Daily Archives: March 28, 2009

William Greider Confirms Taibbi

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Follow this link to William Greider’s appearance on the Bill Moyers’ show.

Although they do not acknowledge the Taibbi article in Rolling Stone, ‘The Big Takeover’ (on AIG-Fin’l Products), I think they are confirming the worries that he raised.

The irony of not acknowledging the Taibbi story is that you really won’t understand Greider’s concerns unless you have read the Taibbi story.

I am now beginning to think that the real disservice that Paul Krugman has been doing in his criticism’s of President Obama’s bailout plans, is that Krugman has been too vague about what really concerns him.  By just claiming that Obama/Geithner are just furthering the Paulson plan of “Cash for Trash”, he has made it too easy to dismiss his criticisms.

Not until I read the Taibbi article did I start to get the picture of what the real problem is.   I was even fooled by the second half of the Charlie Rose Show of March 23. I blogged about this in The Pros and Cons of the Obama Rescue Plan.

I now see how I may have been taken in by the resignation letter of the AIG Financial Products Vice President. See my blog entry The Other Side of the AIG Bonuses Story. At least I was smart enough when I wrote the blog to say that I could not attest to the truthfulness of what was in the letter.  I called it food for thought.  I am beginning to think that this letter is not digestable.

I also ought to acknowledge that in one way or another, Richard H has been trying to tell me some of this stuff for years. I am really glad that he posted the blog item about the Taibbi story.  I also was too dismissive  of Richard H’s post Karl Denninger’s ‘Open Letter to the Ombudsman’ on the PPIP.

It is even getting to the point where I may actually have to pay attention to what Ron Paul has been saying.  He is the Republican Presidential Candidate in the last election whose main point was the damage that the Federal Reserve was doing to our country. I am not sure if he was right for the right reasons or right for the wrong reasons, but perhaps he was right.

Taibbi – ‘The Big Takeover’ (on AIG-Fin’l Products) 1

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On 19 March 2009, Matt Taibbi (in overly salty prose) wrote The Big Takeover (provocatively subtitled ‘The global economic crisis isn’t about money – it’s about power; how Wall Street insiders are using the bailout to stage a revolution’) in Rolling Stone Magazine. He describes some of the internal workings at AIG’s Financial Products subsidiary in London which was responsible for AIG’s credit default swap (CDS) business. He describes the lax (and, sometimes, non-existent) regulatory oversight of the business, and some of the deregulation history. He bemoans the repeal of the Glass-Steagall Act engineered by Senator Phil Gramm and enacted in the waning days of the Clinton administration. And he expresses concern over whether the Obama administration will be able to assert appropriate control over the financial services industry.

The article is long but intriguing, going into some details of AIG-FP that I had not heard before.

Note: Rolling Stone has now truncated the version of this article on its website. However, Alternet is mirroring the full article.