Fed: Rationalizing Cover-Ups, AIG Bailouts

| About: American International (AIG)

This comes from Ryan Chittum of the Columbia Journalism Review:

Whatever Tim Geithner’s New York Fed was trying to hide in the AIG backdoor bailout was so volatile it was deemed worthy of national-security-like classification, and the Fed reacted to media FOIA requests for information by withholding more information.

Reuters gets the scoop on emails that detail the discussion between the Fed, AIG, and the SEC.

The SEC, according to an email sent by a New York Fed lawyer on January 13, 2009, agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG’s confidentiality request.

The SEC had also agreed that if it determined the document should not be made public, it would be stored “in a special area where national security related files are kept,” the lawyer wrote.

Hello! They really didn’t want that information out there. Which, of course, means we really need that information out there.

This is looking like a Watergate-style mess. I suspect the more we learn, the more we will want to stop the cover-up. In the case of Watergate, it was the Supreme Court which brought the whole charade to an end. Question: do we have an ‘activist’ Supreme Court which will overturn previous legal victories in the quest to know more (see Bloomberg wins Freedom of Information lawsuit against Fed)?

The United States has lost any beacon-on-the-hill appeal it once had. After the torture at Abu Ghraib, the rendition, the indefinite detention of enemy combatants at Guantanamo Bay, it was clear that the United States would resort to all means necessary for its policy agenda.

Now, the near-death of the global financial system has further weakened America as doubts have grown about the American model of capitalism. But, you can’t help but think that crony capitalism runs rampant in the U.S. This can only further erode the American exceptionalism to which our President and his predecessors have frequently pointed.

When I detailed how skeptical CW readers were about the recent populist about-face by the Obama Administration I got one interesting reaction in the comments:

Martin Luther began protestant religion because he could see how ugly it was for the Vatican to receive money from sinners and criminals for abolishment of their sins. Criminals could pay pre crime money to receive blessing and insure themselves a place in heaven.

I’m sure this raises a smile with most people.

The American Lobby group is that sinner and the politicians who accept any kind of influence from these lobby groups are the Vatican.

The question is, if Obama became president through this kind of influence, he won’t be able to bite the hand that feeds him.

Anyone over forty soon comes to understand Cinderella Stories truly are the fiction of Walt Disney and in the real world, it all works on back room deals and ol’ boy networks.

If anyone was into genealogy, they’d find out how many cousins use nepotism to advance themselves and their loyal relatives.

Nothing’s going to change and the tax payer is going to continue to get leeched by those who hold the keys to abusing the system.

It’s the American Way.

Greed is the fuel the country runs on.

No different than black market Russia – just a little more lip stick.

The disillusionment is there and will be there for some time to come.

More on the New York Fed below.


The Press Angle of the Fed’s Backdoor-Bailout Cover-up – Ryan Chittum