants to run a Consumer Protec-
he didn’t fully understand what we are really up
Commodity Futures Trading Commission said if the
tion Agency after ignoring consumer complaints for
against.
budget is slashed, “there would essentially be no
years. Even as the FBI denounced “an epidemic of
cop on the beat...we could once again risk another
mortgage fraud” in 2004, their white-collar crime
Here are ten of well-planned but flawed factors that
calamitous disintegration.” He added, according to
units were downsized.
help explain the procrastination and rationalisation
a New York Times report, “the process will mean
for inaction. The government is not just to blame
nothing, squat, diddley … if we get cut we’re going
Fifth, the media has been complicit, seduced,
either. Several industries working together, through
to be in a world of hurt.”
bought off and compromised. The housing bubble
mortgage and Subprime markets and they chose
mushroomed in the very period that the media was
their firms associations, and well-paid operatives, collaborated over years to financialise the economy
Second, the industry invented, advertised and ra-
forced to downsize. Dodgy lenders and credit card
to their own benefit.
tionalised exotic financial instruments as forward
companies pumped billions into advertising in ra-
looking “innovation” and “modernisation” to dis-
dio, television and the internet almost insuring that
Personalising bad guys makes for good TV without
guise their intent while enhancing their field to ma-
there would no undue media investigations.
offering a real explanation.
neuver.
When financial institutions and services became
This was part of creating a shadow banking system
selves in the culture and narrative of Wall Street
the dominant economic sector, they, effectively,
operating below the radar of effective monitoring
by hyping stocks and CEOs. The “guests” routinely
took over the political system to fortify their power.
and regulation. Where is the focus on controlling
chosen by media outlets to explain the crisis were
It was a done incrementally, over years, with savvy,
the out of control power of the leverage-hungry
often part of it.
foresight and malice.
gamblers at unregulated hedge funds?
Financial journalists increasingly embedded them-
Foxes guarding the chicken coop
“Many of the ‘experts’ whom I read or see on TV
calculated these crimes and their cover-ups are.
ignore criminality as a key factor and possible focus
seem clueless, [and] full of hot air. Many of their
“Our laws—innocent until proven guilty, the codes
for an organizing effort.
predictions turn out wrong even when they seem
of ethics that journalists like you abide by limit your
so self-assured and well-informed in making them,”
behavior and give the white-collar criminal freedom
They treat the crisis as if they are at a financial
writes Jim Hightower,
to commit their crimes, and also to cover up their
seminar at Harvard, focusing on the complexities
crimes,” he said.
of derivatives, credit default swaps and structured financial products in language that ordinary people
His advice: “Don’t be deterred by the finance industry’s jargon (which is intended to numb your brain
“We have no respect for the laws. We consider
rarely can penetrate. They argue that banks should
and keep regular folks from even trying to figure out
your codes of ethics, and your laws, weaknesses
not be too big to fail, but rarely they are not too
what’s going on).”
to be exploited in the execution of our crimes. So
big to jail.
Sixth, politicians and corporate lawyers fashioned
honest if they’re playing by the set of the rules;
Few progressive activist groups stress the immo-
settlements of abuses that were exposed rather
they’re hampered by the illegal constraints. The
rality of these practices, much less their criminality
than prosecutions. The government benefited by
white-collar criminal has no legal constraints. You
after all these years! There is little active solidarity
getting large fines while businessmen avoided jail.
subpoena documents, we destroy documents;
even in the progressive community with the newly
you subpoena witnesses, we lie. So you are at a
homeless or jobless.
Financial executives were often rewarded with bo-
disadvantage when it comes to the white-collared
nuses and huge compensation for practices that
criminal. In effect, we’re economic predators. We’re
Where is the active empathy, compassion and the
skirted or crossed the line of criminality.
serial economic predators; we impose a collective
caring for the victims of the financial crimes?
harm on society, time is always on our side, not on, Intentional violations of the spirit and letter of laws
not on the side of justice, unfortunately.”
A populist response to the crisis has been muted. There is little pressure from below on the Admin-
were justified because “everyone does it” by high priced legal firms that often doubled as lobby-
Eighth, even as the economy globalises, and US fi-
istration and Justice Department—which has now
ists. Conflicts of interest were sneered at. Judges,
nancial firms spread their footprint worldwide, there
created a financial crimes task force—to take real
dependent on industry donations for reelection
was little internationalisation of financial rules and
action. It is as if this crime crisis within the financial
looked the other way.
regulations.
crisis does not exist.
Seventh, as the economy changed and industries
Today, even as the French and the Germans pro-
Curiously, as they refuse to discuss the pervasive
that were once separated began working togeth-
pose such rules, Washington still opposes a tough
fraud that did occur, the Obama administration is
er, laws were not updates. Financial institutions
global regime of codes of conduct.
considering a “global settlement” of all housing
estate firms. Yet law enforcement did not recog-
Overseas, in Greece and England, and other
nised this new reality.
parts of Europe, there has been an indictment of
ing a $20bn dollar deal to bury the problem.
