Goldman Returns

“I read the news today, oh boy….”

That old Beatles’ line ran through my head as I heard that dear Goldman Sachs, the Wall Street banking/trading firm which the late Secretary of the Treasury, Hank Paulson used to head (he apparently left with a $500 million golden parachute) has just posted its greatest profits ever: second quarter net income of $3.44 billion. And the Dow of course rocketed higher, and many pundits were allowing as how this meant the financial crisis was over.

Not everyone was so sanguine, though. My favorite commentator, after Katherine Austin Fitts (heard Wednesdays on KPFA’s “Flashpoints” and blogging regularly on solari.com; she spoke about the scam Goldman has been running getting U.S. Treasury money at 1% interest or less, and making a killing with it), was financial analyst Max Keiser. In a video posted by above-mentioned solari.com, Keiser made several delicious observations, pointing out that though these “financial terrorists” at Goldman have engineered a “financial coup d’etat” wherein they now control the United States government (I gather by holding the United States hostage, through Paulson, to compel it to use taxpayer dollars to bail out the financial system or be responsible for a global financial collapse), they still only paid 1% in taxes last year. Moreover, he accused Goldman of “literally stealing $100 million a day…they’re front-running every single trade on the New York Stock Exchange with this high-frequency trading.”

When I looked into said “high-frequency trading,” it turns out the recent scandal involves a former Goldman employee, a computer specialist who designed their high-frequency trading platform which allows Goldman, in microseconds, to make decisions about trading information before everyone else on Wall Street can. The former Goldman employee was found to be stealing parts of the high-frequency system he designed for Goldman, and using it on behalf of his new employer in Chicago.

But to me, this seems a diversion. The real scandal involves Goldman’s use of government funds to continue its high-risk business model, which was what caused the financial collapse in the first place. As Robert Reich, Secretary of Labor under President Clinton, put it in a recent column:

“Goldman is still wagering its capital and fueling giant bets with lots of borrowed money. While its rivals have pared back risks, Goldman has increased them. And its renewed success at this old game will only encourage other big banks to go back into it….Meanwhile, Goldman is still depending on $28 billion in outstanding debt issued cheaply with the backing of the Federal Deposit Insurance Corporation. Which means you and I are still indirectly funding Goldman’s high-risk operations.”

I guess this is what Katherine Austin Fitts meant when she spoke of Goldman’s taxpayer-financed heist—borrowing money from the Federal government for practically nothing, and charging its customers 10 or 15 or 30 times that—when it’s not, that is, investing and leveraging these taxpayer- donated funds at ridiculous margins to play its Wall Street games.

Paul Krugman adds to this story in a recent column, “The Joy of Sachs” (pun intended, with us as the Sachs-ees.) What Krugman points out is not that Goldman Sachs is not a very competent financial outfit—which it is—but rather that they are part of, or perhaps the main proponents of the "financialization" of America. What this involved was the directing of huge sums of capital by the likes of Goldman Sachs into the “construction of unsellable houses and empty shopping malls. They increased risk rather than reducing it, and concentrated risk rather than spreading it. In effect the industry was selling dangerous patent medicine to gullible consumers.” What Goldman did that was different, according to Krugman, was to refrain from buying into “its own hype.” That is, rather than investing in the commodities they knew were toxic (yet they urged consumers to buy them), Goldman sold the securities backed by sub-prime mortgages—“and then made a lot more money by selling mortgage-backed securities short, just before their value crashed.” All of this was legal, says Krugman, but the “net effect was that Goldman made profits by playing the rest of us for suckers.” And now, having taken over the government—if Keiser is right—Goldman is lobbying heavily against any sensible new regulations that would prevent them from doing the same damn thing all over again, only this time with far worse consequences.

