10.15.08
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WHY IS THIS MAN SMILIMNG: Probably because your money is his money.
Again!
America
for Sale
Hank Greenberg and the dismantling of the American dream
By John Sakowicz
This is the sixth of a
multipart series on the state of the economy and how we got here.
This time: Part 1 of a two-part
look at the bailout bill and why Maurice R. "Hank" Greenberg,
disgraced former chairman and CEO of AIG, the world's sixth largest
company, is licking his chops.
On Sunday, Oct.12, I attended
Congressman Mike Thompson's fundraiser at the Barra
Winery in
That first bill, of course, was
a disgrace. An unconstitutional disgrace. In only three paragraphs placed
on one piece of paper, Treasury Secretary Henry Paulson not only wanted
$700 billion, he wanted unrestricted and unprecedented authority in
spending that $700 billion. No congressional input or oversight. No
judicial remedy. And full immunity for Paulson's buddies back on Wall
Street—those guys who perpetrated the most
massive fraud in history and who brought the world to its knees. Talk about
cronyism!
That first bill was voted down.
But leading up to the second
bailout bill, there was unfortunately more political posturing and
ideological rigidity than there was analysis or principle. The second
bailout bill included millions and millions of dollars in earmarks, most of
them just outright pork.
The second bailout bill allowed
the Federal Reserve Bank to issue billions of dollars more in off-the-books
debt in esoteric vehicles like currency swaps, and in secret places like
the Term Auction Facility, totaling almost $1 trillion since the second
bailout bill was signed less than three weeks ago. (The National Debt Clock
on
Nothing for the 2 million
American households facing foreclosure. Sorry neighbor, you're shit out of
luck.
No taxpayer protections, such
as a future plan for recouping losses from the Troubled Asset Relief
Program (TARP), that new agency within the U.S. Department of the Treasury
charged with taking $700 billion worth of Wall Street's toxic waste off its
books and reselling it for whatever the Treasury can get. (TARP is
structured much like the Resolution Trust Company of the savings and loan era.)
How we will repay these losses added to the national debt is anyone's
guess.
Lawmakers have agreed that the
financial future of our children and our grandchildren is a bottomless pit
into which our generation's mistakes can be shoveled. There were no investments
that could have rebooted our economy and reversed unemployment. No
investments in our neglected roads, bridges and schools. No investments in
green technology. No investments in research and innovation in sectors
where
And—astonishingly!—there
is no new regulation or supervision of Wall Street.
Yes, you read that right. No
new regulation or supervision of the robber barons of Wall Street, even
after the blow-up. No new Glass-Steagall Act
(absolutely central to meaningful reform). No curtailment of subprime debt (after all the serial bailouts of this
past year, subprimes seem almost quaint). No
limits on securitized debt, like CMOs, CDOs and SIVs (the
radioactive toxic waste that inflicted such terrible damage on our economy
and that will take many years to dispose of; alas, there are no salt caverns
deep beneath the earth's surface to dump this stuff).
No exchange or central
clearinghouse for the hundreds of trillions of dollars in swaps and
derivatives (discussed at length in these pages; also, see Peter S.
Goodman's excellent article on the front page of the New York Times,
Thursday, Oct. 9, 2008). No punishment for that new master race on Wall
Street, those shadow bankers known as "prime brokers" (also
discussed in here). No rejection of the sham of the free-market voodoo
economics espoused by such neocon knuckleheads
like Karl Rove and Phil Gramm. (Burn them at the
stake!) No backward look at the fiscal and economic mismanagement that led
to the current crisis.
In other words, this massive
bailout of your tax dollars was just business as usual for the casinos of
Wall Street. Just roll the dice. If you win, keep it. If you lose, the Feds
will bail you out. Privatize profit, socialize loss.
When a few pundits objected,
those in Congress—even the good people, like Mike
Thompson—answered like a Greek chorus.
"What's worse than a
flawed bailout?" asked Henry Paulson.
"No bailout," sang
Congress.
Onto this stage stepped one of
the creepiest men in the world. Meet Maurice R. "Hank" Greenberg.
He is licking his chops.
