Swans Commentary » swans.com March 24, 2008  



Entertaining Hullabaloo


by Gilles d'Aymery





(Swans - March 24, 2008)  Where did it all start? I'm not even certain of the chronology, but it has been a tumultuous fortnight in Americana. We've seen political hits, racial swiftboating, deeper financial turmoil, war without end kept under the lid of national amnesia, commodities prices shooting through the roof before slightly receding, national disasters (heavy rains, almost-extinct Chinook salmons, falling cranes, closed bridges, job losses, increased home foreclosures) and other lesser events not worthy of much attention (Gaza, Tibet, Somalia, etc.). Pundits had much on their plates to choose from; it made the cable news lively and entertaining. As we all know, there's no business like show business.

Mr. Bush vetoed a bill sent to him by Congress that was prohibiting the CIA from using harsh interrogation methods -- "one of the most valuable tools in the war on terror," said our we-don't-torture president. Democratic candidates and lawmakers fumed at the brazenness of the president. It is more than past time we bring back the moral leadership of the United States to the world, they averred, fully ignoring that the USA is the most amoral (not immoral) nation the world has ever known.

A political hit took care of Eliot Spitzer, one of the most powerful governors in the country, when The New York Times revealed on March 10 that Mr. Spitzer had been involved in a prostitution ring. The Times was a perfect conduit for the fateful leak. The company just gave two seats on its board of directors to representatives of its largest stakeholders (aside from the "family"), Harbinger Capital Partners and Firebrand Partners hedge funds. Hedge funds, which are an intrinsic component of Wall Street, were obdurate foes of Mr. Spitzer. All Wall Streeters were. For years, Mr. Spitzer had focused his attention on the deep corruption and greed within the financial establishment and the gigantic fraudulent scam abetted by the Bush administration, first as attorney general and second as governor of the state of New York. He had to go. The Times was more than happy to oblige in encouraging the public lynching of the governor, which had been so carefully crafted by the "Department of Justice."

Public it needed be, even if the ruthlessness of the act had to humiliate a woman and three children (whose present and future psychic and psychological repercussions are not hard to fathom). Once entrapped and ensnared, the powers that be could have gone quietly to the governor and given him a few months, say three, to resign, for whatever reason -- the euphemistic "to spend more time with his family" (which he has to do anyway). Such approach, while humane, would not have served the wider purpose, which is to signal all that dissent won't be tolerated, even when coming from establishment's insiders (which Spitzer undoubtedly was), the devastation bequeathed upon his wife and children be damned.

(The call girl, a resilient entrepreneur of sort, with a personal page on MySpace, is apparently negotiating book deals, magazine spreads, movie rights and the like, worth at last count $5 million. Hustler Magazine is offering her $1 million to make the cover. It will help her defray the cost of condoms she must use at $4,000 a pop.)

Efforts to racially swiftboat Barack Obama began in full force with a comment made by Geraldine Ferraro on March 7, that "if Obama was a white man, he would not be in this position." Ferraro, 72, whose 15 minutes of fame took place in 1984 when Walter Mondale selected her to be his running mate because she was a woman, added, "And if he was a woman [of any color], he would not be in this position. He happens to be very lucky to be who he is." Even Barack Obama was puzzled by Ferraro's statement, as though his darker skin color had suddenly turned into an advantage in today's USA. Pushing her reasoning further, one presumes that Mrs. Ferraro believes that David A. Paterson owes the governorship of the state of New York to the color of his skin or to his legal blindness -- "If Paterson was a white man who could see, he would not be in this position." What about Tiger Woods, Serena and Venus Williams, or Lewis Hamilton (the Formula 1 master driver) -- to name just a few extraordinarily talented personalities? To follow Ferraro's reasoning, their accomplishments are directly related to the color of their skin, right? I suppose that black folks all over the country must have laughed out loud, to use an expression of our digital age, at the idiocy and incredulous hypocrisy of Ferraro's comments, but the laughter may well have hidden an underlying anger. Imagine an Obama supporter and member of his campaign asserting that Mrs. Clinton would not be in her position if she were a man... (One certainty here: Had Geraldine Ferraro not been a dumb woman she'd never have been selected by Mondale in 1984! Or maybe it was Mondale who was dumb enough to pick her.)