David Paul, in a new piece on HuffingtonPost.com, “The Greening of Goldman Sachs,” explains a bit more how Goldman did it. Not only did it receive $10 billion in TARP funds, it also managed to “convert itself into a commercial bank and member of the Federal Reserve system, gaining access to low or zero cost capital at the Fed Discount window and access to federally guaranteed borrowing through the FDIC Temporary Liquidity Guaranty Program.” This access to government funds literally saved Goldman Sachs, according to Allen Sloan of CNN.com: “By giving Goldman access to vast amounts of money…the Fed ended panicky demands from Goldman customers that the firm immediately return the cash and securities it was holding for them. That was the equivalent of a run on the bank, which no institution can survive.” The worst part is that the boys at Goldman are now trying to screw the very government that bailed them out by lobbying to buy “the stock purchase warrants it gave the government as part of the TARP deal” at bargain basement prices—something like $500 million for stock warrants worth around $1 billion. Turn a profit on everything and everyone, especially the suckers who saved your ass, seems to be Goldman’s motto.

So here’s the deal folks. Goldman Sachs, thanks to all the poor fools known as Mr. and Mrs. U.S. Taxpayer, is back bigger than ever, now with the U.S. government (the Obama administration and Congress) and our money in its hip pocket. Screw the unemployed. Screw the working stiffs. Screw those who’ve lost their pensions and savings and everything else. And most especially, screw those foolish enough to show you mercy. It’s bonus time on Wall Street once again.

Isn’t it also time for John Q. Public to get really pissed off?

Lawrence DiStasi

Canadian Health Care

The following piece was written by a family friend of my friend, Ninette Bavaro-Latronica, who just returned from visiting relatives in Toronto. She has long been impressed with Canada's 40-year-old universal coverage. As an intro, Ninette pointed out that her cousin, ill with cancer, has benefited from one aspect of the free Canadian plan: a nurse visited his home for 4 hours each day to care for him. In the U.S., such visits would bankrupt many people; in Canada, they are part of the free plan. One final note: a recent column noted that Canada has had problems with funding, and proposes that one possible solution would be to keep the overall plan, but have wealthier Canadians (earning over $100,000/year) pay co-payments for some services, up to about $2500 a year. That would still be far far less than U.S. plans which run up to $15,000 a year. What follows is the article by Ninette's Canadian friend.


As Canadians, our American family and friends have been asking a lot about Canadian health care the past week with all the talk of bringing in government health care in the U.S.A.

As a Canadian I have to say that I am taken back in a very bad way by all the false videos coming on-line this past week about the Canadian health system and painting it as a third world mess.
So I thought I would post some stats and info for our American friends on the Canadian health system so you can see what it is all about.

Before I start with the stats, I want to point out that just like the American health system, the Canadian system is not perfect. It has issues that need to be addressed. But overall the system works great.


THE CANADIAN HEALTH SYSTEM

Canada's health system operates under a government insurance plan. All Canadians regardless of age or income receive the same health coverage, paid for by the government. This Canadian government health coverage covers
services such as:
Visits to a doctor
Diagnostic services
Treatment for injuries or illnesses
Hospital care
Government health care does not cover dental care, eye care, eye glasses or services that are not medically necessary, for example, cosmetic surgery.

In the Canadian system you are allowed to
-Choose your own doctor
-Choose the hospital you want to go to
-Decide to seek other opinions from other doctors or hospitals

Under no circumstances does the government choose which hospital or doctor you go to.

The system basically operates like the private health system in the USA, just the government health insurance pays your bills instead of private insurance.

The Canadian health system is one of the most up to date in the world, and several world reknown hospitals are located here. These include Toronto General Hospital, Toronto Sick Kids Hospital, and many others. The Toronto General Hospital actually was just in the news for creating a special device to help lung transplant patients live longer while waiting for a lung transplant. This device will now be used in American and other world hospitals.

Another question we get asked is about wait times.

The Canadian health system works on how urgent your need is. If you have an illness that needs to be addressed you will get the care fast. But if you have a minor issue such as a small cut and go to the emergency room, than you will wait a little.

That being said, Canada does have an issue with wait times in some hospitals, and the government is addressing this issue now, by expanding emergency rooms and providing more funding to fix these bottlenecks.
Another issue that is being addressed is the lack of new doctors in some parts of the country. This has to do with funding cuts to universities in the 1990's that saw less students entering medical school. The government is addressing this issue now and funding is coming back on-line for universities.

There are lots of videos floating around on the net saying that the Canadian system rations things from tetanus shots, to heart bypass surgery. This is not true. Other claims floating around are that Canada has no medical clinics open on weekends or at night, etc. That is also false.