A few factoids about Hank Greenberg:
Age 83. Said he liberated
Last year, Greenberg ranked 135
of the Forbes 400 Richest People, net worth $3 billion (onshore monies that
we knew about; offshore, probably a lot more). Used to rank in the Top 100
until New York Attorney General Eliot Spitzer busted him for fraud. Settled
with Spitzer for $1.64 billion. Former chairman and CEO of American
International Group (AIG), the world's largest insurance and financial
services company, and the world's sixth largest company by assets. (Also,
one of the few U.S. companies found in China; AIG can trace its roots to a
group of insurance companies started in China by Cornelius Vander Starr in
1919.) Biggest shareholder at AIG, controlling 13 percent of AIG through
holding companies and trusts.
With his sons, Jeffrey
Greenberg, former chairman and CEO of Marsh & McLennan before he was
ousted, and Evan Greenberg, president and CEO of ACE Limited, Hank
Greenberg controls a mind-boggling part of the world's insurance and
financial services industry.
Over the years, the
hard-driving Greenberg has been critical of corporate governance laws,
including Sarbanes-Oxley. He led the Bush administration's attack on tort
lawyers. He's a good friend to neocons; hell,
he's a folk hero, really. Once was quoted as saying, "All I've ever
wanted was an unfair advantage."
And guess what else? Last
month, Greenberg was the biggest single beneficiary of the Feds' $85 billion
bailout of AIG. Last week, the Feds handed AIG another $37.5 billion, just for the asking. Incidentally, none of this
$85 billion plus $37.5 billion is included in the $700 billion bailout
bill. This is extra. Like a bonus.
It pays to have friends in high
places.
Drilling down deeper into
Greenberg's resume, two themes emerge: shadow banks and the shadow
government. Both are related to the bailout bill. More specifically,
Greenberg's relationship with both is now putting him in a unique position
to buy the choicest assets in the TARP portfolio.
Shadow government first.
Lesser known factoids: In the
1980s, the Reagan administration offered Greenberg the job of deputy
director of the CIA. He turned Ronnie down—making too much at AIG. Up
for the job as director of the CIA in 1995. Made the short list of
finalists, but wasn't offered the job. Good pal Henry Kissinger told
Greenberg he was "too Jewish." Consolation prize: vice chairman
of the Council on Foreign Relations. Now Greenberg is honorary vice
chairman and a director on the Council on Foreign Relations.
(Keep in mind that Allen
Dulles, the first director of the OSS, later the CIA, his brother John
Foster Dulles, secretary of state, and the Rockefeller family, among
others, believed that the people of the United States would be better
served by a "shadow government," and started the Council on
Foreign Relations in 1921.)
In addition to his important
role on the CFR, Greenberg was a founding member of David Rockefeller's
Trilateral Commission. The Trilateral Commission is widely perceived as a
Cold War off-shoot of the CFR, and it was started in 1973.
In a speech before Congress and
the American people, on Sept. 11, 1990, President George H. W. Bush—a
founding member, like Greenberg, of the Trilateral
Commission—outlined the objectives of his administration's military
interventions in the
Creeped out yet by this creepy guy?
You should be.
The
Why is the dollar falling?
Because the
What does that have to do with
Hank Greenberg?
Factoid: Founding member of the
U.S.-China Business Council. Member of
Here's the kicker. Who did
Greenberg partner up with a while back, anticipating Wall Street's blow up
and TARP?
The late Shaul
Eisenberg, the former head of the Asian section of the Israeli intelligence
service, Mossad. A billionaire in his own right.
Also someone who knew much about the new World Order, especially
On paper, immediately prior to
working for Greenberg and C.V. Starr, Eisenberg was an arms merchant. He
represented
Eisenberg talked up Chinese
banks and put together a war chest that, some 11 years after his death, is
ready for the greatest fire sale in the history of the world -- the auction
of TARP's portfolio of $700 billion in troubled assets.
The sad part is, except for the
Middle East and maybe a few investors in
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Relocating to
Part
II: Naming names, following the money trail and linking shadow banking to
shadow government. That link is Hank Greenberg.
John Sakowicz is a
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