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Nederlog

September 15, 2018

Crisis: 2008-2018, ¨Great America¨, Stupid Trump, Boom Only For Rich, Break Up The Banks


Sections
Introduction

1. Summary
2.
Crisis Files
     A. Selections from September 15, 2018
Introduction:

This is a Nederlog of Saturday, September 15, 2018.

1. Summary

This is a crisis log but it is a bit different from how it was until 2013:

I have been writing about the crisis since September 1, 2008 (in Dutch, but since 2010 in English) and about the enormous dangers of surveillance (by secret services and by many rich commercial entities) since June 10, 2013, and I will continue with it.

On the moment and since more than two years (!!!!) I have problems with the company that is supposed to take care that my site is visible [1] and with my health, but I am still writing a Nederlog every day and I shall continue.

2. Crisis Files

These are five crisis files that are mostly well worth reading:

A. Selections from September 15, 2018:
1. Ten Years After the Crash, We’ve Learned Nothing
2. Donald Trump, the Democrats, and the Illusion of American Greatness
3. A 'Nervous Breakdown' of the Executive Branch
4. Trump’s Economic Boom Is Only for the Rich
5. On 10th Anniversary of Wall Street Crash, Warren Says: Break Up the
     Banks and Jail the Bankers
The items 1 - 5 are today's selections from the 35 sites that I look at every morning. The indented text under each link is quoted from the link that starts the item. Unindented text is by me:

1. Ten Years After the Crash, We’ve Learned Nothing

This article is by Matt Taibbi on Common Dreams and originally on Rolling Stone. It starts as follows:

Ten years ago, on Saturday, September 13th, 2008, the world was about to end.

The New York Federal Reserve was a zoo. Imagine NASA headquarters on the day a giant asteroid careens into the atmosphere. That was the New York Fed: all hands on deck, peak human panic.

The crowd included future Treasury Secretary Timothy Geithner, then-Treasury Secretary (and former Goldman Sachs CEO) Hank Paulson, the representatives of multiple regulatory offices, and the CEOs of virtually every major bank in New York, each toting armies of bean counters and bankers.

The asteroid metaphor fit. In the twin collapses of top-five investment bank Lehman Brothers and insurance giant AIG, Wall Street saw a civilization-imperiling ball of debt hurtling its way.

Yes, indeed. I have got one remark on Holland (where I have to live, unfortunately): The abobe was not at all true in Holland, according to the Dutch government. The Dutch were ruled then by the utter idiot Balkenende, who only in October started to realize something might have happened - and then recommended all Dutch ¨to cycle a little faster¨. Yes, he did.

Back to the article:

The legend of that meeting, as immortalized in hagiographic reconstructions like Andrew Ross Sorkin’s Too Big to Fail, is that the tough-minded bank honchos found a way to scrape up just enough cash to steer the debt-comet off course.

In Too Big To Fail, the “superstar” chief of Goldman, Lloyd Blankfein, along with “smart” Jamie Dimon of Chase, “fighter” John Mack of Morgan Stanley, and other titans brokered the deal of deals, just in time to stave off a Mad Max scenario for us all.

The plan included a federal bailout of incompetent AIG, along with key mergers – Bank of America buying Merrill, Barclays swallowing the sinking hull of Lehman, etc.

With respect to the fine actors in the film, the legend is bull.

I completely agree with Taibbi, but you´ll have to read his full article to get most of his reasons.
He also discusses three myths about the crisis of 2008, which I will only name here (there is considerably more text in the original:

But history is written by the victors, and the banks that blew up the economy are somehow still winning the narrative. Persistent propaganda about what happened 10 years ago not only continues to warp news coverage, but contributed to a wide array of political consequences, including the election of Donald Trump.

The most persistent myths about 2008:

Myth#1: The crash was an accident
    (...)
Myth #2: The crash was caused by greedy homeowners
    (...)
Myth #3: The bailouts were about saving capitalism
    (...)

Myth#1 is a myth because the crash was not an accident, but the direct outcome of over 20 years of successive deregulations, each of which made the rich more powerful, and the non-rich less powerful.

Myth#2 is a myth because the crash was not caused by greedy homeowners, but by the rich bankers.

Myth#3 is a myth because the bailouts were not about saving capitalism but about saving and protecting the incomes and profits of the big banks.

There is a lot more in the original.

Here is more by Taibbi:

The public to this day has no understanding of the scale of the intervention.

To put it in perspective, the War on Terror has cost America about $5.6 trillion since 9/11, or about $32 million an hour.

The bailouts probably dwarf that effort. Most studies suggest it was a world-war-level mobilization of cash, a generation of savings used to plug a single hole.