American corporate predators, especially Goldman
By all means, workers should rally to protect their
Financial crime was still seen almost entirely under
Sachs. They are being denounced as “financial
jobs and pensions as they have in Wisconsin, but
the framework of securities laws that are designed
terrorists” and discussed in terms of their links to
they should realise that it is the banks who are ulti-
to protect investors, not workers or homeowners
various elite business formations like the Bilderberg
mately to blame for the financial pressures behind
who suffered far more in the collapse. Cases are
Group.
the attack on them. Pension funds have lost billions because of Wall Street scams. State governments
framed against individuals with a high standard of proving intent, not under other kinds of laws used
Ninth, With the exception of softball inquiries by a
to prosecute organised crime and conspiracies.
financial crisis inquiry commission, there has been
By defining crimes narrowly, prosecutions became
have taken a big hit.
no intensive investigations in the United States
Why have the unions and leftist groups been mostly
even like the tepid 9/11 Commission.
silent on these issues?
few and far between. While Senator Carl Levin of Michigan did spend a
Even after the markets melted down, even after Wall
“Cases against Wall Street executives can be dif-
day aggressively grilling Goldman Sachs on one
Street bonus scandals and bailout disgraces, Wall
ficult to prove to the satisfaction of a jury because of
deceptive practice, their defense was more telling
Street has hardly been humbled. It is still spending
the mind-numbing volume of emails, prospectuses,
about the real nature of the problem: “everyone did
a fortune on PR and political gun slinging with 25
and memos involved in documenting a case,” Re-
it”.
lobbyists shadowing every member of Congress to scuttle real reform.
uters news agency reported. The case for criminality has still not achieved critical Criminal minds Convicted financial criminal Sam Antar who ap-
mass as an issue to become a dominant explana-
Its arrogance is evident in an email the Financial
tion for why the economy collapsed. In fact, it is still
Times reported was “pinging around” trading
being sneered at or ignored.
desks. It reads in part: “We are Wall Street: It’s our job to make money.
pears in my film Plunder is contemptuous of how government tends to proceed in these cases, in
Finally, tenth, a big problem in my countdown, are
Whether it’s a commodity, stock, bond, or some
part because they don’t seem to understand how
the progressive critics of the crisis who also largely
hypothetical piece of fake paper, it doesn’t mat-
7 info@diginow.net
fraud to get the issue off the table. They a propos-
worked closely with Insurance companies and real
www.diginow.net
the prosecutors, hopefully most prosecutors, are
against.
to be in a world of hurt.”
you’re only going to hurt yourselves. What’s going
Here are ten of well-planned but flawed factors that
Second, the industry invented, advertised and ra-
to happen when we can’t find jobs on the Street
help explain the procrastination and rationalisation
tionalised exotic financial instruments as forward
anymore? Guess what: We’re going to take yours...
for inaction. The government is not just to blame
looking “innovation” and “modernisation” to dis-
We aren’t dinosaurs. We are smarter and more vi-
either. Several industries working together, through
guise their intent while enhancing their field to ma-
cious than that, and we are going to survive.”
their firms associations, and well-paid operatives,
neuver.
ter. We would trade baseball cards if it were profitable… Go ahead and continue to take us down, but
collaborated over years to financialise the economy Perhaps it’s not surprising, that in an act of preemp-
to their own benefit.
This was part of creating a shadow banking system operating below the radar of effective monitoring
tive anticipation, some years ago, Wall Street firms began financing the construction and administra-
Personalising bad guys makes for good TV without
and regulation. Where is the focus on controlling
tion of privatised jails. They know how to profit from
offering a real explanation.
the out of control power of the leverage-hungry gamblers at unregulated hedge funds?
incarceration too. When financial institutions and services became When will we call a crime a crime? When will we
the dominant economic sector, they, effectively,
Third, the industry promulgated economic theories
demand a jail-out, not just more bail-outs. Unless
took over the political system to fortify their power.
and ideologies that won the backing of the econom-
we do, and until we do, the people who created the
It was a done incrementally, over years, with savvy,
ics profession which largely did not see the crisis
worst crisis in our time will, in effect, get away with
foresight and malice.
coming, making those who favored a crackdown on fraud appear unfashionable and out of date.
the biggest rip-off in history.
March 2011
First, many of those who might be charged with fi-
8
News Dissector Danny Schechter made the film
nancial crimes and fraud invested in lobbying and
As economist James Galbraith testified to Con-
Plunder The Crime of our Time. Parts of this essay
political donations to insure that tough regulations
gress: “…the study of financial fraud received little
appear in his companion book The Crime of Our
and enforcement were neutered before the housing
attention. Practically no research institutes exist;
Time (Disinfo Books).
bubble they promoted took off.
collaboration between economists and criminologists is rare; in the leading departments there are
Hats off to Matt Taibbi for staying on the Wall Street crime beat, asking in his most recent report in Roll-
After hundreds of bankers were jailed in the wake
few specialists and very few students. Economists
ing Stone: “Why Isn’t Wall Street in Jail?”
of the Savings and Loan crisis, financial fraudsters
have soft-pedaled the role of fraud in every crisis
pushed for weakened regulations, guaranteeing
they examined, including the Savings & Loan deba-
“Financial crooks,” he argues, “brought down the
that their colleagues wouldn’t be jailed in when the
cle, the Russian transition, the Asian meltdown and
world’s economy — but the feds are doing more to
next crisis hit.
the dot.com bubble. They continue to do so now.”
