Month: September 2008

Given the state of the world today: conflagrations and uprising in various parts of the globe; the recent hotel bombing in Pakistan proving al Qaeda is still alive and flourishing, despite woefully inadequate measures by western governments to kill them off; the economic crisis threatening to further destabilize the planet; global warming wreaking its own particular blend of havoc, more than ever it’s necessary for our media to present an honest and informed face.

Without honest, truthful, news reporting, unembellished by the stark, emotion-raising headlines more suited to Hollywood blockbuster dramas, we are unable to form frank opinions and adapt our thinking to take account of the true nature of what is happening in this world we all inhabit.

For the last week or so, media news has informed us North Korea is restarting its nuclear program, frozen a few months ago with much fanfare and demolition of a cooling tower. Now, it seems, nasty, wicked North Korea has renegaded on its promises, raised a digit at the West, and is rebuilding its nuclear facilities.

It’s unlikely many Americans viewed it, after all it is broadcast between 5.00 and 5.30 each morning in the US, but BBC World News from London announced this morning, as one of its major headlines:

“NORTH KOREA HAS REMOVED UN NUCLEAR WATCHDOG SEALS FROM A KEY ATOMIC FACILITY”

It wasn’t until some twenty minutes later that the program cut to a reporter at the IAEA headquarters in Vienna who informed us:

“Mohammed El-Baradei says the North Koreans have asked the IAEA to remove their seals and surveillance equipment at Yongbyon. They said they wished to run reprocessing test work which, they said, wouldn’t involve nuclear material.

This information was only received this morning and its understood the seals and equipment are still in place.“ [my bold]

This gross error by the BBC (who were in fact only echoing earlier reports from other media outlets) is a typical example of the sloppy journalism now rampant even among the more respectable of news media. We’ve come to expect hideous distortions, frequently outright lies, from the likes of Fox News, CNN, and even BBC America’s evening news show, which from its inception has aspired to the sensationalist format of its US counterparts.

The BBC brags it’s World News program reaches “276 million homes in more than 200 countries and territories around the world”.^[1]Given that many people switch on for the headlines before dashing off to work in the morning, how many heard the BBC’s headline announcement, but missed the later clarification?

It happens so frequently – a blazing headline broadcast to the world, before any attempt is made at verification – one has to wonder: is it becoming deliberate?

^{[1] BBC Press Office “BBC World News” April 2008}

Filed under: Media hype

Finally, on NBC News last night, the question of who’s to blame for the financial meltdown was addressed by CNBC’s Dylan Ratigan.^[1] I waited for the final condemnation of government departments hand-in-glove with corporate commerce; the greedy CEO’s gorging themselves fat on the sub-prime mortgage market, while those they conned live in homeless shelters, or with relatives, as their houses are repossessed.

I waited in vain:

“So, who’s to blame? We all are. From the moms and pops who took advantage of the low minimum payments on their credit cards to grow their business, to trillion dollar institutions. If you thought you could reap the rewards of easy credit without the consequences, this is the proof that you can’t.”

According to Ratigan, our benevolent government has stepped in to buy up all the bad debt, so banks can continue lending us – the people – the money we need.

It seems the government is blameless; the companies involved in creating the sub-prime mortgage crisis, innocent. We, the people, are at fault for daring to desire a small slice of the very large financial cake being consumed by these fatcats of industry and politics.

We should have refused the mortgages they offered. We should have insisted on not owning our own home. Those ‘already approved’ credit cards they force through our letterboxes every day should have been ignored. They didn’t really want us to take up their offers of credit, they were only pretending – apparently.

Our philanthropic government isn’t really using our hard earned taxes to bale out Fannie Mae, Freddie Mac, AIG, and now all the other financial institutions fallen victim to their own avarice; George W Bush is paying for it all out of his own pocket. At least, that’s how it would appear listening to Dylan Ratigan.

Ratigan, looks a well-heeled sort of guy. No doubt he lives in a fine house, lacks for little other than, perhaps, a private jet, and is buffered from the financial meltdown by a fat salary from CNBC. He’s probably the sort of American who blames the victim in cases of rape. In this instance, he’s certainly accusing the victims of the crime, rather than the perpetrators.

To coin good old American phraseology, Mister Ratigan is AN ASSHOLE.

^{[1] “What brought the US economy to the brink? (video) NBC Nightly News, September 19th 2008}

Filed under: Corporate mouthpieces

What’s the difference between Gatwick Airport in London, England, and the US financial markets?

The answer is – quite a lot.

Britain’s Competition Commission (formerly the Monopolies and Mergers Commission until 1998) has forced Gatwick Airport to put itself up for sale.^[1] The owners, BAA, have got too big and powerful (they own seven major airports in Britain) and, the Commission say, competition is suffering as a result.

