America under Obama: foxes guarding the henhouse

Ascending to power, the first black President of the US was talking about "a choice the nation should make". "We are choosing hope over fear. We are choosing unity over division" to overcome the gravest economic crisis since the Great Depression of the 1930s. However, America enjoyed the inauguration ceremony despite financial hardships.

Barack Hussein Obama`s inauguration cost $150 million- most expensive in history. Just compare: in 2005 George W. Bush's inauguration cost $42,3 million, while Bill Clinton's ascending to power in 1993 required $33 million. The campaign had never been financed so generously by both parties to symbolize a new consensus. At least $35 million were raised only through "voluntary donations" from businessmen and politicians of different partial identification as they wanted to prove their allegiance to the authorities.

A US political analyst and observer Justin Raimondo introduced a new term "obamacon" as analogy to "neocons" (the term neoconservative was originally used as a criticism against liberals who had moved to the right under Reagan).

Naturally, the authorities tried to calm down taxpayers, who began to discuss the inauguration cost. Carole Florman, spokeswoman for the joint congressional committee on inaugural ceremonies, told the New York Daily News about the inauguration: "It needs to be appropriate to the magnitude of events that it is."

The guests in Washington felt the magnitude of the event when opened their wallets. "Voluntary contributors" among businessmen and politicians were given the green light to implement their fantasies and thus benefit from the inauguration events. Hotels in Washington announced high-sky fees, pressing on the tourists to visit the ceremony. The Omni Shoreham Hotel in Washington DC offered the most extravagant $440,000 "Live Like a President" package. It included private jet, private dining with a personal chef, complete with entertainment by political satirist Mark Russel, personal concierge and chauffeur, entry for four to "A New Birth of Freedom" inaugural events on January 20, pre-inauguration makeover at a spa-salon, commemorative inaugural photo album with a personal inaugural photographer, personalized President and First Lady cologne and perfume and... a "Foreign Policy Trip", which included five nights at the Kempinski Hotel Moika 22 in Saint Petersburg with first-class roundtrip airfare for four.

Although Barack Obama said nothing about changes in US cooperation with Russia, the key figures in the US Administration know perfectly well how to approach the Russian elite. It would be enough to mention Lawrence Summers, the Head of the White House's National Economic Council.

Summers praised Anatoly Chubais as "demigod". "Shock therapy", protection to "Harvard boys" plundering Russia and America, which resulted in Harvard's biggest fine ever... US swindling "reformers" then managed to avoid serious losses thanks to protection from a group of high-ranking officials, Lawrence Summers being one of them. He promoted "Privatizing Russia", a sensational book by his Harvard protégé Andrei Schleifer, who had received hundreds of thousands of dollars from the Harvard Institute for International Development. Summers signed the book, praising Schleifer and his co-authors: "The authors carried out something notable in Russia and now they present their exclusive book". The event was preceded by a big corruption scandal in Russia, when Russian bribe-takers were said to have received astronomical sums for the non-written books about privatization (the aforesaid book appeared later). The scandal was dubbed in Russia as "Union of Writers` Case". Head of the Russian Center for Privatization Maksim Boiko was dismissed, the same happened to Chubais and Kokh, who were no longer members of the government.

Apart from this, Summers initiated the implementation of brigandish reforms in Lithuania, Poland and Ukraine and was cynical enough to lobby an idea of transporting toxic wastes to third world countries (as he explained, it would be more "cost effective" to export toxic materials to impoverished countries).

A Canadian economist and professor of economics at the University of Ottawa Michel Chossudovksy released an article headlined "Who are the Architects of Economic Collapse? Will an Obama Administration Reverse the Tide?", in which he gives characteristics of Obama`s team of economists. The foreword to the article posted on the "Le Reseau Voltaire" website reads: "Professor Michel Chossudovksy draws our attention to the fact that the people picked by the new US leader to handle economic issues are those guilty of the current financial turmoil. Talking about "changes", they recruit the same people to continue the old policy".

During the recent long hearings in the Senate (before Timothy Geithner, former president of the Federal Reserve Bank of New York and Lawrence Summers`s protégé, was appointed by Obama the US Secretary of the Treasury), nobody did even mention Geithner`s participation in the adoption in 1999 of the Financial services Modernization Act (FSMA), lobbied by the Wall Street and the US political establishment. Experts name the Act as one of the major reasons for the ongoing economic turmoil. The 1999 FSMA was conducive to the repeal of the Glass-Steagall Act of 1933. A pillar of President Roosevelt's "New Deal", the Glass-Steagall Act was put in place in response to the climate of corruption, financial manipulation and "insider trading" which resulted in more than 5,000 bank failures in the years following the 1929 Wall Street crash.

The Wall Street lobbyists managed to abandon Roosevelt's anti-speculation practice only 70 years after. As the new lawmakers supported all those Enron, Freddie Mac and Fannie Mae, the move was again interpreted in relation to Bill Clinton and, again, Lawrence Summers. Bill Clinton and the then Secretary of the Treasury removed the restrictions in 1999 and the Wall Street breathed a sigh of relief.

One should not wonder why Lawrence's protégés did not ask those five Republican Senators, who voted against Geithner`s nomination as the US Secretary of the Treasury, any uncomfortable questions. On 23 January Washington held the talks on unregulated markets, which were organized by the American Enterprise Institute. A Republican Senator from Texas (1985-2002) and chairman of the Senate banking committee Phil Gramm was so persistent in lobbying an idea to ease control over the Wall Street, that his name was even included in the 1999 Act, making the full version sound like Gramm-Leach-Bliley Modernization Act.

In December 2000 Phil Gramm together with a US Senator for Indiana Richard Lugar (he then handled agricultural issues) presented the second "Gramm-Lugar Commodity Futures Modernization Act" draft bill. The amendments to the Act gave the green light to speculative futures-related attacks on basic commodities, including oil and food. Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard Lugar few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted. "Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional aide familiar with the bill's history. The balding and bespectacled Texan strode onto the Senate floor to hail the act's inclusion into the must-pass budget package. But only an expert, or a lobbyist, could have followed what Gramm was saying. The act, he declared, would ensure that neither the sec nor the Commodity Futures Trading Commission got into the business of regulating newfangled financial products called swaps-and would thus "protect financial institutions from overregulation" and "position our financial services industries to be world leaders into the new century."

"Don't understand credit default swaps?- a journalist with "Mother Jones" popular website asked the readers.- Don't worry-neither does Congress". "Credit default swaps are essentially insurance policies covering the losses on securities in the event of a default. Financial institutions buy them to protect themselves if an investment they hold goes south. It's like bookies trading bets, with banks and hedge funds gambling on whether an investment (say, a pile of subprime mortgages bundled into a security) will succeed or fail. Because of the swap-related provisions of Gramm's bill-which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers-a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed", the journalist explained.

When asked during the hearings in the Senate how to cope with the current situation, the newly-appointed Secretary of the Treasury failed to utter a word.

"Let us remember that if this financial crisis taught us anything, it's that we cannot have a thriving Wall Street while Main Street suffers-in this country, we rise or fall as one nation; as one people,"- Barack Obama said during his election campaign. In view of the recent appointments to the economic team of the new US administration (which to a big extent represents the "thriving Wall Street"), experts commented on these words in the following sarcastic way: "Obama sent foxes to guard the hen house".

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