Egypt Diverts Media Attention from U.S. Economy
By Greg Hunter’s USAWatchdog.com
The revolution in Egypt has been going on for nearly two weeks. It is intensifying. There are reports of gunfire, beatings of foreign journalists and looting. It is a riveting story because so much is at stake for America. However, the Egypt saga is sucking up resources and attention away from other stories that are also very important for America.
Crowded out of the news picture is the recent Financial Crisis Inquiry Commission (FCIC) report on the causes of the financial meltdown in 2008. The report was released late last week. One of the conclusions to the report was “the crisis was avoidable.” Some of the other conclusions were: “Widespread failures in financial regulation . . . too many financial firms acting recklessly and taking on too much risk . . . An explosive mix of excessive borrowing and risk by households and Wall Street . . . And systemic breaches in accountability and ethics at all levels.” (Click here to read the FCIC report conclusions.)
This enormous debacle cost $12.3 trillion to contain (according to the Federal Reserve) and, yet, this report has gotten very little scrutiny in the mainstream media. This financial crisis is both historic and outrageous. Historic, because of the vast amounts of money created to stem the debt tsunami has never been done before. Outrageous, because not a single financial elite, that caused the problem, has been indicted or jailed. One of my favorite lines from the report is, “. . . we clearly believe the crisis was a result of human mistakes, misjudgments, and misdeeds that resulted in systemic failures for which our nation has paid dearly.” “Mistakes, misjudgments”—what happened to crime and fraud?
The FCIC’s 14 page conclusion only mentioned fraud and crime in one short section. The report read, “The report catalogues the rising incidence of mortgage fraud, which flourished in an environment of collapsing lending standards and lax regulation. The number of suspicious activity reports—reports of possible financial crimes filed by depository banks and their affiliates—related to mortgage fraud grew 20-fold between 1996 and 2005 and then more than doubled again between 2005 and 2009. One study places the losses resulting from fraud on mortgage loans made between 2005 and 2007 at $112 billion.”
In the wake of the Savings and Loan crisis in the early 1990’s, 1,000 financial elites were successfully prosecuted according to white-collar crime expert William Black. Black is a professor of economics (University of Missouri-Kansas City) and says the 2008 crisis is at least 40 times bigger. Not a single indictment?
Mike Whitney at Counterpunch.com feels the same way and wrote an excellent post on the recent conclusions from the FCIC. Whitney said, “So, the report is actually a cover up, a way of going over the events in excruciating detail without assigning blame. The whole 500-page rehash could be summarized in two words, “shit happens”. Maybe that’s the best the commission could do, but it’s going to take more than that to restore the public’s confidence in the system.” (Click here to read Whitney’s complete post.)
Whitney goes on to say, “. . . Predatory lending is bad, ethics matter, corporate governance needs watching, and regulations need to be tightened. While this is all true, it doesn’t get to the heart of the matter: Who’s responsible? That’s what the public wants to know. They don’t want to know who sold what CDO to whom. They want justice. That’s all.” It doesn’t look like there is going to be justice anytime soon.
Meanwhile, the banks are continuing to use government sanctioned accounting fraud to value real estate and securities they own at peak levels, and not what they could sell for today. This makes the banks’ balance sheets look better than reality. Many banks would be insolvent without this dishonest accounting. If the accounting is allowed to be rigged on a massive scale, and the cover up of vast alleged crime is so orchestrated, the situation must be dire.
I call it the “Stupor” Bowl – what nonsense! Did you hear that some folks in Texas will be without power, but the power authority will make SURE that the Stupor Bowl has plenty of juice? Criminal!
And did you also see that Bill O’Reilly will be “interviewing” Obama? More nonsense! What could Obama possibly say on camera at the “Stupor Bowl” that will make any kind of a difference to those who are starving, without homes or in foreclosure, etc.?
We are living in Roman circus-like times! Keep the people entertained and they don’t have to THINK too much and certainly don’t have to notice the corrupt activities of our elected officials. The “Stupor Bowl” is an intentional dumbing down of our society.
I’m not against sports, but this makes absolutely no sense given our economic situation and the plight of our country at this time. Can you imagine the MULTI-MILLIONS that will be spent on this kind of “entertainment” all in the name of sports? Why don’t the over-paid beef-a-lo athletes and owners give some of the loot from this event to charitable causes? Imagine the number of veteran’s homes (now in foreclosure) that could use a financial so they and their families are not out in the streets.