In contrast, the US financial industry has been in charge of its own regulation for a number of years; result: there hasn’t been any. Unless someone can now pull off a miracle, and no-one can, the global economy will slide into recession for the foreseeable future.

George W Bush yesterday acknowledged the crisis as ‘these adjustments to the financial markets’. Considering it was only last week he said the US economy was hunky-dory and incredibly buoyant, this must surely mean we’re only one step away from another Great Depression.

Ironically, within a week, the Republican government of George W Bush has turned violently Socialist, nationalizing not only the mortgage giants Fanny Mae and Freddie Mac, but the monster, AIG, as well. Without so much as a ‘by-your-leave’, they’ve taken billions of dollars of our money and poured it down the throats of, perhaps, the three greediest companies on the planet.

Cable news channels have made much of us “waking up this morning to find we own an insurance company……”.

What utter rubbish. We don’t ‘own’ anything. In fact, we may find we ‘own’ a lot less by the time this fiasco has played itself out. Can those people who’ve lost their savings from collapsed banks go knocking on AIG’s door, asking for their share of the company – in dollar bills, please. Of course not.

Washington may now own part of AIG, the government certainly does, but that only means it controls the decision-making within the company. Given the half-baked financial ideas to come out of Washington lately, it’s unlikely Poulson and Benanke can do any better than AIG’s grasping board of directors.

Remember the government hand-out checks earlier this year that were supposed to boost the economy and put everything back on track?^[2] They didn’t work, did they? And it looks like we’re about to give them back – with interest.

The sub-prime mortgage crisis came about because banks loaned money irresponsibly to those with no financial ability to repay the debt. Both banks and borrowers are now facing the consequences. Loaning large sums of government money to companies, now in similar straits to the house-buyers they conned, seems equally irresponsible. More so, when the government is simply printing the dollar bills to pay for it.

An MSNBC ‘financial expert’ was asked yesterday if it was possible to go on printing money in this way. He responded with this:

“The Feds wallet is infinite. They can print money till the cows come home. Now, the downside is, of course, sparking inflation down the road, but the ability to raise money and provide rescue funds is basically without end.”^[3]

This is possibly the most outrageously irresponsible statement I’ve ever heard on an American news program. Making money by printing money is a short term recipe for financial disaster. This “expert’s” almost casual reference to inflation proved that, somewhere deep in the recesses of his tiny mind, he had heard of a country called Zimbabwe.

Of course, there’s no-one to blame. It’s nobody’s fault. Cable news anchors wring their hands and look glum, but not one of them points a finger, or dares to demand there should be retribution. So, just who is responsible?

Interviewed on BBC America News tonight, Bob Diamond, the president of Barclays, wasn’t too concerned. He doesn’t need to be; his company has just bought the remnants of Lehmann Bros at a giveaway price. Moving one step beyond George W Bush’s “adjustments” he admitted there were “some issues” in the financial system. He went on:

“but we’ve learned a lot about liquidity, and I think those lessons needed to be learned.”

An admission that the President of Barclays is using a financial meltdown to swot up on ‘liquidity’ hardly inspires confidence. Shouldn’t he, and his fellow CEO’s, have learned about liquidity at college? Or, at least taken a night-school course before running one of the biggest financial institutions on the planet?

Mister Diamond, you may use our taxpayer’s money to pay for your education, but we also need to learn our lessons. Like you, the people of America have pretended to know much, and learned little. We trusted you and your corporate ilk. That was our mistake. We relied on our government to oversee your industry. It failed in its duty. For that the US president bears ultimate responsibility.

America always tries to do things ‘its’ way. It never looks beyond its borders for ideas, because being America, it doesn’t believe anyone else could have any better ideas. America needs to remove its blinders. That’s one of the lessons we have to learn in order not to let Bob Diamond, and his financial buddies, get away with the greed and corruption that is the true cause of the financial chaos taking place in the world today.

The British Competition Commission, in line with European Community legislation, has forced a huge company, BAA, to split itself up. If the American people, through its government, had ensured similar regulatory legislation was in place, together with effective control of the US financial sector, AIG would never have become so huge that its demise could rock the world; the sub-prime mortgage fiasco would never have occurred; Fanny Mae and Freddie Mac need not have been nationalized, and the global marketplace would not be turned upside-down, as it is today.

The American people need to learn lessons from others, more experienced. Rampant, unchecked capitalism inevitably produces a free-for-all of greed and corruption. In the end, it’s the ordinary people of America, and throughout the world, who will pay for it.

^{[1] “Gatwick Airport put up for sale” BBC, September 17th 2008}

^{[2] “A Drop In The Ocean?” Sparrow Chat, January 24th 2008}

^{[3] No link, but if you’re quick you may catch this video interview on the NBC Nightly News, website, labeled, “Desperate Times, Desperate Measures”.}

Filed under: Financial markets