Paul J. Nyden
The lack of federal oversight and regulation played a major role in creating economic difficulties Americans face today.
Reckless! How Debt, Deregulation and Dark Money Nearly Bankrupted America
By Byron L. Dorgan
St. Martin's Press,
xvi + 268 pages.
Hardcover, $24.99.
CHARLESTON, W.Va. -- The lack of federal oversight and regulation played a major role in creating economic difficulties Americans face today.
The failure of Congress to see through the carefully crafted lies of top Bush administration officials, including Colin Powell and Condoleezza Rice, helped enmesh us in the ongoing Iraq quagmire.
Sen. Byron L. Dorgan, D-N.D., documents these problems in his new book Reckless! How Debt, Deregulation and Dark Money Nearly Bankrupted America.
Writing in a readable, often homespun style, Dorgan expresses dismay at the failure of Congress and presidents to rein in the ballooning greed of corporate executives, executives who made hundreds of billions by manipulating home mortgages, creating hedge funds and engineering questionable credit default swaps.
Many seeds of today's economic crisis, Dorgan stresses, were planted during the presidency of Bill Clinton, who chose most of his financial gurus directly from Wall Street.
Dorgan specifically criticizes Clinton for promoting the Financial Services Modernization Act of 1999 that repealed the Glass-Steagall Act of 1937.
Passed when Franklin D. Roosevelt was president, Glass-Steagall was designed to protect America's banks from risky investments by preventing the irresponsible speculation that helped spark the Great Depression in 1929.
Dorgan was among only eight senators who voted against Clinton's bill.
In his new book, Dorgan criticizes a wide range of banks, insurance companies and investment groups. He asks who was supposed to be regulating their bizarre behavior.
Four banks - Bank of America, JP-Morgan Chase, Citigroup and Wells Fargo - now control nearly a third of all bank deposits in the country.
By the end of 2008, Citigroup was reeling from the weight of "toxic assets" it acquired. To help out, the federal government handed Citigroup $45 billion in cash and federal guarantees to cover up to $306 billion in its toxic assets.
Yet, Dorgan adds, the Citigroup executives "whose irresponsible behavior allowed this to happen are still there. The Treasury Secretary bailed them out without requiring any accountability or change in management."
The "willful blindness" of federal regulators, Dorgan believes, should be made into a felony offense.
The costs of war
Reckless details the economic consequences of war, whose costs are shifted to future generations.
"No country can go to war and offer tax cuts to its wealthiest citizens while it adds the cost of war to its federal debt. At least it can't do that without catastrophic consequences to its economy," Dorgan warns.
Today, a lot of our growing national debt is being financed with loans from China and Japan.
Our growing deficit is made worse by an "orgy of greed" by private contractors raking in cash from the ongoing war.
Last year, we had 146,000 American soldiers in Iraq. At the same time, U.S. contractors employed 190,000 workers.
Those private contract workers, often paid $150,000 or more a year, are routinely better equipped with protective body armor and armored vehicles than our own soldiers.
Dorgan has harsh words for former Secretary of State Colin Powell, a four-star general who had chaired the Joint Chiefs of Staff, for testifying at the United Nations on Feb. 5, 2003, to justify Bush administration plans to invade Iraq. The war began on March 19, just six weeks later.
Reckless! How Debt, Deregulation and Dark Money Nearly Bankrupted America
By Byron L. Dorgan
St. Martin's Press,
xvi + 268 pages.
Hardcover, $24.99.
CHARLESTON, W.Va. -- The lack of federal oversight and regulation played a major role in creating economic difficulties Americans face today.
The failure of Congress to see through the carefully crafted lies of top Bush administration officials, including Colin Powell and Condoleezza Rice, helped enmesh us in the ongoing Iraq quagmire.
Sen. Byron L. Dorgan, D-N.D., documents these problems in his new book Reckless! How Debt, Deregulation and Dark Money Nearly Bankrupted America.
Writing in a readable, often homespun style, Dorgan expresses dismay at the failure of Congress and presidents to rein in the ballooning greed of corporate executives, executives who made hundreds of billions by manipulating home mortgages, creating hedge funds and engineering questionable credit default swaps.
Many seeds of today's economic crisis, Dorgan stresses, were planted during the presidency of Bill Clinton, who chose most of his financial gurus directly from Wall Street.
Dorgan specifically criticizes Clinton for promoting the Financial Services Modernization Act of 1999 that repealed the Glass-Steagall Act of 1937.
Passed when Franklin D. Roosevelt was president, Glass-Steagall was designed to protect America's banks from risky investments by preventing the irresponsible speculation that helped spark the Great Depression in 1929.
Dorgan was among only eight senators who voted against Clinton's bill.
In his new book, Dorgan criticizes a wide range of banks, insurance companies and investment groups. He asks who was supposed to be regulating their bizarre behavior.
