As a firecracker on the Fourth of July. So, here's the deal...if you entered "Naomi Klein is hot" into a search engine and dropped into here, you owe me a comment. Right after you read her Rolling Stone article, "The New Trough," excerpted below. Funny how the Wall St. bailout looks a lot like Iraq--a "fraud-free zone:"
See if any of this sounds familiar: As soon as the bailout was announced, it became clear that Treasury officials would hire outsiders to perform their jobs for them — at a profit. Private companies wanting to help manage the bailout were given just two days to apply for massive, multiyear contracts. Since it was such a mad rush — after all, the entire economy was about to implode — there was no time for an open bidding process. Nor was there time to draft rigorous rules to make sure that those applying don't have serious conflicts of interest. Instead, applicants were asked to disclose their conflicts and to explain — and this is not a joke — their "philosophy in fulfilling your duty to the Treasury and the U.S. taxpayer in light of your proprietary interests and those of other clients." In other words, an open invitation to bullshit about how much they love their country and how they can be trusted to regulate themselves.
The first major contract to be awarded in the bailout was for legal advice — and the choice Treasury made was Halliburton-esque in its audacity. Six law firms were invited to bid, but four declined, either because they didn't want the contract or because they had too many conflicts of interest. Rep. Barney Frank, chairman of the House Financial Services Committee, said the fact that so many law firms chose not to bid "shows that the guidelines are sufficiently rigorous."
Or it may just show that the bidder who won the contract — Simpson Thacher & Bartlett — takes a more relaxed approach to conflicts than its colleagues. The law firm is a Wall Street heavy hitter, having brokered some of the biggest bank mergers in recent years. It also provided legal support to companies trading mortgage-backed securities — the "financial weapons of mass destruction," as Warren Buffett called them, that detonated the banking industry. More to the point, it was hired to provide legal services to the Treasury in its negotiations to spend $250 billion of the bailout money purchasing equity in America's banks. The first stage of the plan involves buying stakes in nine of the country's top banks. Incredibly, Simpson Thacher has represented seven of the nine: JPMorgan, Bank of New York Mellon, Bank of America, Citigroup, Morgan Stanley, Goldman Sachs and Merrill Lynch.
According to its contract, Simpson Thacher has agreed not to represent any of the banks "against the U.S." when they negotiate with Treasury for the equity money.
There were two kinds of people who wrote, passed, and signed that bailout contract: bumbletwits and goniffs. Naomi Klein, on the other hand, was sagacious enough to decode the shpiel. Her book The Shock Doctrine: The Rise of Disaster Capitalism describes the long prelude to this series of unfortunate events, and it won't put you to sleep. (At least not if you Googled the title.) Her work will endure, she's the Upton Sinclair of international finance, and richly deserves a Pulitzer Prize. Here's the rest of the article and here is her blog. Now tell me why you think she's hot--me, I've always been a sucker for smarts.
