Today's Stories

July 23, 2009

Jeffrey St. Clair
The Masters of Perfidy: AIG and the System

July 22, 2009

Bernard Chazelle
How to Argue Against Torture

Nikolas Kozloff
The Coup and the U.S. Airbase in Honduras

Carl Ginsburg
The Recovery, Phase Two

Clifton Ross
Back to the Future? Return to El Salvador

Anthony DiMaggio
Health Care, Media and the Case for Socialized Medicine

Michael Donnelly
The Whoppers Behind WOPR

Nadia Hijab
Memoirs of a Lost Arab World

Dedrick Muhammad
Structural Inequality: News Not Fit to Print?

Charles Thomson
Cronyism at the Tate

Alan Farago
Ted Williams and the Florida Keys

Website of the Day
Himmelstein: Howard Dean is a Liar

July 21, 2009

Sasan Fayazmanesh
The Iranian Election and Its Aftermath

Uri Avnery
Breaking the Silence on Israeli War Crimes

Dean Baker
Séance on Wall Street

Jonathan Cook
Team Twitter: Israel's Internet War

Dave Lindorff
Saving Private Bergdahl

Andy Worthington
Interrogating the Uighurs

David Macaray
Heat, Dust and OSHA

Carl Finamore
The Deferential Party

Harvey Wasserman
Cronkite and Three Mile Island

Walter Brasch
The Marie Antoinettes of Health Care

Website of the Day
Linebaugh: Magna Carta and the Commons

July 20, 2009

Pam Martens
Judicial Apartheid

Nikolas Kozloff
Honduras and the Big Stick: Obama's Bullish Behavoir in Latin America

Paul Craig Roberts
Threatening Iran

Deepak Tripathi
Obama's Policy on China and Iran

Ira Glunts
Netanyahu's Time Bomb: Building in the Vineyard of the Mufti

P. Sainath
Put Your Money Down, Boys

Binoy Kampmark
The Moon Landing and the Cold War

Stephen Fleischman
The First Anchorman

Norman Solomon
Cronkite and Vietnam: Beyond the Hype

Andy Worthington
Predictable Chaos as Gitmo Trials Resume

Ron Jacobs
Out of the Haze, Into the Darkness: Recalling 1979

Website of the Day
Why Publishing Can't be Saved (as it is)

July 17-19, 2009

Alexander Cockburn
"Watch What We Do, Not What We Say"

Nikolas Kozloff
Chiquita in Latin America: From Arbenz to Zelaya

Joanne Mariner
CIA Apples: Bad at the Top of the Tree

Joe Bageant
America's White Underclass

Jonathan Cook
Israeli Road Signs: Wiping Arabic Names Off the Map

Saul Landau
Why So Much Sympathy for Madoff's Dupes and So Little for the Poor?

John Ross
Jurassic Fallout in Mexico

Sue Sturgis
Senator Sessions, Race and Impartiality

Anita Sinha /
Daniel Farbman
The Ricci Case and the Myth of Special Treatment

Peter Morici
Obama's Donut Economics

Pervez Hoodbhoy
Whither Pakistan? A Five-Year Forecast

Ramzy Baroud
Gaza and the Language of Power

Greg Moses
The Real Demand Crisis

Kia Mistilis
The Niger Delta Crisis

Missy Beattie
The Placebo President

David Ker Thomson
How Not to See: Things to Tell Your Eyeballs

James G. Abourezk
Evil Spirits: the Booze Strip in Indian Country

Paul Richards
Why Does Jon Tester Want to Log Wild Montana?

Dave Lindorff
Dark Days for Working People (With Three Small Rays of Light)

Marc Levy
Just Like Hanoi Jane

Matt Siegfried
The Good War Goes Hot

Stephen Martin
Panopticon Blues

Ben Sonnenberg
Sembène's Faat Kiné

David Macaray
Casablanca: When Melodrama Trumped History

Charles R. Larson
A Pakistani, Victorian Novel Celebrating Women

David Yearsley
That's Women for You: Abbas Kiarostami's Così

Lorenzo Wolff
Death Rattle and Roll: the Sound From England's Gutters

Poets' Basement
Payne, Anderson and Williams

Website of the Weekend
Hitler Learns of Sarah Palin's Resignation

July 16, 2009

Paul Craig Roberts
What Economy?

Afshin Rattansi Iranian Planes and the Hidden Toll of Economic Sanctions

Gregory V. Button
The Search for Environmental Justice in Perry County, Alabama

Evan Knappenberger
Profile of a Deserter

Michelle Bollinger
Why is Leonard Peltier Still in Prison?