My two-cents for the day…thanks for reading.
nothing like a good distraction for the MSM. If the MSM had any clue they would cover the “biggest bank fraud” in history like OJ driving down the highway! This is the story that really needs the 24/7 coverage MSM treatment!
And did you see bernanke’s comments about trimming the debt? WTF? This is the guy who is suppose to be the expert not Congress! If Congress was in charge of fiscal policy why do we need the FED? If the FED was truly independent it would cap Congressional spending for the countrys fiscal health something we should demand. The FED just like a husband cutting up his wifes credit card the FED needs to cap the debt if Congress can not. I believe it is their fudicary duty to do it.
Wait to our govenment uses the Cairo coverage to a pass a debt ceiling raise, or worst. I believe the economy will now be placed by MSM on the back page with Egypt being the catalist to begin the lack of coverage. They needed a new event to cover so their lack of coverage didn’t look planned, Egypt being a perfect fit. Don’t look for coverage as usual after Cairo settles down.
On a another note, the middle east in turmoil, meanwhile, the stock market rallies, go figure.
Maybe it’s no accident that the useful idiots have spent so much energy and time getting us to focus on Egypt.
They are good at this as we can look back on Bill’Wag the Dog’Clinton and how he used Yugoslavia to get our attention off of his perverse antics in the Oval office not so long ago.
The media were only too willing to do the bidding of their CFR masters.
you said: “One of the conclusions to the report was “the crisis was avoidable.” Some of the other conclusions were: “Widespread failures in financial regulation . . . too many financial firms acting recklessly and taking on too much risk . . . An explosive mix of excessive borrowing and risk by households and Wall Street . . . And systemic breaches in accountability and ethics at all levels.””
Geez, since the government madated an increasing amount of subprime loans…I guess report failed to redirect the responsibility accordingly?? Must have been contracted out by the guilty at hand.
You’re right on the money, Greg. I felt the same way about the all the arm waving over the recent 126 Mafia arrests – the ’40s and ’50s gang that is almost irrelevant. “Hey! Look what we did for you today!” Forget about the Wall Street one they should be going after.
They’re trying to gin up anything they can to divert attention away from the issues that really need to be addressed.
Greg, you failed to include congress critters in your list of real crooks.
Darn good post and analysis; thank you!
Okay, a few points if I may.
First, as a newsman, you know that “blood sells.” Also, now that Mubarak’s “goons” have attacked newspeople, the “Fourth Estate” will launch its vendetta against the “hated tyrant.”
Second, like many involved in economics, I read that report last week, and yes, there was little if any charges levied. This is yet another case of “justice delayed is justice denied.” Yes, this SHOULD have been front page news.
Or, should it?
I seem to recall what Mr. Call, my econ teacher in community college, said. And that is, that the average American has the economic understanding of a sixth grader. All the average American cares about, to quote Dr. Pearce, is “…their sports and their funny papers.” Americans have famously short memories, their looted 401(k)s are ancient history. All Americans care about now is why home heating oil/natural gas is so high, and will they be able to afford the gas necessary to haul them to the WalMart and back home again.
Third, what goes on in the Middle East affects this country’s economy. Because of the disturbances (and the real threat that what has happened in Tunisia and Egypt will spread), oil prices are going higher (at this writing, $102 per barrel). This will affect not on fuel prices, but the prices of shipping as well. Say “hello” to even higher food prices (in other words, hope y’all have your stockpile of food for yourselves, families, and pets). Also, kiss “goodbye” to the “recovery” (like we even HAD one!).
Fourth, the conditions in Egypt mirror this country. There is high unemployment, especially amongst the youth. Inflation grows, prices shoot up accordingly. (Those on fixed income/low wages have to satisfy their hunger with pet food on sale.) Instead of a dictator we have politicians who lie and cheat, and a system where alternate parties are not heard from, just the same single party at every “election.” We have public “employees” who act, not as servants, but as petty ante dictators and cheap satraps. This country has missed its “Summer of Discontent” for two years running, but data points to one this year (partly because the cost of video games are going WAY up!).
