Reprinted from www.libertylobby.org, home of The SPOTLIGHT archive
U.S. Taxpayers Bail Out Wall St.
Megabankers, Wall street financiers, "free-traders" and hot money investors are planning to stick American taxpayers with refloating the economies of Asian countries torpedoed by currency speculators. This financial salvage operation is expected to require around $120 billion by current estimates.
The same elite group who set up the $50 billion Mexican bailout in 1994 is expected to benefit from your "loans" to these high-risk clients.
As this issue of The SPOTLIGHT went to press, Manhattan's financial district was abuzz with rumors Federal Reserve Chairman Alan Greenspan has already laid out $10.5 billion to help "stabilize" the finances of Indonesia, shaken in recent weeks by the marauding of foreign currency traders.
To put up the money, Greenspan drew on the so-called Exchange Stabilization Fund of his agency, a seldom-noted Fed slush fund that now totals $37 billion, these sources say.
Such huge and devious bailouts are necessary because otherwise the "contagion" and ripple effect" of a financial crisis might spread from one affected region throughout the global economy, argues Robert Hormats, vice- chairman of New York's giant Goldman, Sachs investment bank and a powerful former Clinton administration official.
"What Hormats really means is that without a handout from U.S. taxpayers, the Indonesian developers and entrepreneurs who have borrowed heavily from Wall Street -- most of whom are in trouble these days -- will default on their debt to U.S. banks such as his own Goldman Sachs," explained economist Lillian Tarrant, a lecturer in international finance at the state University of New York.
ASIA IN TURMOIL
Thailand, Malaysia and South Korea -- where five of the 10 largest industrial conglomerates are believed to be bankrupt -- are all experiencing similar turmoil in the wake of devastating raids by international currency speculators who have wrecked the economic equilibrium of all Asia this summer.
"Most of the High-flying Asian deal-makers are in hock to their eyebrows to Wall Street,' says Tarrant. "Citibank, for example, has a whopping $70 billion in outstanding loans to Asian borrowers on its books. Unless there is a broad bailout, those debts will go largely sour."
But does the cause of saving Citibank's annual earnings reports - and sky- high profits -- justify handouts of tens of billions of dollars from U.S. public funds?
"Of course not," says business writer Claude Dalgleish. "Anyone can see now that behind the Clinton administration's loudly trumpeted slogans for a 'global economy' and 'free trade' the reality is merely a rush of debt-driven, dicey speculation."
Wall Street has grown fat and sassy on its rake-offs in so-called "emerging markets," Dalgleish noted. "But forcing or conning taxpayers into supporting this sort of profiteering with their hard-earned money should be treated as a crime."