Overall Canadians receive the same top notch health care Americans get, the difference is that when they ask for your health card, Canadians pull out a Government Health Insurance card(called OHIP in Ontario), and Americans pull out cards from insurance companies or pay on their own.

This is what our health cards look like. This is for Ontario the province we live in. Every resident carries a card like this. You just present this card and receive medical care. Want to know why we have pictures on our cards? Because Americans were coming up to Canada and using their Canadian family members cards to get health care, when our cards had no photos.

(photo I.D. for Canadian plan--much like a U.S. driver's license)



Some stats.

Life expectancy

Canada: 80.4 years

United States: 77.8

Infant mortality Rate

Canada: 5.4 per 1,000

United States: 6.9 per 1,000


Per capita expenditure on health (USD)

Canada: $3,678

United States: $6,714

Healthcare costs as a percent of GDP

Canada: 10.0

United States: 15.3

Basically the U.S.A. spends a higher percentage of tax dollars on health care each year than Canada does, yet everyone is not covered like in Canada.

Nuclear Treason

When one reads Seymour Hersh’s material (The Samson Option, Random House: 1991) on Israel’s pursuit of, manufacture of, and testing of nuclear weapons in a program which began in the late 1950s, and America’s response to it, one has no choice but to consider the word “treason.” That is because for decades, starting with the late days of the Kennedy Administration, and continuing through Lyndon Johnson, Richard Nixon, Jimmy Carter, Ronald Reagan, and beyond, successive American Presidents, intelligence officials and Cabinet members have all had a hand in a clandestine policy to keep the increasingly conclusive proof that Israel had succeeded in producing nuclear weapons a secret. A secret from the American public. A secret from U.S. allies. A secret from the world—even as the United States loudly and overtly banged the drum promoting the Non-Proliferation Treaty it had a major hand in writing, and from its beginnings, enforcing. It has vociferously protested when any nation but the big 5 (the U.S., the Soviet Union, France, England, and China) has made moves to acquire nuclear weapons. It has accused nations such as India and Pakistan of endangering the world, and more recently North Korea and Iran of violating their commitments under the NPT. It has called them everything from liars to frauds to criminals to Hitlerian dictators threatening other nations and worldwide conflagration.

And yet, when it came to Israel, the American political establishment bent (and still bends) over backwards (or perhaps forwards) to look the other way: see no evil, hear no evil, and definitely speak none. And there has been one overriding reason for this: fear of the protests that would arise from the American Jewish community if the United States revealed Israel’s dirty secret. Fear that the big money coming to American politicians from that same community would be cut off. One of John F. Kennedy’s major contributors, for example, was a hosiery and apparel mogul named Abraham Feinberg. His financial donations had rescued Harry Truman’s presidential campaign in 1948 by financing Truman’s whistle-stop train campaign. Feinberg then managed to collect a huge campaign chest for the Kennedy campaign as well, and thereby secured direct influence in that White House. Having raised many millions of dollars needed to help Israel build its nuclear facility at Dimona, Feinberg’s zeal to protect “his” facility ran into conflict with Kennedy’s commitment to nonproliferation and desire to get IAEA inspections of it. Feinberg “fought the strongest battle of my career to keep them from a full inspection” by getting his message to the President (he met directly with Defense Secretary Robert McNamara): an inspection of Dimona would result in less support in Kennedy’s 1964 presidential campaign. Though unable to fight off an inspection completely, Feinberg was able to cripple it: instead of the IAEA, Washington agreed to send an American inspection team, one that would schedule its inspection visits in advance, with Israeli’s permission. This gave Israel time, as Hersh puts it, to build a “Potemkin Village” to deceive their American visitors (p. 111). In other words, the Israelis built a false control room showing that no chemical reprocessing plant (and hence no conversion of spent nuclear fuel to bomb-grade plutonium) was operating, and the American team dutifully reported that Israel had only a “standard reactor.”

