by Charley James

Yesterday’s solemn, over-the-top, wall-to-wall, commercial free coverage of Michael Jackson’s death left me wondering if Archduke Ferdinand had been shot a second time.

Yes, Jackson once was an entertainment and music genius but he hadn’t done anything in years, yes, and his parents doomed him in childhood to a miserable life.  But Prince is a music and show biz genius, too, yet he keeps his private peccadilloes private. And, besides, many of us had parents who doomed us as kids to something or another awful in adulthood.

Somehow, though, we didn’t end up with totally unhealthy and unnatural – possibly illegal – attachments to young boys that Jackson thought was just fine. Nor did we dangle our own newborn by the ankles over a hotel balcony, constantly sponge off of other people in recent years because we couldn’t afford our lifestyle, show up one day for a trial wearing pajama bottoms, became addicted to prescription medicines and rely on thugs from the Nation of Islam for security.

We didn’t end up wack-o Jack-o.
As news helicopters kept circling the UCLA Medical Center where Jackson dies, one anchor after another talked about the “crowd” gathered outside the hospital to pay tribute.

First of all, there were maybe 200 people at any one time, hardly a crowd. In Los Angeles, a city of 3.8-million, you can get 200 people who are silly enough to worship the famous to show up for a garage door opening if it somehow involves a celebrity.

Second, the fact that he was quite possibly a pedophile was conveniently overlooked in yesterday’s “All Jack-O All The Time” coverage: The jury found Jackson not guilty, which doesn’t always mean innocent. Just ask former Sen. Ted Stevens. In Jackson’s case, the DA didn’t prove his guilt beyond a reasonable doubt. Fine. In our system he wasn’t legally guilty and I accept the fact. But let’s not forget that, in the early-to-mid 1990s, it was widely reported that Jackson paid untold millions to another family on the same issue involving their young son and, in return, the parents withdrew charges they’d filed against him.

Infamous Fascination
I’m not the first to note that America has become a culture obsessed by a macabre fascination with the infamous.

In the past 10 days alone, along with Jackson’s death we’ve been treated ad nauseum to coverage of tearful admissions of infidelity by Sen. David Vitter and Gov. Mark Sanford – with interest in Sanford multiplied by his colorful disappearance for five days followed by his convoluted, sniveling story of finding true, meaningful love in Argentina, of all places. Add widespread coverage of Ryan O’Neill saying that Farah Fawcett finally agreed to marry him as she lay days away from death, the marital traumas of Jon and Kate, and probably something about another trailer trash relative in the goofy Palin family, and cable news had no time left yesterday to give much coverage to, oh, Pres. Obama’s morning announcement on the energy bill moving through the House or following up on his news conference compromise with himself about the absolute need for a public option in health care reform.

The problem is ubiquitous.

Even the normally sober Juan Cole’s blog Friday morning was devoted to why Jackson was popular in the Middle East. At least Paul Krugman asked if any reader remembered Wilbur Mills and his “Argentinean firecracker” in explaining that he wasn’t going to comment on the Sanford debacle.

Absurd Realism
As absurd as is the Jackson coverage, I’m realistic enough to know that something like the sudden death of a notorious celebrity draws viewers. Even Walter Cronkite and Ed Murrow recognized that fact. But they kept it in perspective, devoting the time the story deserved: A brief introduction, a quickly assembled bio, perhaps a clip of another celebrity saying how sad it all is, and that was that.

Still, I can’t help feel unsettled when Keith Olbermann is on air for hours, garbed Murrow-like in a vest and shirtsleeves as if telegraphing that Something Momentous Is Being Reported Here, talking gravely about what essentially is an Entertainment Tonight story.

It’s a shame when anyone dies prematurely. But it’s even more of a shame when the death is treated by the media as a major event, worthy of the kind of coverage given to a state funeral or outbreak of war. When did we lose our perspective?

Don’t conservatives, ConservaDems, the Republican Party and the rest of the “climate change is a hoax” crowd ever get tired of being wrong?

For several years, business lobbyists along with GOP and other right wing mouthpieces in Congress and on the air have been yowling that the US cannot afford what they claim is the gargantuan cost of various proposals to control global warming. Claiming an end to the world as we know it if any legislation passes to reduce greenhouse gas emissions, they insist that the cost will bankrupt every man, woman and child of us.

Yet again, the right is wrong.

