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Ali Baba & the Forty Thieves The reason I was thinking of Ali Baba is, I was wondering: how do we open our present treasury chambers and political backrooms, what are the magic words that will open up and shine a light on today's secrets? Many of those secrets are so ugly and festering and rotting, at the very least they badly need a ray of daylight. The fact that Ali comes with Forty Thieves in tow of course makes his tale all the more appealing as a metaphor for our times. President Obama thinks he can help: he considers bailing out newspapers, ostensibly to promote journalistic notions such as truth-finding. "I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding,"But that of course is the horse a mile and a half behind the cart. And in left field to boot. The reason the blogosphere has gained so much attention is that "serious fact-checking" is a long forgotten part of American journalism. And -financial- government involvement in the news industry, whatever else it may indeed accomplish, is not exactly the most obvious way to get a reporter to go digging in that same government's dirt. What Obama complains about in the blogosphere, that it's all about opinions, doesn't describe that sphere, it describes the news industry that is no longer able to deliver any shrapnel of news without having first run it through the opinion wringer of its editors and ownership. Whoever wishes to get a fair picture of today's reality has no choice but to turn to the internet. This is so obvious by now, it's become useless to deny. Which means it would be a far better idea to fund those sources, not the established papers, so people can go out digging for the truth who are not affiliated in some way or another with existing interests. Let me give two examples of subjects that badly need the kind of serious journalism that is simply not provided by the media we expect it from. Ron Paul has long clamored for an audit of the Federal Reserve. Tim Geithner apparently has proposed a setting in which the Fed, along with "outside experts", can go through its own books. That should work.... The Fed, of course, has said no. I don't find this all that interesting. Simply because I don't think a real audit of the Fed has any chance of happening. What I would like to see answered first of all is on what authority Congress, or the White House for that matter, could force the Fed to open up. Go through the 1913 statutes, or whatever they may be called, with which Congress founded the Federal Reserve. In those statutes, Congress gave away its constitutional right to issue the nation's money, an act that in itself may very well be unconstitutional: the Founding Fathers never meant for a privately owned central bank to issue the nation's currency, so is it legal for Congress to hand over its constitutional authority to such an institution? And when it did anyway, did Congress still retain the right to audit the Fed? I'm no lawyer, but I would seriously doubt it. Which is why I think that all the noise Ron Paul is making is just that, noise. Whether he knows that, I can't tell. You would hope, though, that he's prepared before making his noise. But that makes him a suspect person in my view. I'd venture that all Congress can do is to abolish the Fed (not going to happen), not audit it. But yes, by all means, let's have some Woodwards and Bernsteins out there figure it out in the interest of the American people. If the president wants to fund the research, fine by me, as long as he keeps his nose out of it. Oh, and while they're at it, perhaps their bosses can explain to us why this wasn't already done a long time ago. A second story that badly needs good reporting is the Bank of America takeover of Merrill Lynch, along with the questions concerning who knew what when and what on earth made the SEC try and sweep it under the carpet for $33 million. In a nutshell: Fed chairman Ben Bernanke and then Treasury Secretary Paulson are alleged to have pressured BofA into taking over Merrill, after it found out Merrill's situation was much worse than it initially presumed (which is weird in itself: why didn't they read the books a bit better?). The extent of Merrill's problems was then -allegedly- kept from BofA's shareholders leading up to their December 5 2008 vote on the takeover. What was also not revealed, nay, even denied, was that BofA's execs had agreed to pay Merrill execs $5.8 billion in bonuses for running their bank into the ground. It's that last little ditty that the SEC, on August 3 2009, agreed to settle with BofA for $33 million. However, 2 days later, Federal Judge Jed Rakoff refused to accept the settlement. A nice detail: at least one former Merrill employee received a bonus bigger than the intended $33 million settlement sum. What seems to have irked Judge Rakoff more than anything is that the shareholders, whose interests were harmed by the failure to disclose the bonus payment agreement, would be on the hook for the $33 million supposed to settle the case that harmed them. Rakoff has set a