President Lyndon Johnson continued this charade (American inspections of Dimona took place each year on schedule, always finding nothing, including the time in 1963 when Israel’s reactor “went critical”—meaning it was producing 70 megawatts of power, far more than the alleged 24 megawatts needed for electricity, and enough to start producing plutonium.) As Hersh writes:

“By the middle 1960s, the game was fixed: President Johnson and his advisers would pretend that the American inspections amounted to proof that Israel was not building the bomb, leaving unblemished America’s newly reaffirmed support for nuclear nonproliferation.” (p. 143).

The American CIA knew full well what the Israelis were doing: “Everybody knew” about the Israeli missile, one CIA analyst said, “but nobody would talk about it.” This allowed President Johnson to make statements, after China exploded its first nuclear weapon on October 18, 1964, such as: “Nuclear spread is dangerous to all mankind…We must continue to work against it, and we will.” (p. 149.) After the Israeli victory in the Six-Day War of 1967, the intentional ignorance became even more pronounced, as the White House sided more openly with Israel. Israel was importing yellowcake (uranium ore) from South Africa in great quantities, and it was monitored by IAEA. As one U.S. official monitoring nuclear developments said, “We knew about the yellowcake, but we weren’t allowed to keep a file on it. It simply wasn’t part of the record. Anytime we began to follow it, somebody in the system would say, ‘That’s not relevant.’”

But the most overt piece of pandering to his American Jewish supporters—and specifically to the same Abe Feinberg mentioned above—by Lyndon Baines Johnson took place just before LBJ left office. As Hersh describes it, the CIA by this time knew for certain that Israel had manufactured at least four nuclear weapons (it had actually made many more). But Israel wanted American F-4 Phantom jets—a high performance airplane that could carry nuclear weapons on a mission to Moscow (which Israel was determined to, and did target to dissuade the Soviets from aiding Egypt and other Arab nations). Many in the Johnson administration wanted to use this Israeli hunger for the F-4 as a bargaining chip to get Israel to sign the Nuclear Non-Proliferation Treaty (NPT). Paul Warnke, assistant secretary of defense, to that end called Yitzhak Rabin, Israel’s American ambassador, to his office and questioned him about Israel’s nuclear program. Rabin refused to answer, and Warnke leveled him with a long overdue tirade: “Mr. Ambassador, we are shocked at the manner in which you are dealing with us…You, our close ally, are building nuclear bombs in Israel behind our back.” Rabin of course denied it, but was so outraged that he not only lied about the encounter (he said in his memoirs that the whole encounter was about the F-4, and Warnke’s attempt to blackmail Israel by insisting on complete on-site supervision of all Israeli arms manufacturing and research), but also activated all of Israel’s supporters in Congress to oppose the NPT inspections. Most tellingly, Rabin called upon Abe Feinberg. Feinberg recalled Rabin complaining that “Everything you (Feinberg) have done about Phantoms is going down the drain. Clifford (Clark Clifford, Secretary of Defense and Warnke’s boss) is insisting on the NPT.” Now Feinberg had just recently met the President and Walt Rostow, his National Security Adviser, and remembered the President saying there would be “no conditions” to the sale of the planes. Hersh narrates the rest:

“So I picked up the telephone,” he said, “called the White House, and asked for Rostow.” The national security adviser was having dinner at Clifford’s house, and Feinberg, who was well known to the White House switchboard operators, was patched through. “Walt gets on the telephone,” continued Feinberg, “and I say, ‘Walt, you and I and the President were together and Johnson said ‘no conditions.’ Walt agrees. I say, ‘When you get back to the table, tell that to Clifford.’”

Clifford apparently got the message. For when Paul Warnke “arrived at a later meeting of his staff, all of whom favored tying the F-4 sale to Israeli acceptance of the NPT, he dramatically drew his hand across his neck. The NPT was out.” Harry Schwartz recalled Warnke’s account of the Clifford-Johnson dialogue: “Clifford called Johnson and LBJ said, ‘Sell them anything they want.’
“‘Mr. President, I don’t want to live in a world where the Israelis have nuclear weapons.’
“‘Don’t bother me with this anymore.’ And he hangs up.” (pp. 190ff)

