It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.

Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.

The money was packed onto pallets inside a heavily guarded New York Federal Reserve compound in East Rutherford, New Jersey, trucked to Andrews Air Force Base outside of Washington, and flown by military aircraft to Baghdad International Airport.

By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. But soon after the money arrived in the chaos of war-torn Baghdad, the paper trail documenting who controlled it all began to go cold...
 

On this day, December 30th, in 1936 — 75 years ago today — hundreds of workers at the General Motors factories in Flint, Michigan, took over the facilities and occupied them for 44 days. My uncle was one of them.

The workers couldn't take the abuse from the corporation any longer. Their working conditions, the slave wages, no vacation, no health care, no overtime — it was do as you're told or get tossed onto the curb.

So on the day before New Year's Eve, emboldened by the recent re-election of Franklin Roosevelt, they sat down on the job and refused to leave.

They began their Occupation in the dead of winter. GM cut off the heat and water to the buildings. The police tried to raid the factories several times, to no avail. Even the National Guard was called in...

But now, I think, the game is at long last over.

As 2011 slithers to its end, none of the major problems that led to the crisis point three years ago have really been solved. Bank balance sheets still reek. Europe day by day becomes a financial black hole, with matter from the periphery being sucked toward the center until the vortex itself collapses. The Street and its ministries of propaganda have fallen back on a Big Lie as old as capitalism itself: that all that has gone wrong has been government's fault. This time, however, I don't think the argument that "Washington ate my homework" is going to work. This time, a firestorm is going to explode about the Street's head—and about time, too...

This time, I fear, the public anger will not be deflected. Confessions, not false, will be exacted. Occupy Wall Street has set the snowball rolling; you may not think much of OWS—I have my own reservations, although none are philosophical or moral—but it has made America aware of a sinister, usurious process by which wealth has systematically been funneled into fewer and fewer hands. A process in which Washington played a useful supporting role, but no more than that.

Over the next year, I expect the "what" will give way to the "how" in the broad electorate's comprehension of the financial situation. The 99 percent must learn to differentiate the bloodsuckers and rent-extractors from those in the 1 percent who make the world a better, more just place to live. Once people realize how Wall Street made its pile, understand how financiers get rich, what it is that they actually do, the time will become ripe for someone to gather the spreading ripples of anger and perplexity into a focused tsunami of retribution. To make the bastards pay, properly, for the grief and woe they have caused. Perhaps not to the extent proposed by H. L. Mencken, who wrote that when a bank fails, the first order of business should be to hang its board of directors, but in a manner in which the pain is proportionate to the collateral damage. Possibly an excess-profits tax retroactive to 2007, or some form of "Tobin tax" on transactions, or a wealth tax. The era of money for nothing will be over...

There will be violence, mark my words. Houses burnt, property defaced. I just hope that this time the mob targets the right people in Wall Street and in Washington. (How does a right-thinking Christian go about asking Santa for Mitch McConnell's head under the Christmas tree?)...

At the end of the day, the convulsion to come won't really be about Wall Street's derivatives malefactions, or its subprime fun and games, or rogue trading, or the folly of banks. It will be about this society's final opportunity to rip away the paralyzing shackles of corruption or else dwell forever in a neofeudal social order. You might say that 1384 has replaced 1984 as our worst-case scenario. I have lived what now, at 75, is starting to feel like a long life. If anyone asks me what has been the great American story of my lifetime, I have a ready answer. It is the corruption, money-based, that has settled like some all-enveloping excremental mist on the landscape of our hopes, that has permeated every nook of any institution or being that has real influence on the way we live now. Sixty years ago, if you had asked me, on the basis of all that I had been taught, whether I thought this condition of general rot was possible in this country, I would have told you that you were nuts. And I would have been very wrong. What has happened in this country has made a lie of my boyhood.

There should be more to America, Gore Vidal has written, than who pays tax to whom. It has been in Wall Street's interest to shrivel our sensibilities as a nation, to shove aside the verities of which General MacArthur spoke at West Point—duty, honor, country—in favor of grubby schemes and scams and "carried interest" calculations. Time, I think, to take the country back.

The anciens régimes in various guises keep trying to play by the old rules, expecting the people to fold, yet the people—tens and hundreds of thousands of them—keep pushing back. To state this fact is not to romanticize the revolutionary moment, but rather to begin appreciating it as something different in scope and kind from anything that has come before. Never has such a vast region had such young populations. Half the people of Egypt are not yet 25; half those of Syria are younger than 22. In Yemen the median age is 18.

The level of contact and communication these Arabs enjoy was inconceivable to their parents. And yet the young people take it for granted, as part of the natural order in which they're growing up. Twenty years ago, there was no 24-hour satellite news station in Arabic. Now there are many. By 2009, according to a University of Maryland survey of the Arab world, some 80 percent of the respondents were getting their international news from television, and most (58 percent) were getting their headlines from Qatar-based Al Jazeera. Follow-up polls find that the Arab public has widened its range of news sources: about 27 percent of those connected to the Internet have signed on to the Web for the first time in just the past year. Perhaps most important, in a region where telephone landlines were difficult to obtain and tightly monitored until the late 1990s, roughly a third of Egypt's people now have mobile phones. In Saudi Arabia, most people have more than one.

