Monday, February 21, 2011

Jim Flaherty, Goldman Sachs and the Foxes in the Henhouse

When the Conservatives won the election in 2006 and Jim Flaherty was named the minister of finance, his choice for deputy minister raised a few eyebrows. Mark Carney was a high ranking executive from Goldman Sachs who was making millions of dollars a year. Why would he accept a position that paid a fraction of what he was used to making?

But at the time our attention was drawn to the undemocratic floor crossing of David Emerson and the subsequent drama on the hill.

As a result, the media barely gave it a passing glance. But this should have made headlines, and if not then, then at least now, in light of the mess that Goldman Sachs has made of the global economy. What was their interest in Canada?

Progressive journalists and bloggers have been sounding the alarm on Jim Flaherty's sub-prime mortgage fiasco, but no one in government or the MSM are touching it. I mentioned reading Matt Taibi's two articles in the Rolling Stone on Saturday, and it really put Canada's situation into perspective. I sat up half the night with open books scattered everywhere, and came to the conclusion that this is not simply about the gamble of high-risk mortgages. This is much deeper.

This is about Wall Street taking over this country's finances and setting us on a dangerous course. And as Linda McQuaig and Neil Brooks reveal in their book: The Trouble With Billionaires, once they move in you never get them out.
... by the early 1990s, prodigies of Wall Street had effectively taken over government by being appointed to its top economic management positions. A virtual revolving door now connects the power corridors of Wall Street and Washington, with Goldman Sachs practically serving as a training school for those running the U.S. Treasury. Robert Rubin spent twenty-six years at Goldman Sachs, rising to co-chairman of the firm before becoming Treasury secretary under Bill Clinton; Henry Paulson, a one-time Goldman CEO, became George W. Bush's Treasury Secretary. (1)
And the result has been massive deregulation, allowing Wall Street to become the Las Vegas strip. And any attempt to reverse this has proven to be impossible.
This extraordinary political clout has enabled the wealthy few to effectively disable government when it comes to regulating financial markets. So when Brooksley Born, head of the U.S. Commodity Futures Trading Commission, tried in the late 1990s to bring greater oversight to the wildly gyrating derivatives market, she was stopped in her tracks. It was almost a foregone conclusion that her efforts would be defeated, since she was opposed by the three most powerful government officials in the financial domain: Treasury Secretary Robert E. Rubin, Securities and Exchange Commission Chairman Arthur Levitt Jr., and Federal Reserve Chairman Alan Greenspan. Significantly, these men had all earned their wealth via Wall Street and all were dedicated to the Wall Street creed of deregulation. (1)
Jim Flaherty and Stephen Harper appear to have a very unhealthy infatuation with banks. I wonder if as part of role playing, they make their wives dress up as banks or bankers. But then I try not to wonder about things like that and turn my attention to pleasanter thoughts. Like a multi-car pile up.

But you can't escape this "good banks" phenomenon. It's everywhere. Canadian banks didn't fail because they were sound and regulated. But turns out this was only smoke and mirrors, because what Mark Carney has been doing, is deregulating Canada's financial sector.

We know that this new security perimeter deal is only for the benefit of multinational corporations, as globalization seeks to create a flat earth, with nothing in it's path. But Canada was a stumbling block because we had one of the safest banking systems in the world.

That's about to change. With a Wall Street guru now head of the Bank of Canada, our safeguards are being incrementally removed, that were once a barrier to foreign interests getting rich off the Canadian taxpayer.

Mark Carney started with taxing income trusts, that destroyed the life savings of many Canadian seniors, but netted $35 billion for Goldman Sachs' clients. He also removed the 15% tax on foreign investors, clearing the way for more takeover of Canadian assets. (2) In the 2010 budget, more tariffs were removed, costing taxpayers another $300 million a year, that will have to be absorbed by the working class.
The tariff elimination was by far the biggest move for corporate Canada ... [and] Despite the fiscal crunch, in which more than $160-billion will be added to the national debt by mid-decade, the federal government committed to follow through on cuts to corporate tax rates, to 15% by 2012. It would also establish a panel of MPs and businesspeople to look at repealing layers of red tape that might be adding unnecessary costs for companies. (3)
Translation for "repealing layers of red tape" - the removal of environmental protections.

Welcome to Wall Street.

The taxpayer funded ads about our economy are only creating a facade. Because behind the scenes, the boys are busy creating the perfect storm. A deregulated banking industry and an enormous amount of high-risk mortgages, now owned by us.

None of this was by accident, nor was it just a fleeting and dangerous whim. And I can prove it.

This is one in a series of articles on Jim Flaherty, his relationship with Goldman Sachs and why it might be too late to change the course they have put us on.


1. The Trouble With Billionaires, By Linda McQuaig and Neil Brooks, Viking Canada, 2010, ISBN: 978-670-06419-9, Pg. 65-66

2. Ottawa moves to eliminate tariffs, By Paul Vieira , Financial Post, March 4, 2010

3. Taxes and Avoiding Them on Everyone's Tongue, Toronto Sun, November 11, 2007

1 comment:

  1. I doubt very much Farterhy chose the Carney man.
    I'm sure a strong suggestion was whispered in his hairy little ear.