Wall Street Journal, Rupert's sovereign disaster? by gimleteye

It was inevitable that the Bush White House would conspire with the nation’s largest banks to pile on the fiscal insanity it allowed to bubble, like melted plastic. This is an administration that does not believe in anything, or rather, that anything it believed in is pliable as silly putty.

Today the Wall Street Journal editorial page is playing with the same silly putty.

The Journal casts its steely gaze at sovereign wealth funds of the kind owned by the government of Abu Dhabi that invested, last week, more than $7 billion in the badly shaken Citigroup.

Of course, that is not the big news of the day.

The big news is the planned bailout of Wall Street by the White House, now being spun as a necessary step to rescue millions of homeowners who were put in severe financial jeopardy because Wall Street, itself, refused to be regulated of its own greed.

On this subject—the bailout— the editorial writers at the Wall Street Journal will be burning the candles all weekend long. It will be fascinating reading how the ideologically pure put lipstick on the pig Hank Paulson, Treasury chief, is bringing to the party.

I can’t blame Paulson, who must be yearning for the private sector where such outlandish deception in private transactions, especially between and amongst public corporations, never needs to be disguised as the public interest or the common good.

So—on a Saturday—when the Bush White House and Wall Street are conspiring with impunity against any feasible interpretation of conservative fiscal values, the Wall Street Journal opines on other government's impunity.

“The sovereign trillions are also concentrated not just in a few hands, but in a few government-controlled hands. This increases the risk that investments are made, or withdrawn, for political rather than economic reasons.” … “With so much money comes the temptation, and ability, to wield political influence—and they do.”

Pardon my confusion, but given the circumstances of the Wall Street bailout now wrapping up in its fine details (including no doubt, massive fees and commissions to the issuance of whatever paper will be used to mask the worthlessness to which it contributes) there is no difference in the withering gaze that should be leveled at the liquidity spigot that the Treasury and the Federal Reserve have turned on and the behavior of despots controlling sovereign wealth.

“It’s no accident the Abu Dhabi fund was formed in the first petro-dollar era in the 1970’s, and that it is booming again amid the current sequel. These funds owe much of their current size from bad US monetary policy. We were nearly as ‘dependent on foreign oil’ in the 1980’s and 1990’s as we are today. But with a responsible Federal Reserve and strong dollar, there was no boom in petrodollars.”

It is hard to read this, without gagging. The Wall Street Journal editorial page was Alan Greenspan’s major cheerleader during his tenure at the Federal Reserve, during the entire run-up of serial financial bubbles—the last of which, in housing and development, has turned into the worst economic crisis in modern times.

It was U.S. monetary policy, too, driven by politics and campaign contributors who reaped billions of dollars in wealth—contributing to the massive dislocation and comparative disadvantage of American workers and the middle class—that allowed capital to be leveraged to unheard of volumes, spun like confection candy against the walls of a glass centrifuge.

The Wall Street Journal somberly concludes, that “sovereign” money that invests in America “should be welcome as long as it plays by American rules and doesn’t threaten our national security.”

Now that the centrifuge that pinned most of us to the inside of the glass walls while thievery was rampant, has stopped, we can climb down into this bright new world of chicanery and deceit.

Leaving aside a trillion dollar war hatched from the brains of paranoid patriarchs supported by the Wall Street Journal editorial page, the mishandling of the US economy, primarily to serve political interests of corralling campaign contributions from developers and Wall Street interests, should be reported by the national media this way:

The Republicans who delight in battering Democrats as “tax and spend liberals” have presided over the destruction of the US dollar and painted our economy into such a deep corner that it will take taxes to lift us out.

I couldn’t make this stuff up. Republicans, who claim to be values voters, should be ashamed and so should the Wall Street Journal.


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