So there it is. "Don’t bother me with this anymore," says the President of the United States. Nevermind hypocrisy. Nevermind being taken for a fool by another nation whom the United States has supported and continued to support in the face of worldwide opposition, and without which support this nation could not last a day. Nevermind being spied on, lied to, hijacked, and, in at least one instance, being attacked by this same nation that seems immune to criticism (I refer to the now-infamous "Liberty" incident, wherein Israeli aircraft fired upon an American telecommunications ship in international waters during its 1967 Six-Day War, killing 34 Americans and wounding 171.) LBJ, like Kennedy before him, felt constrained to honor his commitment to a major American Jewish donor, regardless of the fact that nuclear nonproliferation, which the President believed in as sincerely as he believed in anything and on which, arguably, depended the fate of the entire world, was openly mocked and endangered thereby.

Nor was this the end. This same kind of intentional blindness, this same massive hypocrisy, this same kowtowing to the organized might of American Jewry has continued almost unabated ever since, through every President and every administration, up to and including the administration of Barack Hussein Obama. CIA reports have been buried. Public accounts of Israel’s nuclear activities have been ignored by the world’s media: for example, in April 1976, Time magazine reported that shortly after the 1967 Six-Day War, Israel’s war hero Moshe Dayan had secretly ordered the building of a reprocessing plant. The report came from David Halevy, an Israeli citizen. Nothing happened. Ten years later, this time in 1986, the London Sunday Times ran an explosive story, based on the testimony of Israeli defector Mordecai Vanunu, detailing the inside story, with photos, of the huge Isaeli nuclear operation, including the fact that the Israeli nuclear stockpile now totaled more than 200 warheads, including some of the most sophisticated weapons in the nuclear arsenal such as advanced missile delivery systems targeting the Soviet Union, and “suitcase bombs” capable of infiltrating any country. Again, there was no reaction, other than a widespread Israeli disinformation campaign, much of which was organized by the rival Sunday Mirror of London by its pro-Israeli owner, Robert Maxwell.

Of course, some might say, ‘No one should worry. Israel is an ally, a sane and rational democracy, whose leaders would never employ such weapons.’ But that would be to forget the zealots who are in charge of this “democracy,” and what they have said, and done already. In the aftermath of the 1956 Suez War, for example, in which the Israeli leader David Ben Gurion considered President Eisenhower’s refusal to back Israel as a dastardly betrayal, one Israeli official is quoted by Hersh as saying: “We got the message. We can still remember the smell of Auschwitz and Treblinka. Next time we’ll take all of you with us.” (p. 42) It was at this point that Israel initiated its secret plan, with French aid, to go nuclear. And by the time of Israel’s 1973 Yom Kippur war with Egypt and Syria, it was not only nuclear, but deadly serious about acting. Most Americans, consumed with their own domestic drama known as Watergate, could never have known how close the world came at this time to Armaggedon, and worse (if anything could be worse than nuclear destruction), how the Israelis used that threat of Armaggedon to blackmail its patron and ally, the United States of America.

Hersh devotes an entire chapter, and more, to this episode. For the truth is, in the early days of the war, Israel was in a panic. Its famed commander, Moshe Dayan, having been totally surprised by the Arab attack, was virtually conceding defeat to the advancing Egyptian and Syrian armies which had destroyed 500 of Israel’s tanks and 400 planes, including 14 F-4 Phantom jets. An October 8 cabinet meeting resulted in three related decisions:

“Israel would rally its collapsing forces for a major counterattack; it would arm and target its nuclear arsenal in the event of total collapse and subsequent need for the “Samson Option” [i.e. bringing down “all of you with us”]; and finally, it would inform Washington of its unprecedented nuclear action—and unprecedented peril—and demand that the U.S. begin an emergency airlift of replacement arms and ammunition needed to sustain an extended all-out war effort.” (p. 225).

All three of these plans were implemented. Israel did counterattack, and managed to salvage the situation. But it also went on nuclear alert, readying its nuclear weapons not once, but twice in the course of the Yom Kippur war. It did this openly, partly to impress the Americans, but partly also to scare the Soviet Union into persuading their Arab allies not to advance beyond the pre-1967 borders. Apparently this warning to Egypt was given, according to Mohammed Hiekal, editor of Al Ahram, the leading Egyptian newspaper, warning the Egyptians that the “Israelis had three warheads assembled and ready.”

