Shock Capitalism: The Swindlers Of 2008 Are Now Betting On World Hunger

In his new book, “The Great American Stick Up”, journalist Robert Scheer makes one of the most lucid and accurate analysis of the 2008 global financial meltdown or what we call here the strategy of shock capitalism. Scheer connects the dots and  exposes “How Reagan Republicans and Clinton Democrats enriched Wall Street while mugging Main Street”.

While some people might be critical of Robert Scheer for treating the “Masters of the Universe” of Wall Street like criminals, the points that Scheer is making in his new book can hardly be contested. There is more than plenty of blame to pass around in this case, and Scheer is able to generously share the blame between Wall Street and their “partners in crime” in Congress. Scheers argues that the banksters and their political associate “did it” knowingly.

TARP: The Biggest Swindle In Financial History

Robert Scheer is rightly putting a large number of people in the same putrid bag of greed and stupidity.

“Yes, there is a “they”: the captains of finance, their lobbyists, and allies among leading politicians of both parties, who together destroyed an American regulatory system that had been functioning splendidly for most of six decades since it was enacted in the 1930s,” writes Scheer.

Further, Scheer accurately blames both Republicans and Democrats, and the administration of Reagan, Bush Sr., Clinton, Bush Jr., and Obama for being the accomplices of the giant Wall Street swindle, which took 30 years to bare its fruits.

“This was a giant hustle that served the richest of the rich, and left the rest of us holding the bag, a life-altering game of musical chairs in which the American public was the one forced out. Worst of all, legislators from both political parties we elect and pay to protect our interest from the pirates who assaulted us, instead changed our laws to enable them,” writes Scheer.

Scheer notes that it was Robert Rubin, Clinton’s Treasury Secretary and former co-chairman of Goldman Sachs, who led the fight to free the financial markets from regulations, and then, after leaving the Treasury, went on to a $15 million-a-year job with Citigroup. Beside Rubin, Scheers also puts squarely the blame on Alan Greenspan and Lawrence Summers who “inflated a giant real estate bubble by purposely not regulating the derivatives market, resulting in oceans of money that was poured into bad loans sold as safe investment.”

The Obama administration is also obviously to blame for putting in the lead of its economic team people like Summers and Geithner, and keeping Bernanke to head the Feds. Summers, Geithner and Bernanke were very much an important  part of the problem over the years, and none of them  have the vision to be part of the solution.

“President Obama’s proposed reform legislation stops far short of reintroducing the kind of regulation of the markets that prevented such a disaster since 1929. If we as a people learn anything from this crash, however, it should be that there is no adults watching the store, only a tiny elite of self interested multi-millionaires and billionaires making decisions for the rest of us. As long as we cede that power to them, we can expect to continue getting bilked,” writes Robert Scheer.

In other words, President Obama had the unique historic opportunity to re-set the clock and be the new FDR that America so badly needed, but instead he decided to run an economic policy almost identical to the  Wall Street and big corporations friendly policy of Bill Clinton.

Big Financiers Are Now Betting On World Hunger

Recently, of all people, the President of the World Bank, Robert Zoellick, said that “for the first time in history more than a billion people go to bed hungry every night”. Zoellick also added that the United Nations Millennium Development Goal to eradicate hunger by 2015 “will not be achieved”. Recent natural disasters are only compounding the problem for food commodities, and potential very serious food shortage.

The monsoon in India and the killer floods in Pakistan have devastated the region, and have destroyed crops and livestock. In just a few months, the price of rice and tea has increased by more than 30 percent. In Russia, the fires that swept through the farmland have dramatically reduced the wheat harvest.

But the upcoming new food crisis looming in our global forecast is more man made than anything else. Raw material, and especially food commodities, are the new prime target for global investors. After betting on property values, and by doing so creating the real estate bubble, the financial “Masters of The Universe” of the financial markets are now turning their undivided attention to agriculture commodities.

International hedge funds are now gambling on basic commodities such as wheat, rice, corn and soy. For example, in September, Amajaro, a London based hedge fund, bought a quantity of cocoa equivalent of 25 percent of all European stocks. Needless to say, a few days later the price of cocoa per tonne skyrocketed and broke all records. After causing the financial collapse, and later profiting from it, the super-wealthy speculators are now focused on making a “killing” by stocking up on food commodities and watching the poor go hungry. How is shock capitalism working for you?

Editor’s Note: Robert Scheer is a veteran journalist. He belongs to a disappearing breed of American journalists with Dan Rather, Bill Moyers and Bob Woodward who value real news, facts, the truth  and have the guts to challenge people in power. You can find Robert Scheer on Twitter.


14 Responses to Shock Capitalism: The Swindlers Of 2008 Are Now Betting On World Hunger

  1. Martha October 13, 2010 at 6:58 am

    It is impossible to ignore Robert Scheer. He is a brilliant American liberal who always offers a sober assessment of current social and economic affairs. By rejecting governments that serve as a mouthpiece for corporate elites, he encourages ongoing discussion of how to create an America that is for peace and justice.

