[In another nod to The Daily Show, I recommend (especially to the Libor scandal dilettante/newbie) Jon Stewart’s excellent summary of the scandal, highlighting not only the banks’ manipulation of this uniquely important lending rate, but also their bilking of pension funds and local (municipal/county/state) governments through related investments: Part 1, “International Banking Conspiracy Actuality” (begin at 37 second mark); and Part 2, “Libor fallout”.]
And now, here’s my best shot at covering Libor and connecting it to my thesis on corrupt systems and empathy (or the “striking lack” thereof).
For those who are as yet unfamiliar with the Libor scandal, it involves the unprecedented rigging of what is essentially the prime institutional lending rate of the world — the London Interbank Offered Rate — by several of the world’s largest banks (sixteen of which are now under investigation related to this unfolding criminal conspiracy; one of which, England’s Barclays, has already been exposed and fined nearly half a billion dollars, and is presently cooperating with the U.K. and U.S. authorities as they proceed with their investigations).
As I understand it, the Libor scandal involves several years of international megabanks manipulating the world’s prime lending rate (affecting some $10 trillion in loans) in order to game (among other things) a $360 trillion derivatives market (representing roughly half of the total global market in derivatives, aka “financial WMDs”) linked to ten different currencies.
My source for this last point, pertaining to the derivatives market in currency-tied Libor rates, is highly esteemed economist/author Simon Johnson’s Baseline Scenario blog from earlier this month: “The Market Has Spoken, and It Is Rigged.” In the course of that blog, Johnson poses the increasingly unavoidable question, “Is the financial sector crooked at its core?” He concludes, in short, that it is: “Power corrupts, and financial market power has completely corrupted financial markets… completely destroying the legitimacy on which sensible financial intermediation needs to be based” (emphasis mine).
That’s a pretty devastating assessment coming from an awfully credible mainstream source, and Mr. Johnson is hardly alone.
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During his mini-interview a couple of Thursdays ago on The Colbert Report (begin at the 8min., 30sec. mark), The New York Times’ David Leonhardt frankly observed: “We seem to have gone through a number of years in which not only did cheating become acceptable in a lot of parts of the financial system, but the regulators — the police — weren’t looking very closely.”
Mr. Leonhardt is obliquely referring to what’s known as “regulatory capture,” the situation that arises when an industry has grown so powerful that it basically dictates to its nominal policing entities the manner in which they should perform their oversight functions, effectively self-regulating (what could possibly go wrong?). For a few excellent examples of “captured” (and tamed) regulators, see the SEC, FDA, and the Nuclear Regulatory Commission — and then, of course, there’s the U.S. Treasury, taking the cake (that would be the $16 TRILLION taxpayer-financed “cake” that postponed, at least for a few years, the day the banksters would have to don their golden parachutes).
In his interview with Mr. Colbert, Leonhardt wryly scoffs at the notion of legal consequences for criminal elites: “I’ll believe bankers going to jail when I see bankers going to jail” (this, despite his assessment of “clearly illegal” behavior revealed in years of Libor manipulation).
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And that’s the whole story in a nutshell, isn’t it? Elite impunity/immunity, on the one hand (no matter the scale or degree of the crime, or the recidivism of its perpetrator), and, on the other hand, obscenely generous patronage, including, but hardly limited to, socializing the oligarchs’ losses (heads, we win, tails, you lose “capitalism”) — all to serve a few recklessly criminal “job creators” (you know, the folks who just collapsed the world’s economy and are presently using the Euro and austerity to pillage and depress the economies of Western Europe).
My point is this: Far-reaching corruption disillusions and dispirits a society, draining it of hope. When people doubt the fundamental integrity of their institutions and see large-scale injustice and heinous crimes (massive fraud, torture, mass murder) not merely ignored but actually rewarded (repeatedly/constantly), they will eventually grow cynical, with a diminished capacity for EMPATHY (without which, I don’t actually believe that human beings are worth much — however harsh that sounds, picture humanity without empathy, without compassion on any level, and I think you might agree…).
IRAQ and US
And speaking of discounting the value of human beings, I suppose it’s time to turn this conversation to America’s attitude toward the Middle East…
- WHERE ARE AMERICANS’ CRIES FOR JUSTICE FOR OUR IRAQI VICTIMS?
- WHY ARE WE APPARENTLY STILL SO SUSCEPTIBLE TO UNFOUNDED NEOCONSERVATIVE WARMONGERING (especially when it comes to SYRIA and IRAN)?
Those are two of the questions that drove me to write this blog, because our foreign policy sentinels — our elected representatives, the press and media — are presently in Paterno/Ratzinger/Geithner mode: all too willing to clam up, personally profit, facilitate, and ignore the ongoing rape and criminality of the world they’re supposed to be monitoring and keeping honest.
…and that just leaves us, everyday Americans like YOU and ME, to reject the prevailing culture of apathy and corruption.
Which begs the question: How do YOU feel about America’s record in Iraq over the past couple of decades? Are you familiar with the basics of Iraq’s devastation as a result of America’s relentless (often criminal) predations over the years? Consider the brutally cruel 1990s sanctions alone: studies suggest that between 500,000 and 880,000 Iraqi children under the age of five DIED during the Clinton years, as a direct result of those sanctions — and then there are the hundreds of thousands of likely other victims, including senior citizens and sick people, etc. — who also died as a result of the punitive sanctions demanded by the U.S. alone (seen as excessive by critics, denying Iraqis potable water rather than WMDs, simply in order to put pressure on the regime).
The more recent record, featuring an actual war, includes another several hundred thousand needlessly dead Iraqis – very possibly over a million — the result of a premeditated frame-up concocted by unflappably greedy and self-righteous men (the neocons) who congratulated themselves on their noble intentions as they set out to violate the Nuremberg Charter and invade a nation of 27 million people on a pack of lies…
We know these things. The record is clear: Bush and his cabal are among the worst war criminals in history… easily.
So it’s fair to ask: DO AMERICANS CARE ABOUT JUSTICE? As a result of our actions, Iraq’s children are dead; her society is fractured as never before (largely thanks to Sec. Rumsfeld’s use of sectarian death squads — “The Salvador Option” — in the earliest days of the war, which engendered a vicious retaliatory cycle); her infrastructure is destroyed; her wealth is being plundered by external enemies; Baghdad is dark and divided by blast walls and razor wire; and over 4.5 million Iraqis (nearly 20%) have been turned into refugees… We should also consider the fact that Iraq had the highest literacy rate, best healthcare, and lowest infant mortality in the region, prior to the devastation unleashed by America’s wars and sanctions.
I find it remarkable that — even though the vast majority of Americans understand full well that the Bush administration knowingly LIED in order to justify the Iraq War — there has been no discussion (zero) in this country about making so much as an apology to Iraqis (the majority of whom have lost an immediate family member as a result of the war), let alone reparations. If some other powerful nation had falsely accused our leaders of building weapons they weren’t building and falsely linked our leaders to some egregious terrorist attack in order to justify a war on America that ultimately killed 1 in 27 Americans, I think we would (justifiably) consider that nation’s actions MONSTROUSLY CRIMINAL.
But we do nothing. America seems to feel that the Iraq War was an embarrassment, rather than a crime. Nothing to see here, no looking back… Which is why we’re able to blithely repeat our most egregious mistakes, again and again… which brings us to SYRIA.
Next: A Striking Lack of Empathy, Part III: The NeoCons Keep Killing, Americans Keep Snoozing