from T. Christian Miller, ProPublica,
September 15, 2009 ( view source )

WASHINGTON, D.C. – Congress could save as much as $250 million a year through a sweeping overhaul of the controversial U.S. system to care for civilian contractors injured in war zones, according to a new Pentagon study.

In the most extensive review ever of the taxpayer-financed system, the Pentagon suggested that the government could issue its own insurance to cover the skyrocketing costs of medical care and disability pay for injured civilians.

Currently, the U.S. pays more than $400 million annually to AIG and a handful of other carriers to purchase special workers' compensation insurance policies required for overseas civilian contractors by a law known as the Defense Base Act, the study found.

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On March 22, Intrepid Liberal Journal published his own podcast interview here with veteran journalist William Greider about his new book "Come Home America":

Over the years, Greider has been a determined voice of truth against a backdrop of America’s pro-war, pro-Wall Street governing elites and their enablers inside the corporate media. While Alan Greenspan was celebrated, Greider warned that the Federal Reserve and other regulatory agencies were guilty of dereliction.

Now The Nation's national affairs correspondent, William Greider has been a political journalist for more than 35 years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers "One World, Ready or Not", "Secrets Of The Temple", "Who Will Tell The People", "The Soul Of Capitalism" and, most recently, "Come Home America".

This past Thursday, March 27, William Greider was again interviewed, this time by another veteran journalist, Bill Moyers, on the PBS program Bill Moyers Journal, and issued one of the most ominous political evaluations and warnings of his long career...

BILL MOYERS: Yeah, the corporate state is here.

WILLIAM GREIDER: The corporate state is here. And I'd say, let's not argue over that. The fact is, if the Congress goes down the road I see them going down, they will institutionalize the corporate state in a way that will be severely damaging to any possibility of restoring democracy. And I want people to grab their pitch forks, yes, and be unruly. Get in the streets. Be as noisy and as nonviolently provocative as you can be. And stop the politicians from going down that road. And let me add a lot of politicians need that to be able to stand up. Our President needs that to be able to stand up.

(full transcript below...)

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The AIG scandal and ensuing economic crisis is ubiquitous in news again this morning and as William Greider whom Intrepid Liberal Journal interviewed yesterday last year had "been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice".

Reuters is reporting this morning that:

Documents turned over to the Connecticut attorney general show that American International Group Inc paid out over $218 million in bonuses, more than the previously disclosed $165 million, published reports said on Saturday.

The reports said the documents were turned over to Attorney General Richard Blumenthal's office late on Friday in response to a subpoena.

The documents show that bonuses of at least $1 million were paid to 73 people, and five received more than $4 million.

The giant insurance company has been widely criticized for granting bonuses after receiving federal bailout funds exceeding $180 billion.

An AFP report via RawStory explains that Obama plans to unveil a sweeping financial regulation plan:

The administration of President Barack Obama will move to increase oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, The New York Times reported.

Citing unnamed government officials, the newspaper said on its website that the plan was expected to be unveiled this week in preparation for Obama?'s first foreign summit next month.

The proposal would seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, the report said.

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(8pm - promoted by Edger)

I have been asked some interesting questions in my series A Diary A Day. Like is it possible a single home mortgage is represented in multiple bundles, or has trigger multiple insurance payments.

Let explore the possibilities below the fold.

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(3:00pm - promoted by Edger)

The topic below was originally posted on my blog, the Intrepid Liberal Journal.

I first became aware of William Greider after the publication of his 1981 Atlantic Monthly profile of President Reagan’s embattled Office of Management and Budget Director (“OMB”), David Stockman. At the time I was just a kid and the Reagan administration insisted they could simultaneously balance the budget, cut taxes and increase defense spending exponentially.

Greider’s reporting however exposed that even Stockman, doubted the fiscal prudence of Reaganomics. After the article’s publication, Stockman absorbed public humiliation when President Reagan took him “to the woodshed.” I trace that article as a seminal moment in my own political awareness.

Over the years, Greider has been a determined voice of truth against a backdrop of America’s pro-war, pro-Wall Street governing elites and their enablers inside the corporate media. While Alan Greenspan was celebrated, Greider warned that the Federal Reserve and other regulatory agencies were guilty of dereliction. When celebrated economists such as Paul Krugman extolled the virtues of free trade and globalization, Greider warned of lost jobs at home and condemned the shameful exploitation our consumption habits subsidized abroad.

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(5pm - promoted by Edger)

Yesterday I diaried about my understanding of how the meltdown happened, here. But there is part of the diary worthy of a diary on it's own. The very important part played by Wall Street's three biggest arbiters of credit. We will look at their part combined with how these instruments were allowed to be traded that may be the largest fraud ever perpetrated against the American people. We will discuss the illegal actions that can and MUST be pursued below the fold.