A new study released by the non-partisan Congressional Budget Office (LINK www.cbo.gov/ftpdocs/103xx/doc10327/06-19-CapAndTradeCosts.pdf) calculates the cost in 2020 of cap-and-trade at 18-cents a day per household.

That’s right: 18-cents. Per household. Math was never my strongest subject but I can use a calculator and, by my figuring, we’re talking about $1.26 per week. Most families spend more than this on ridiculously expensive Starbucks or Tim Horton’s or whatever coffee every day.

Put differently, for about $65.50 per year per US household, Douglas Elmendorf of the CBO wrote to Rep. Dave Camp (R-MI) of the House Ways and Means Committee, we can create a system under HR 2454, known as The American Clean Energy and Security Act of 2009, that is shown to make a serious dent in greenhouse gas emissions almost as soon as it is enacted.

I’m sure that Camp, the ranking Republican on the committee, was expecting a rather different answer.

Somehow, I doubt the answer he received will shut him – or the other “let the iceberg’s melt” crowd – up at all.

(You can read a fascinating profile of new DOE Secretary, Nobel Laureate Steven Chu in the 19 June edition of Rolling Stone Magazine - not yet online. - Ed.)

Although the story is being widely reported across Europe and Asia, it’s received scant media coverage in the US.

AsiaNews along with other major media outlets outside the US are reporting that Italy’s financial police, the Guardia Italiana di Finanza, seized US government bonds worth US$134.5-billion from two Japanese nationals at Chiasso, located less than 50 miles from Milan on the Italian-Swiss border.

Other than a sceptical piece at Bloomberg News Wednesday, the seizure hasn’t been reported on in the US.

This is surprising because the haul includes 249 Federal Reserve bonds worth US$500-million each plus ten Kennedy bonds and other US government securities worth one billion dollar each.

The question business reporters should be asking is whether the bonds are real, meaning a foreign government is trying to quietly dump US Fed securities? Or are they counterfeit, a scheme to destabilize the American economy and currency during a period of economic crisis? But, so far, US financial journalists are as inquisitive about the suitcase full of bonds as they were about, oh, AIG’s dodgy underwriting practices, the sub-prime market, toxic assets in banks and Bernie Madoff before the lid on each was blown sky high.

Pyongyang’s Game?
In the 1990s, North Korea was caught running a huge and highly sophisticated counterfeiting scheme, printing what the Secret Service described at the time of the bust as excellent quality US$100 bills printed on undetectable yet not quite genuine paper, distributing the money mostly in Macao but also around Asia.

The counterfeit ring was shut down as was at least one Asian bank found to be active participants in the scheme. But it shows that the North Koreans have the capability to print superb if fake bank notes that are almost undetectable. With the United Nations’ new sanctions choking off Pyongyang’s access to hard currency, it’s entirely possible that the North Korean government hatched another counterfeit scheme to generate cash.

“We’re working with the Italian financial police to determine whether the securities are genuine or are part of a counterfeiting operation,” is all a US Treasury spokesperson tells me today before declining further comment because the matter is under investigation.

Privately, a source in the intelligence community says that if the notes are fakes, it makes sense that they would originate in North Korea.

“Pyongyang is smart enough to not try shipping nuclear or other material it knows we’re all looking for coming out of the country,” the source tells me. “We know they can print fake money no one other than experts can spot so why not print fake bonds?”

The source estimates that $134.5-billion in counterfeit bonds would produce a fast US$250-million in hard currency for North Korea when sold “and maybe a little more if they’re willing to shop around and wait a bit.”

Calling George Smiley
The Bloomberg article’s lead correctly says the news sounds like a plot straight out of a John Le Carre novel.

A rogue state is hemmed in on all sides and even its best friend, in this case China, is staring it down. Nuclear technology, its one exportable cash commodity, is suddenly on everyone’s black list. There’s a leadership crisis in the capital and hard-liners in the military are demanding money to pay for extremely costly nuclear tests and missile launches. Moderate elements need hard currency to buy black market food and medicine for the nation’s starving population.

And then everyone remembers the printing press sitting over in the corner, unused for a while but fully functional. All that’s required is obtaining three or four of the real bonds, spring the country’s best engraver from a dank political prison cell, and run off a few hundred billion of the US bonds.

All that’s missing is Connie Sachs, Le Carre’s alcoholic research expert with the world’s deepest memory rummaging through old files, passing notes to the mad Hungarian, Toby Esterhase, and George Smiley up in his pepper pot room on the fifth floor of the Circus pulling the strings.