Four banks - Bank of America, JP-Morgan Chase, Citigroup and Wells Fargo - now control nearly a third of all bank deposits in the country.
By the end of 2008, Citigroup was reeling from the weight of "toxic assets" it acquired. To help out, the federal government handed Citigroup $45 billion in cash and federal guarantees to cover up to $306 billion in its toxic assets.
Yet, Dorgan adds, the Citigroup executives "whose irresponsible behavior allowed this to happen are still there. The Treasury Secretary bailed them out without requiring any accountability or change in management."
The "willful blindness" of federal regulators, Dorgan believes, should be made into a felony offense.
The costs of war
Reckless details the economic consequences of war, whose costs are shifted to future generations.
"No country can go to war and offer tax cuts to its wealthiest citizens while it adds the cost of war to its federal debt. At least it can't do that without catastrophic consequences to its economy," Dorgan warns.
Today, a lot of our growing national debt is being financed with loans from China and Japan.
Our growing deficit is made worse by an "orgy of greed" by private contractors raking in cash from the ongoing war.
Last year, we had 146,000 American soldiers in Iraq. At the same time, U.S. contractors employed 190,000 workers.
Those private contract workers, often paid $150,000 or more a year, are routinely better equipped with protective body armor and armored vehicles than our own soldiers.
Dorgan has harsh words for former Secretary of State Colin Powell, a four-star general who had chaired the Joint Chiefs of Staff, for testifying at the United Nations on Feb. 5, 2003, to justify Bush administration plans to invade Iraq. The war began on March 19, just six weeks later.
"Much of the information in Secretary Powell's speech turned out to be false. It wasn't just wrong; in many cases it was wrong by a country mile."
At the time, Dorgan himself was not a major critic of the pending invasion. On Oct. 11, 2002, he did not join the 23 senators who voted against a joint resolution allowing Bush to dispatch troops to Iraq.
Most members of Congress trusted the Bush administration to create and pursue responsible policies against terror in the aftermath of the 9/11 attacks.
"It was a misplaced trust," Dorgan writes. "This is a reminder of how important it is for all of us to always question and challenge our leaders when presented with choices that could lead to war."
Today, Dorgan believes the Iraq War will be long remembered as one of the major mistakes in foreign policy in American history.
Growing economic problems
Recent federal economic policies have widened the chasm between the ultra-rich and most Americans.
Today, the top 1 percent of households control 38 percent of the nation's wealth, while the bottom 60 percent have only 4 percent.
In 1980, the average corporate CEO in the United States earned 40 times as much as the average worker. Today, the average CEO gets paid more than 400 times as much.
Dorgan believes Congress should take steps to control ballooning executive salaries and huge severance packages when they leave.
Congress also fails to monitor expenditures in Iraq by major private contractors in Iraq and to punish them for submitting false bills.
Dorgan cites many examples:
Halliburton, whose chairman and chief executive between 1995 and 2000 was soon-to-be Vice President Dick Cheney, billed the Pentagon for providing our soldiers in Iraq 42,000 meals a day. At the time, Halliburton was serving only 14,000 meals a day.
Kellogg Brown and Root, a former Halliburton subsidiary, set up offshore offices and shell companies in places like the Cayman Islands to avoid paying tens of millions of dollars in Medicare and Social Security taxes.
The Parsons Corp. was paid to build 142 primary health centers in Iraq. But two years later, when all the money was gone, Parsons had constructed only 20 facilities, many of which were poorly built.
Halliburton contract workers repeatedly failed to purify water, from sources like the Euphrates River, used by American soldiers. As a result, our soldiers suffered sudden increases in dangerous bacterial infections.
"The Pentagon, in a stunning demonstration of incompetence, was seemingly unconcerned with an issue that threatened the health of its soldiers," Dorgan writes.
Reckless includes chapters that discuss energy consumption, climate change and health care.
Today, we are the world's biggest energy consumer.
With just 5 percent of the world's population and 3 percent of its known oil reserves, U.S. residents consume 25 percent of all energy generated throughout the world.
To cut down on oil imports from Iraq and other potentially hostile countries, Dorgan backs more drilling in the United States and greater use of alternative fuels, including corn-based ethanol and wind power - proposals that generate widespread criticism from many environmental groups.
In the end, Dorgan maintains a positive outlook. He expects the "extraordinary spirit of the American people to demand and expect more of themselves and their government."
Dorgan has served in the House of Representatives and Senate for 28 years. Currently, he chairs the Democratic Policy Committee.
His book offers unique perspectives from an insider who regularly holds hearings and helps make government decisions, and an insider who readily admits his own errors.
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.
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His book should have started with "My inability to see problems as they occur rather than ability to describe problems after the fact".