The POLICY
protect them than to prosecute them.” In effect, their deregulation strategy also deliber-
Fourth, prominent members of the financial ser-
True enough, but that’s only part of the story. The
ately “decriminalised” the environment to make
vices industry were appointed to top positions in
Daily Kos called his investigation a “depressing
sure that practices that led to high profits and low
the government agencies that should have cracked
read” perhaps because it suggests that the Obama
accountability would be permissible and permitted.
down on financial crime, but instead looked the
Administration is not doing what it should to reign
What was once illegal soon became “legal”.
other way. The foxes were indeed guarding the chicken coop guiding institutions that tolerated if
in financial crime. Many of the lawyers he calls on to act come from big corporate law firms and buy
No enforcement
not enabled an environment of criminality.
into their worldview. The cops and watchdogs were taken off the beat.
Alan Greenspan and Ben Bernanke were repeat-
Kos should be more depressed by the failure of the
Anticipating and then dissolving restraints, they
edly warned by underlings at the Federal Reserve
progressive community to focus on these issues,
engineered a low-risk crime scene in the way the
Bank about pervasive predatory practices in the
and not pressing the government to do the right
Pentagon systematically prepares its battlefields.
mortgage and Subprime markets and they chose
thing.
This permitted illicit practices, to be encouraged by
to do nothing. Now Greenspan acknowledges per-
CEOs in a variety of control frauds to keep profits
vasive fraud but decries the lack of enforcement
There is much more to this story. It’s also more
up so that the executives could extract more rev-
while Bernanke wants to run a Consumer Protec-
about institutions than individuals, more about a
enue.
tion Agency after ignoring consumer complaints for years. Even as the FBI denounced “an epidemic of
captured system that enables and covers up crime and, then, deflects attention away from the deeper
Today’s proposed Republican cutbacks of the fund-
mortgage fraud” in 2004, their white-collar crime
problem.
ing of regulatory bodies aims to undercut recently
units were downsized.
passed financial reforms. One Commissioner of the Commodity Futures Trading Commission said if the
Fifth, the media has been complicit, seduced,
budget is slashed, “there would essentially be no
bought off and compromised. The housing bubble
You could see that when television host Bill Mahrer
cop on the beat...we could once again risk another
mushroomed in the very period that the media was
pressed Taibbi to name the biggest Wall Street
calamitous disintegration.” He added, according to
forced to downsize. Dodgy lenders and credit card
crooks, on his weekly political comedy show,
a New York Times report, “the process will mean
companies pumped billions into advertising in ra-
he didn’t fully understand what we are really up
nothing, squat, diddley … if we get cut we’re going
dio, television and the internet almost insuring that
Ten problems
there would no undue media investigations. Financial journalists increasingly embedded them-
the mind-numbing volume of emails, prospectuses,
about the real nature of the problem: “everyone did
and memos involved in documenting a case,” Re-
it”.
uters news agency reported. The case for criminality has still not achieved critical
selves in the culture and narrative of Wall Street by hyping stocks and CEOs. The “guests” routinely
Criminal minds
often part of it.
mass as an issue to become a dominant explanation for why the economy collapsed. In fact, it is still
chosen by media outlets to explain the crisis were Convicted financial criminal Sam Antar who ap-
being sneered at or ignored.
pears in my film Plunder is contemptuous of how government tends to proceed in these cases, in
Finally, tenth, a big problem in my countdown, are
part because they don’t seem to understand how
the progressive critics of the crisis who also largely
“Many of the ‘experts’ whom I read or see on TV
calculated these crimes and their cover-ups are.
ignore criminality as a key factor and possible focus
seem clueless, [and] full of hot air. Many of their
“Our laws—innocent until proven guilty, the codes
for an organizing effort.
predictions turn out wrong even when they seem
of ethics that journalists like you abide by limit your
so self-assured and well-informed in making them,”
behavior and give the white-collar criminal freedom
They treat the crisis as if they are at a financial
writes Jim Hightower,
to commit their crimes, and also to cover up their
seminar at Harvard, focusing on the complexities
crimes,” he said.
of derivatives, credit default swaps and structured financial products in language that ordinary people
His advice: “Don’t be deterred by the finance industry’s jargon (which is intended to numb your brain
“We have no respect for the laws. We consider
rarely can penetrate. They argue that banks should
and keep regular folks from even trying to figure out
your codes of ethics, and your laws, weaknesses
not be too big to fail, but rarely they are not too
what’s going on).”
to be exploited in the execution of our crimes. So
big to jail.
the prosecutors, hopefully most prosecutors, are Sixth, politicians and corporate lawyers fashioned
honest if they’re playing by the set of the rules;
Few progressive activist groups stress the immo-
settlements of abuses that were exposed rather
they’re hampered by the illegal constraints. The
rality of these practices, much less their criminality
than prosecutions. The government benefited by
white-collar criminal has no legal constraints. You
after all these years! There is little active solidarity
getting large fines while businessmen avoided jail.
subpoena documents, we destroy documents;
even in the progressive community with the newly
you subpoena witnesses, we lie. So you are at a
homeless or jobless.
Financial executives were often rewarded with bo-
disadvantage when it comes to the white-collared
nuses and huge compensation for practices that
criminal. In effect, we’re economic predators. We’re
Where is the active empathy, compassion and the
skirted or crossed the line of criminality.
serial economic predators; we impose a collective
caring for the victims of the financial crimes?
harm on society, time is always on our side, not on, not on the side of justice, unfortunately.”
