According to Matt Taibbi, the current actions being taken to repair the economy amount to a giant and successful takeover of the country by Wall Street insiders. As usual, his essay speaks clearly about the causes and results of the scandalous behavior of AIG (as one example), is required reading.
People are pissed off about this financial crisis, and about this bailout, but they’re not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d’état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — “our partners in the government,” as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.
The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
Jane Hamsher at firedoglake has more:
…underlying the public’s trust was the assumption that those in charge were doing this because there was no other choice, and they thought people like Timothy Geithner knew it was their job to keep the people who had looted their retirement funds and sacked their value of their homes from profiting from taxpayer largesse while they struggled. They most certainly did not share Timothy Geithner’s belief that everyone in the banking industry should continue to get rich.
It’s impossible to know when Geithner realized that the AIG bonuses were eminent, but one thing is clear — he did not anticipate the public rage, the critical breaking of trust that the bonuses symbolized. He thought he could stomp around a bit, shake his head and talk about “outrage” but it would eventually blow over. He, the administration and the anxiety pundits do not seem to realize that the AIG bonuses are not just a “drop in the bucket.” They trigger a whole set of ugly conclusions. As dday says, “the public knows intuitively that they’ve been getting a raw deal for decades, and the bonuses are only a small part of the story.”
What they telegraph to the American public, quite appropriately, is that the people in charge are perpetuating a broken system and enriching their friends at taxpayer expense, and it calls into question everything they have been told. It’s a signal that the whole thing is a crock, that it’s no more than a great and penultimate oligarchical looting.