The Special Inspector General of the TARP put the gross government outlay at $4.6 trillion, with over $16 trillion in guarantees. Bloomberg concluded the rescue expenditure was $12.8 trillion. Fortune (which saluted the investment as hugely profitable for America in the end) put the number at $14 trillion. The Levy Institute at Bard College did probably the most extensive study, and put the number at $29 trillion.

That is, there still are rather different (in fact, mostly conservative) estimates, but it did take a whole lot of money, that was mostly taken from the taxes, and fed to the rich so that they could remain rich.

Here is more:

The bank-state merger brokered 10 years ago this week socialized the risks of the financial sector, and essentially converted Wall Street into a vehicle for annually privatizing a big chunk of America’s GDP into the hands of a few executives. The same people who were minutes from being (deservedly) destitute 10 years ago are now a permanent aristocracy.

Just look at the numbers. The average finance-sector salary last year was over $375,000, or five times the rate of the rest of the private sector. While the rest of the economy mostly ran in place, just the average Wall Street bonus grew 17 percent in 2017, to $184,220, or about three times the median income for an American household.

I think the above diagnosis is quite correct. Here is the last bit that I quote from this article:

Outside Manhattan, the pain was just starting. In 2008, 861,664 families lost their homes, and homeowners lost a breathtaking $3.3 trillion in home equity (coincidentally, this was the TARP inspector’s estimate for the entire net outlay of the bailout). By 2011, a full 11.6 million homeowners were underwater on their homes.

Out there, in foreclosure – er, flyover – country, the only way out of the crisis was a big hit. You either foreclosed and lost your credit rating forever, or you sold your home, usually the chief investment in your life, at a gigantic loss. But a major principle of the bailout is that the banks never had to take any losses at all. Not one cent.

Precisely. This is a strongly recommended article, with a lot more than I quoted.


2. Donald Trump, the Democrats, and the Illusion of American Greatness

This article is by Jeremy Scahill on The Intercept. It starts as follows:
Team Trump says the president can’t be indicted, and he’s indicated he may use the power of the pardon to launder the crimes of his associates. This week on Intercepted: Constitutional law professor Zephyr Teachout is running to be the New York attorney general and she has vowed to put Trump and his organization in her legal sights if she wins. She talks about why she believes Trump may have violated the emoluments clause, the foreign money he has received since becoming president, and her plan to undermine his potential pardons. Socialist academic Dr. Keeanga-Yamahtta Taylor talks about socialism, capitalism, and what real resistance looks like in Trump’s America. On the 17th anniversary of 9/11, the longest continuous U.S. war in history continues in Afghanistan. Rep. Barbara Lee tells the story of her historic lone vote against the Authorization for the Use of Military Force and the harassment and death threats she received after her speech on September 14, 2001. Jeremy analyzes the U.S. opposition to the International Criminal Court, what the tributes to John McCain tell us about the U.S. empire, and why the anonymous op-ed in the New York Times was neither heroic nor an act of resistance. With insurgent progressive candidates challenging — and sometimes beating — Democratic establishment candidates, the future of the Democratic Party is at a crossroads. We speak with Nathan Robinson, the editor of Current Affairs magazine, and Intercept Senior Politics Editor Briahna Joy Gray about the state of left politics, the midterm elections, and the reappearance of Barack Obama.
Then again, I will not review most of that and part of the reason is that Zephyr Teachout lost to Andrew Cuomo, while the rest of the reason is that this article consists of a considerable amount of text, of which I will quote just two bits, both by Jeremy Scahill.

This is the first bit:
The horrid stain that is Donald Trump’s presidency has opened a space for the most intellectually dishonest power brokers in the American empire to fellate themselves and each other as they dream of a day when a good guy like George W. Bush, a mass murderer, or Bill Clinton, a belligerent warmonger who spent eight years attacking the poor and building up the prison industrial complex, can return decorum to America. Trump is definitely an anomaly. And he does indeed pose his own unique threats to peace in the United States and around the world, but largely, he’s an anomaly in circumstance and style.
I agree. Here is the last bit, and it is about the 16 years of Democratic presidents, who in fact mostly worked for the rich:

JS: As I look at it when we look back at the last 16 years of democratic presidents: Two terms of Clinton, two terms of Obama.