The trouble is that the Italian border seizure isn’t fiction.

If the bonds are the real deal, then which government is fire saleing its stash of US debt obligations? If they’re fakes, who is trying to flood the market with counterfeit American government obligations?

And why aren’t Americans being told about this?

by Charley James

More than MSNBC, BBC or CNN; more than The New York Times or The Independent; more than perhaps any other news outlet, the world should be thanking Nico Pitney.

For seven days, his live blogging at Huffing Post of the Iranian election uprising has kept the world informed of what is happening inside Tehran and other cities. He’s become a link and a lifeline between heroic Iranians defying the authorities who find ways to send cell phone videos and Tweets with the latest raw footage and information.

Even better, like any good journalist, he works hard to verify information before posting it and, if he cannot, he says the information is unverified.

Moreover, Pitney is breaking news faster than the MSM can get it out. For example, on Saturday morning while Reuters was citing Iranian state media claims that the tomb of Ayatollah Khomeini, founder of the Islamic Republic, was hit by a suicide bomber, Pitney was blogging that the only people talking about the bombing was the state media. He’d received no confirmed reports from people in Tehran keeping him posted via Twitter. Hours after the alleged incident, Pitney was still unable to confirm the bombing but was carrying detailed information on which embassies were accepting people wounded by policy, the army, Revolutionary Guards and the Basiji militia.

On Saturday afternoon, he was passing along verifiable messages that presidential candidate Mousavi was on Jayhoon St., speaking to demonstrators.

As important, Pitney is showing the world what the streets are link, including this remarkable cell phone video of unarmed demonstrators squaring off against the heavily armed Basiji.

When another video was removed from Facebook showing a seriously wounded young woman who died as people tried helping her, Pitney downloaded it to HuffPo’s own servers. Caution: The video is extremely graphic.

Pitney worked in relative obscurity until Rachel Maddow interviewed Pitney during the week. I tried reaching him today and was thanked effusively but told he’s too busy keeping up with the massive street fighting. It’s totally understandable; in fact, shortly afterward, he modified his g-mail address posting by asking people to not send him congratulatory notes because too many important messages from Iran were already clogging his account.

When the dust settles and journalism award time rolls around, let’s hope that his amazing work is recognised.

Like when it rolled out its laughable 18-page “budget” five months ago that forgot to include any numbers, yesterday John “Man Tan” Boehner, Eric “Ralph Wiggums” Cantor and a handful of other Congressional Republicans unveiled a four page health care “plan” Wednesday that not only had no numbers, it had no substance, no ideas – good or bad – and the closest it came to being a plan was calling it one on the cover.

Not wanting to lose the spotlight to their colleagues in the House, three Republican Senators – John Kyl, Mitch McConnell and Pat Roberts – were busy introducing the Preserving Access to Targeted, Individualized and Effective New Treatments and Services (PATIENTS) Act of 2009. Their bill would prohibit Medicare or Medicaid from using “comparative effectiveness research to deny coverage.”

In layman’s language, this means Medicare would be compelled to pay for useless treatments. This comes from the same claque that prevented Medicare from negotiating drug prices when Republicans controlled Congress and the drug benefit was being introduced.

The trio actually launched this idiotic piece of legislation with a straight face, not noticing it is the silliest thing to come along since Nancy Reagan’s astrologer told Ronnie when to make policy speeches. As Paul Krugman points out Thursday morning, there are four insane components to the Republican’s latest piece of garbage:

1. Republicans who rail against wasteful government spending are taking action to prevent the government from … reining in wasteful spending.

2. Politicians who warn that the burden of entitlements is killing the federal budget are stepping in to block the single most painless route to reducing the growth of entitlements.

3. They’re doing it in the name of avoiding “rationing of health care” but they’re specifically addressing taxpayer-funded care. If you want to go out and buy a medically useless treatment, Medicare won’t stop you.

4. These same politicians are opposed to expanding coverage because it’s evil for government to “ration care” by only paying for things that work; it is, however, virtuous to ration care by refusing to pay for any care at all.

“You’re assuming people watching CNN are thinking,” a staff member to a Republican Senator tells me this morning. “We’re simply trying to make the point that government-sponsored health care is a terrible idea.”