Greg, everything said here is so true. But the one thing that makes this middle east rebellion stand out is the people taking action. What we have in the USA is a bunch of talk and no action. We can report tons of information in all the media outlets and as long as our younger generation is stuck in their own time warp with their electronic gadgets oblivious of life moving forward around them, nothing will change with the corruption and spending in our government today. Not until a complete financial collapse that impact them personally will anything change, and the older generation has brought this on as we wanted our kids to have everything and bought them everything. They had little personal responsibility to improve their own lives.
Just a little perspective based on your $12.3 trillion citing as the Fed’s costs disclosed to date:
1 million seconds is 12 days
1 billion seconds is 31 years
1 trillion seconds is 31, 668 years
12.3 trillion seconds is 389,762.4 years.
That pretty much sums up the situation. Did we say the debt is out of control? 🙂 And, that’s just the Fed costs to date, not including other U.S. debt, etc.
Based on this correct perspective of the numbers, we can understand all the diversions, coverups, non-indicted parties, lack of reference as fraud/crime (heck, this is beyond beyond). We’re not even talking about the Fed’s bailouts for European Central Banks, other European banks, corporations, and so on.
Solution: declare it all null and void, default, kick out the culprits, begin with a new Constitutional Convention. I’m sure you have lots of sensible ideas, and so do many of your commenters. I’ve been reading all for some time and we have a well-read, feet-on-the-ground audience here. Amen!
It has been said that in any exchange there may exist a lonely “six seconds of truth”, a brief interlude of non-spin, unadulterated clarity.
This morning (Feb 4) on “Morning Joe” I witnessed just such a moment.
In the eight o’ clock hour in a panel discussion with main participants Chris Matthews and Pat Buchanan, this pearl was espoused by Mr. Matthews (and I paraphrase here): ‘…we (America) give them (Egypt)a helluva lot of money, of course we should have influence in their internal affairs.’ And there folks is the root of all our (America’s) foreign policy problems. If we pay, we gotta have a say.
Sounds like any elected office in our great nation. Money speaks and lots of money speaks loudest. So much for our representative republic form of government. This just finally put it out on the table; in a throw away remark. – uggghhhhh.
“NEVER LET A GOOD CRISIS GO TO WASTE”
Just caught a comment on Fox News to the effect that (paraphrased) “the people of Egypt are making their opinions known, but the leadership isn’t listening.” Hmmm….. sounds oh, so familiar!!! Wonder what would happen if hundreds of thousands of Americans showed up in Washington and made their opinions known?? Oh, yeah. They did – and the leadership didn’t listen!!!
Don’t really want it to happen, but if the internet went down and the young people of this country lost their facebook, twitter, etc., we might actually see something similar to Egypt!!
Wonder if all the demonstrating and activism of the 60’s and 70’s burned out the older crowd?? Or are we just too tired and brainwashed to do anything effective??? What a sad commentary on my generation!
Thanks for the great article – will be sharing with several family members and friends!! Keep up the good work!!
Thank you for bringing this FCIC report to our attention. I think you are right – if there had not been a crisis in Egypt then this report would have received much more attention.
I feel like all the national & cable news organizations are so focused on Egypt and as a result have minimized the numerous issues we are facing right here in the U.S. When people are unemployed, losing / lost their homes, exhausted their savings & IRAs, can’t afford to send their children to college, see their cities & states running out of money and talking about cutting local & state services – at those times we don’t want to hear hours of news about Egypt. We also want to know what is being done by the U.S. government to solve our problems here in our own country and what is being done to be sure this type of financial crisis doesn’t happen again.
It feels like lately that the news organizations have stopped talking what is going on right here in the U.S. to solve our problems. I’d like to believe that it is the attention paid by the news programs which pushes our U.S. government to stay on task & deal with issues. We count on the news organizations to keep the light on the U.S. issues and to ask the hard questions and to challenge the politicians. I want to see the U.S. politicians and the white house talking about what’s happening right here in the U.S. – not just hear interviews about what they think about Egypt’s situation.
When we have to watch real life where our family & friends are struggling to find a job to pay their bills – it’s really hard to see hours of media time focused mostly on what’s happening in Egypt. Many of us in the U.S. don’t have jobs and can’t pay our bills, so Egypt is not the only thing on our minds today.
