Debt and Debtor, or When Timmy Met Benny

Sure, they're intellectually stunted, sartorially handicapped, and stranded in perpetual adolescence, but their grasp of economics rivals that of Ben Bernanke and Timothy Geithner: Dumb (Lloyd) and Dumber (Harry) live it up on money "borrowed" from a blackmailer.







What is this? Where's the money?!?


That's as good as money, sir. Those are IOUs. Go ahead and add it up; every cent's accounted for. Look -- see this [holds up a note written in magic marker]? That's a car. Two-hundred-seventy-five thou. Might wanna hang on to that one.


-- Lloyd Christmas, the cretinous friend of imbecile Harry Dunne, tries to placate armed and agitated blackmailer Nicholas Andre after spending the ransom money.



A moment's reflection is sufficient to convince an honest person that Harry and Lloyd, the cerebrally challenged duo featured in "Dumb and Dumber," were engaged in exactly the same kind of racket -- albeit in microcosm -- as the one run by the Federal Reserve System and its political servitors.



In substance, the worthless, crudely hand-printed rectangular slips of paper Harry and Lloyd had stuffed into Mary Swanson's briefcase were every bit as valuable as the worthless, elaborately decorated rectangular slips of paper the Fed insists are "as good as money." The same is true of Treasury Notes -- that is, official IOUs emitted by the Regime in Washington. It's also true of the corporate paper issued by the corporate beneficiaries of the Fed's most recent investment bubble -- such as the great corporate vampire squid called Goldman Sachs, to choose an example not entirely at random.


"I expected the Rocky Mountains would be a lot rockier than this": Dumb and Dumber pose in front of the Grand Teton Mountains during a retreat with the Power Elite at the Rockefeller redoubt in Jackson Hole, Wyoming.



Goldman's corporate nomenklatura probably dresses just a bit better than Henry and Lloyd, who dropped several hundred dollars apiece for matching tailored tuxes in powder blue and safety orange.



But the Goldmanites were just as eager to spend other people's money and just as insistent that their unwilling creditors accept a pile of useless IOUs. Since they're the people who effectively run the Treasury Department, the Goldmanites have the means to force the rest of us to pay off the bad IOUs they received from AIG when that rotten pillar of the corporatist establishment was rescued by the federal government in 2008.




Newly released e-mails document the "frenzied" efforts made in September 2008 by Treasury Secretary Timothy Geithner -- at the time the capo in charge of the New York "family" of the Federal Reserve mafia -- to arrange a taxpayer-backed bailout of the worthless AIG insurance and investment conglomerate.



Then-Treasury Secretary Henry Paulson was a former Goldman CEO; as head of the New York Fed, Geithner was a Goldman retainer, and Goldman was among the sixteen "counterparties" with the largest exposure to AIG's worthless paper. So it comes as a surprise to nobody that Geithner's most urgent priority in bailing out AIG was to make sure that the "counterparties" weren't left to absorb the financial consequences of investing in the firm's junk derivatives. This is why he and his comrades at the New York branch of the Fed arranged a "backdoor bailout" for Goldman and other unnamed beneficiaries by way of AIG. The details of that secret swindle were literally treated like a matter of "national security."



A Reuters report discloses that Geithner and his comrades at the New York Fed "were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that `special security procedures' would be used to handle the document.'"



The SEC helpfully suggested that the critical information be filed under a special seal and then deposited "in a special area where national security related files are kept," with the information restricted from public inspection until 2018. I suspect that the really critical details of this arrangement were discussed by the principals in a room accessible only through a biometric scan, in conversations protected by the cone of silence.



If the term retains any useful meaning, and assuming that we're permitted to use it without being subject to official reprisal at the hands of Cass Sunstein, the Obama junta's commissar for Correct Thinking, this arrangement can only be described as a conspiracy.



Furthermore, this particular plot -- which was dragged into the light by the House Committee on Government Reform -- displays to good effect the practical definition of the term "national security." No, that phrase has nothing to do with protecting the rights, property, or well-being of the hoi polloi; it refers instead to the preservation of the plundering class and its interests from the people at large.


Another illustration was provided last week when Goldman announced its corporate "earnings" for the final quarter of 2009 -- a year that saw the actual unemployment rate soar to 22 percent.


Everything Goldman "earned" last year was the product of officially sanctioned theft and fraud at the expense of the beleaguered productive class, which is confronting the prospect of extinction.



Just before the heads of that criminal enterprise gave a public account of their illicit haul, the syndicate's headquarters were surrounded by police. The problem here is that rather storming the building and frog-marching the perps into waiting paddy wagons, the police were on hand to erect barricades to protect them from their victims.