Russell Mokhiber
White House to ABC News: No Obama Single-Payer Doc

Belén Fernández
Iranian Penetration, Oh My!

Alice Walker
What is Torture Like? A Letter to Obama

Nicholas Dearden
Paying the Climate Debt: the G-8's Troubling Model

Albert Osueke
Sotomayor and the Identity Mountain

Website of the Day
Sotomayor for the Prosecution

July 15, 2009

Manuel Garcia, Jr.
The Assassination Bureau

Vijay Prashad
A Political Recession

Dean Baker
Stimulus Arithmetic

Ray McGovern
Cheney Sweating Bullets

Jonathan Cook
Jenin's Model of "Economic Peace"

David Rosen
Shouts From the Gallery: the Sotomayor Hearings and the Culture Wars

Eric Walberg
Uighurs vs. Afghans: a Study in Contrast

Greg Moses
Three Dimensions of a Complete Stimulus Plan

Sousan Hammad
Decolonizing Israel

Binoy Kampmark
The Trial of Charles Taylor

Tracy McLellan
The Story of My Arrest

Website of the Day
11 Days in Saudi Gitmo

July 14, 2009

Eamonn McCann
The Emperors of Bombast: Bono, U2 and the Crisis of World Capitalism

Joanne Mariner
Obama's New Euphemism

Franklin Spinney
The Taliban Rope-a-Dope

Steve Heilig
Walking Mount Tam: an Interview with Gary Snyder

Ali Abunimah
Hamas' Choice

Dave Lindorff
The End of "Nice" Health Care Reform

Nikolas Kozloff
The Politics of Destabilization: McCain and Honduras

Ellen Brown
From Golden State to Subprime State

Alice Slater
How US Missile Defense Plans Sabotaged Nuclear Disarmament Talks With Russia

Ron Jacobs
Protest U.S. Aggression

Joe Allen
The Fight to Save James Hickman in Jim Crow-Style Chicago

Website of the Day
Mel Brooks Does the French Revolution

July 13, 2009

Uri Avnery
The Essence of the Regime

Mike Whitney
The Deflating Economy

P. Sainath
How the World Depression Hits Orissa

Gareth Porter
A US / Iraq Conflict on Iran

Paul Moore
Rap in the Streets, Rap in the Suites

Tim Wise
Off the Deep End: Private Clubs, Public Prejudice

Andy Worthington Former Insider Shatters Credibility of Military Commissions

David Macaray
Cartoon Voices: Serf's Up in Hollywood

Cal Winslow
The Healthcare Worker War

Niranjan Ramakrishnan
Spring in the Time of Obama

Website of the Day
Washington's Deep Game with China

July 10-12, 2009

Alexander Cockburn
Obama's Biden Problem

José Pertierra
The Cuban Five: a Cold War Case in a Post-Cold War World

John Ross
After the Honduran Coup

Conn Hallinan
The Settlements and the Quartet

Nikolas Kozloff
C Street Band: Sex Scandals, Moral Hypocrisy and the Far Right Agenda in Latin America

Clifton Ross /
Marcy Rein
U.S. and Honduras: Dr. Jekyll and Mr. Good Neighbor

Carl Ginsburg
Summers' Clouded Crystal Ball

Michael Neumann
Say It Loud, Say It Proud: There is No God!

Gilad Atzmon
The Left and Islam: Thinking Outside of the Secular Box

Jeffrey St. Clair
The Parable of the Golden Parachute

Ellen Hodgson Brown
California Dreamin': How the State Can Beat Its Budget Woes

Jim Goodman
Rural America Needs More Than Listening Sessions

Christopher Bickerton
Europe's New Politics of Hard Times

Wendell Potter
Health Care Industry Adopts Tobacco Lobby's Tactics

Dave Lindorff
CIA Lies: Why Isn't Congress in Open Revolt?

David Ker Thomson
Switchbacking Toward Bastille Day

Anthony DiMaggio
The Michael Jackson Feeding Frenzy

Raymond Lawrence
Michael Jackson as Sexual Pervert: the Calumnies of Peter King

Walid El Houri
Neda and Marwa: a Tale of Two Murdered Women

Stephanie Westbrook
Yes, We Camp

Roger Gaess
The Shades of Highgate Cemetery

David Yearsley
Tara, America's Dream House

Kim Nicolini
Caution: Men at Work, Robbing Banks

Poets' Basement
Five Poems From the Japanese

Website of the Weekend
Free Tiga and Hugh!

