Media Fiddle While America Burns

I got into trouble many years ago when I co-hosted CNN’s now-defunct Crossfire show and told an Ambassador from Libya, who was filibustering and denying his government’s links to terrorism, to “Please shut up.” The producer told me that I went too far, but at least I said “please.” On the other hand, CNBC’s Maria Bartiromo went too far when she concluded a Monday interview with Saudi Prince Alwaleed bin Talal, a major Citigroup investor who has been bailed out by U.S. taxpayers, by saying, “Thank you very much for your precious time.”

Precious time? This is a multi-billionaire foreigner whose financial firm has been bailed out with U.S. taxpayer money. Alwaleed ought to thank us for our precious money―money we don’t have to lend to foreign billionaires.

Bloomberg News, one of the few news organizations seriously examining the role of the Federal Reserve in the financial meltdown, now puts the cost of the various bailouts and other federal schemes to “save” the financial system at an incredible $7.7 trillion. And there is no reason to believe that the bailouts are at an end. At the end of it all, America could be reduced to the status of banana republic, without the ability to pay to import bananas.

America has become “Bailout Nation,” in the words of CNBC, and one of their star correspondents is taking her precious time to thank a Saudi prince for the opportunity to seek his advice on U.S. financial affairs, now that U.S. taxpayers have bailed him out.

As the Russian-born comedian Yakov Smirnoff might say, “What a country!” But how long can such a country survive? The answer may depend on the Group of Thirty, a secretive and mysterious organization of so-called smart people that includes President-elect Barack Obama’s pick to run the Department of the Treasury, Timothy Geithner. Incredibly, the candidate of “hope” and “change” has picked someone right in this middle of planning this financial mess to take us out of it.

Announced by Obama to much fanfare in the media, Geithner has a career that includes work for Kissinger Associates and the federal government and membership in the little-known Group of Thirty. Please don’t accuse me of entertaining a conspiracy theory. This is actually mentioned in his official biography and the organization has an official website. It calls itself “a private, independent, nonprofit, international body” but I can find no serious investigative reporting into its influence and controversial connections.    

Members of the Group of Thirty include several people close to Obama; not only Geithner but Paul Volcker, who is the chairman of the Group of Thirty, and Lawrence Summers, Obama’s designee as chairman of the National Economic Council. Interestingly, the Governor of the People’s Bank of China is also a member. As we discussed in our recent AIM Report, China has played a largely behind-the-scenes role in America’s unfolding financial and economic crisis. Treasury Secretary Henry Paulson, dubbed the “Armand Hammer of Communist China” because of his personal and financial ties to China, has been right in the middle of this but has largely escaped media scrutiny for an obvious conflict of interest.

New York Times columnist Paul Krugman is a member of the Group of Thirty and could shed some light on the operations of this curious organization. But I could find no record of him having written about what happens at its meetings. Perhaps that is because the group’s annual International Banking Seminar, which takes place to coincide with the fall meetings of the International Monetary Fund and World Bank, is “an invitation-only, off-the-record forum.” One of the participants, according to a photo on the group’s website, was Federal Reserve chairman Ben Bernanke.

The Group of Thirty seems almost as secretive as the Federal Reserve itself, which is refusing to disclose the details of nearly $2 trillion in loans it has extended during the current crisis. Bloomberg News has filed a Freedom of Information Act lawsuit to force disclosure of this information.  

The Group of Thirty’s annual report reveals that it has received “donations” or funds from various institutions, including American International Group, the central banks of various countries, Goldman Sachs, the Dubai Financial Services Authority, Lehman Brothers, and Soros Fund Management, run by the controversial pro-Obama billionaire, George Soros.

If you look at the funders of the organizations represented by some of its members, you find a literal “who’s who” of entities involved in the financial meltdown. Some have gone bankrupt (Lehman Brothers) but others are getting taxpayer-financed bailouts (American International Group). How can public officials serve in a private organization of this nature? Isn’t that a potential conflict of interest?

Rather than subject any of this to scrutiny, David Brooks, the phony conservative who writes for the New York Times, recently wrote a column about all the smart people signing up to work for Obama and his new administration. The column was almost as embarrassing as Bartiromo thanking the Saudi prince for his “precious time.” Brooks seems to think that we are impressed by people―“the best of the Washington insiders,” as he called them―who are supposed to be brighter than the rest of us. But are they really so smart? If so, why aren’t their bailouts working? And even if they do work, who’s going to pay for them?

I am not impressed by arrogant elitists like Brooks and those he admires. Indeed, I get angry, as a journalist and media critic, when I watch the columnists, reporters and anchors treating those who mismanaged this crisis or benefit from it with respect they clearly do not deserve. One of them is Timothy Geithner, the head of the Federal Reserve Bank in New York and Obama’s pick as Treasury Secretary.

Both the New York Times and the Washington Post ran stories on Tuesday about Geithner’s key role in Paulson’s reckless and haphazard bailout strategy. The Times story, on page one of the business section of the paper, was generally supportive of this “wonder boy” but does quote one critic on the record as saying,  “All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.” This seems like a comment that deserves a follow-up story.

To its credit, a Times editorial noted evidence that Geithner and Summers “have played central roles in policies that helped provoke today’s financial crisis.”

Paulson was supposed to be brilliant, too. At least that is what the media said about him when he panicked the Bush Administration and the Congress into passing his $700-billion Wall Street bailout plan. But he has taken several detours on his way to “rescue” the economy. It would be funny were it not for the fact that he is playing around with our money and making the situation worse. The only person who deserves more blame for the current mess is President Bush, who was persuaded by his chief of staff, Josh Bolten, a former Goldman Sachs executive, into hiring Paulson. 

There is a desperate need for critical media scrutiny of those who are running this show, like Paulson and Bernanke, as well as their cronies, like Geithner. But even the “conservatives” on the Fox News “Special Report” show have been expressing awe at Obama’s appointments, including Geithner and Summers. “I think it is an excellent team,” said Charles Krauthammer on the Monday night show. “I thought they were pretty impressive,” said Fred Barnes.

It seems abundantly clear that the TV show Hannity & Colmes, which Colmes will be leaving by the end of the year, isn’t the only Fox News program in need of new blood. You know the situation in the media is desperate when the “conservatives” on a Fox News program are more supportive of Obama’s appointments than the liberal editorial page of the New York Times. 

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