Tag Archives: Tim Geithner

Wasting the Lehman Crisis: What Was Not Saved Was the Economy, by Michael Hudson

Debt as the solution to a debt collapse only harms the economy and sets it up for an even bigger fall later on. From Michael Hudson at counterpunch.org:

Photo Source futureatlas.com | CC BY 2.0

Today’s financial malaise for pension funds, state and local budgets and underemployment is largely a result of the 2008 bailout, not the crash. What was saved was not only the banks – or more to the point, as Sheila Bair pointed out, their bondholders – but the financial overhead that continues to burden today’s economy.

Also saved was the idea that the economy needs to keep the financial sector solvent by an exponential growth of new debt – and, when that does not suffice, by government purchase of stocks and bonds to support the balance sheets of the wealthiest layer of society. The internal contradiction in this policy is that debt deflation has become so overbearing and dysfunctional that it prevents the economy from growing and carrying its debt burden.

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This 65-year old lost most of his life’s savings for failing to file a form, by Simon Black

Every day, everywhere, individuals get screwed by the government, and 99 percent of the time their stories go untold. Simon Black tells the enraging story of Bernhard Gubser at sovereignman.com:

By all accounts Bernhard Gubser was living the American Dream.

Born in Switzerland he moved to the Land of the Free in the early 1980s to work at an international shipping company based in Laredo, Texas.

Eventually Mr. Gubser worked his way up to be President of the company and began traveling around the world to expand the business.

He became a naturalized citizen of the United States in the 1990s, something that would eventually cost him $1.35 million.

As a Swiss native, Gubser had a Swiss bank account. And as he was routinely spending a lot of time in Switzerland for business, and he felt that he might one day retire there, he kept the account open.

But the federal government has a rule: US taxpayers must disclose their foreign bank accounts each year to the Treasury Department.

Up until a few years ago, few people knew about this rule.

It wasn’t until around 2010, when the US government finally realized they were flat broke, that they started making a big deal about offshore reporting requirements and penalizing people with undisclosed accounts.

Gubser maintains that as soon as he found out about the requirements, just like most people, he immediately began to file the offshore disclosures.

The federal government took a different view, dinging him with a penalty of $1.35 million, roughly half of his life’s savings.

As they say, of course, ignorance of the law is not an excuse.

And Gubser is paying a $1.35 million penalty because he didn’t know.

Neither did Tim Geithner, as it turned out. Several years ago the former Secretary of the Treasury was found to have “accidentally” underpaid his taxes.

In this case, ignorance of the law was a perfectly valid excuse. Geithner was only required to pay back what he owed without additional consequence.

Hillary Clinton has been in the spotlight for having removed official, confidential, and classified documents from the State Department to her personal email server while she was Secretary of State.

She claims she didn’t know.

The President of the United States has closed ranks around her insisting that it was an honest mistake and that no crime was committed.

Funny thing, as anyone who’s ever held a security clearance in the Land of the Free knows, before being allowed access to confidential documents you sign a non-disclosure agreement known as the SF312.

I’ll never forget my own experience with the SF312 when I received a Top Secret clearance in the military. It was pretty sobering.

In the intelligence world, people joke that the SF312 is when you ‘sign your life away’, because the entire document threatens you with all kinds of penalties and imprisonment for mishandling of classified information.

Among the many federal laws governing classified information, Section 793(f) of the US criminal code criminalizes gross negligence resulting in the mishandling documents.

So whether or not Ms. Clinton ‘intended’ to violate the law is irrelevant.

And if it were anyone else who unwittingly spent months or even years mishandling classified information, we would be turning big rocks into little rocks wearing Dayglo orange jumpsuits.

To continue reading: This 65-year old lost most of his life’s savings for failing to file a form