July 9, 2009

Ronnie Cummings
How Industry Giants are Undermining the Organic Foods Movement

Jonathan Cook
Two-State Solution, Israeli-Style

Nikolas Kozloff
Honduran Destablization, Inc.: Otto Reich and the International Republican Institute

James Bovard
McNamara's Other Body Count

Norman Solomon Afghanistan: the Escalation Scam

Allan Nairn
Indonesia Gets to Pick Its Killer

Andy Worthington
Revamping the Military Commissions

Tomas Borge
The Sadsack Soldiers of Honduras

Nadia Hijab
Palestinian Titanic

Paul Krassner
How Jeff Goldblum Didn't Die

Website of the Day
Dave Lindorff Wants Your Money--Will Give Good Reports

July 8, 2009

Saul Landau
In Amazonia

Dean Baker
The Green Shoots are Dead: Why the Economy Needs a Third Stimulus

Winslow T. Wheeler
Gates, Congress and the F-22

Eric Walberg
Obama in Russia

Ray McGovern
Is Texas Harboring a Torture Decider?

David Rosen
When Sadism Goes Systematic: Prison Rape as Policy

Dr. Mona El Farra
Gaza From a Distance

Ron Jacobs
McNamara and the Post: When Idiocy and Hubris Merge

Benjamin Dangl
High Stakes in Honduras

Alan Farago
How I Almost Pitched McNamara Into the Sea

Website of the Day
Ayatollah So

July 7, 2009

Alexander Cockburn
McNamara: From the Tokyo Firestorm to the World Bank

Uri Avnery
Israeli Court Rebukes Military

Brian M. Downing
Crossing the Helmand

Gary Leupp
Biden, Israel and Iran

Gregory A. Burris
My Brush With Homeland Security

David Macaray
When in Doubt, Blame a Labor Union

Laura Flanders
Obama Hushes Health Care Advocates

Alan Farago
Princple Over Principal

Greg Moses
Texas Patels Take Over Dallas Bank

Dan Bacher
Three Big Lies About the Peripheral Canal

Website of the Day
Tragedy at Toncontin

July 6, 2009

Patrick Cockburn
Saddam Hussein's FBI Interviews

Diana Johnstone
Zionist Fanatics Practice Serial Vandalism in Paris

Nikolas Kozloff
Honduran Coup to Venezuelan Coup: Same Old Globalizers and Torture School Grads

Gary Leupp
Operation Khanjar Begins

Jonathan Cook
Israel Calls on Ultra-Orthodox Jews to Stop "Arab Takeover"

Tim Wise
Of Fireworks and False Memories

Franklin Lamb
Cynthia McKinney and the Kidnapping of the Spirit of Humanity

Charles R. Larson
Sarah Palin, Plain and Tall

Carlos Benemann
California's Bingo Bondage: Getting Paid in IOUs

Shepherd Bliss
The Soulless Machine: Caught in the Cellphone Snare

Jerry Kroth
Stuart Levey and World War III

Karyn Strickler
A Fell-Swoop Moment Missed

Website of the Day
The Rise in Military-Backed Public Schools

July 3-5, 2009

Alexander Cockburn
Gob Smacked

Eamonn Fingleton
Detroit's Collapse: the Untold Story

Jeffrey St. Clair
Is the Bald Eagle Really Back?

Mike Whitney
Running on Empty

Pam Martens
The Parable of Michael Jackson's Debts

George Ciccariello-Maher
The Counter-Revolution Will Not be Tweeted

Paul Craig Roberts
The Big Whorehouse on the Potomac

Patrick Cockburn
The Haggling Over Iraqi Oil

Anthony DiMaggio
A Perilous Path: Iraq and the Language of De-Escalation

Roger Burbach
Honduran Coup: Target Left?

John Ross
Left's Grip on Mexico City Slips

Nikolas Kozloff
Meet Jim Demint: Coup Apologist

Gareth Porter
The Iran Canard

Andy Worthington
Finally, a Trial Date in the African Embassy Bombings Case

Saul Landau
Bad Times, Worse Habits

David Macaray
How We Spend Our Money

Adam Federman
The Recovery That Wasn't

Jane Slaughter Labor's Vague Rally for Health Care

Russell Mokhiber Black Caucus Muzzled on Israeli Kidnapping of McKinney

Robert Jensen
Beyond Independence

Robert Bryce
Hey, Paul Krugman, Here are 2.4 Billion More Climate Traitors

Belén Fernandez
The Situation in Honduras

Missy Comley Beattie
Would Jesus Pack Heat?