Which Bureaucrat?
Trash talk was heard all over Capitol Hill Thursday and Friday. Wednesday’s GOP talking point was warning about “inserting bureaucrats between you and your doctor,” and it was repeated at least a half-dozen times by interchangeable Republican faces popping up on cable news and C-SPAN.

Uhm, shouldn’t Republicans watch something besides Fox News occasionally? It is insurance company “bureaucrats” who keep inserting themselves between patients and doctors, denying coverage or treatment for people who are ill. Earlier this week Keith Olbermann treated us to the latest outrage: AIG, US Airways liability insurer, is telling a survivor of the airline’s Hudson River crash that she and her three year old daughter would not be covered for psychological counselling to deal with the on-going trauma of watching themselves almost die.

Yes, it’s that AIG. The one we own. One of us should tell AIG that even the Pentagon finally is treating Post-Traumatic Stress Disorder.

As for bureaucrats and medicine, I’ve had three grandparents and two parents covered by Medicare between the time they turned 65 and when they died – some in their late 80s and early 90s. Combined, they enjoyed 130+ years of Medicare and not once were any of them ever told by a “bureaucrat” they wouldn’t be covered for treating one ailment or another. They never waited to see a doctor nor did a “bureaucrat” dictate to their physicians which treatment to use or what medication to prescribe.

Oh, and by the way, dear Republicans: Not even the strongest proponents of a universal, single payer health care reform package is suggesting that doctors, nurses and other health professionals will work for the government. So why are you comparing them to postal workers and the Department of Motor Vehicles the way you did Thursday? Are you crazy, stupid or just plain liars trying to scare Harry and Louise (LINK www.youtube.com/watch?v=RGvkZszS21Y) into opposing health care reform one more time?

“OK, so likening a public plan to the DMV is an exaggeration. So what? The point is to stop this thing cold,” the Republican staffer admits reluctantly. “No one likes bureaucrats and everyone hates the Post Office and DMV. It’s a good ‘word picture’ that people who watch cable news can understand.”

So the answer to my question is: The GOP is happy lying to scare people while they try scoring a false point.

Paying Billions Already
What the viewers disparaged by the GOP don’t understand is they’re already paying for universal coverage, of sorts. An article published Thursday in The New England Journal of Medicine reports that we’re already spending $43-billion annually treating the 50-million uninsured Americans.

But care is an uneven hodgepodge of federal, state and local programmes, and much of the money is spent poorly or in the wrong place.

The report, co-authored by Linda Blumberg and John Holahan says, “Care provided in this way varies considerably by locale and does not amount to continuous, comprehensive care for the uninsured, nor do all the uninsured have access to such publicly subsidized services.

“Once everyone has health insurance coverage, either public or private, these funds can be redirected to help finance a new system that includes income-related subsidies for care provided in efficient health systems,” the article maintains.

Blumberg and Holahan call for a mandated public system, noting that research shows that without mandates, many people will remain uninsured because premiums will gobble up too much of their income – as much as 30%, according to the article, or about the same as rent or food.

Conceding that some federal subsidies will be needed, “most will go to the poorest and sickest – those who are most likely to enrol on a voluntary basis. Thus, a mandate will (also) bring healthier people and those with higher incomes into the system at a relatively low incremental cost, as compared with a voluntary approach with the added benefit of government financing redirected from the programs that currently cover uncompensated care.”

Whatever talking point the GOP rolls out today in its fight to keep America sick, remember that Republican staff people on the Hill admit all the party is trying to do is create scary “word pictures” to frighten the average cable news viewer. Republicans have always been good at twisting emotions and playing on fear. It’s past time for progressives to borrow a page from the Republican playbook and talk emotions, not just facts and figures.

The good news about Fox News blubber mouth Bill O’Reilly is that he speaks to only a teeny, tiny percentage of the country; the bad news is part of that small and dwindling group actually thinks he makes sense and then goes out and kills people because they believe his vile, hate-filled rhetoric.

Much as a woman who is battered by her husband but won’t leave him or press charges enables the brute’s actions, O’Reilly may not have pulled the trigger in the Holocaust Museum or in Dr. Tiller’s church but he – and others such as Operation Rescue’s heinous Troy Newman, the bulbous, bilious Rush Limbaugh, batty Michelle Malkin who’s on record justifying interning Japanese-Americans during World War II, and the just plain goofy Anne Coulter – are enablers who give voice and authenticity to crazy people who do the shooting.

It is time for all of us to call these people what Joan Walsh of Salon.com already did: Hateful, vile people whose words enable violence among the conservative fringe.