court date no later than February 10, 2010. So far, it looks like just another tale out of 1001 nights of Wall Street toxicity, albeit with a refreshing point of view from the judicial branch in the playbook. But this may still not be the whole story. New York Attorney General Andrew Cuomo is also looking into the case, and he subpoenaed 5 BofA directors last week. Cuomo wants to know whether BofA directors withheld information from shareholders. Cuomo’s investigators will ask directors how much they knew about Merrill’s losses, and the role they played in decisions about disclosing information to shareholders. They will also ask if government officials threatened to remove BofA’s management and the board if the bank didn’t proceed with the deal. Cuomo. Ran for governor in 2002, and failed. Would like another run. He's a career man, married a Kennedy and all that. Has a good team at his disposal, like Elliot Spitzer did when he held the AG post. Spitzer successfully did make the jump to governor. Cuomo. What would happen if he keeps digging? How would his investigation cross-pollinate with the case before Judge Rakoff? Looks like a great case for a group of go-getting reporters to me. The problem I think with this case is that it looks so much like Watergate, in that it reaches right up to the highest offices in the land. Maybe not the Oval Office, we’ll have to see about that, but certainly uncomfortably close to it. There are persistent rumors that the Obama team is pressuring New York State Governor David Paterson not to run for another term. Not because it would hurt the Democratic Party, which is the "official"reason, say these rumors, but to open the way for Andrew Cuomo, to move from being Attorney General to making a run for Governor. What the rumors argue (if rumors can be said to do such a thing) is that this would conveniently move Cuomo out of the way of an investigation that he's in the middle of, and that has the potential to damage the reputations of eminent Wall Street bankers as well as very eminent Washington politicians, from both the Bush and Obama administrations. Now we're getting closer. From where I am seated, I'd suspect that Tim Geithner is sitting neither pretty nor easy. Geithner has so far largely been kept out of the limelight, but he was leading the New York Fed when the BofA/Merrill takeover was being pushed through. It was Geithner's legal team that handled all the details surrounding the deal, which obviously took place inside the New York Fed's jurisdiction. So what did Geithner know? On April 23, the Wall Street Journal published this revealing article: Lewis Testifies U.S. Urged Silence on Deal, which claims that Paulson and Bernanke pushed BofA CEO Ken Lewis to hide the truth about Merrill Lynch from BofA shareholders ahead of their vote on the takeover. Yes, that would be highly illegal if it turns out to be true. Threatening to kick Lewis out of his job if he didn't comply with the plans is then merely the icing on the criminal cake. The article doesn't mention Geithner at all. Ain't that just the most curious thing? However, Rep. Edolphus Towns (D-N.Y.) asked Geithner about his role in the takeover. On April 24, the Washington Independent reported: Geithner, of course, was neck deep in crafting the bailout strategies under the Bush administration, and now Towns, who heads the House Oversight and Government Reform Committee, has joined forces with Rep. Dennis Kucinich (D-Ohio), who chairs the Domestic Policy subpanel, to ask what role Geithner played in the controversial BofA-Merrill deal. From the lawmakers’ April 23 letter to Geithner: I know what you're thinking: what the hell ever happened to that letter? How did Geithner respond? Where are Towns and Kucinich now? Surely they must be tragically drugged and gagged in an alley someplace, or they would be raising hell? And why does that silence hurt my ears? Well, that's where the inquiring reporters should come in. And don't. On June 24, Huffington Post had this to say: Breaking News: Tim Geithner, Treasury Secretary, supposedly emailed telling BofA that they couldn't back out of acquiring Merrill Lynch, according to CNBC. So what's going on? Why does the White House turn on NY Governor Paterson 15 months before his term is up? Washington meddling in state politics is awkward in the best of times, and this ain't one of them. The world may well be a whole different place by December 2010, and Paterson may be a hero by then. And why does the Obama team choose to leak this so overtly to the press? |
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One day, when Ali Baba was in the forest, and had just cut wood enough to load his asses, he saw at a distance a great cloud of dust approaching him. He observed it with attention, and distinguished soon after a body of horsemen, whom he suspected to be robbers. He determined to leave his asses in order to save himself; so climbed up a large tree, planted on a high rock, the branches of which were thick enough to conceal him, and yet enabled him to see all that passed without being discovered.