The New York Times' front page exposé on the role that Goldman Sachs has played in the Greek tragedy unfolding in Europe right now raises a huge number of concerns both for the U.S. economy and the financial reform measures now in Congress.
To recap, Greece and a number of other European Union (EU) countries are dangerously in debt. EU rules say member countries cannot have budget deficits that exceed three percent of GDP. Greece's debt is closer to 12 percent. Other countries including Spain, Ireland, Italy and Portugal are also in trouble. These countries are "too big to fail." A default by any one of them would rock the global markets, putting an end to the hopeful signs of an EU recovery and potentially leading to a "double dip" recession here in the United States.
Greece and perhaps the other EU nations have been hiding the extent of the debt for years. This week, it was revealed that they have been able to do this with the aid of major U.S. players like Goldman Sachs. The German magazine Der Spiegel broke the story that Greece did a billion-dollar currency swap with Goldman Sachs in 2002 that did not show up on the nation's books as debt.
While President Obama is in Washington talking about putting a freeze on government spending, soon millions of American families will be out in the cold. In one month, one million Americans are slated to lose their unemployment insurance. Millions more will follow.
In January 2005, USA Today revealed that a U.S. Department of Education contract paid Williams to promote Bush's No Child Left Behind legislation on his TV show and to ask other African American journalists to do likewise. Democrats and media activists were appropriately outraged at such blatant and hidden government propaganda. A January 7, 2010, report by Marcy Wheeler on her Firedoglake blog exposed the similar failure of the Obama Administration and influential MIT economist Jonathan Gruber to fully and consistently reveal Gruber's role in receiving hundreds of thousands of dollars as a paid consultant to the Obama Administration, while promoting Obama's health care legislation.
Roff, a long-time Republican activist and right wing pundit, notes that in the William's payola scandal "senior Democrats in the U.S. House of Representatives wrote to President George W. Bush expressing their outrage. In one of those letters, then-House Minority Leader Nancy Pelosi and Reps. Henry Waxman, George Miller, David Obey, and Elijah Cummings denounced the payments made to Williams under a government contract as 'illegal covert propaganda' intended to influence the American electorate."
What a difference partisanship makes now that Obama is president. In the Gruber scandal prominent liberals including New York Times columnist Paul Krugman have attacked the messenger, Marcy Wheeler and Firedoglake, rather than criticizing the lack of disclosure and the money changing hands, and digging further into the relationship between Obama and his paid health care advocate Jonathan Gruber.
Ben Bernanke, chairman of the Federal Reserve, gave a speech this week that made headlines and raised eyebrows: “Lax Oversight Caused the Crisis, Bernanke Says.” Finally, many thought, the Fed Chairman would fess up to his role in the crisis! Alas, 98 percent of the speech is dedicated to justifying what the Fed did right over the last decade, and the “lax oversight” apparently had more to do with other agencies charged with regulating mortgages and underwriting practices, not his own.
Despite proclaiming a need to cut medical costs, the Senate health care reform bill contains a provision that will benefit large drug companies while hurting manufacturers of generic drugs. As it is now written, the bill will keep less-expensive generic drugs from entering the market for fully 12 years, far longer than the five to seven years President Barack Obama had advocated. The concession to Big Pharma companies, which manufacture expensive brand-name drugs, follows an $80 billion agreement made earlier this year between the White House and large drug makers like Merck and Pfizer, who promised to support President Obama's health reform plan, cut drug prices and pay additional taxes to help expand health insurance coverage over the next 10 years. Kathleen Jaeger, President and CEO of the Generic Pharmaceutical Association, said the health reform bill passed by the Senate " ... unfortunately, amounts to a treasure trove to brand drug companies who stand to make enormous profits from health care reform -- putting brand drug profits over patients ... With generics saving the health care system one billion dollars every three days, Congress should be looking at increasing, not decreasing, access to safe effective and affordable generic and biogeneric medicines."