CRASH TALK

Robert Reich, Salon - The Wall Street bailout is starting to look like the most expensive tax-supported fiasco in history. The problem for the Obama administration is that this bailout is near the very center of the president 's economic recovery program. It's not possible for the economy to bounce back until credit markets are working again. Yet even though the bailout so far is a bust, Geithner still hasn't decided -- or told the public -- how he's going to use the remaining $300 billion of bailout money differently.

The president cannot afford to lose the public's confidence that his administration is a careful steward of the public's money. The public was willing to go along with a large stimulus package. But it won't go along with a second stimulus, and certainly not another TARP. And until the public feels confident that its money isn't being thrown down a rat hole, it may balk at other ambitious undertakings such as healthcare or education or the environment.

Before it can clean up Wall Street or do much of anything else, the administration has to clean up the way it's been trying to clean up Wall Street.

Frank Rich, NY Times - In general, it's hard to imagine taxpayers shelling out billions for a second bank bailout unless there's a full accounting of every dime of the first. . .

Why has there been so little transparency and so much evasiveness so far? The answer, I fear, is that too many of the administration's officials are too marinated in the insiders' culture to police it, reform it or own up to their own past complicity with it.

The "dirty little secret," Obama told Leno, is that "most of the stuff that got us into trouble was perfectly legal." An even dirtier secret is that a prime mover in keeping that stuff legal was Summers, who helped torpedo the regulation of derivatives while in the Clinton administration. . .

Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was pushed out of Harvard's presidency at the bubble's height, you have to wonder how he can now sell the administration's plan for buying up toxic assets with the help of hedge funds. It will look like another giveaway to his own insiders' club. As for Geithner, people might take him more seriously if he gave a credible account of why, while at the New York Fed, he and the Goldman alumnus Hank Paulson let Lehman Brothers fail but saved the Goldman-trading ally A.I.G.

Paul Rosenberg, Open Left - It's not a question of doing Wall Street's bidding, because they won't, necessarily. Rather, it's a question of thinking Wall Street's thoughts, of having absorbed them by osmosis for so long, and through so many channels that even when they seek to oppose Wall Street on some issue or another, the form it takes is virtually indistinguishable from agreement to anyone who's not an insider themselves.

Washington Post - Maryland could become the first state in the country to make it illegal for credit card companies to retroactively change their interest rates, a practice that can force people who owe money further into debt. The legislation passed the House of Delegates, and its prospects in the state Senate probably will be boosted by a national mood that has turned powerfully against banks and in favor of struggling consumers. The bill would prohibit card companies that change their rates from applying the new rate to debt a consumer already has incurred. Card companies often do that now when a computer detects that a customer has missed a payment on a different card or loan. Even if the customer decides the new rate is too high and cancels the card, the new rate can be applied to debt the customer already has. Federal regulations adopted in January would establish similar protections nationwide in July 2010. But if the Maryland bill passes, it would go into effect this summer, giving state consumers the safeguards a year early.

Rufus and Kristan Lawson, Scavenger's Manifesto: Why Dumpster Diving Can Save You from Going Off the Deep End - Two thousand years ago, half the world's population survived by hunting and gathering. With the rise of civilization, old-fashioned hunting and gathering became virtually obsolete. But all modern-day scavengers are hunter-gatherers. Define hunter-gathering as foraging, taking what comes. Define it as sublimating choice to the bigger thrill of chance. It translates to saving money and potentially working less. It translates to dodging whatever market sector some genius thinks you belong to. Modern scavenging means wearing, using and eating castoff goods from countless strangers, thus you cannot be predicted, tracked, deciphered. You are the mystery. With lighthouse eyes, you find furniture, fashions, art, appliances, jewelry, food. You scavenge seeds. Sometimes you do not know what they are when you plant them, and find out only when plants rise: My garden grows parsley, purple tomatillos, three kinds of bok choy. You never know. . . Some scavenge for fun. Some scavenge to save. Money. The world. Their souls. While consumers around us drown in debt, we liberate ourselves with every cent we save while liberating would-be trash.

Matt Taibbi, Rolling Stone - It's over - we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline - a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history - some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial - we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck - bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." . . .

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.

BBC - Nineteen US states are demanding that insurance giant AIG reveal details of bonuses paid to executives, so they can take steps to recover the funds. This comes after New York Attorney General Andrew Cuomo said AIG had given him such a list.. . . Connecticut has also subpoenaed AIG for the details. Governor Jodi Rell said the state would pursue "all legal means available to void the bonuses and recapture the taxpayer dollars." The coalition of states is made up of Arizona, Delaware, Illinois, Kentucky, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Washington and West Virginia.

Chris Bowers, Open Left - In Fiscal Year 2008, the federal government allocated $153 billion on the Iraq war. While that was the most of any year since the war began, it is still less than the $170 billion the government has spent on AIG in the last six months. The $170 billion in six months is also larger than the six-month GDP of all but 26 countries in the world, according to the World Bank. The country right behind AIG expenditures in the rankings is Denmark. We could have paid the salary of everyone in Denmark for six months, and still spent less money than we spent on AIG.

Marnie Glickman, Green Change - It's not only AIG that is taking advantage of American taxpayers. Congress is too. In January, Members of Congress gave themselves a $4,700 pay raise. They now earn a princely $174,000 annual salary, plus pension and perks. Twenty years ago, Congress passed the infamous "midnight pay grab" granting itself automatic pay raises. Finally, on March 17th, the U.S. Senate voted to stop the automatic annual pay raises. However, House Democratic leaders want to keep the automatic pay raises. House Majority Leader Steny Hoyer said he's "not for" the bill to stop the automatic pay raises, and that he "not going to commit to bringing it to the floor."