Annual Fundraising Appeal
Over the course of 21 years, we’ve published many unflattering stories about Henry Kissinger. We’ve recounted his involvement in the Chilean coup and the illegal bombings of Cambodia and Laos; his hidden role in the Kent State massacre and the genocide in East Timor; his noxious influence peddling in DC and craven work for dictators and repressive regimes around the world. We’ve questioned his ethics, his morals and his intelligence. We’ve called for him to be arrested and tried for war crimes. But nothing we’ve ever published pissed off HK quite like this sequence of photos taken at a conference in Brazil, which appeared in one of the early print editions of CounterPunch.
100716HenryKissingerNosePicking
The publication of those photos, and the story that went with them, 20 years ago earned CounterPunch a global audience in the pre-web days and helped make our reputation as a fearless journal willing to take the fight to the forces of darkness without flinching. Now our future is entirely in your hands. Please donate.

Day12Fixed

Yes, these are dire political times. Many who optimistically hoped for real change have spent nearly five years under the cold downpour of political reality. Here at CounterPunch we’ve always aimed to tell it like it is, without illusions or despair. That’s why so many of you have found a refuge at CounterPunch and made us your homepage. You tell us that you love CounterPunch because the quality of the writing you find here in the original articles we offer every day and because we never flinch under fire. We appreciate the support and are prepared for the fierce battles to come.

Unlike other outfits, we don’t hit you up for money every month … or even every quarter. We ask only once a year. But when we ask, we mean it.

CounterPunch’s website is supported almost entirely by subscribers to the print edition of our magazine. We aren’t on the receiving end of six-figure grants from big foundations. George Soros doesn’t have us on retainer. We don’t sell tickets on cruise liners. We don’t clog our site with deceptive corporate ads.

The continued existence of CounterPunch depends solely on the support and dedication of our readers. We know there are a lot of you. We get thousands of emails from you every day. Our website receives millions of hits and nearly 100,000 readers each day. And we don’t charge you a dime.

Please, use our brand new secure shopping cart to make a tax-deductible donation to CounterPunch today or purchase a subscription our monthly magazine and a gift sub for someone or one of our explosive  books, including the ground-breaking Killing Trayvons. Show a little affection for subversion: consider an automated monthly donation. (We accept checks, credit cards, PayPal and cold-hard cash….)
cp-store

or use
pp1

To contribute by phone you can call Becky or Deva toll free at: 1-800-840-3683

Thank you for your support,

Jeffrey, Joshua, Becky, Deva, and Nathaniel

CounterPunch
 PO Box 228, Petrolia, CA 95558

Behind Closed Doors

An Economy Without Firewalls

by ALAN FARAGO

More than two years after Wall Street’s closest brush with death since the Great Depression, taxpayers, investors and voters are still waiting for the kind of bare knuckles Congressional action like the Pecora Hearings in the 1930s that resulted in federal legislation creating basic firewalls within the banking industries.

For more on this, read Pam Martens’ terrific piece in CounterPunch, "The Most Vital Ingredient in Wall Street Reform Goes Missing". This morning’s Miami Herald shows the cracks in the wall: on the one hand reporting the Rooms-To-Go economy as showing new signs of life, and on the other, Miami’s closest connection to the Wall Street crisis: LNR, managing nearly $22 billion in troubled commercial backed mortgages.

Lennar and LNR were founded by the Miller family in Miami whose good works and contributions include generous gifts to the University of Miami School of Medicine and other local charities (except, naturally, for the environment). Both companies reach far beyond Miami’s parochial politics. Lennar is one of the nation’s largest production homebuilders. Its serial projects in South Florida to move sprawl outside the Urban Development Boundary (Parkland, Florida City Commons) provoke the ire of conservationists struggling to protect national parks. To Lennar and Wall Street, these tempests amount to less than rounding errors on the corporate balance sheet.

Small as they are, those rounding errors do add up. They add up to deforming democracy. The distortions at County Hall through land use zoning and permitting facilitates a well-mannered segregation of citizens from their government, the peddling of influence by the lobbyist corps and the engineering cartel puts ordinary voters at a further distance. In Miami-Dade, Florida’s largest and most politically influential county, every effort at reform of the land use pattern that wraps up sprawl and overdevelopment has been thwarted and suppressed, despite the economic collapse. One county commissioner, Joe Martinez, directly benefited from an insider transaction on a lot owned and platted originally by Lennar.

Production homebuilders form their own cartel across the nation, teaming up with local players, partnering in land aggregation for example or the intermediate stages of large-scale development that wrap up millions of dollars in fees and influence peddling at the lowest rungs of government related to zoning and permitting and councils. Commissioner Martinez, for instance, obtained his lot for his dream house from a builder and former president of the Latin Builders Association who teamed with Lennar in one of its subdivision developments. (The local Lennar vice president, Anthony Seijas, is recent past president of the Latin Builders and now an executive in a Lennar subsidiary specializing in distressed real estate investments.)

The Miller family, through ownership of LNR, also invests in another side of the development equation; gambling the arbitrage between distressed debt and its value as a "workout" asset. In playing both the long and short sides of the development equation on a national scale the largest shareholders of Lennar and LNR have a unique play on the financial markets. That play, however, is not agnositic. It is based on optimism that growth of construction and development, in huge increments and pools of mortgages measured in the hundreds of millions, will never stay down for long.

The time release depression has allowed companies like Lennar and LNR to hold out for sunnier days with crutches unavailable to consumers and small businesses. Lennar and LNR are part of a network of large financial institutions that lobbied expensively and extensively for the prerogatives of the "free market" over many decades. The visible benefits include a provision supported by the Obama White House in 2009 legislation that allows homebuilders to write off current losses– billions– against profits during the building boom. LNR, like most of Wall Street, is surviving through an accounting rule change recently approved by Congress that gives the nation’s largest financial institutions (ie. the issuers of debt owned by LNR and owed by Lennar) the flexibility to price their balance sheets as though a 30 to 50 percent devaluation of assets has not occurred.

This is not the place to argue whether enforcing the mark-to-market rule — or just to shrug and let it go– would have resulted in 25 percent unemployment throughout the United States, but there is no question that the fundamental characteristic of the time-release depression is precisely to allow the big recipients of debt to survive and not collapse. That’s Plan A. The problem: there is no Plan B.

If Congressional hearings on financial regulations only reinstitute the firewalls that once protected depositor institutions from speculative investment banks, the opportunity to cure the deep, underlying distortions of democracy that have grown out of the dependence of the economy on collateralized debt and other forms of financial derivatives will be missed. It is critical not just to regulate the markets for that debt, to provide for clear transparency in valuations, but also to integrate how communities choose to grow and to re-balance democracy in favor of citizens and taxpayers so that power and wealth is not so concentrated behind closed doors.

Those closed doors mesh with Wall Street’s. It is said we can’t open them, because otherwise we risk another Great Depression. Where we are, today, may get us to the same place– only slower. The mainstream media is proving an unreliable guide for the underlying cause of this time-release depression. One can’t build an economy of Potemkin Villages based on Rooms-To-Go advertisements without a day of reckoning. That goes equally for the overdevelopment of downtown Miami– a sinkhole for billions of collateralized mortgage bonds– as for suburban sprawl near the Everglades and the billions of taxpayer dollars to correct past mistakes.

ALAN FARAGO, conservation chair of Friends of the Everglades, lives in south Florida. He can be reached at: afarago@bellsouth.net

 

WORDS THAT STICK