So, on March 12, Mr. Spitzer had resigned from the governorship, Wall Street was rejoicing at his demise, and Mrs. Ferraro, having done her part to derail Mr. Obama's candidacy, was out of her supportive role in the Clinton campaign. Still, that very day saw another political casualty.

Admiral William Fallon, head of Central Command and one of the most brilliant strategic minds in the military (according to the secretary of defense) had to resign because he did not support the "strategy" of the commander in chief on the Global War On Terror (in Iraq) and insisted on diplomacy with Iran. War with Iran would not happen under his watch, he let it be known. The civilian leadership heard him and acted accordingly. An admiral or whatever other brass is not supposed to decide what the strategy of the USA ought to be. Admirals and generals execute. They do not decide. Which is the way it should be (beware of military white horses) and is a clear reminder of who is in charge (moneyed interests) -- even though Fallon's positions were assuredly correct.

By the end of the week, Streeters were not drinking champagne any longer and Obama had a bigger threat to his candidacy to confront.

Gold passed the $1,000 mark per ounce, crude oil went over $110 a barrel.

Carlyle Capital Corp., an Amsterdam-based hedge fund affiliated with the Carlyle Group, which was still managing some $21.7 billion of speculative funds last month, had to throw in the towel after defaulting on $16.6 billion of debt. CCC had borrowed 32 dollars for every dollar of equity. The fund had been set up in 2006 and had made an initial public offering on the Amsterdam stock exchange in July 2007. Its shares had fallen more than 90 percent in a single week.

Blackstone had to close one of its hedge funds at a loss of $10 billion. The famed Kohlberg Kravis Roberts (KKR), still supposedly liquid, saw its rating downgraded by Standard & Poor's. New York based Drake Management is on the brink of being forced to close its largest hedge fund. London based Peloton Partners liquidated its biggest hedge fund last month. Thornburg Mortgage, the second biggest United States lender after Countrywide (the latter being bailed out by Bank of America), failed to meet margin calls, getting ever closer to being insolvent. These bad news did not make the front page of the corporate media. However, Bear Stearns did big time.

By March 13, rumors surfaced that Bear Stearns, the fifth-largest investment bank in the U.S., was facing a run on the bank. The next day, its stock was down to $30 from a high of $171 in January 2007. Its chairman was trying to assuage the panicked investors by demonstrating a high level of confidence and reassuring the financial community that the firm had plenty of liquidity to match any margin calls that would come its way -- all the while being on the red-alert phone with the people who count (Fed, Treasury, JP Morgan). The treasury secretary spent his Sunday morning appearing on political shows. "We are on top of the situation," he kept emphasizing. Indeed, he was. Two days later, Bear Stearns had been taken over by JP Morgan for $2 a share -- pennies on the dollar -- with a $30 billion insurance from the Fed. Additionally, the Fed opened a $200 billion lending window to investment banks, thus becoming an investment bank of its own, supported by the full strength of the US government (our taxes, and kids', grandkids', great-grandkids', and great-great-grandkids', at work). While we've all focused our attention on the subprime mortgage mess, it appears that it had little to do with the reason that precipitated this aggressive move by the Fed and Treasury -- sticking it to the shareholders and providing a lifeline to the bondholders. What's slowly transpiring has to do with a little-known, entirely unregulated, and basically untested market called "credit default swaps" (don't ask what they are, some kind of insurance to cover losses). The outstanding value of that market has grown from $900 billion in 2001 to the considerable sum of $45 trillion, of which it is reported Bear Stearns carried an outstanding value of $2.5 trillion. We are talking about a totally different order of magnitude. Had Bear Stearns been allowed to go under, the financial markets worldwide could have gone asunder. JP Morgan, incidentally, is one of the biggest players in that market, which explains why the Fed and Treasury brought JP Morgan in the deal and why no other financial institution bid on Bear's dead corpse.

Fortunately for those disinclined to drill into these arcane issues, the corporate news had plenty diversions to offer the viewers and readers. That same Monday, March 17, David A. Paterson was sworn in as the new governor of the state of New York. He gave a congenial speech, which was widely televised and commented upon by the usual crop of bloviators. Then the next day, Paterson, having learned the lesson given to Eliot Spitzer, called an impromptu news conference, in which he admitted that he had been unfaithful to his wife and had had several affairs with other women. When asked the reason he was coming out with this embarrassing story, he answered that he wanted to start his term in office clean and avoid the risk of being blackmailed (an indirect reference to his predecessor). Thankfully, that story had very little leg. No one wanted to get into another episode of salacious turpitude, and that very same day, Barack Obama gave an eloquent speech forced upon him by another carefully orchestrated campaign to disparage him, this time through guilt by association. Race -- a most inane construct -- was now threatening Obama's efforts to reach the nomination of the Democratic Party and his potential election to the highest job in our delusory land.