A populist response to the crisis has been muted. There is little pressure from below on the Admin-
were justified because “everyone does it” by high priced legal firms that often doubled as lobby-
Eighth, even as the economy globalises, and US fi-
istration and Justice Department—which has now
ists. Conflicts of interest were sneered at. Judges,
nancial firms spread their footprint worldwide, there
created a financial crimes task force—to take real
dependent on industry donations for reelection
was little internationalisation of financial rules and
action. It is as if this crime crisis within the financial
looked the other way.
regulations.
crisis does not exist.
Seventh, as the economy changed and industries
Today, even as the French and the Germans pro-
Curiously, as they refuse to discuss the pervasive
that were once separated began working togeth-
pose such rules, Washington still opposes a tough
fraud that did occur, the Obama administration is
er, laws were not updates. Financial institutions
global regime of codes of conduct.
considering a “global settlement” of all housing fraud to get the issue off the table. They a propos-
worked closely with Insurance companies and real estate firms. Yet law enforcement did not recog-
Overseas, in Greece and England, and other
nised this new reality.
parts of Europe, there has been an indictment of
ing a $20bn dollar deal to bury the problem.
American corporate predators, especially Goldman
By all means, workers should rally to protect their
Financial crime was still seen almost entirely under
Sachs. They are being denounced as “financial
jobs and pensions as they have in Wisconsin, but
the framework of securities laws that are designed
terrorists” and discussed in terms of their links to
they should realise that it is the banks who are ulti-
to protect investors, not workers or homeowners
various elite business formations like the Bilderberg
mately to blame for the financial pressures behind
who suffered far more in the collapse. Cases are
Group.
the attack on them. Pension funds have lost billions because of Wall Street scams. State governments
framed against individuals with a high standard of proving intent, not under other kinds of laws used
Ninth, With the exception of softball inquiries by a
to prosecute organised crime and conspiracies.
financial crisis inquiry commission, there has been
By defining crimes narrowly, prosecutions became
have taken a big hit.
no intensive investigations in the United States
Why have the unions and leftist groups been mostly
even like the tepid 9/11 Commission.
silent on these issues?
few and far between. While Senator Carl Levin of Michigan did spend a
Even after the markets melted down, even after Wall
“Cases against Wall Street executives can be dif-
day aggressively grilling Goldman Sachs on one
Street bonus scandals and bailout disgraces, Wall
ficult to prove to the satisfaction of a jury because of
deceptive practice, their defense was more telling
Street has hardly been humbled. It is still spending
9 info@diginow.net
Intentional violations of the spirit and letter of laws
www.diginow.net
Foxes guarding the chicken coop
a fortune on PR and political gun slinging with 25 lobbyists shadowing every member of Congress to scuttle real reform. Its arrogance is evident in an email the Financial Times reported was “pinging around” trading desks. It reads in part: “We are Wall Street: It’s our job to make money. Whether it’s a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn’t matter. We would trade baseball cards if it were profitable… Go ahead and continue to take us down, but you’re only going to hurt yourselves. What’s going to happen when we can’t find jobs on the Street anymore? Guess what: We’re going to take yours... We aren’t dinosaurs. We are smarter and more vicious than that, and we are going to survive.” Perhaps it’s not surprising, that in an act of preemptive anticipation, some years ago, Wall Street firms began financing the construction and administra-
March 2011
tion of privatised jails. They know how to profit from incarceration too. When will we call a crime a crime? When will we demand a jail-out, not just more bail-outs. Unless we do, and until we do, the people who created the worst crisis in our time will, in effect, get away with
10
the biggest rip-off in history.
The POLICY
News Dissector Danny Schechter made the film Plunder The Crime of our Time. Parts of this essay appear in his companion book The Crime of Our Time (Disinfo Books).
While Bernie Madoff languishes in jail, bankers continue to profit as the poor lose their homes and hope.
www.diginow.net
T
11 info@diginow.net
hank you, Bernie, for breaking your us more information on the details of his silence - even if you are still clinging dirty deals. to that cover-up mode you adopted since you took the entirety of the blame for your Do not believe all you read crimes. Even The New York Times interview is beWhat is clear is that ripping off the rich is ing disputed, reports the New York Post: punished far more severely than ripping “The trustee representing thousands of off the poor. The lengthy sentence you were Bernard Madoff’s victims disputed a report given spared countless other greedsters that he personally grilled the Ponzi monand goniffs from facing the music - what ster in prison.” music there is. “There has been no direct communicaIn an interview - with a reporter from The tion between them,” said David Sheehan, New York Times who is writing a book to the chief counsel for the court-appointed cash in on a man who has already cashed trustee, Irving Picard, after The New York out - we learn, in the vaguest terms, that Times reported that Picard and Madoff had Mr M believes the banks he did his crooked met over the summer. business with “should have known” his figures did not figure. Keeping with the deceit “The Times later changed a quote from that has served him well over the years, he Madoff and altered some text online that had implied Picard personally visited Bernames no names. nie in the Butner, NC, lockup where he is That said, how right he may be. There serving a 150-year sentence. Picard did were many who should have known and not dispute that his legal team met with done something about it. The Securities Madoff.” and Exchange Commission (SEC) and other regulators for one. Perhaps The New Madoff is also still not coming clean about York Times for another. Remember, it was the web of alliances he had internationally, Madoff’s confession to his sons that started as well as in New York. We live in a global him on his way to his new 12’ x 12’ home economy after all. We now know of Swiss from home - in a federal correctional in- and Austrian connections - but what about stitute, where he may dream of his seized Israel, where this ingratiating handler was penthouse, homes and yachts - rather than well known for his connections with Jewish philanthropists and institutions? So far, any press expose. that story has yet to be told. For years, he went undetected by business journalists, who knew - or should have At the same time, the people investigating known - what he was up to. There are even Madoff are making a small fortune. Accordquestions about the speed with which he ing to the Financial Times: “The army of was sentenced, preventing him from being lawyers and consultants helping to recover tried - a process which, through diligent funds from Bernard Madoff’s $19.6bn fraud cross-examination, would have brought stand to earn more than $1.3bn in fees, ac-
cording to new figures that detail the cost ing something wrong, we don’t want to know.”’” of liquidating the huge Ponzi scheme.”