C. G. Estabrook
La Cina e Vicina

Stephen Martin
The Fog of Economic War

Charles R. Larson
Adichie on Her Own

Lorenzo Wolff
A Voice Like a Newsreel: the Soul of James Carr and the Civil Rights Movement

Kim Nicolini
The System That Hijacked New York

Poets' Basement
Farrelly, Kazak and Stadler

Website of the Weekend
Paul Krassner v. Larry King

July 2, 2009

Andrew Cockburn
The Wall Street White House

Nikolas Kozloff
Spinning the Honduran Coup

Wendell Potter
Obama's False Friends of Health Care Reform

Ellen Hodgson Brown
California's Empty Wallet

Christian Christensen Iran: Networked Dissent?

Patrick Irelan
Lost in Patagonia

Binoy Kampmark Returning Iraq

Nicola Nasser
Ethnic Cleansing as State Policy

Brian Tokar
Climate Bill: Cap(italize) and Trade(Off)

Dan Bacher
Panama Canal North?

Website of the Day
Scheuer on Immigration: "The only chance we have as a country right now is for Osama bin Laden to deploy and detonate a major weapon in the United States."

July 1, 2009

Vijay Prashad
Iran and Us

Alberto Vallente Thorensen
Why Zelaya's Actions Were Legal

Paul Craig Roberts
Pirates of the Mediterranean

Robert Weissman
150 Years

Manuel García, Jr.
The New Crisis in Aviation

Victor Figueroa-Clark / Pablo Navarrete
Honduras, a Coup With No Future

Norman Solomon
The NYT and Troop Deaths: Abstract Quality Journalism

Franklin Lamb
Remembering Amnon Kapeliouk

Martha Rosenberg
When Doctors Boo

Diane Rejman
Mothers and Military Lies

Website of the Day
The Color of the Race Problem is White

June 30, 2009

Michael Hudson
Debt Deflation Arrives

Esam Al-Amin
Iran and Washington's Hidden Hand

Benjamin Dangl
Showdown in Honduras

Jonathan Cook
Israeli Doctors Collude in Torture

Franklin Lamb
Hezbollah After the Elections

George Wuerthner
Beetle Hysteria ... Again: the Truth About Bugs, Fires and Ecosystems

Todd Gordon
Acceptable Versus Unacceptable Repression

Ron Jacobs
Mark Sanford, Sexual Liberation and LGBT Equality

Kenneth Libby
Conditions for Citizenship

Julian Vigo
Feeling Michael Jackson

Website of the Day
Inside the Mega-Churches

June 29, 2009

Ishmael Reed
The Persecution of Michael Jackson

Nikolas Kozloff
The Coup in Honduras: Obama's Real Message to Latin America?

Clifton Ross
Coups and Constitutions: From Bolivia to Honduras

Patrick Cockburn
Why Iraq is Now the Most Corrupt Country on the Planet

Uri Avnery
Between Tel Aviv and Tehran

Conn Hallinan
Dealing With North Korea: Why Threats and Sanctions Will Backfire

James G. Abourezk
Where the Money Isn't Going

Ralph Nader
The Holes in Obama's Financial Regulation Plan

Carol Miller
Why Fiscal Conservatives Should Love Medicare-for-All

Greg Moses
Jobs First

Website of the Day
Key Leaders of Honduran Coup Trained in the US

June 26-28, 2009

Alexander Cockburn
The Hate Crimes Bill: How Not to Remember Matthew Shepard

Jeffrey St. Clair
Meet the Retreads: Obama's Used Green Team

Doug Peacock
Elk River: History and the Yellowstone

Daniel Wolff
The Night Before: a Glimpse of the Lenape

Mike Whitney
What the Big Banks Have Won

John Ross
The New York Times and Stolen Elections

David Rosen
Cry, Hypocrite, Cry: the Tradition of Sex Scandals and American Politicians

Emily Ratner
Thoughts on Manhood From the Rafah Tunnel

Gareth Porter
Airstrike Report Belies "Blame Taliban" Line

Farid Marjai
Green, But Not Velvet

Nadia Hijab
The Rift in Iran: Memo to the "Do Something" Brigade

Paul Craig Roberts
Gun Control: What's the Agenda?

Fred Gardner
FDR's Real Defining Moment: Ending Prohibition

Carl Ginsburg
Obama's Father's Day

Paul Watson
Fear and Loathing in Madeira

David Ker Thomson
Nothing

Farzana Versey
The Man in the Mirror: Michael Jackson as Tramp

Geoff Berne
Obama and Charter Schools: The Showdown at Schottenstein

Todd Alan Price
Ohio: Birthplace of Charter Education ... and Opposition to It

Ramzy Baroud
People for Sale in a Hungry World

Jeff Sher
Health Care Showdown

Dr. Carol Paris Despite My Arrest by Max Baucus, I Will Continue to Advocate for Quality Health Care for All

Walter Brasch Adultery as Family Value?

