Michael Hudson : The Real AIG Conspiracy

It may seem odd, but the public outrage against $135 million in AIG bonuses is a godsend to Wall Street, AID scoundrels included. How can the media be so preoccupied with the discovery that there is self-serving greed to be found in the financial sector? Every TV channel and every newspaper in the country, from right to left, have made these bonuses the lead story over the past two days.

What is wrong with this picture? Is there not something over-inflated about the outrage led most vociferously by Senator Charles Schumer and Rep. Barney Frank, the two leading shills for the bank giveaways over the past year? And does Pres. Obama perhaps find it convenient that finally, at long last, he has been able to criticize something that he believes Wall Street has done wrong? Even the Wall Street Journal has gotten into the act. The government’s takeover of AIG, it pointed out, "uses the firm as a conduit to bail out other institutions." So much more greed is involved than just that of AIG employees. The firm owed much more to other players – abroad as well as on Wall Street – than the assets it had. That is what drove it to insolvency. And popular opposition has been rising to how Mr. Obama and Mr. McCain could have banded together to support the bailout that, in retrospect, amounts to trillions and trillions of dollars thrown "down the drain." Not really down the drain at all, of course – but given to financial speculators on the winning "smart" side of AIG’s bad financial gambles.

"The Washington crowd wants to focus on bonuses because it aims public anger on private actors," it accused in a March 17 editorial. But instead of explaining that the shift is away from Wall Street grabbers of a thousand times the amount of bonuses being contested, it blames its usual all-purpose bete noire: Congress. Where the right and left differ is just whom the public should be directing its anger at!

Here’s the problem with all the hoopla over the $135 million in AIG bonuses: This sum is only less than 0.1% – one thousandth – of the $183 BILLION that the U.S. Treasury gave to AIG as a "pass-through" to its counterparties. This sum, over a thousand times the magnitude of the bonuses on which public attention is conveniently being focused by Wall Street promoters, did not stay with AIG. For over six months, the public media and Congressmen have been trying to find out just where this money DID go. Bloomberg brought a lawsuit to find out. Only to be met with a wall of silence.

Until finally, on Sunday night, March 15, the government finally released the details. They were indeed highly embarrassing. The largest recipient turned out to be just what earlier financial reporters had said was rumored: Mr. Paulson’s own firm, Goldman Sachs, headed the list. It was owed $13 billion in counterparty claims. So here’s the picture that’s emerging. Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.

It now looks as if Mr. Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIG’s counterparties. This is where public outrage should be focused.

Instead, the leading Congressional shepherds of the bailout legislation – along with Mr. Obama, who came out in his final, Friday night presidential debate with Sen. McCain strongly in favor of the bailout in Mr. Paulson’s awful "short" version – have been posing as conspicuously as possible for the media to cover a deflected target – the AIG executives receiving bonuses, not the company’s counterparties.

There are two questions that one always must ask when a political operation is being launched. First, qui bono? Who benefits? And second, why now? In my experience, timing almost always is the key to figuring out the dynamics at work.

Regarding qui bono, what does Sen. Schumer, Rep. Frank, Pres. Obama and other Wall Street sponsors gain from this public outcry? For starters, it depicts them as hard taskmasters of the banking and financial sector, not its lobbyists carrying water for one giveaway after another. So the AIG kafuffle has muddied the water about where their political loyalties really lie. It enables them to strike a misleading pose – and hence to pose as "honest brokers" next time they dishonestly give away the next few trillion dollars to their major sponsors and campaign contributors.

Regarding the timing, I think I have answered that above. Talking about AIG bonuses has effectively distracted attention from the AIG counterparties who received the $183 billion in Treasury giveaways. The "final" sum to be given to its counterparties has been rumored to be $250 billion, do Sen. Schumer, Rep. Frank and Pres. Obama still have a lot more work to do for Wall Street in the coming year or so.

To succeed in this work – while mitigating the public outrage already rising against the bad bailouts – they need to strike precisely the pose that they’re striking now. It is an exercise in deception.

The moral should be: The wetter the crocodile tears shed over giving bonuses to AIG individuals (who seem to be largely on the healthy, bona fide insurance side of AIG’s business, not its hedge-fund Ponzi-scheme racket), the more they will distract public attention from the $180 billion giveaway, and the better they can position themselves to give away yet more government money (Treasury bonds and Federal Reserve deposits) to their favorite financial charities.

