The Looting Class

Gretchen Morgenson has a good piece based on newly released documents concerning the single greatest crime committed by the looting class in the past two years, the bailout of Wall Street with the taxpayer payout of a hundred cents on the dollar for AIG's worthless derivatives. Morgenson writes:

The documents also indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts. That decision, say critics of the A.I.G. bailout, has cost taxpayers billions of extra dollars in payments to the banks. It also contrasts with the hard line the White House took in 2008 when it forced Chrysler’s lenders to take losses when the government bailed out the auto giant.

But the best part of the piece is not only did Wall Street get the backdoor bailout:

When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill Lynch — over any irregularities with most of the mortgage securities it insured in the precrisis years.

Any irregularities, that is more appropriately fraud, which was and remains rampant across the system. Fraud is the main criminal device of the looting class. Yves Smith digs deeper into the crime scene and its perpetrators. It's essential to understand that many in government are not simply colluding with the looting class, but are full fledged members. Chris Whalen at IRA has a good piece on Public Enemy #1, Robert Rubin, writing:

Reasonable people might call Robert Rubin the chief architect of the financial crisis and also of Wall Street's grand strategy to minimize the political damage from the subprime crisis. From his mismanagement of the U.S. Treasury's dollar policy in the mid-1990s to his bailout for Mexico (for Goldman Sachs and other Wall Street dealers), to the rescue of Citigroup and AIG in 2008, Rubin has met or exceeded the most demanding expectations for duplicity from our public servants.

Nearly two decades after first migrating to Washington, he apparently is still calling the shots of U.S. financial and economic policy with the full support of President Barrack Obama. Working through his favorite marionettes, Treasury Secretary Tim Geithner and Economic Policy Czar Larry Summers, most recently Rubin managed the defense of Wall Street following the great crisis.

The fleecing of the public by the looting class has now become a matter of general public policy. The looting class' transference of much of the private losses, that is fraud, onto the public books, now ransoms the entire economy for full payment. In an excellent piece(tx jesse), a Professor Hossein-zadeh at Drake University writes:

"Never before has so much debt been imposed on so many people by so few financial operatives--operatives who work from Wall Street, the largest casino in history, and a handful of its junior counterparts around the world, especially Europe.

External sovereign debt, as well as occasional default on such debt, is not unprecedented . What is rather unique in the case of the current global sovereign debt is that it is largely private debt billed as public debt; that is, debt that was accumulated by financial speculators and, then, offloaded onto governments to be paid by taxpayers as national debt. Having thus bailed out the insolvent banksters, many governments have now become insolvent or nearly insolvent themselves, and are asking the public to skimp on their bread and butter in order to service the debt that is not their responsibility.

After transferring trillions of dollars of bad debt or toxic assets from the books of financial speculators to those of governments, global financial moguls, their representatives in the State apparatus and corporate media are now blaming social spending (in effect, the people) as responsible for debt and deficit!

This debt is illegitimate and needs to be repudiated. Pouring more money into an economy that has a criminal financial system is no solution, and it doesn't matter how much you spend, the economy will be moribund. The greatest crimes are those committed in full public view, grandiosity is their cover. People simply cannot conceive of criminal activity on such a scale. Such has been our looting class' quarter-century crime spree, climaxing with the collapse of the global economy and the massive swapping of private loss onto the public books. The looting class is private public partnership headquartered on Wall Street and the Fed, but with affiliations across the banking system and government. They will in the end only be stopped by a concerted effort of the American people to reclaim both their government and control of their economic destiny. The looting class needs to be to brought to justice.