Glen Johnson
The Village and the Wall

Charlotte Laws
Hold the MSG!

Charles R. Larson
Dickens in Morocco, Sort Of

Kim Nicolini
The Erasure of Art

David Yearsley
Yankee Prof Takes on Dallas

Lorenzo Wolff
When the Songs Remain the Same

Poets' Basement
Larson, Davies, McLellan and Gardner

Website of the Weekend
Kayakers vs. Shell Oil

June 25, 2009

Kathy Kelly
Now We See You, Now We Don't

Jack Bratich
You Provide the Tweets, We'll Provide the Info War: the Media and the Iranian Protests

Wendell Potter
The Health Insurance Industry v. Health Care Reform: a Former Insurance Industry Insider Tells All

Charles R. Larson
Don't Cry for Him, Argentina! GOP Sex Scandal of the Week

Alan Farago
The Tears of Mark Sanford

Jonathan Cook
Israeli Firms Accused of Profiting Off Holocaust

Gareth Porter
Khobar Bombings: Telltale Signs of Saudi Fraud

Bitta Mostofi /
Bill Quigley
"You Will Not Get Past Us"

David Macaray
Six Ways to Reinvigorate Labor

Mark Schuller
Haiti's Elections: "Beat the Dog Too Hard"

Website of the Day
Worst Slide Story

June 24, 2009

Andrew Cockburn
How the U.S. Has Secretly Backed Pakistan's Nuclear Program From Day One

Dean Baker
Making Financial Regulation Work

Andy Worthington
The Story of Abdul Rahim al-Ginco

James Bovard
Obama and the Torturers

Diana Gibson /
Ray McGovern
Torture Eats the Soul

P. Sainath
The Age of the Everyday Billionaire

Gareth Porter
Investigating the Khobar Tower Bombing: Why Was Al Qaeda Excluded From the Suspects List?

Robert Alvarez
The Department of Energy's Nuclear Albatross

Dave Lindorff
Medicare for All

Steven Colatrella Remembering Giovanni Arrighi

Website of the Day
Protest as Terrorism

June 23, 2009

David Price
Obama's Classroom Spies

Patrick Cockburn
Iraq Reels Toward a New Era

James Ridgeway /
Jean Casella
Bi-Partisan Bull on Health Care: Three Ex-Senators Get It Up for the Health Care Industry

Dave Lindorff
Using the Economic Crisis to Attack Workers

Carmelo Ruiz-Marrero
Puerto Rico: Biotech Island

Gary Leupp
Dennis Ross Moves to the White House

Brian M. Downing
The Erosion of the Mullahs' Monolith

Robert Bryce
Are Theocracies Doomed?

Nicholas Dearden
The G8 is Dead

Yousef Munayyer
Seeing Through Israeli Delay Tactics

Website of the Day
The Great White Father of America

June 22, 2009

Michael Hudson
Obama's (Latest) Surrender to Wall Street

Esam Al-Amin
What Actually Happened in the Iranian Presidential Election? A Hard Look at the Numbers

Chris Floyd
Dexter's Legions in Afghanistan

Jack Z. Bratich
The Fog Machine: Iran, Social Networks and Genetically Modified Grassroots Organizations

Atash Yaghmaian
We Children of the Revolution

Laura Carlsen
Victory in the Amazon

Paul Craig Roberts
The U.S. Regime-Change Recipe for Iran

Vijay Prashad
Gun v. Butter: Now You are Only Poor

Fred Gardner
Charles Lynch Gets a Year and a Day (No Thanks to Eric Holder)

Andy Thayer
The Blank Check: How We Got the Obama-DOMA Debacle

David Macaray
Unions and the Newspaper Crisis

Website of the Day
The Most Spied Upon Town in America?

June 19 - 21, 2009

Alexander Cockburn
I Become an American

Jeffrey St. Clair
Firebrand: Rod Coronado's Flame War

Patrick Cockburn
Who Will Control Iraq's Oil?

Al Giordano
What the Left Should be Learning From Iran

Henry A. Giroux
The Iranian Uprisings and the Challenge of the New Media

Anthony DiMaggio
The Electoral Façade

Paul Craig Roberts
Are the Iranian Protests Another US Orchestrated "Color Revolution?"