March 2011
The comments of readers to The Times appear to be more insightful than the paper’s own reports. Here is one from Texas: “I actually, sort of, feel sorry for this man. He was just doing what many investment firms were doing at the same time. He has been imprisoned as a scapegoat - yet many people since then - and to this day - are doing the same thing. Where are the indictments against the thousands of other people who did the same thing - and knowingly led this country into financial disaster?”
12
Banks close ranks
Yves Smith of NakedCapitalism.com quips: “This sounds credible - but it also seems more than a tad self-serving.” Andrew Leonard asks in Salon: “Should we trust him? After all, if there is one thing we know about Bernie Madoff, it is that he is one hell of a liar. But as evidence emerges that bank executives were exchanging emails wondering about Madoff’s amazing investment record, the possibility that the banks were purposefully looking the other way is not inconceivable.”
The POLICY
The truth is that many of us still do not reThe best reporting on this subject is not in ally want to know - because, if we did, we the mainstream press but in a music maga- would have to do something about it. zine, Rolling Stone, where Matt Taibbi investigates why the whole of Wall Street is By their actions, both Democrats and Renot in jail: “Financial crooks brought down publicans clearly appear to prefer the most the world’s economy - but the feds are do- simplistic understandings - or misundering more to protect them than to prosecute standings. them,” he charges. The Financial Crisis Inquiry Commission Madoff also believes the banks who ser- (FCIC), like the 9/11 and Warren Comviced him did not want to know about missions before it, avoided key issues. The his Ponzi scheme which, unfortunately, is FCIC inquiry did not call for a criminal probably true - and an attitude coming not indictment of wrongdoers. While informative, its report was ultimately a dud - telling just from the banks. us mostly what we knew, although there The Times report added: “He spoke with were some disclosures that our tepid press great intensity and fluency about his deal- still missed. ings with various banks and hedge funds, pointing to their ‘willful blindness’ and Now the Republicans want to water down their failure to examine discrepancies be- the regulations on derivatives in the Doddtween his regulatory filings and other in- Frank financial ‘reform’ legislation, claiming they will lead to a loss of jobs. This is formation available to them. predictable: Every effort to defend big busi“’They had to know,’ Mr Madoff said. ‘But ness is always couched in terms of helping the attitude was sort of: “If you’re do- the public.
There was no response from his colleagues.
ternet to organise and mobilise for change. In the US, the internet seems to function more as an escape valve, consuming hours of our time and giving us another way to talk to each other - and ventilate against the government. Social media here seems to be more for socialising.
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The government supports internet freedom So who will do anything about abroad - but restricts it and spies on it at it? home. Obama has already supported a law allowing him to shut it down here in a naThe political right prefers to change the tional emergency. subject, while the left does not seem to have the time or energy to make economic The passivity of the public is one result of justice its principal concern - even as polls the inundation by middle-of-the-road meshow the economy is the number one prob- dia and effective information deprivation. lem for most in the US. As Noam Chomsky puts it: “The populaProgressives should hang their heads in tion in the United States is angry, frustratshame at the minimal amount of activism ed and full of fear and irrational hatreds. taking place against the banks and the es- And the folks not far from you on Wall calating numbers of foreclosures. Homes Street are just doing fine. They’re the ones and hope are being stolen from people for who created the current crisis. They’re the whom the term “depression” now has a ones who were called upon to deal with personal, as well as economic, meaning. it. They’re coming out stronger and richer than ever. But everything’s fine - as long as The other day, economist Jeff Sachs - who the population is passive.” has a lot of atoning to do for his own misguided, destructive economic advice to That is our problem, Bernie. Even if the Russia after the fall of the Soviet Union - people want to know, it is not that easy to warned that little is being done about eco- find out. Let us thank the media and our nomic inequity and the growing ranks of government for that. the poor in the US. He asks if people who run things in the US want “another Egypt”. News dissector Danny Schechter edits MeHe is a policy wonk, not an activist - and diachannel.org. His new film, Plunder: The likely fears the idea. Crime of Our Time, tells the story of the financial crisis as a criminal tale. Many activists say they want to emulate the Egyptians, but who will organise anything as effective - even in a land that used to be known for people’s movements - to raise He can be reached at: dissector@mediachannel.org hell? In Egypt, young people used the in-
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The New York Times reported: “Representative Stephen Lynch, Democrat of Massachusetts, warned: ‘You think regulation is costly? How about the $7trillion we just lost from not regulating the derivatives markets?’”
March 2011
WHO CONT 14 The POLICY
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TROLS YOU?
