Today I will be referring back to my post Is Is China Buying Kennecott Copper? I will examine the financial policies of the Heritage Foundation and explain why I believe their policies gave China their large reserve of US dollars, and an economic advantage.
I will go on to explain why the Heritage Foundations policies are diametrically opposed to Reaganomics, contrary to their claim. This is based off from an article by Paul Craig Roberts who served as an economist under the Reagan Administration and is said to be the “Father of Reaganomics.” All referenced material can be found on my earlier post Is China Buying Kennecott Copper.
Additional information that was provided at the end of the show:
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/18/AR2008091804211.htmlIn Crucible of Crisis, Paulson, Bernanke, Geithner Forge a Committee of Three
By David Cho and Neil Irwin
Washington Post Staff Writers
Friday, September 19, 2008; Page A01From the rescue of Bear Stearns to the takeovers of Fannie Mae, Freddie Mac and American International Group, all the key decisions have been made by Treasury Secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and Timothy F. Geithner, the president of the Federal Reserve Bank of New York.
Timothy F. Geithner helped organize the bailout of AIG. AIG has paid the most money out to Goldman Sachs. Henry M. Paulson was a Chief Officer at AIG until 2006 when Bush appointed him to be Treasury Secretary http://en.wikipedia.org/wiki/Henry_Paulson#Goldman_Sachs Obama
People who worked for Goldman Sachs got second place for donating to Barack Obama’s campaign http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638
http://counterpunch.org/hudson03182009.html
Here’s the problem with all the hoopla over the $135 million in AIG bonuses: This sum is only less than 0.1 per cent – one thousandth – of the $183 BILLION that the U.S. Treasury gave to AIG as a “pass-through” to its counterparties. This sum, over a thousand times the magnitude of the bonuses on which public attention is conveniently being focused by Wall Street promoters, did not stay with AIG. For over six months, the public media and Congressmen have been trying to find out just where this money DID go. Bloomberg brought a lawsuit to find out. Only to be met with a wall of silence.
Until finally, on Sunday night, March 15, the government finally released the details. They were indeed highly embarrassing. The largest recipient turned out to be just what earlier financial reports had rumored: Paulson’s own firm, Goldman Sachs, headed the list. It was owed $13 billion in counterparty claims. Here’s the picture that’s emerging. 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.
Let’s go after the REAL money given to AIG – the $183 billion! I realize that this has already been paid out, and we can’t get it back from the counterparties who knew that Alan Greenspan and George Bush and Hank Paulson were steering the U.S. economy off a real estate cliff, a derivatives cliff and a balance-of-payments cliff all wrapped up into one by betting against collateralized debt obligations (CDOs) and insuring these casino bets with AIG. That money has been siphoned off from the Treasury fair and square, by putting their own proxies in the key government slots, the better to serve them.
So let’s go after them altogether. Sen. Schumer said to the AIG bonus recipients that the I.R.S. can go after them and get the money back one way or another. And it can indeed go after the $183-billion bailout recipients. All it has to do is re-instate the estate tax and raise the marginal income and wealth-tax rates to the (already reduced) Clinton-era levels.
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