What you largely had come out of those 16 years was a push even further to the right in this country. Certainly, with its domestic politics did the lives of poor people get better as a result of the Clintons and the and Obama? No. Did the war stop? No, they expanded. Did the Republicans mainstream many of their ideas within the institutional Democratic party? Yes, yes they did. And I look at that and then I compare it to what did Hillary Clinton’s people say, they wanted? They said we want women to run for office. We want young people to run for office. We want black people to run for office. We want people of color, LGBTQ — and in so many races that we have seen just in the past year, you see the Hillary Clinton wing of the Democratic Party coming in and endorsing incumbent conservative in some cases old white male Democratic candidates against the very people that they said that they wanted to run.

I agree, and there is a whole lot more in this recommended article.


3. A 'Nervous Breakdown' of the Executive Branch

This article is by Philip Rucker and Robert Costa on Truthdig and originally on The Washington Post. It starts as follows - and John Dowd was Donald Trump´s personal attorney:

John Dowd was convinced that President Donald Trump would commit perjury if he talked to special counsel Robert Mueller. So on Jan. 27 the president’s then-personal attorney staged a practice session to make his point.

In the White House residence, Dowd peppered Trump with questions about the Russia investigation, provoking stumbles, contradictions and lies until the president eventually lost his cool.

“This thing’s a goddamn hoax,” Trump erupted at the start of a 30-minute rant that finished with him saying, “I don’t really want to testify.”

The dramatic and previously untold scene is recounted in “Fear,” a newly published book by Bob Woodward that paints a harrowing portrait of the Trump presidency, based on in-depth interviews with administration officials and other principals.

Yes, this seems all true, and in fact the article is a review of Woodward´s ¨Fear¨.

Here is some more:

Woodward depicts Trump’s anger and paranoia about the Russia inquiry as unrelenting, at times paralyzing the West Wing for days. Learning of the appointment of Mueller in May 2017, Trump groused, “Everybody’s trying to get me”—part of a venting period that shellshocked aides compared to Richard Nixon’s final days as president.

Woodward, an associate editor at The Post, sought an interview with Trump through several intermediaries to no avail. The president called Woodward in early August, after the manuscript had been completed, to say he wanted to participate. The president complained that it would be a “bad book,” according to an audio recording of the conversation. Woodward replied that his work would be “tough,” but factual and based on his reporting.

A central theme of the book is the stealthy machinations used by those in Trump’s inner sanctum to try to control his impulses and prevent disasters, both for the president personally and for the nation he was elected to lead.

Yes indeed - and I add to the last quoted paragraph that in my psychologist´s opinion Trump is insane, simply because he very probably has a grandiose or malignant narcissistic personality disorder, which makes him, in my opinion, and the opinion of many psychologists and psychiatrists utterly unfit to be president of the USA.

Here is some more:

Woodward describes “an administrative coup d’etat” and a “nervous breakdown” of the executive branch, with senior aides conspiring to pluck official papers from the president’s desk so he couldn’t see or sign them.

Again and again, Woodward recounts at length how Trump’s national security team was shaken by his lack of curiosity and knowledge about world affairs and his contempt for the mainstream perspectives of military and intelligence leaders.

I am not amazed one bit, but admit that I have been writing about Trump a lot. Here is the last bit that I quote from this article:

On March 5, Dowd and Trump attorney Jay Sekulow met in Mueller’s office with the special counsel and his deputy, James Quarles, where Dowd and Sekulow reenacted Trump’s January practice session.

Dowd then explained to Mueller and Quarles why he was trying to keep the president from testifying: “I’m not going to sit there and let him look like an idiot. And you publish that transcript, because everything leaks in Washington, and the guys overseas are going to say, ‘I told you he was an idiot. I told you he was a goddamn dumbbell. What are we dealing with this idiot for?’ “

“John, I understand,” Mueller replied, according to Woodward.

Later that month, Dowd told Trump: “Don’t testify. It’s either that or an orange jumpsuit.”

But Trump, concerned about the optics of a president refusing to testify and convinced that he could handle Mueller’s questions, had by then decided otherwise.

“I’ll be a real good witness,” Trump told Dowd, according to Woodward.

“You are not a good witness,” Dowd replied. “Mr. President, I’m afraid I just can’t help you.”

The next morning, Dowd resigned.

I say. And this is a recommended article, with a lot more than I quoted.


4. Trump’s Economic Boom Is Only for the Rich

This article is by Amanda Marcotte on AlterNet and originally on Salon. It starts as follows:
The much-anticipated 2018 midterm elections are looming, with widespread expectations that the historic unpopularity of Donald Trump will lead to big gains for the Democrats come November. But the political media, always ready to inject some drama and tension into what is already a stressful election season, believes it has found the fly in the ointment: The economy. The narrative that's taken hold is that the economy is doing smashing and the only question is whether or not Trump will be able to take credit, or whether voters hate him so much that they will vote against his party anyway.
The reporting is quite true, though what it reports on is quite false: At most 10% of the Americans got better from the blooming economy, and these are almost exclusively the rich or their - well earning - servants, and not the 90% of all non-rich.