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US Supreme Court controversy
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erhaps you’re familiar with Clarence Thomas, the LongDong-Silver-loving US Supreme Court Justice. With a new term beginning on The Court, he has just passed the five-year mark for not only saying nothing of value while hearing cases, but nothing at all. Yes, you read that correctly— while no US Supreme Court Justice in over two centuries has gone even a single term without speaking from the bench during arguments, Thomas has managed to do it for five in a row. To quote Stephen Colbert, “the man is a rock…in that he could be replaced by a rock and I’m not sure anyone would notice.” Sadly, it shouldn’t really come as much of a surprise that if someone were going to set this record, it would be Justice Thomas. He
certainly never even approached being “the most qualified” person in the land to sit on the Supreme Court, as President George H.W. Bush, who nominated him to the High Court, said after offering his name.
a terrible precedent in a democracy. And at least in theory, the judiciary is supposed to be impartial, and therefore above politics.
Yet, in only the past few weeks, a number of embarrassing episodes have not only turned the Legal I’m quite sure that Bush didn’t Tracheotomy into a punch line for even believe that himself, unless late night comics, but have quite he was limiting the field of com- honestly raised questions about petition to Thomas, then-vice whether any fully-functioning president Dan Quayle, and his democracy would allow him to namesake offspring. But if he was continue rendering judgments so clearly unworthy then—and he important in deciding not only was—he is now about as appropri- the law, but values of our society. ate a judge as Newt Gingrich is a marriage counselor. First, there was the fact that Thomas, whose wife has earned almost $700,000 for—as far as I can tell— being his wife, finds government disclosure forms to difficult to While he doesn’t seem to even fill out that he accidentally put $0 want to participate in his day job, where $700,000 was supposed to Thomas certainly does engage in be under “spousal income”. the kind of partisan politicking that is not only unseemly, but sets That’s right, for a guy who is sup-
Politicised justice
of the supposedly power-to-thepeople Tea Party movement. While according the The New York Times, “a court spokeswoman said Justice Thomas had made a ‘brief drop-by’ at the event in Palm Springs, California, in January 2008 and had given a talk,” in that darn financial disclosure report that keeps getting him in trouble, Thomas reported that he was reimbursed by the right-wing Federalist Society for having spent “four days” at this very same event.
But wait, there’s more! As reported over the past week, the goodgovernment group Common Four days, or a few hours? You Cause has caught ole Clarence in say tomato. I say tomahto. what those in the legal profession might call a “lie”.
Convention in Florida, shortly after Thomas was nominated to the High Court. Saperstein walked into a reception late, and was called over by a group of the top defense lawyers in the country, whom he had befriended, even though they represented opposite sides in court. These men stood to benefit greatly if Thomas was sworn in, as they represented the kind of big business interests to which Thomas had sworn fealty.
Monied interests
Past performance
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When they asked Saperstein what he thought of the nomination, he replied that he thought, “it was an insult to every competent lawyer in America.” He expected this notion to be met with an argument, but instead, every This is all on top of all the rea- single member of this group sons he never should have made agreed. Not only that, but to a Thomas attended a meeting of it to the Supreme Court in the man, they offered (in public no wealthy corporate barons on the first place, such as sexually ha- less) that not one of them would West Coast, not long before join- rassing Anita Hill and appar- hire him to join their firms, so ing his fellow deluded, activist ently other young women who’ve little did they think of his mind conservative judges in overturn- come forward in the years since. and abilities as a lawyer. ing roughly 100 years of settled law to claim that corporations Along these lines, a couple of in- Then Senate Judiciary Chairman should be able to buy and sell de- teresting anecdotes were recently and current Vice President Joe mocracy on the free market, like shared with me by famed attor- Biden, as well as other Democrats equities or an Emmy. ney Guy Saperstein, who started who allowed this man to become the largest plaintiffs civil rights a member of the Supreme Court And as such, these corporate law firm in America and success- should be supremely embar“people” can spend pretty much fully prosecuted the largest race, rassed to this day (as should evwhatever they want on election- sex and age discrimination class ery Republican, but I won’t hold eering, a wonderful little valen- actions in American history. my breath on that). tine to a republic that is supposed to be defined by “one person, one Saperstein was co-counsel with Yet, how about addressing this vote”. Thomas for a race discrimina- mistake. Thomas has shown no tion case against State Farm moral compass, judicial ethics, The problem, of course, is those back in the 1980s, when he was intellectual rigor and underwealthy conservatives with representing private plaintiffs standing of his duties. For this, whom Thomas ate pigs-in-a- and Thomas was doing the same Supreme Court Justice Clarence blanket and likely fantasised for the Equal Employment Op- Thomas should be impeached. about replacing the social safety portunity Commission (EEOC). net with breakaway glass stood While Saperstein, as was com- Cliff Schecter is the president of to directly benefit from these mon practice, wanted to ask the Libertas, LLC, a progressive pubchanges to our law, contained judge for a hiring order, which lic relations firm, the author of in the infamous Citizens United would solve the problem in the the 2008 bestseller The Real Mccase. future, Thomas did not. Ideolo- Cain, and a regular contributor gy, then as now, trumped sound to The Huffington Post. So Thomas went ahead and lied judgment. about how much time he spent at that retreat held by the infamous Saperstein also recalls attending Cliff Schecter On Twitter: Koch Brothers, the sugar daddies the American Bar Association @Cliffschecter
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posed to decide how to interpret our Constitution, apparently reporting the bounty his wife pulled in through the right-wing welfare system of think tank stipends and Tea Party activism is somewhat more difficult than making jokes about body hair and coca cola to co-workers of a female persuasion. As this is a family news outlet, you’re just going to have to go look up the rest yourself.
