The Bailout Profiteers and the Multi-Trillion-Dollar Crime Scene

Naomi Klein on the Bailout Profiteers and the Multi-Trillion-Dollar Crime Scene

“The more details emerge, the clearer it becomes that Washington’s handling of the Wall Street bailout is not merely incompetent. It is borderline criminal,” says Naomi Klein, author of The Shock Doctrine.

...with $290 billion already committed, the Bush administration has taken no action to fill congressionally-mandated independent positions to oversee how the bailout is used.

...there’s a few elements now that are being described as illegal that we’re finding out.

There’s another piece of this puzzle that is also borderline illegal, which is that in addition to the $700 billion...bailout, there’s another $2 trillion that’s been handed out by the Federal Reserve in emergency loans to financial institutions, to banks, that actually we don’t really know who they’re handing the money out to, because, apparently, it’s a secret.

The other thing that the Fed won’t disclose is what they have accepted as collateral in exchange for these loans. This is a really key point, because, of course, at the heart of the financial crisis is—are these so- called distressed assets...there’s a very good chance the taxpayers aren’t going to be getting this money back.

...Gordon Brown got voting rights at the banks that they bailed out, seats on the boards, 12 percent dividends for...UK taxpayers, as opposed to the five percent negotiated in the US and no voting rights and no seats on the board. Other thing Gordon Brown did is he got it in writing that the banks had to start lending, as opposed to Henry Paulson, who didn’t get it in writing, and the banks are not lending.

...what the market wants is for there not to be tough regulation, is for the free money to keep flowing. What will upset the market, what will create a rocky transition, is if it’s clear that there’s a new sheriff in town, that they’re going to have to follow the law, that they’re going to cut off all of this corporate welfare, there’s going to be real accountability, real conditions attached to the money. You know what? The market really doesn’t want that.

...we actually have it backwards. It’s not the banks that have been partially nationalized; it’s Treasury that has been partially privatized by the very banks that created the crisis in the first place.

...this bailout is really not a bailout at all; it’s a parting gift to the people that the Bush—that George Bush once referred to jokingly as “my base.” You know, in one of my columns recently, I likened it to what European colonial rulers used to do when they finally realized they had to hand over power; they would loot the treasury on the way out the door...So people have to be ready for this. You know, the next shock is yet to come.

...You know, what we’re really seeing...is a resurrection of the entire free trade—discredited free trade agenda. This crisis being used—the shock of this crisis being used to resurrect all of these discredited deals. The Colombia free trade deal, the International Monetary Fund, the Doha round, they’re all coming back from the dead at precisely the moment that we should be actually burying, for good, this whole agenda of deregulation.

November 17, 2008

http://www.democracynow.org/2008/11/17/naomi_klein_on_the_bailout_profiteers