In light of renewed calls to give the Federal Reserve more regulatory powers, a new report by Neil M. Barofsky, special inspector general for the Troubled Asset Relief Program (TARP, or the taxpayer-financed financial bailout) lays out some startling, if not altogether unsurprising, curiosities. From the Times:
The Fed, under Mr. Geithner’s direction, caved in to A.I.G.’s counterparties, giving them 100 cents on the dollar for positions that would have been worth far less if A.I.G. had defaulted. Goldman Sachs, Merrill Lynch, Société Générale and other banks were in the group that got full value for their contracts when many others were accepting fire-sale prices. On the question of whether this payout was what the report describes as a “backdoor bailout” of A.I.G.’s counterparties, Mr. Barofsky concluded: “The very design of the federal assistance to A.I.G. was that tens of billions of dollars of government money was funneled inexorably and directly to A.I.G.’s counterparties.” The report noted that this was money the banks might not otherwise have received had A.I.G. gone belly-up.
Goldman Sachs, we all should know, was led from 1998 to 2006 by none other than the Bush administration’s Secretary of the Treasury, Henry Paulson, who had actually worked for the company in some capacity since 1974. Now, you don’t devote over thirty years to a company and then forget who your friends are. Especially when your compensation package in 2005 was upwards of $37 million. Noting the above, what Barofsky terms a “backdoor bailout,” I am more inclined to call a multi-billion dollar “reach around.”
I have not yet read the entirety of the report, but I plan to (as you should too). It can be found here.
How many scholarly stakes in the heart will we need before Martin Heidegger (1889-1976), still regarded by some as Germany’s greatest 20th-century philosopher, reaches his final resting place as a prolific, provincial Nazi hack? Overrated in his prime, bizarrely venerated by acolytes even now, the pretentious old Black Forest babbler makes one wonder whether there’s a university-press equivalent of wolfsbane, guaranteed to keep philosophical frauds at a distance…
Not only did [Hannah] Arendt have an affair with [Heidegger] when she was an 18-year-old student about half his age, before Hitler took over, but despite his public exaltation of the Fuhrer, despite his firing Jews once he became rector of Freiburg University. We now know that she later resumed some kind of warm relationship with the brownshirt philosopher (yes, it turns out he often wore one to his lectures). Arendt helped usher Heidegger back into the intellectual version of polite society, indeed assisted in preventing his ostracism as a Hitlerite, at least by those who considered his notoriously opaque use of philosophical language to offer something of value beneath it—apart from further opacity….
As the weird and wistful innocence of the Aughts fast approaches the grim futurism of the Twenty-whatevers, recent events in the news provide us with the opportunity to revisit a simpler, some would say quainter time of economic and political tomfoolery.
Amid a global frenzy fed by multibillion-dollar hedge funds, wealthy speculators and governments [are] all rushing to stock up on the precious yellow metal, the price of gold briefly surpassed $1,100 an ounce on Friday, a record high…. In the United States, ads promising high prices for gold are regular fodder for late-night television spots, while buyers are setting up tables at shopping malls or hosting gold-buying gatherings at private homes—like recession-era Tupperware parties…. “Everyone and their grandmother has a sign out saying, ‘We buy gold,’ ” said Ron Lieberman, the owner of Palisade Jewelers in Englewood, N.J. He estimates that 10 times as many people come into his store to sell gold now as when the metal was selling for $300 an ounce at the beginning of the decade…. “In Europe, people want physical gold to store themselves, with no documents,” said Bernhard Schnellmann, director for precious-metal services at Argor-Heraeus. Often, the company doesn’t know the ultimate destination of the bars it makes, only the identity of the bank in Zurich or London that is handling the order.
Which of course brings to mind another much-related century-trotting fad: Pirates!
“In times of change and danger when there is a quicksand of fear under men’s reasoning, a sense of continuity with generations gone before can stretch like a lifeline across the scary present.” ~ John Dos Passos
I know I can always count on Andrew J. Bacevich, ever the fearless b.s.-detector, to make me question whatever foreign misadventure the US government—no matter who the Comandante en Jefe—is trying to sell the American people:
What is it about Afghanistan, possessing next to nothing that the United States requires, that justifies such lavish attention? Among Democrats and Republicans alike, with few exceptions, Afghanistan’s importance is simply assumed—much the way fifty years ago otherwise intelligent people simply assumed that the United States had a vital interest in ensuring the survival of South Vietnam…. Fixing Afghanistan is not only unnecessary, it’s also likely to prove impossible. Not for nothing has the place acquired the nickname Graveyard of Empires. Americans, insistent that the dominion over which they preside does not meet the definition of empire, evince little interest in how the British, Russians, or others have fared in attempting to impose their will on the Afghans. As General David McKiernan, until recently the U.S. commander in Afghanistan, put it, “There’s always an inclination to relate what we’re doing now with previous nations,” adding, “I think that’s a very unhealthy comparison.” McKiernan was expressing a view common among the ranks of the political and military elite: We’re Americans. We’re different. Therefore, the experience of others does not apply.