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WHO SAVES YOU?
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Seventy-five people confirmed a day after a 6.3 magnitude tre
The death toll from a devastating earthquake in Christchurch, New ous total of 65. The city’s mayor Bob Parker said almost 300 people collapsed buildings was not known. However, 15 survivors who had were rescued on Wednesday morning.
March 2011
22 February 2011
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d dead and almost 300 missing, emor rocked Christchurch
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Zealand’s second biggest city, has risen to 75, up from the previe were listed as missing but cautioned that the number trapped in d been trapped in a six-storey office building since Tuesday’s quake
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March 2011
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The Other Side Of The WORLD
T
he death toll from a devastating earthquake in Christchurch, New Zealand’s second biggest city, has risen to 75, up from the pre vious total of 65. The city’s mayor Bob Parker said almost 300
people were listed as missing but cautioned that the number trapped in collapsed buildings was not known. However, 15 survivors who had been trapped in a six-storey office building since Tuesday’s quake were
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rescued on Wednesday morning.
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he death toll from a devastating earthquake in Christchurch, New Zealand’s second biggest city, has risen to 75, up from the previous total of 65. The city’s mayor Bob Parker said almost 300 people were listed
as missing but cautioned that the number trapped in collapsed buildings was not known. However, 15 survivors who had been trapped in a six-storey
March 2011
office building since Tuesday’s quake were rescued on Wednesday morning.
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The Other Side Of The WORLD
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March 2011
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The Other Side Of The WORLD
T
he death toll from a devastating earthquake in Christchurch, New Zealand’s second biggest city, has risen to 75, up from the previous total of 65. The city’s mayor Bob Parker said
almost 300 people were listed as missing but cautioned that the number trapped in collapsed buildings was not known. However, 15 survivors who had been trapped in a six-storey office building
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since Tuesday’s quake were rescued on Wednesday morning.
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March 2011
AFTER THE EARTHQUAKE IN NEWZEALAND
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History’s shifting sands The revolutions sweeping the Arab world indicate a tectonic shift in the global bal-
March 2011
ance of people power.
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For decades, even centuries, the peoples of the Arab world have been told by Europeans and, later, Americans that their societies were stagnant and backward. According to Lord Cromer, author of the 1908 pseudo-history Modern Egypt, their progress was “arrested” by the very fact of their being Muslim, by virtue of which their minds were as “strange” to that of a modern Western man “as would be the mind of an inhabitant of Saturn”.
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The only hope of reshaping their minds towards a more earthly disposition was to accept Western tutelage, supervision, and even rule “until such time as they [we]re able to stand alone,” in the words of the League of Nations’ Mandate. Whether it was Napoleon claiming fraternité with Egyptians in fin-de-18e-siècle Cairo or George W. Bush claiming similar amity with Iraqis two centuries later, the message, and the means of delivering it, have been consistent. Ever since Abd al-Rahman al-Jabarti, the great Egyptian chronicler of the French invasion of Egypt, brilliantly dissected Napoleon’s epistle to Egyptians, the peoples of the Middle East have seen through the Western protestations of benevolence and altruism to the naked self-interest that has always laid at the heart of great power politics. But the hypocrisy behind Western policies never stopped millions of people across the region from admiring and fighting for the ideals of freedom, progress and democracy they promised. Even with the rise of a swaggeringly belligerent American foreign policy after September 11 on the one hand, and of China as a viable economic alternative to US global dominance on the other, the US’ melting pot democracy and seemingly endless potential for renewal and growth offered a model for the future. Trading places But something has changed. An epochal shift of historical momentum has occurred whose implications have yet to be imagined, nev-
er mind assessed. In the space of a month, the intellectual, political and ideological centre of gravity in the world has shifted from the far West (America) and far East (China, whose unchecked growth and continued political oppression are clearly not a model for the region) back to the Middle - to Egypt, the mother of all civilization, and other young societies across the Middle East and North Africa. Standing amidst hundreds of thousands of Egyptians in Tahrir Square seizing control of their destiny it suddenly seemed that our own leaders have become, if not quite pharaohs, then mamluks, more concerned with satisfying their greed for wealth and power than with bringing their countries together to achieve a measure of progress and modernity in the new century. Nor does China, which has offered its model of state-led authoritarian capitalist development coupled with social liberalisation as an alternative to the developing world, seem like a desirable option to the people risking death for democracy in the streets of capitals across the Arab world and Iran. Instead, Egyptians, Tunisians and other peoples of the region fighting for revolutionary political and economic change have, without warning, leapfrogged over the US and China and grabbed history’s reins. Suddenly, it is the young activists of Tahrir who are the example for the world, while the great powers seem mired in old thinking and outdated systems. From the perspective of “independence”
When they raise their voices loud and clear and struggle against exploitation.” Aren’t such lines supposed to be uttered by American presidents instead of Egyptian union activists? Similarly, in Morocco activists made a video before their own ‘day of rage’ where they explained why they were taking to the streets. Among the reasons, “because I want a free and equal morocco for all citizens,” “so that all Moroccans will be equal,” so that education and health care “will be accessible to everyone, not only the rich,” in order that “labour rights will be respected and exploitation put to an end,” and to “hold accountable those who ruined this country”.
