“The Greatest Swindle Ever Sold”, by Andy Kroll in The Nation

There is a discussion in progress in the comments to Are we citizens? Or peasants?, asking if America is a tyranny?  If so, Americans requires astonishingly little oppression.  Ignorant and apathetic — don’t know and don’t care — the government needs no secret police, no concentration camps, no limits on free speech, and no limits on free assembly.

“Anger is easy. Anger at the right person, at the right time, for the right reason, is difficult.” — Aristotle, in the Nicomachean Ethics, book IV, chapter 5 (lightly paraphrased)

“Telemachus, now is the time to be angry.” — Odysseus, when the time came to deal with the Suitors. From the movie The Odessey (1997)

Sheep are easy to fleece.  That’s what makes us sheep, as described in “The Greatest Swindle Ever Sold“, Andy Kroll, The Nation, 26 May 2009.  I recommend reading it in full.  At the end are links to other articles about this outrage.  Excerpt:

On October 3, as the spreading economic meltdown threatened to topple financial behemoths like American International Group (AIG) and Bank of America and plunged global markets into freefall, the US government responded with the largest bailout in American history. The Emergency Economic Stabilization Act of 2008, better known as the Troubled Asset Relief Program (TARP), authorized the use of $700 billion to stabilize the nation’s failing financial systems and restore the flow of credit in the economy.

That $700 billion bailout has since grown into a more than $12 trillion commitment by the US government and the Federal Reserve. About $1.1 trillionof that is taxpayer money–the TARP money and an additional $400 billion rescue of mortgage companies Fannie Mae and Freddie Mac. The TARP now includes twelve separate programs, and recipients range from megabanks like Citigroup and JPMorgan Chase to automakers Chrysler and General Motors.

Seven months in, the bailout’s impact is unclear. … What cannot be disputed, however, is the financial bailout’s biggest loser: the American taxpayer.

The US government, led by the Treasury Department, has done little, if anything, to maximize returns on its trillion-dollar, taxpayer-funded investment. So far, the bailout has favored rescued financial institutions by subsidizing their losses to the tune of $356 billion, shying away from much-needed management changes and–with the exception of the automakers–letting companies take taxpayer money without a coherent plan for how they might return to viability.

The bailout’s perks have been no less favorable for private investors who are now picking over the economy’s still-smoking rubble at the taxpayers’ expense. The newer bailout programs rolled out by Treasury Secretary Timothy Geithner give private equity firms, hedge funds and other private investors significant leverage to buy “toxic” or distressed assets, while leaving taxpayers stuck with the lion’s share of the risk and potential losses.

Given the lack of transparency and accountability, don’t expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is.

Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government’s $1.1-trillion, publicly funded bailout.


Originally published in Fabius Maximus and reproduced here with the author’s permission.