John Ross
46 Dead Mexican Toddlers: Sacrificed on the Altar of Neoliberalism

Gareth Porter
Spinning Civilian Deaths in Afghanistan

Carl Ginsburg
Obama's Bix Fix: Placating the Bankers, Again

Tommi Avicolli Mecca
40 Years After Stonewall: From Smash the Church to Going to the Chapel

Joe Bageant
Workers' Rights: No Balls, No Gains

Serge Halimi
Protectionism: We've Been Here Before

P. Sainath
Price of Rice, Price of Power in India

Jim Goodman
The Claim Deniers: Why the Health Insurance Industry Doesn't Deserve Our Trust

Dave Lindorff
Obama's Health Care Waterloo

Rannie Amiri
Bush Jumps Over Maine, Carter Lands in Gaza

Robert Fantina
Iran, Obama and McCain

Harvey Wasserman
Big Nuke's Radioactive Hoax in Impoverished Ohio

Walter Brasch
They Got Away With Murder: 12 Angry White People

David Ker Thomson
This Moment's Bill of Rights

Charles R. Larson
No Voice: Telling Her Mother's Story

David Yearsley
Escape From the Torture Chamber

Kim Nicolini
When the Closet is the Culprit

Ben Sonnenberg
Rossellini and the Art of Ambiguity

Poets' Basement
Beatty and Kowitt

Website of the Weekend
Grown in Yellowstone, Slaughtered in Montana

July 23, 2009

AIG and the System

The Masters of Perfidy

By JEFFREY ST. CLAIR

The first clue that something was terribly amiss with the insurance giant AIG should have been made manifest when the conglomerate began offering products--and financial products at that. What exactly does an insurance company produce? The short and nasty answer is that AIG manufactured precisely what it was meant to guard against. Namely, risk. Extreme risk.

Ultimately, AIG was cashiered on several trillion dollars of risky financial products, sewn together by Ivy League math whizzes and aces in the arcane art of arbitrage. These were fanciful consolidations of debt that no sane insurer would ever have indemnified. When the company crashed in the dismal autumn of 2008, it turned sheepishly to the insurer of last resort for rescue: the U.S. government. The disgraced executives made the case that the rot in AIG was spreading and was threatening to go systemic. Too big to fail became the mantra of the bailout. AIG, perhaps the most recklessly managed company in the world, was so thoroughly enmeshed in nearly every sector of the American—and even global—economy that to let it sunder would be to risk the crash of the nation. Or so they said.

Both the Bush and the Obama teams—themselves thoroughly marinated in the AIG mindset—quickly capitulated to financial extortion and infused the company with more than $182 billion in taxpayer cash—a sum that continues to rise each month with the inexorability of a lava dome inside an active volcano. Thus did the Obama administration in one of its first official acts endorse the remorseless logic of throwing good billions after bad.

The Treasury Department and AIG’s management were so harmonious that Timothy Geithner allowed AIG’s executives to continue to run the company even after the bailout. The top brass at AIG had successfully duped Geithner and his political puppet master Larry Summers into buying the far-fetched idea that the collapse of AIG had been perpetrated by a handful of rogue traders operating out of satellite offices in distant London and suburban Wilton, Connecticut.

Indeed, Geithner and Summers were so sympathetic to the plight of these corporate titans that they sanctioned more than $450 million in executive bonuses to managers at AIG, including the disgraced Financial Products Division.

Of course, AIG had, among other giants of Wall Street, insured Goldman Sachs, which had made its own dementedly bad investments in subprime loans to the tune of tens of billions of dollars. And there was no way in hell that Geithner, Summers or Hank Paulson was going to let Goldman Sachs eat those loans. And that bit of political sleight-of-hand seems to have paid off handsomely for Goldman Sachs, which just posted record quarterly profits of $700 million only a brief nine months after it seemed like the investment house was on the verge of an ignominious collapse. In other words, the $54 billion in direct payments the feds had lavished on Goldman, Merrill-Lynch and the other Wall Street firms was just the icing on a very rich cake.

In a sense, it’s only fitting that the government ended up as the ultimate guarantor for those furious seasons of Wall Street greed. After all, by consciously dismantling the regulatory framework that tended to constrain the felonious instincts that come naturally to the Wall Street player (such as the Glass-Steagall Act), the government played a decisive role in fostering the rampant financial criminality and looting that reached its apogee in 2008, crashing the global economy, draining retirement funds and pension accounts and casting millions from their homes and millions more into the perdition of long-term unemployment. All of this coming down in an era of extreme government austerity, typified by over-burdened and underfunded social welfare programs. As with the defunct regulations to restrain corporate crimes, so too had the economic safety net been sheared away--its tethers sliced by Reagan, the Bushes and Clinton—long before the economy cratered. Now there is nothing to cushion the blow on the long fall to the bottom.