A psychiatrist told me that the raging voices on the far right – like the killers themselves – all seem to suffer from a common, distorted view of the world, triggered by something called “insufficient attachment disorder.” Developed by Dr. John Bowlby in the 1960s, essentially the idea is that infants who do not develop a secure attachment to their parents early in life can end up as angry adults who don’t trust others – especially those who disagree with them – and can feel some degree of paranoia, often lashing out at the world in both socially accepted and, sometimes, unacceptable ways.

Like gluing doors shut on women’s health clinics, killing doctors in church, storming the Holocaust Memorial to kill everyone in sight, or ranting utter claptrap ad nauseum on television. Witness O’Reilly’s over-the-top reaction to Walsh Friday when she appeared on his show to discuss the Dr. Tiller killing:

Meanwhile, outfits like Operation Rescue continue to issue press releases that sanctimoniously proclaim it “… will continue to help lead the fight against abortion through peaceful and legal means.” The June 8 statement by Operation Rescue’s general counsel apparently means it’s alright for the organization to post home addresses and phone numbers, and e-mail contacts, on the internet of health professionals performing perfectly legal medical procedures so the crazies can target them.

These holier-than-thou words contradicted by the group’s hateful actions fit the definition of “enabler” held by every 12 Step group in the world.

For example, OR’s “senior policy advisor,” Cheryl Sullenger – who did federal time for being caught with explosives in her car – reportedly has been interviewed by the FBI in connection with Dr. Tiller’s murder since the supposed killer had her name and phone number sitting on the dashboard of his car when he was arrested. She’s said on television that she provided Dr. Tiller’s coordinates to the shooter.

Co-conspirator? Maybe not. Enabler? Absolutely.

If I were as crazy as the lunatics on the right, I’d post the residential addresses and unlisted phone numbers that I have of O’Reilly, Limbaugh, Malkin and Coulter with this article so people could go picket their homes. I don’t because, as Richy Brockelman used to say on The Rockford Files, “the thing of it is is this …” Progressives don’t hate the world so we don’t post people’s private information on the web for every lunatic to find and jump in their car with a shotgun under the front seat or explosives and firebombs in the trunk.

Even though O’Reilly et al are vile people who don’t deserve it, we do know where to draw the line.

by Charley James

In so-called “public service” ads appearing on TV and radio, or in print and on the intertubes, many health insurance companies urge people to stay healthy by quitting smoking. The company that provides a supplemental policy to me that covers things not paid by Canada’s national health even e-mailed a helpful PDF brochure with a quit smoking plan.

Guess what? They don’t mean it. None of them do. In fact, they profit if you don’t.

A new study just published in The New England Journal of Medicine documents how major health insurance providers in the US, Canada and Britain hold billions of dollars in stock in companies that sell cigarettes and other tobacco products.

Wesley Boyd, the study’s lead author, found that at least $4.4-billion in insurance company funds – which come from premiums paid by policy holders – are invested in companies whose highly profitable subsidiaries are major producers of cigarettes, cigars and chewing tobacco.

“Despite calls upon the insurance industry to get out of the tobacco business by physicians and others, insurers continue to put their profits above people’s health,” writes Boyd, a Harvard Medical School faculty member. 

Joining a loud chorus of people saying the same thing, Boyd concludes, “It’s clear their top priority is making money, not safeguarding people’s well-being.” 

Gee, ya’ think?

Billions Of Dollars
Collectively, the health insurance industry controls nearly $4.5-billion of tobacco company stock – a nice down payment on basic universal health care coverage.

Prudential is the worst offender. It has nearly $1.7-billion invested in big tobacco. Its insurance arm, which sells both health and disability coverage, has $814-million in British-American Tobacco stock and another $513-million sitting with Imperial Tobacco while Prudential Financial sits on $186-million of Philip Morris-USA stock, $69.4-million of Reynolds American and $8.8-million in Lorillard.  

Canada’s Sun Life, which offers a wide range of group and individual supplemental health plans, is second on the “please smoke our investments and die” list. It has more than $1-billion invested in tobacco companies, including Philip Morris-USA and Lorillard. 

Other insurance companies cited in the article holding big chunks of tobacco stock include New York Life and MassMutual. Northwestern Mutual, which sometimes calls itself “the quiet company” but it may have dropped the ad slogan when its wheezing and hacking, smoker’s cough got too loud, also makes the list with a comparatively paltry $253.8-million in stock in big tobacco.