This week I’ve started watching my own local news channels more and a lot less of the national news stations. I’m reading online versions of print newspapers and magazines. I’m so thirsty for news about what’s happening in our own government that I’m surfing the Internet looking for articles like yours, just so I can stay focused on what is very important to me at this time..
Thanks for filling the news void and sharing an important story! I have bookmarked your site so I can follow your news – seeing how I’m not getting much economic news from the media these days.
Well said Greg.
The mass media just loves a militant political crisis though (or any other similar type of crisis for that matter). Even better if there is some violence and bloodshed to film. They just thrive on it and the more of it they can get the happier they are. That’s what they believe the “sheeple” want to see and so that is what they dish up as news for maximum ratings.
I think they have decided the financial “crash” is old news and much too technical for the sheeple to be interested in. Then of course the influence of the banking and finance industry is such that it would rather not have it’s dirty linen aired in the mass media again and again.
Yet it is probably the most important story of the past 5 -10 years and it tends to get little traction any more unless it is from a few responsible writers such as yourself.
It might appear “reading between the lines” that the banking and finance industry got to 4 of the Commissioners (all Republicans as it happens) who were apparently most unhappy with the conclusions of the report and also felt their views were being dismissed to some extent.
I watched a PBS interview with one of the dissenting Commissioners, DOUGLAS HOLTZ-EAKIN. Quite possibly the industry had done a good job on this guy who was desperate, among other things to undermine the idea that uncontrolled derivatives really had any role in causing the crash. (The last thing the industry wants is any kind of regulation of out of control derivatives of course). Then he attempted to suggest that the crisis was not really a US issue but a global problem and, iter alia, really had nothing much to do with past Government policies or actions of the FED. (Getting the drift here are you?)
Here is a little sample of Douglas’ views:
“So, a simple narrative that it’s Wall Street greed left run amuck by regulators makes us nervous, and on the other side, a simple narrative that it was all bad government policy. We believe it’s a very complicated narrative.
The second level is the focus of the majority report really is on people, institutions, this bank, that bank, transactions. We do believe that this was a global credit bubble. There was a housing bubble in Spain. There was a credit bubble in England. The kinds of regulation we saw at banks, we — the majority focuses on the Fed.
We had very different supervision in Germany. Still had troubles with the banks. In the United Kingdom, they had to rescue their banks. The notion that we’re so centered on the United States is missing the real evidence in the case.”
Hmmm. Well he must think we are all stupid. (To begin with, the fact that many foreign banks had loaded themselves up with now near worthless toxic US originated securities – which threatened their solvency – apparently was not an issue to him).
Also interviewed was the Chairman of the Commission, PHIL ANGELIDES, whose comments were interesting and were certainly not what the FED or the Banking and Finance industry wanted to hear (far from it). Nothing Phil said was surprising and he certainly presented himself as a credible, unemotional, objective and authoritative representative.
The transcript of the PBS interviews are here and are worth a read, although it is much too little. Issues like this warrant an entire program on PBS – and more.
Now I intend to get a copy of the entire Commission report and we can draw our own conclusions.
Thank you and apologies for a too lengthy comment.
Samantha in Tucson and Greg: “Roman circus-like times”, how astutely
phrased Samantha. We have so much booze, drugs, porn, and sports addicts out there now can we expect anything less? Our president stated at the prayer breakfast this week that he watches 3 football games a given Sunday, I can’t seem to find enough time for one. The yard needs attention, groceries have to be purchased, church, a few phones calls for next days work, etc. I can just bet that are esteemed government officials live a three game day every day, another story that won’t be aired on MSM. They really do take us for stupid you know. If Americans start to wise up maybe they can add another reality show or two, that will help control any movement to take our country back.
“. . . we clearly believe the crisis was a result of human mistakes, misjudgments, and misdeeds that resulted in systemic failures for which our nation has paid dearly.” I clearly believe as you do…’–what happened to crime and fraud?’ Rubin set all this up to happen under Clinton, then pushed forward by Bush with a wink and a nod from all regulatory agencies and oversight by congress, and now a big shove over the cliff by Obama. Congress? oh boy!–co-conspirators, no help there from the esteemed republicans. MSM? I finally got tired of paying good money every month to watch the ‘pundits’ lie to me, even on the so-called ‘fair and balanced’ channel. Either they are incredibly stupid, which I believe a lot are, or in on the take down, which the remaining are. I finally cancelled my satallite subscription just last week and only connect to the outside world by internet. What a relief! Television is gone now out of my life and those hundreds of channels of junk scrambling american brains daily are no longer on my itinerary. wow!….i can think again!!!….keep up the posting and good work Greg…..