    It remains to be seen how Democrats will work through Scheer’s analysis. Maybe Obama can still make progress on matters of economic and social inequality, maybe he can’t. It’s a crucial question.

    Race and social class are both pivotal questions in America, and Obama’s election was significant. Democrats need to carefully consider how they wish to move forward.

    • Jack Russell October 14, 2010 at 8:06 pm

      “Democrats need to carefully consider how they wish to move forward.”

      Wow!! Yeah?? Democrats need to move out of the way. RINOs – ‘democrat-lites’ – Need to go with them. This country is predicated upon an ‘evolving or living Constitution’ to our PERIL. I reserve the exception of the amendment process as the way to shift the Consitution to address issues that society demands we need a different direction on. Beyond the amendment process this country eased onto he slippery slope a century ago and the evidences of that became undeniable in the 60’s. “Progressivism” is a LIE. We need to return to the foundation and underpinnings of this nation and “Progressives’ are childishly struggling against the conservation of our national values.

  2. rj October 13, 2010 at 1:21 pm

    Sounds about right, if they were not buying oil futures the price would be about 18-20 a barrel.
    Did he mention the green coalition who is also prospering due to the “ethanol” mandates for gasoline, corn a food staple will continue to go up…the greens also want population reduction….reads starvation, war, abortion, and let the old die health care mandates….also reads “agricultural subsidies” for multinational agribusiness conglomerates at taxpayer expense makes me want to puke…

  3. BK October 14, 2010 at 6:49 am

    This is not capitalism. This is crony capitalism.

    When losses are socialized and profits privatized, that’s not capitalism, but socialism.

    • Gilbert Mercier
      Gilbert Mercier October 14, 2010 at 10:20 am

      No it is not. When losses AND profits are socialized it is communism.
      But, when losses and profits are spread across society more fairly, using appropriate taxation to adequately fund social programs, such as universal health care and good education for all, that is socialism.
      It works pretty well in most European countries. Americans should try it sometime, instead of having a mental block on word such as socialism that they clearly do not understand.

      • Mook October 14, 2010 at 11:10 am

        Problem is the politicians and bureacrats vs free markets decide the “more fairly” and what’s “good for all” parts of your assertion. Euro economies are in the toilet and getting worse as a result of their social spending which you praise.

  4. Aa- October 14, 2010 at 10:38 am

    you fail to mention that depression era regulation prevents stocking of commodities (esp such as foods) by non-producing partner…

    eg. a farmer can stock up the wheat. but a financier cannot.

    in 1991 it was deregulated… but silently… and media never questioned.. so the partner in crime is not global bankers + senate.. it is far more sinister gang that also killed JFK. if you give a damn about political correctness then you will know who are the members of this big gang.

  5. BT October 14, 2010 at 3:08 pm

    “TARP: The Biggest Swindle In Financial History”

    If this is the case, why are we not doing anything about it?

    I tend to think of Wall Street and TARP as the friend who never repaid my $100 that I lent him.

  6. Jack Russell October 14, 2010 at 7:56 pm

    You lost me when you tried the old cannard about FDR having contributed to the economic welfare of the U.S. Poppycock! FDR’s monetary policies stretched The Great Depression until WWII slammed the door on it.

  7. richard October 15, 2010 at 12:36 pm

    Except that it’s not capitalism, it’s corporate and political fraud. Plain and simple.

    I’m a capitalist. I sell my services for a market wage, that’s all. Let’s not get confused, otherwise we will get communism handed to us as a replacement, which is also corporate and political fraud.

  8. Wisdom October 16, 2010 at 8:03 am

    They are like locusts. Anything of intrinsic value is game to these greedy parasites. They give no thought to the destruction they leave in their wake. Even the purposeful rape of our planet is not sacred if it brings them more profit and control.

  9. Kevin October 16, 2010 at 9:48 am

    Wow, it’s hard to know where to start.

    “International hedge funds are now gambling on basic commodities such as wheat, rice, corn and soy.”

    Agricultural commodity derivatives aren’t new. Didn’t anyone see “Trading Places” 27 years ago? And no company is betting that the UN’s anti-hunger programs will make a noticeable dent in any commodity prices. That’s amazingly stupid, even for a conspiracy theory.

    The housing bubble was caused by cheap money and people bidding on homes based not on their worth, but on how big of a monthly mortgage payment they could afford. The cheap money was easy, shortsighted politics. Demands that lenders relax loan requirements was stupid, pandering, no-sighted politics. Those two together caused the housing bubble. Not a conspiracy of bankers.

  10. Wisdom October 16, 2010 at 11:00 am

    Conspiracy or not, the practice of trying to make a profit off of unfortunate circumstances does nothing to benefit the common good. In fact, it is inherently evil.

  11. james October 16, 2010 at 11:27 pm

    we need to exterminate some greedy banksters and the the gangsters on wall street.

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