Finally, the blackmail was also implemented by the nuclear arming. Israel was already outraged that Henry Kissinger was taking his time in resupplying the Israeli military with the weapons that had been lost. Without the assurance of immediate delivery of such American weapons, Israeli commanders would be hampered in their vital counterattack. According to Hersh, a call on Kissinger by Simcha Dinitz, Israel’s ambassador to Washington, changed Kissinger’s mind. Confirmation of this comes, not from Kissinger’s memoirs, which omit any mention of Israeli nuclear capability (though they do mention the replacement of its war losses by October 9), much less its threat; but from Hermann F. Eilts, the American ambassador to Egypt. Eilts maintained that at the end of Kissinger’s tenure as Secretary of State, he brought up the 1973 war, and casually referred to the nuclear option: “Henry threw in that there was a concern that the Israelis might go nuclear. There had been intimations that if they didn’t get military equipment, and quickly, they might go nuclear”(p. 230). James Schlesinger, Secretary of Defense, concurred that “Kissinger just turned around totally. He got a little hysterical” in urging an immediate and massive resupply of weapons to Israel in October 1973. Schlesinger added that “there was an assumption that Israel had a few nukes and that if there was a collapse, there was a possibility that Israel would use them.” Finally, Anwar Sadat, then leader of Egypt, told Mohammed Heikal that Kissinger had said at the time: “It was serious, more serious than you can imagine.”

Before the war was over, Russia would threaten military intervention to get Israel to abide by the cease-fire, the United States had put the 82nd Airborne Division, B-52s carrying nuclear weapons, and the aircraft carrier John F. Kennedy on alert, and Israel responded by going on nuclear alert one more time. Hersh cites one more confirmation of the episode—more dangerous by far than the Cuban Missile Crisis about which we’ve heard so much—in a March 10, 1980 addendum to a column by Jack Anderson. Anderson wrote as follows:

“Locked in secret Pentagon files is startling evidence that Israel maneuvered dangerously near the edge of nuclear war after the 1973 Arab assault. The secret documents claim that Israel came within hours of running out of essential arms. ‘At this crucial moment, the possibility of nuclear arms was discussed with the U.S,’ declares one report. American authorities feared the Israelis might resort to nuclear weapons to assure their survival. This was the most compelling reason, according to the secret papers, that the United States rushed conventional weapons to Israel.” (p. 236)

If all this doesn’t make your flesh crawl, I don’t know what will. Read The Samson Option and you’ll see that this is only a sketch of a much more detailed and disturbing story. This is so especially in the light of President Obama’s trip, this week, to try to re-invigorate the START Treaty with Russia, to delimit the nuclear stockpiles of the two major nuclear states even further. All of which is admirable. So is the United States’ continuing attempts to end nuclear proliferation. But all the fine words of statesmen and politicians seem like so much horse shit when viewed in the light of the half-century of dissimulation, deception and outright treason when it comes to Israel’s still-unacknowledged nuclear secrets. I mean think of it: Israel rants and raves about the alleged nuclear plans of Iran. It attacks and destroys Iraq’s Osirak reactor, to unanimous applause. It threatens a similar attack on Iran’s nuclear facilities. It bellows and wails about terrorists who are plotting to infiltrate its borders, or those of the United States, with a suitcase bomb. And all along, it has been the lying, guilty party, doing the same thing, and much much worse. Possessed of hundreds of weapons and advanced rocketry to deliver them, it has threatened the world with nuclear conflagration more than once, and made known that it would do it again. What is a rational person to make of this? What are we to make of our leaders—who have known of this massive deception, of the spying of Jonathan Pollard who forwarded 500,000 pages of incredibly sensitive documents to Israel—and who have at the same time carried on with their hypocritical fulminations against nations like Iran and Korea for their “deceptions.” What are we to make of the political calculations of presidents—not one but several—who are willing, for political purposes, for continued campaign contributions to assure their own re-election, to put the entire world at risk of nuclear armaggedon? Can we call this anything other than despicable? anything other than treason?

Lawrence DiStasi