Obama: Corruption We Can Believe In

by: Jacob Freeze

Sun Mar 22, 2009 at 10:20

Our "establishment" is corrupt, and public outrage about the AIG bonuses is a very good thing, because it scares the corrupt "elite," and fear is the only force that can control those monsters.

This is only half right, as far as it goes, but it doesn't go quite far enough, and stops at a politically safe distance from the Oval Office, which is exactly where the buck is supposed to stop, and where Barack Obama continues to enable and support the most corrupt financial "establishment" since exactly the same corrupt "establishment" produced the Great Depression.

The whole chorus is singing in unison about the corruption of Henry Paulson and Tim Geithner, and somehow forgetting that Mr. Obama was already supporting humongous give-aways to corrupt banks in their most blatant conceivable manifestation, during his last debate with John McCain, when he endorsed Paulson's grab at an absolutely unrestricted mountain of money, $700 billion, and it wasn't just a blank check that Obama wanted Congress to sign over to Paulson... it even included pre-emptive immunity from prosecution!

Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.

It now looks as if Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIG's counterparties. This is where public outrage should be focused.

Instead, the leading Congressional shepherds of the bailout legislation - along with Obama, who came out in his final, Friday night presidential debate with McCain strongly in favor of the bailout in Paulson's awful "short" version - have been highlighting the AIG executives receiving bonuses, not the company's counterparties.

So Obama was already on board the gravy train for Goldman Sachs and AIG on October 15, 2008, and celebrating "the financial rescue plan that Senator McCain and I supported," with zero accountabilty, and not even the foggiest idea where the money would go, except wherever Henry Paulson wanted to put it.

And now that Mr. Obama is driving that gravy train, instead of just tooting its whistle in Congress and Presidential debates, it just keeps rolling faster and faster, with yet another trillion dollars on track for "quantitative easing," yet another exotic financial device that almost none of us had ever heard of, only a few weeks ago.

I'm glad that the AIG bonuses have finally waked up a little outrage in the slumbering public, and I'm glad that Krugman and James Galbraith and Glenn Greenwald and Atrios are denouncing the corruption of our governing "elite," or "establishment," or whatever they choose to call it, but it's absurd to denounce so many soldiers and under-bosses of our homegrown financial mafia, and yet leave out the kingpin of the whole operation, the capo di tutti i capi, Barack Obama, the infinitely generous godfather of the most blatantly corrupt mob of financiers since an almost identical gang of thieves produced the Great Depression.