It wasn’t a resignation, Egypt FIRED THEIR LEADERSHIP…….we can do that too.
We can fire the FED, etc….this is a great primer. A huge, non-violent protest, honored by the army, that is bringing change.
Americans, see this? it’s a “distraction” only if we don’t get the lesson. We can FIRE LEADERSHIP too.
re: the financial picture…been draggin’ on for years. Americans haven’t lost enough yet to really organize.
Everything diverts media attention away from the US economy. The media diverts the most. Egypt is just the current convenient way of diverting attention.
Inflation, not Egypt, is the bigger story. Inflation is the overarching story, without which Egypt would have probably not seen a revolt. When everything costs more, the poorest rise up. I doubt there’s a one-handed economist to refute that.
When something is really big, like Egypt’s crisis, it’s just another diversion from the various crises in USA. Here’s just one exmple:
Sheriff’s Officers Accused Of Emptying Wrong Home In Botched Foreclosure
HILLSIDE – A 76-year-old Hillside woman has filed a claim for damages against Union County, alleging that officers of the county sheriff’s department illegally entered her home and removed the entire contents because they had the wrong address of a foreclosure.
But now, let us focus on Egypt…as if we could do anything about it. As for the botched foreclosure raid, I’ts pretty hard to fix stupid.
The situation is dire only in so much as the US population must wake to the notion that they hold the answers by supporting gold bullion and by also monetizing bullion for payments at the grass roots level. This time is truly different because the answer must come from the bottom-up. The elite can only wave “the stick”. They cannot offer “carrots” in their top-down role because of the threat to the legacy system (the USD). The development of the dollar was not ultimately meant to be used only as a currency in the way that we know it, but also as a real-time measure for bullion payments. Without the free floating valuations and the demise of the fixed price of bullion, real-time gold valuations could not have been developed, nor could fully gold backed digital currency. We are all following the same script, but people keep making the same historical mistake of “looking up” for answers.
Obama is no more in control of the Islamic Revolution taking place in Egypt than Jimmy Carter was when the Shah was overthrown by the Islamic Revolution in Iran. The Shah was our U.S. installed puppet dictator in Iran, just as Mubarak is our puppet dictator in Egypt. The people in the Middle East do not want democracy, but they do want to be free from American imposed secular dictatorship. They prefer Islamic dictatorship! Even Israel is not a democracy, based upon how they mistreat the Arab portion of their population (second class, at best).
Hello again Greg. I have someone to blame, or more, some THING. Stick with me on this one…I think the CREDIT SCORE is largely to blame for this mess. What a great idea you know? What does a good credit score get you? Happiness? A larger male endowment? No and hellz no respectively. A good credit score gets you one thing. MORE DEBT. Think about it. A person that pays cash his whole life (BECAUSE HE OR SHE ACTUALLY HAS THE MONEY) has virtually no credit score, and has saved their money to be able to buy the things that are important to you. Want more stuff? Work harder. Want a better car? Get an education. When the credit score became important is when the house of cards was built. I had wonderful credit…need i go further? Sound familiar? When i look back i realize know how important education and thinking really were, now im stuck, with guess what, a bad credit score. But wait? Whats that? It doesnt really matter?? Why? Because now i live in an apartment (with a rent i can afford not a mortgage that will kill me) i drive me a nice little honda 4 cyl, and only buy what i can absolutely afford. (Now thanks to you a little silver too) When I save about 60,000, maybe a house will actually be affordable to someone like me and i can just outright OWN A HOME, NOT A MORTGAGE. Thanks for all the warnings Greg, these guys are too smart for blame, after all they thought it up, dont you think they would own the scrutinizers too? Peace from Houston Greg.
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Bang on Greg! The sad thing is NOTHING has changed. It’s business as usual on Wall St. It’s now been revealed that the banksters at JP Morgan were hip to Madoff’s ponzi scheme 18 months prior to his apprehension but continued to do business with him. I’m quite positive this latest juicy tidbit of financial malpractice will fall on deaf ears also. Hey! It’s Superbowl weekend afterall.