From its inception, the USA has been an unwilling host to a self-perpetuating Hamiltonian elite that lusted for a seamless merger of politically favored corporate interests, the banking cartel, and the government. That desire was finally consummated in the September Revolution of 2008, in which Congress -- amid overt threats of martial law -- surrendered the keys to the public treasury to Wall Street. As a result, we are now living under a fascist kleptocracy of remarkable purity. Granted, it has yet to mature fully into an undisguised totalitarian despotism, but the advent of such a system will not be deferred so long as to try our patience.



So profound is Washington's depravity that its conduct makes that of overtly fascist governments look positively moderate by comparison.



About a year and a half ago, Cristina Kirchner, the Peronist (which is to say, fascist) president of Argentina, decided to nationalize that country's private pension system. The pilferage took place in broad daylight: Legislation was submitted to the National Congress and duly enacted -- but only after a public debate that banished any residual doubt that this was an undisguised theft of private property by an insolvent government.



"We don't have any doubt that this is violating the right to private property," observed Argentine Senator Ernesto Sanz. Latin American political analyst Claudio Loser referred to the "nationalization/expropriation of Argentine pension funds" as "one of the most blatant acts of financial piracy in the country's recent history."


The confiscation of at least $30 billion in private pension funds by Kirchner's robber state took place in October 2008 -- just shortly after the Bipartisan robber state in Washington set in motion a much grander exercise in larceny.



Only the hermetically sealed clique fronting the criminal syndicate called the Federal Reserve System knows how much was stolen from the public for the benefit of Goldman Sachs and other politically protected banking interests after the Fed's speculative bubble exploded. For all of this, the appetites of the parasite class remain unappeased, and its servants in the government ruling us are casing out a target for another heist: Specifically, the Feds are examining the possibility of staging an Argentine-style raid on private pension funds, now that the re-inflated market has restored them to a plunder-worthy size.



Unlike the hijacking carried out by Argentina's neo-fascist government, however, Washington's version would occur by way of executive decree, without even a semblance of legislative deliberation.



As Wendy McElroy summarizes, Geithner's Treasury Department "is officially formulating ways to force a portion of every 401k/IRA account into `fixed payment annuities' -- that is to say, into long-term Treasury bonds. In other words, your retirement dollars would be converted into government IOUs.... The money-grab at your retirement will begin modestly -- e.g. with just a small portion of your retirement converted -- and then, like government itself, it will expand."



Once again, Treasury is poised to do this administratively, without further Congressional action. Just as Bush and his successor claim essentially limitless "war-making" power based on the September 2001 "Authorization for Use of Military Force," Hank Paulson and Timothy Geithner claim that the September 2008 TARP legislation provides cover for any act of wealth redistribution deemed suitable by the Treasury Secretary, aka America's Economic Dictator.

Doing "God's work" by plundering the powerless: Goldman Sachs Chief Commissar Lloyd Blankfein

Granted, the Feds have been stuffing suitcases full of IOUs for decades in the form of various non-existent "trust funds" for Social Security, highway maintenance, and the like. However, this new proposal would treat privately held retirement accounts as collective property.


The funds stolen from those accounts would be used to write long-term IOUs in order to help the Regime continue to float the short-term IOUs necessary to keep wealth flowing into the coffers of its corproatist clientele.



Goldman CEO Lloyd Blankfein, who has described the machinations of the bankster elite as "God's work" (this is true, assuming that the deity he refers to is Plutus), insists that Goldman's architects of financial fraud as "among the most productive people in the world." Assuming that Blankfein and his ilk consider lucrative deviousness to be a species of productivity, he might have a point.


As Sinclair Lewis observed decades ago, such people make "nothing in particular, neither butter nor shoes nor poetry." What will happen to them when there's nothing left to steal, the currency collapses, and the division of labor breaks down?


While it's likely that they've already made contingency plans to flee our looted and wrecked country in search of new populations to afflict, we can at least hope that a few of them will be caught on the way to the airport and forced to share in the misery they've arranged for the rest of us, or maybe treated to some personalized misery of our own design. Such thoughts provide cold comfort amid the destitution descending on our land, but the way things are going I'll take such comfort wherever I can find it.

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(The original version of this essay erroneously used the expression "Goldman employee" to describe the significant but complicated relationship between the company and Timothy Geithner when the latter was head of the New York Fed. My thanks to commenter Isaac Stanfield for highlighting that inaccuracy.)

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