“Stand firm and don’t waiver .... Victory always belongs to the people who stand firm and demand their just rights,” Kamal Abbas urged Americans. When did they forget this basic fact of history? From top to bottom The problem clearly starts from the top and continues to the grass roots. Barack Obama campaigned for the presidency on the slogan “Yes we can!” But whether caving in to Binyamin Netanyahu, the Israeli prime minister, on settlements, or standing by as Republicans wage a jihad on the working people of Wisconsin, the president has refused to stand up for principles that were once the bedrock of American democracy and foreign policy.
Foundations sinking into the sands? Although she likely did not intend it, when Hillary Clinton, the US secretary of state, warned Arab leaders in early January that they must “reform” lest their systems “sink in the sand” her words were as relevant in Washington as they were in Tunis, Tripoli, Cairo or Sanaa. But Americans - the people as much as their leaders - are so busy dismantling the social, political and economic foundations of their former greatness that they are unable to see how much they have become like the stereotype of the traditional Middle Eastern society that for so long was used to justify, alternately (and sometimes simultaneously) supporting authoritarian leaders or imposing foreign rule. A well known Egyptian labour organiser, Kamal Abbas, made a video telling Americans from Tahrir that “we and all the people of the world stand on your side and give you our full support”. It is a good thing, because it is clear Americans need all the support they can get. “I want you to know,” he continued, “that no power can challenge the will of the people when they believe in their rights.
The American people are equally to blame, as increasingly, those without healthcare, job security or pensions seem intent on dragging down the lucky few unionised workers who still have them rather than engage in the hard work of demanding the same rights for themselves. The top one per cent of Americans, who now earn more than the bottom 50 per cent of the country combined, could not have scripted it any better if they had tried. They have achieved a feat that Zine El Abidine Ben Ali, Hosni Mubarak and their fellow cleptocrats could only envy (the poorest 20 per cent of the population in Tunisia and Egypt actually earn a larger share of national income than does their counterpart in the US). The situation is so desperate that a well known singer and activist contacted me in Cairo to ask organisers of Tahrir to send words of support for union workers in Wisconsin. Yet “Madison is the new Tahrir” remains a dream with little hope of becoming reality, even as Cairenes take time out from their own revolution proudly to order pizza for their fellow protesters in Wisconsin. The power of youth and workers In Egypt, workers continue to strike, risking the ire of the military junta that has yet to release political prisoners or get rid of the emergency law. It was their efforts, more than perhaps anyone else,
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squares across the region, the US looks ideologically stagnant and even backwards, filled with irrational people and political and economic elites incapable of conceiving of changes that are so obvious to the rest of the world.
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Can one even imagine millions of Americans taking to the streets in a day of rage to demand such rights?
that pushed the revolution over the top at the moment when people feared the Mubarak regime could ride out the protests. For their part, Americans have all but forgotten that the “golden years” of the 1950s and 1960s were only golden to so many people because unions were strong and ensured that the majority of the country’s wealth remained in the hands of the middle class or was spent on programmes to improve public infrastructure across the board.
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The youth of the Arab world, until yesterday considered a “demographic bomb” waiting to explode in religious militancy and Islamofascism, is suddenly revealed to be a demographic gift, providing precisely the vigour and imagination that for generations the people of the region have been told they lacked. They have wired - or more precisely today, unwired - themselves for democracy, creating virtual and real public spheres were people from across the political, economic and social spectrum are coming together in common purpose. Meanwhile, in the US it seems young people are chained to their iPods, iPhones and social media, which has anesthetised and depoliticised them in inverse proportion to its liberating effect on their cohorts across the ocean.
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Indeed, the majority of young people today are so focused on satisfying their immediate economic needs and interests that they are largely incapable of thinking or acting collectively or proactively. Like frogs being slowly boiled alive, they are adjusting to each new setback - a tuition increase, here, lower job prospects there - desperately hoping to get a competitive edge in a system that is increasingly stacked against them. Will Ibn Khaldun be proved right?
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It now seems clear that hoping for the Obama administration to support real democracy in the Middle East is probably too much to ask, since it cannot even support full democracy and economic and social rights for the majority of people at home. More and more, the US feels not just increasingly “irrelevant” on the world stage, as many commentators have described its waning position in the Middle East, but like a giant ship heading for an iceberg while the passengers and crew argue about how to arrange the deck chairs. Luckily, inspiration has arrived, albeit from what to a ‘Western’ eye seems like the unlikeliest of sources. The question is: Can the US have a Tahrir moment, or as the great Arab historian Ibn Khaldun would have predicted, has it entered the irreversible downward spiral that is the fate of all great civilizations once they lose the social purpose and solidarity that helped make them great in the first place? It is still too early to say for sure, but as of today it seems that the reins of history have surely passed out of America’s hands. Mark LeVine is a professor of history at UC Irvine and senior visiting researcher at the Centre for Middle Eastern Studies at Lund University in Sweden. He has authored several books including Overthrowing Geography: Jaffa, Tel Aviv and the Struggle for Palestine (University of California Press, 2005) and An Impossible Peace: Israel/Palestine Since 1989 (Zed Books, 2009).
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