The architects of this economic deregulation achieved a truly fearful bi-partisan symmetry that persists to this day. Even now, amid the rubble of Wall Street’s collapse, the neo-liberals and neo-conservatives remain as uniform as conjoined twins in their devotion to a broadly deregulated market. Any talk of bringing back forceful correctives such as a new and improved Glass-Steagall Act was immediately squelched by Obama, flanked by John McCain and Mitch McConnell, as well. If the crash of AIG—the largest in history—was in the sclerotic parlance of the times a “teachable moment” it is apparent that while much was ventured, nothing was learned.

The problem is that the government bailout, which some accounts now estimate will eventually top $24-cap T-for Trillion—flowed almost entirely in the wrong direction. Instead of helping to mend the lives of Wall Street’s victims—the unemployed, the uninsured, the destitute and homeless—Bush and Obama rewarded the perpetrators. They even gave them bonuses.

* * *

As the financial writer Michael Lewis explains in a fascinating article on the AIG FP division in Vanity Fair, the financial products offered by AIG were little more than complex iterations of the bizarre financial instruments designed in the 1980s by Drexel, Burnam, Lambert—the company that brought us the junk bond and other improvised explosive devices of high finance.

The young turks at AIG FP, led by Joseph Cassano, improved on the Drexel, Burnham model—or at least mutated it for their own purposes. The game was all about swallowing risk—hiding it, hedging it and repackaging it as, yes, a financial product and not a liability. In other words, something to swap, buy, sell and make money on. Lots and lots of money.

And it worked—for a while. Soon Cassano’s division was piling up $300 million a year in profits and making the platoon of financial tricksters themselves hugely wealthy. Bonuses of more than $25 million a year were commonplace. The executives were making a killing in looting their own hedge funds by skimming 35 per cent of the profits, a self-asserted gratuity that would shame even the most rapacious personal injury lawyer.

All through the high-flying 90s, the AIG risk-swallowing business continued to defy gravity, posting amazing profits on ever more opaque financial confabulations. Then in 2002 came the first whiff of rot. AIG insiders told Michael Lewis that the decomposition began to gnaw away at the FP Division the very moment Cassano replaced his mentor Tom Savage as CEO of the subsidiary. Of course, this retrospective was  almost certainly motivated in large measure by post-fall ass-covering. But there’s no question that Cassano was an abrasive personality and not, like many of the traders, an Ivy Leaguer with a DNA profile shaped by generations of old money.

Like AIG’s former CEO, Hank Greenberg, who had been chased out of the company by Eliot Spitzer, Cassano was viewed by his rivals and subordinates as a reckless bully, who ruled the company through the humiliation of nearly everyone he encountered from secretaries to junior executives. Cassano’s father was a police office and the son brought the brute mentality and creepy paranoia of the street cop into the executive suites and the trading room floor. He ruled the London office by fear and did not countenance any contrarian opinions, even as the trading instruments passing before the insurers became more fantastical and the economic perils ever more extreme.

Lewis’ AIG confidents blame the terminal descent of their company on Cassano’s over-weening arrogance and his rather crude understanding of the very products his FP Division was manufacturing.

In other words, Cassano simply didn’t have the head for the complex math at play in those deep derivatives. He didn’t see the pitfalls, trapdoors and inevitable apocalypse at the end of the road. And his team of math geniuses—many with minds minted by MIT and Harvard—went along for the ride, swallowing his torrents of abuse, glossing over the hollow core of the hedge funds. Why? Because, naturally, they were making too much money to object and Cassano, despite his tyrannical fits, was dishing out eight-figure bonuses for Christmas. Indeed, many of the top AIG traders did worse than merely endure Cassano’s abuse—bother personal and organizational. They coddled his worst financial impulses and sucked up to him. In other words, they did their damnedest to suppress their consciousness of guilt.

In the aftermath of the wreckage, Cassano’s supervisors back at AIG HQ in Manhattan have worked sedulously to create the impression that they scarcely knew the man running their hottest division. From Hank Greenberg to Edward Libby, the top brass has sought to portray Cassano and his team as an out-of-control unit that had somehow fled the reservation.

This won’t wash. Not for those in the know, any way. The man who was running AIG’s darkest appendage had been installed as boss of the division by Greenberg himself, who saw in Cassano a man who shared his own despotic management style in  playing billion-dollar shell games with other people’s money. When Eliot Spitzer brought down Greenberg in 2005 for the executive’s accounting high-jinks, some inside AIG thought that Cassano might eventually end up taking his place. Others in the company believed that he should’ve been slapped in leg irons. Opinions on Cassano four years ago were divided, but there was no shortage of them. Now Cassano is suddenly the man no one knew about.