Anybody paying the least attention to the Middle East knew those two basic trends in Arab fecundity and connectivity. But no one really foresaw what would happen when you stirred them together on the streets of Tunis or in Tahrir Square. And anyone who claims to have figured out exactly where that volatile and creative mix will take the region is still just guessing. The only certainty is that the Arabs will keep surprising the West, and very often themselves: pushing back when historically they would have been expected to submit, developing new strategies for thwarting demagogues, and over time—it's impossible to say how much time—shaping their own sorts of democracies.

There are grave misgivings about this new dynamic in the West. There's the sudden and unsettling realization that the old deals cut with Arab despots may not sit so well with the despots' former subjects. And yes, those despots' peace treaties and tacit understandings with Israel could be examples. But the hoary enmity toward the Zionists is, like most other history, not especially relevant at the moment to the Arab kids who are taking over the Arab world (unless the Israelis give them reason to care anew—and as of this writing, that has not happened)...

The impoverished peasants who subsisted in this information-starved world resembled the rural society Karl Marx described in France in the 1850s: a conglomeration rather than a class. Its members had no interconnectivity outside their families and villages. They were like "potatoes in a sack," Marx wrote: "They cannot represent themselves, they must be represented."...

The rich, conservative monarchies are viewed with deep suspicion by young democrats, who are sure the Saudis and Qataris are underwriting retrograde Salafism at the expense of secular liberalism. But the royals also seem to be supporting democratic freedoms elsewhere as a way of coopting dissenters at home. (They once did the same with jihadists.) Is that a risky proposition? Sure. But they're no better at reading the entrails of sacrificed dictators than anyone else has been...

And even if it were, the era when such takeovers were feasible has passed. There are too many men and women who have too many ways of making their voices heard, whether on the streets or in cyberspace. There's no looking back. These once-closed societies are now open or opening, and that process cannot be reversed. The history of the modern Arab world has only just begun.

Reagan insider: 'GOP destroyed U.S. economy'
by Paul B. Farrell
MarketWatch
August 10, 2010
 

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider — someone so close to the development of the Reaganomics ideology — says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish...

Do we need more proof Washington's not working for middle class families? We got it once again this week.The big banks and their army of lobbyists couldn't stop the creation of a new Consumer Financial Protection Bureau, so now they are trying to undermine its work, enlisting their Republican friends on the Senate Banking Committee to stop the nomination of Richard Cordray to lead the agency — just to try to slow up the agency from doing its work.It's outrageous — and we've got to hold them accountable.

Senate panel concludes Goldman Sachs profited from financial crisis

 

A Senate panel report made public Wednesday says Goldman Sachs Chief Executive Lloyd Blankfein, shown above, and other executives at the investment banking giant misled the Senate's Permanent Subcommittee on Investigations. They did so, the report says, when they appeared before the subcommittee last April and testified that the investment bank had not consistently tilted its own investments heavily against the housing market - a position known as being "net short." 

then again, he served as Chairman of President George W. Bush's Council of Economic Advisers, and it was the Republican policies of deregulation and lack of enforcement when the Republicans controlled the White House, the Senate, and the House of Representatives that led the American economy off the cliff... Bush did not veto a single federal spending bill his first five years in office, when the Republicans controlled the House and the Senate... the federal deficit rose more during the Bush years than all previous 42 presidents combined...

Bernanke did mention how unfortunate and unwise it was that AIG was unregulated, but that is not even the tip of the iceburg that wrecked the American economic Titanic... he did not say anything about unregulated NINJA loans...

Scott Pelley acted all stunned and surprised when Bernanke said it would take another five years for the American economy to recover, but that is actually a wildly optimistic prediction... in reality, it will probably take at least 20 years, if the economy ever does recover, which is iffy...

first, the reason it will take so long is all based on what was the cause of the economic disaster— American real estate... with reality-based steady economic growth, rather than bubbles doomed to burst, real estate goes up in value in America an average of a hundred bucks a month... so for houses to rise in value to what they possessed when they were sold when the subprime bubble had risen, with the growth of about 1200 bucks a year, it will take at least 20 years for the houses to be worth what they were in 2006...  and we are by no means even in the beginning of recovery yet, because home foreclosures are still setting new records every month, so it will be some time before the real estate even begins to increase in modest value... 

second, in the interview with Pelley, Bernanke himself described how 8.5 million jobs were lost in the crash, and only a million jobs have been recovered... so if it takes over two years to recover a million jobs, then again, we are looking at about 20 years before full employment again...

but there are other factors that make me even more pessimistic... China, with a billion consumers, has a lot more spending power now, so the global demand for oil and food is increasing, and the supply is not increasing, which means the prices are going up... gas will easily be three bucks a gallon for American drivers a year from now, and I am being optimistic with the price still that low... energy prices for home and business utilities are going up... food prices are going up, too...

so Americans face higher prices and lower wages for years to come...

At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed, and the American people now have this information...

What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.

We also learned that the Fed's multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald's, Caterpillar, Harley Davidson, Toyota and Verizon.

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse — which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.

Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities.  Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.

Has the Federal Reserve of the United States become the central bank of the world?

The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college. Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis they started never happened...

I intend to investigate whether these secret Fed loans, in some cases, turned out to be direct corporate welfare to big banks that used these loans not to reinvest in the economy but rather to lend back to the federal government at a higher rate of interest by purchasing Treasury Securities. Instead of using this money to reinvest in the productive economy, I suspect a large portion of these near-zero interest loans were used to buy Treasury Securities at a higher interest rate providing free money to some of the largest financial institutions in this country. That is something that we have got to closely examine...

We have begun to lift the veil of secrecy at one of most important agencies in our government. What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people.