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Years ago, in the 70's my "was-band" worked as a commodities broker for Merrill Lynch. In those days Merrill's biggest issue was their unwillingness to promote women to positions on the trading floor. It was during the time Nelson "Bunkie" Hunt and his brother tried to corner the silver market. Known as Silver Thursday, the very idea one person could come so close to cornering a global metals market, set Wall Street and much of the world back on their heels.

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(8pm - promoted by Edger)

In researching my Sunday diary I ran across some interesting facts and figures I thought I would share with you. Grab a pencil and paper, your pocket calculator and pop some pop corn because this is going to be entertaining in a sick and disgusting sort of way. Follow me below the fold for a trip to the house of cards where our dreams live, located at the intersection of greed and larceny with a little betrayal along for the ride.

between 2001 and 2006, the number of terminated subprime purchase-money loans — those used to purchase rather than refinance a house – outweighed the estimated number of first-time-homebuyers with subprime mortgages. According to the analysis, many subprime borrowers may have intended to make a quick exit from subprime loans — using the loans as “bridge financing” to speculate on house prices and then sell for a profit after values increased.

The study also found that subprime lending did not increase homeownership, as subprime activists believed it could. The number of defaults in a sample of subprime purchase-money mortgages within two years of origination is almost equal to the estimated number of first-time homebuyers who held subprime mortgages, the analysis found.

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If you're anything like me and I suspect like most of us, you know about the scandal surrounding AIG's bonus payouts to the same company employees in their London operation that were at the center of the Credit Default Swap scheming that triggered the current global financial meltdown, but also like me you're probably no economist nor expert in financial matters and are having a difficult time wrapping your head around what, exactly is going on, how we got here, and why our economy seems to be collapsing.

Sharona Coutts is a law graduate and an honors graduate from Columbia Journalism School's investigative seminar and now writes for ProPublica, an independent, non-profit newsroom in Manhattan that produces investigative journalism and describes themslves as "producing journalism that shines a light on exploitation of the weak by the strong and on the failures of those with power to vindicate the trust placed in them".

Sharona has put together a very good Q&A piece that helps in understanding what exactly is going on with AIG. She has also produced a very good related piece: Timeline: AIG and Their Bonuses that she quotes in the Q&A article reproduced here.

AIG’s Bonus Blow-Up: The Essential Q&A
by Sharona Coutts, ProPublica - March 18, 2009 5:12 pm EDT

Monday marked six months to the day since AIG’s first bailout, but it wasn’t until news of executive bonuses over the weekend that public fury truly focused on the hemorrhaging insurer.

President Obama told Americans he was "choked up with anger" over bonus payments to executives at AIG’s Financial Products office whose bad bets pushed the company to the brink of collapse. The administration is worried about public anger turning against it, not just the company.

In some respects, the sudden anger is mystifying. After all, there’s nothing new about the bonuses except that a portion of them – $165 million – were actually paid on Friday. Contracts instigating the bonuses were made a year ago, and they’ve regularly been in the news in recent months.

And the amount involved is dwarfed by the tens of billions that flowed to banks and hedge funds.

AIG’s plan to pay bonuses have been public knowledge for more than a year. Why is this blowing up now?

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Edward M. Liddy grew up in New Brunswick, New Jersey, earned a bachelor's degree from Catholic University of America in 1968 and a master's in business administration from George Washington University in 1972.  He then began a long career in corporate America, including stops at the Ford Motor Company in Detroit, drug maker G.D. Searle & Co in Skokie, Illinois, and Allstate Corporation in Northbrook, Illinois.

During Edward Liddy's apprenticeship in the buccaneering life he was exposed to the most influential teachers and lasting experiences.  While at Searle, Liddy who was CFO worked for a CEO , Donald Rumsfeld, who has always epitomized the height of arrogance as demonstrated by a successful buccaneer.   When he was at Allstate, Liddy presided over the company during and after hurricane Katrina, and Liddy observed first hand the effects of over exposure to risk and subsequent loss of trust when Allstate was faced with the massive losses suffered by homeowners in New Orleans, and Allstate subsequently canceled insurance policies and exited the business of insuring homeowners against casualty, lucrative as the business might have once been and could be.

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(11am - promoted by Edger)

It's still not too late to take our economy back, but we can't depend on Obama to do it, we're going to have to take it back ourselves. Starting on March 19th.

The Village Voice:

Credit derivatives are breaking and will continue to break the world's financial system and cause an unending crisis of liquidity and gummed-up credit. Warren Buffett branded derivatives "financial weapons of mass destruction." Felix Rohatyn, the investment banker who organized the bailout of New York a generation ago, called them "financial hydrogen bombs."

Corporate elites have been waging class warfare against us for decades. They've riddled us with Bankruptcy Bill bullets, napalmed us with NAFTA, massacred our labor unions, turned our healthcare system into the Bataan Death March, and now they're dropping financial hydrogen bombs on us.

According to The Village Voice, one of their deadliest and most lethal weapons has been the AIG Financial Products office in London, where a large proportion of those radioactive credit derivatives were written.

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