Source : http://www.globalresearch.ca/the-real-aig-conspiracy/12784

Elements of Reason

Cognition, Choice, and the Bounds of Rationality

Edited by

Arthur Lupia, Mathew D. McCubbins, Samuel L. Popkin

Many social scientists want to explain why people do what they do. A barrier to constructing such explanations used to be a lack of information on the relationship between cognition and choice. Now, recent advances in cognitive science, economics, political science, and psychology have clarified this relationship. In Elements of Reason, eighteen scholars from across the social sciences use these advances to uncover the cognitive foundations of social decision making. They answer tough questions about how people see and process information and provide new explanations of how basic human needs, the environment, and past experiences combine to affect human choices. Elements of Reason is written for a broad audience and should be read by anyone for whom ‘Why do people do what they do?’ is an important question. It is the rare book that transforms abstract debates about rationality and reason into empirically relevant explanations of how people choose.

Citizens and Politics

Perspectives from Political Psychology

Edited by James H. Kuklinski

University of Illinois, Urbana-Champaign

Citizens and Politics: Perspectives from Political Psychology brings together some of the research on citizen decision making. It addresses the questions of citizen political competence from different political psychology perspectives. Some of the authors in this volume look to affect and emotions to determine how people reach political judgements, others to human cognition and reasoning. Still others focus on perceptions or basic political attitudes such as political ideology. Several demonstrate the impact of values on policy preferences. The collection features chapters from some of the most talented political scientists in the field.

What Science Offers the Humanities

Integrating Body and Culture

By Edward Slingerland
University of British Columbia, Vancouver

What Science Offers the Humanities examines some of the deep problems facing current approaches to the study of culture. It focuses especially on the excesses of postmodernism, but also acknowledges serious problems with postmodernism's harshest critics. In short, Edward Slingerland argues that in order for the humanities to progress, its scholars need to take seriously contributions from the natural sciences—and particular research on human cognition—which demonstrate that any separation of the mind and the body is entirely untenable. The author provides suggestions for how humanists might begin to utilize these scientific discoveries without conceding that science has the last word on morality, religion, art, and literature. Calling into question such deeply entrenched dogmas as the "blank slate" theory of nature, strong social constructivism, and the ideal of disembodied reason, What Science Offers the Humanities replaces the human-sciences divide with a more integrated approach to the study of culture.

HECC - Centre for Human Evolution, Cognition, and Culture

Integrating Science and the Humanities

Heuristics and Biases

The Psychology of Intuitive Judgment

Edited by

Thomas Gilovich
Cornell University, New York
Dale Griffin
Stanford University, California
Daniel Kahneman
Princeton University, New Jersey

Judgment pervades human experience. Do I have a strong enough case to go to trial? Will the Fed change interest rates? Can I trust this person? This book examines how people answer such questions. How do people cope with the complexities of the world economy, the uncertain behavior of friends and adversaries, or their own changing tastes and personalities? When are people's judgments prone to bias, and what is responsible for their biases? This book compiles psychologists' best attempts to answer these important questions.

The Triple Helix

Gene, Organism, and Environment

Richard Lewontin is Alexander Agassiz Research Professor at the Museum of Comparative Zoology, Harvard University. His many books include Biology and Ideology, Not in Our Genes, and Human Diversity

One of our most brilliant evolutionary biologists, Richard Lewontin has also been a leading critic of those--scientists and non-scientists alike--who would misuse the science to which he has contributed so much. In The Triple Helix, Lewontin the scientist and Lewontin the critic come together to provide a concise, accessible account of what his work has taught him about biology and about its relevance to human affairs. In the process, he exposes some of the common and troubling misconceptions that misdirect and stall our understanding of biology and evolution.

The central message of this book is that we will never fully understand living things if we continue to think of genes, organisms, and environments as separate entities, each with its distinct role to play in the history and operation of organic processes. Here Lewontin shows that an organism is a unique consequence of both genes and environment, of both internal and external features. Rejecting the notion that genes determine the organism, which then adapts to the environment, he explains that organisms, influenced in their development by their circumstances, in turn create, modify, and choose the environment in which they live.

The Triple Helix is vintage Lewontin: brilliant, eloquent, passionate, and deeply critical. But it is neither a manifesto for a radical new methodology nor a brief for a new theory. It is instead a primer on the complexity of biological processes, a reminder to all of us that living things are never as simple as they may seem.

How People Learn:

Brain, Mind, Experience, and School: Expanded Edition

Authors:

Committee on Developments in the Science of Learning with additional material from the Committee on Learning Research and Educational Practice, National Research Council

Authoring Organizations

Description:

This popular trade book, originally released in hardcover in the Spring of 1999, has been newly expanded to show how the theories and insights from the original book can translate into actions and practice, now making a real connection between ...

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Reviews:

"The contributors to the book have done a marvelous job of summarizing a dizzying array of research from widely disparate disciplines. ... How People Learn is a wonderful book..."

-- Contemporary Psychology: APA Review of Books, December 2001

"...exciting new research ...

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