Here is more:
The reality is that ordinary Americans may not be feeling the effects of this allegedly booming economy, and Trump administration policies that line the pockets of the rich while undermining social safety net programs Americans rely on will only make the impact of income inequality worse.
Quite so. And this is on the 90% of the non-rich Americans:
Households are barely getting back to where they were before the crash of a decade ago and, unfortunately, the value of work doesn't seem to have improved nearly as much as it should have. One particularly telling trend is that earnings actually went down for people who have full-time jobs. The American dream, in which a person can work full time and create a proper nest egg for herself, continues to be elusive for huge chunks of the country.
Precisely. Here is the last bit that I quote from this article:
House Republicans are already working on a planthey call "Tax Reform 2.0," which is designed to make tax cuts for the wealthy permanent, along with other policies that favor the wealthy and upper middle class while leaving out poor people and people who are struggling to save money out of the loop entirely. Worse, progressive economists fear that this will be used as an excuse to gut programs that help keep people out of poverty.

"The Tax Scam 2.0 is yet another part of a well-worn conservative playbook: Explode deficits with massive tax cuts, then ask the middle class to pay the price through cuts to Social Security, Medicare, and other priorities that are important to a majority of Americans," Alexandra Thorton, tax policy director at the Center for American Progress, said in an emailed statement.

Yes indeed: quite so. And this is a strongly recommended article.

5. On 10th Anniversary of Wall Street Crash, Warren Says: Break Up the Banks and Jail the Bankers

This article is by Jake Johnson on Common Dreams. It starts as follows:
With Saturday marking the tenth anniversary of the collapse of Lehman Brothers and the start of the worst financial meltdown since the Great Depression, Sen. Elizabeth Warren (D-Mass.) declared Thursday night that the only way to avoid another crisis is to break up the Wall Street banks that caused it and hold wealthy executives accountable for their crimes.

"Oh, yeah. Give me a chance," Warren said when asked by Andrew Sorkin of the New York Times if she still supports breaking up big banks, many of which are far larger than they were before the 2008 crash.

"We have got to change the rules," Warren declared, highlighting her effort to implement a 21st century Glass-Steagall Act to separate commercial and investment banking. "This Congress rolling back regulations on the biggest financial institutions, rolling back regulations on Wall Street, this is absolutely the wrong direction for us to go."

Asked if the United States is prepared for another crisis—which a bipartisan deregulatory measure passed in March makes far more likely—Warren responded: "No, not even close."

I completely agree with Sen. Warren. Here is some more:

In addition to pushing for stronger safeguards against big bank speculation, Warren also argued in a tweet on Thursday that "we need to start holding Wall Street executives accountable" if we are to avoid another crash.

Far from being held accountable for their actions, former Lehman Brothers executives and staffers are reportedly holding a ritzy tenth anniversary get-together on Saturday to celebrate the anniversary of their firm's collapse.

"I introduced the Ending Too Big to Jail Act to force law-breaking bankers to trade in their pinstripe suits for orange jumpsuits," Warren said, highlighting legislation she unveiled in March.

Precisely. Here is the last bit that I quote from this article:

Thanks to the Obama administration's bailouts and the Trump administration's massive gifts to Wall Street in the form of tax cuts and deregulation, America's five biggest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs—have raked in more than $583 billion in combined profits since the crisis, according to a new analysis by Public Citizen published this week.

In an op-ed for USA Today on Friday, Morris Pearl—former managing director of the financial firm BlackRock Investments and now chair of the Patriotic Millionaires—argued that by allowing Wall Street firms to continue to expand and engage in risky betting, the Trump administration is actively heightening the risk of another major crisis.

Quite so, again. And this is a strongly recommended article.


Note
[1] I have now been saying since the end of 2015 that xs4all.nl is systematically ruining my site by NOT updating it within a few seconds, as it did between 1996 and 2015, but by updating it between two to seven days later, that is, if I am lucky.

They have claimed that my site was wrongly named in html: A lie. They have claimed that my operating system was out of date: A lie.

And they just don't care for my site, my interests, my values or my ideas. They have behaved now for 2 years as if they are the eagerly willing instruments of the US's secret services, which I will from now on suppose they are (for truth is dead in Holland).

The only two reasons I remain with xs4all is that my site has been there since 1996, and I have no reasons whatsoever to suppose that any other Dutch provider is any better (!!).
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