The supreme irony in this is that the insurance companies make money both ways: It charges smokers higher premiums for buying the very products that profit the industry’s investment portfolio.

“Smokers lose twice over,” Boyd writes with just a trace of irony.

Not Trustworthy
How can an industry that profits twice from people smoking themselves into ill health or an early grave be taken seriously when universal health care is being discussed?

By most common definitions, the industry has a very basic conflict of interest. And you don’t have to torture the definition of “conflict of interest” the way Yoo and Bybee tortured the word “torture” to reach this conclusion: The industry simply is not a trustworthy, honest negotiating partner.

No wonder I get a bad case of the creeps whenever I read that Sen. Max Baucus not only is negotiating with insurance companies about health care reform, he’s actually listening to them. This is akin to listening to Sarah Palin explaining about teaching teenaged girls on how not to get pregnant. Ronald Reagan lecturing Paul Krugman on economics. AIPAC helping negotiate a two-state solution to the Israeli-Palestinian problem. It’s a total non-compute.

Baucus would be much better served listening to the wise words of the robot in the old TV series Lost in Space, who proclaimed at least once each episode, “Danger, Will Robinson! Danger!”

So would we.

 

 

This was the only image we could reproduce

Pentagon Reportedly Has Video Of Children Screaming While Being Sodomized
by Charley James

Somehow, the Sydney Morning Herald obtained some of the additional Abu Ghraib photos that the Obama administration is in US court trying to keep hidden as it fights an ACLU Freedom of Information lawsuit. Fifteen of the 60 are published on-line Saturday (Sydney time) by the newspaper. 

Is it because we’ve become inured to photos of Americans torturing prisoners of war that I don’t have the same violent, angry reaction to this latest batch as I did when the first Abu Ghraib pictures were leaked? Have I watched that same video loop of a jump-suited Army volunteer being waterboarded too many times to feel the same intense nausea at images of what George Bush, Dick Cheney, Donald Rumsfeld and the rest of the Inquisition priests authorised in my name? Did seven years of a constant drip-drip-drip on my head as each new piece of information leaked out of yet another crime against humanity desensitise me to the horror of what we became?

America finally jump the shark, dooming us and our time to be remembered in history as the moment when we joined a long list of nations whose self-betrayal led to our own collapse. And why do I not feel an Arctic chill blain down my back when I think of this horrific possibility, or how and why it happened? Why we let it happen?

I am revolted by my own lack of revulsion.

Mourning In America
Meanwhile, Daily Kos is reporting Seymour Hersh saying the US government has videotapes of boys being sodomized at Abu Ghraib prison in Iraq.

“The worst is the soundtrack of the boys shrieking,” the reporter told an ACLU convention last week. Hersh says there was “a massive amount of criminal wrongdoing that was covered up at the highest command out there, and higher.”

This may be the reason behind Pres. Obama’s decision this week to fight releasing the images and video tapes.

Hersh was speaking to the ACLU’s 2004 America At A Crossroad membership conference last week. According to Kos, Hersh also said,

Some of the worse that happened that you don’t know about, ok. Videos, there are women there. Some of you may have read they were passing letters, communications out to their men. This is at Abu Ghraib which is 30 miles from Baghdad [...]

“The women were passing messages saying “Please come and kill me, because of what’s happened”. Basically what happened is that those women who were arrested with young boys/children in cases that have been recorded. The boys were sodomized with the cameras rolling. The worst about all of them is the soundtrack of the boys shrieking that your government has. They are in total terror it’s going to come out.

It’s impossible to say to yourself how do we get there? who are we? Who are these people that sent us there?”

As Dick Price of LA Progressive wrote to me, whatever moral high ground we once held is gone. Maybe forever. We should all be in mourning for America.

by Charley James

“Demonizing the bankers as if they and they alone created the financial meltdown is both inaccurate and short-sighted,” Citigroup chairman Richard Parsons told reporters recently. “Everybody participated in pumping up this balloon and now that the balloon has deflated, everybody has some part in the blame.”

Oh no we don’t.

Talk about dissembling. The truth is that the top subprime lenders whose loans are largely blamed for triggering the global collapse were owned or backed by giant banks – including Citigroup, whose chairman now feels so unjustly vilified – that are now collecting hundreds of billions of dollars in bailout money. Even worse, several paid huge fines to settle predatory lending charges for their direct, sub-prime activity. So, big banks funding the subprime industry weren’t hapless victims of an unforeseen financial collapse as they portray themselves; they were enablers who were bankrolling the lending that all-but brought down the world’s financial system.