For days on end short snippets of sermons delivered by Obama's pastor of twenty years (now retired) were relentlessly blasted on YouTube and the cable TV channels. The good pastor dared to claim that 9/11 was a blowback operation (something the CIA and Chalmers Johnson have said repeatedly); that America was not a moral country; that its culture was rotten to the core; that it was a racist country; and that the US government conspired to spread AIDS to the black community (welcome to the conspiracy trend of the American culture, Reverend Wright! 30% of Americans believe that 9/11 was an inside job... There is money to be made, and is being made, here!). The reverend was only saying with wonderful flourishing rhetoric what remains unsaid in polite society, considered too un-American, and decried as hate speech. All of the sudden Mr. Obama was being accused of condoning hate speech and racist comments, and faulted for not having left the church where he was married and his two daughters baptized.

Here is a man, who all along the campaign trail had kept the race issue as far away as he could, being now enmeshed in racial politics, a story that has kept being hammered ever since. Even this Sunday's political shows spent half their time rehashing that story. Mr. Obama gave two subsequent policy speeches, on the Iraq War and on the economy, but the news corps mostly ignored them, concentrating all their attention on the negative repercussions on the Obama campaign (to the delight of the Clinton camp).

Meanwhile, if you lived in the U.S., you would have been hard pressed to note the fifth anniversary of the Iraq War. It passed almost unnoticed. A few speeches about the progress achieved thanks to the surge, a few articles regretting the good intentions gone awry because of incompetent decisions and strategy, and a few protestors arrested here and there. And off it was, back under the radar screen. It is said that Americans have turned against the war not because it was wrong in the first place but because we are not winning. And then there are more pressing issues at hand, like gas prices, and the economic slowdown that looks more and more like a recession in the words of the commentariat. Interestingly, dozens of veterans of the wars in Iraq and Afghanistan gathered in Maryland, March 13-16, 2008, for Winter Soldier hearings in which the veterans described the atrocities they had witnessed or participated in. If you did not have access to Amy Goodman's show, Democracy Now!, you were out of luck. The story was practically blacked out by the corporate media.

Meanwhile the Clintons kept talking about the merits of experience -- suggesting that even Mr. McCain was more experienced than Mr. Obama -- and counting the superdelegates, one of whom, New Mexico governor Richardson (an Hispanic who may sway the Latino vote) defected to the Obama camp. The Tibetan unrest was moderately covered to please the liberal humanitarian crowd, and the Middle Eastern tour by John McCain and his Sancho Panza, as New York Times columnist Frank Rich calls Joe Lieberman (what about a McCain-Lieberman Republican ticket?), ended these two weeks of entertaining news with Mr. McCain's revelation that the Iranians were training, arming, financing al Qaeda terroristas in Iran before sending them into Iraq to kill Americans.

Beyond the lively entertainment it is becoming increasingly hard to reconcile and digest all these events and make sense of them. So much confusion reigns. The ship of state appears increasingly compassless, reacting to events that are getting out of control, the hull taking water on port and starboard sides in abandon. Add to that chaos the warnings that Mother Nature keeps sending us with growing frequency, and somehow, seeping up to the surface, Walt Whitman's famous words rise to one's conscience surreptitiously:

O Captain! my Captain! our fearful trip is done;
The ship has weather'd every rack, the prize we sought is won;
The port is near, the bells I hear, the people all exulting,
While follow eyes the steady keel, the vessel grim and daring:

          But O heart! heart! heart!
          O the bleeding drops of red,
          Where on the deck my Captain lies,
                    Fallen cold and dead.

(Walt Whitman [1819-1892], "O Captain! My Captain!" -- Leaves of Grass, 1900.)


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Internal Resources

America the 'beautiful'

Patterns which Connect

US Elections & Democracy


About the Author

Gilles d'Aymery on Swans (with bio). He is Swans' publisher and co-editor.



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Swans -- ISSN: 1554-4915
URL for this work: http://www.swans.com/library/art14/ga249.html
Published March 24, 2008