According to his colleagues in London, Cassano was ascetic in his total commitment to the company he was steadily destroying. So devoted, in fact, that Cassano recycled most of his $38.5 million salary right back into AIG and its toxic products. The remainder of his AIG trove—estimated at some $238 million—he cached in that most timid of financial parking lots, the U.S. Treasury Bill. Say this for Cassano, he was no preening financial playboy. He dressed casually, drove a modest car and lived to work—and terrorize his staff. “Without AIG FP, he had nothing,” one trader told Lewis.

* * *

With Greenberg and Savage by his side, Joseph Cassano turned AIG FP into a kind of recycling station for toxic financial properties held by corporations, equity firms, banks and institutional hybrids, those freaks and sports of the post-Glass-Steagall era. Cassano opened the gates of AIG FP to them, one and all, eventually absorbing $450 billion in corporate credit-default swaps and another $75 billion in the fatal subprime mortgages. He became Wall Street’s one-stop waste manager, insuring and amalgamating bad debts of every stripe, from credit cards to student loans, corporate buyouts to commercial mortgages, transmuting this junk into big new packages with a glossy veneer that masked the entropic nature of the whole enterprise.

After the attacks of 9/11 and subsequent nosedive of the global economy, AIG’s business began to pick up, as troubled executives desperately scrambled for someplace to dump their risky debts. Cassano and Co. were happy to provide the landfill services, charging a very healthy tipping fee.

But gradually, almost imperceptibly, the weight of the debt-load began to shift, tilting away from traditional corporate investments and decisively toward the necrotic subprime mortgages. By 2005, AIG FP’s consumer loan insurance portfolio consisted of 95 per cent subprime mortgages. The seeds of destruction had been sown. When housing prices began to plummet, AIG was doomed.

But is Cassano the arch villain of this particular chapter in the annals of American capitalism or was he, in the end, Wall Street’s willing dupe?

To reach a plausible assessment it’s vital to remember that AIG was digesting what the big Wall Street houses fed it. Often these packages were artful mixes of consumer and corporate debt. So artful, in fact, that AIG’s brain trust wasn’t entirely clear what they were bonding. The risks were blended, sliced and pressurized into indecipherable collages of debt, like mutual funds from Mars. One top analyst thought that AIG’s credit-default packages consisted of no more than 10 per cent subprime loans. Another put the figure at 20 per cent tops. Cassano, it appears, had no clue about the real number and didn’t care. In his mind, there was simply no way the housing market would go bust—not across the board, any way. And his Wall Street clients at Goldman, Sachs and Merrill-Lynch backed him up in this delusion. After all, what did they have to lose?

In 2007, Cassano, as blissfully ignorant of the peril immediately before him as Wile E. Coyote ten feet off the cliff, boasted in a talk to a seraglio of investors that it was hard for him to even imagine a scenario “that would see us losing one dollar on any of these transactions.”

Less than six months later, it was all over. Cassano had been evicted from AIG (though he continued to get paid $1 million a month as a consultant without  portfolio) and Goldman, Sachs was knocking at the door of the company demanding that AIG compensate the investment firm for its own landslide of bad debts. AIG was in no position to pay up, naturally, but Goldman, Sach’s man at Treasury, its former CEO Hank Paulson, did—dollar for dollar.

In for a dollar, in for a trillion.

It has been said by Wall Street apologists that the crash of AIG was an aberration, a singularity of greed run amok. No one could have predicted the fall, they say. Wall Street analysts were beguiled by the blizzard of prospectuses and portfolios on AIG operations that were, they claimed, as immune from explication as the most arcane passages in Finnegans Wake. So too with the business press, which was apparently so mesmerized by these chimerical reports that they completely missed the financial fun-and-games transpiring inside AIG FP.

The regulators at the SEC have also connived to claim ignorance about the true condition of AIG and it’s more malign operations as it veered toward the cliff of no return, fooled, they claimed, by the company’s diction of deceit. Somehow missing the daily bulletins of impending ruin, the regulators have tried to offload all the blame on Cassano and his traders for perverting the system.

This is all nonsense. AIG operated at the very heart of the system, a system enabled by the SEC and its political overlords. Indeed, AIG served as the system’s great backstop, its failsafe. What happens when the failsafe fails?

So now the bills from this tableau of financial debauchery have come due. That $182 billion pay-out wasn’t a final call, but merely an opening bid. Tens of trillions may yet follow.

No, AIG didn’t pervert the system. It was a creature of a perverse system. One that it is literally consuming itself from the inside out. A mighty leveling looms.

Jeffrey St. Clair is the author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature and Grand Theft Pentagon. His newest book, Born Under a Bad Sky, is just out from AK Press / CounterPunch books. He can be reached at: sitka@comcast.net. 

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