Who says so? 

Not some lefty, fringe, bank hating, consumer activist group but The Center for Public Integrity (CPI), a highly respected, non-partisan research organization. It released a massive report this week on its analysis of government loan data. CPI scoured nearly 7.2-million subprime mortgages made from 2005 through 2007, a span between the peak and collapse of the boom, and its findings are depressingly dismal.

It turns out that big American, European and Asian banks truly are the demons here. 

They poured billions into the subprime lending market due to a never-ending demand for high-yield, high-risk bonds backed by home mortgages. The banks – including household names like the late Lehman Brothers, Merrill Lynch, Citigroup and Goldman Sachs – made huge profits for fuelling the sub-prime engine while executives collected bonuses reaching hundreds of millions of dollars until the bottom fell out of the real estate market, a bubble they were largely responsible for creating in the first place by generating artificial demand for homes the banks knew buyers could not afford.

Stressed Out Test
Meanwhile, the so-called “stress tests” of the 19 largest banks released Thursday by Treasury says everything is almost hunky-dory. Last night, Steve Bartlett of the Financial Services Roundtable was on the PBS NewsHour insisting “it’s good news for the economy, good news for the financial sector.” Well, not quite, as it turns out; not if you look more closely. 

How can a stress test be valid when the final audit reports were negotiated between Treasury and each bank, more than half of the humongous banks put under a microscope need to ante up tens of billions of dollars in new capital and quickly, and the toxic assets – such as subprime loans – that keep banks from lending are still on their books?

In effect, we’re in about the same financial pickle as we were last fall except billions are propping up a trembling financial system and it’s still not healthy.

My reaction to the Treasury report was, “Oy, gevault!” Paul Krugman, writing in today’s New York Times, was more elegant: “While bankers may find the results of the stress tests ‘reassuring,’ the rest of us should be very, very afraid.”

If Krugman is afraid, I am terrified.

Media Nonchalance
While the news media was busy reporting “it ain’t so bad,” Dean Baker was writing at The American Prospect that overlooked in all the cheerleading are new Bureau of Labor Statistics findings that growth of salaries and benefits in the private sector fell to only 0.8% last quarter – well below the rate of inflation – and represent another sharp drop from the previous quarter. 

Since wage and benefit income make up 60% of all national income, Baker writes, “This is a piece of really bad news that swamps by an order of magnitude the items presented as good news …” 

He goes on to say, “If reporters would focus more on reporting the news rather than repeating what the Fed chairman says the public would be much better informed.”

Here we go again.

One reason we’re in this financial mess is because too few business and financial reporters at Authoritative And Respected Publications such as the Times, Business Week and The Wall Street Journal as well as CNBC, the NewsHour and even the usually deliberate BBC World drank gallons of Wall Street’s Kool-Aid all through the Bush years. With the occasional exception of Bloomberg News, few journalists bothered to scrounge beyond news releases and PR-flacked interviews with sometimes dissembling, often lying, CEOs to bother noticing the shaky house of cards on which the Republican’s “robust” economy was built.

What isn’t being covered – not even now, after all we’ve been through since September – is the raft of financial stories that will keep bolo punching us:

• How about the tens of millions of our dollars the banks are spending on lobbying against measures that would help beleaguered taxpayers who are bailing them out. 
• No attention is paid to the fact that banks still aren’t lending, not to consumers, small businesses, home buyers or folks brave enough to buy a new car. 
• Nobody is writing about the rising default rate on credit cards, a sure sign people are out of cash. 
• There’s nothing about the fault line to about split the earth open again when another round of sub-prime mortgages adjust beyond the home owner’s ability to pay. 

Meanwhile, Pres. Obama and Congress are dithering over re-regulating the financial markets, shying away from clamping down on predatory credit card practices, failing to exercise control over the banks and auto companies we all now own, shying away from forcing banks to sell off their toxic assets – something that TARP was supposed to be all about – and acting as if they’re forgetting about how poor we all are.

Maybe this is why the mournful, opening lines of a Janis Joplin song keep echoing in my head today:

“Busted flat in Baton Rouge, waitin’ for a train, 
And I’s feelin’ near as faded as my jeans.”