The key to a good con is misdirection. Convincing a mark to close out his bank account, liquidate all his property, and borrow, steal, or embezzle in hopes of realizing a big score requires getting him to believe in something for nothing. Getting him to look over there—while you fleece him, over here.
This is not just simply cheating someone. This is getting a person to reach into his own pocket and beg you to take his money. A good confidence artist believes the mark has it coming for being stupid.
You’ve read a lot about how what's going on in Wisconsin is not local. It’s about finishing the long national looting begun in 2008. It's true. The Big Con is on.
It's on when Wisconsin’s governor denies there’s anything nefarious about a clause in his union-busting bill allowing public power plants to be put up for sale, without bid, notification, review, or disclosure of fair market value.
Yet at the same time a local energy group—apparently Alliant Energy, a corporation that made direct contributions to Governor Walker’s campaign--is soliciting resumes, seeking “experienced Plant Managers for multiple power plants located in Wisconsin.”
Look over there! Unions! Pensions! Deficits!
It's on when D.C. floats a proposal to allow banks to “reduce the loan balances of troubled borrowers who owe more than their homes are worth.”
Look at that! Bad loans! Troubled borrowers!
The con is on.
Because the proposal also says this:
“The cost of those writedowns won’t be borne by investors who purchased mortgage-backed securities.”No, those poor unfortunates will be held blameless.
Who are they? The very Wall Street banks that, as Matt Taibbi points out ,
when they flooded the market with these phony securities…were smart enough to realize that they were eventually going to blow, so they started betting against them. They went to companies like AIG, and they took out trillions of dollars of credit default swaps and pseudo-insurance policies on these mortgages. The bailout wasn’t really to pay off real losses in these mortgages. It was really to pay off the bets on these mortgages. So, not only did they flood the market with a trillion dollars of defective merchandise, they got the United States taxpayer to pony up $5, $6, $7 trillion worth of bailout money to pay off their bets on all this stuff.
Look! Crisis! Bailouts!
With Wall Street off the hook, who will bear the burden for these massive losses?
The investors who weren’t banks. The ones the banks convinced to buy the MBS’s.
Like pension funds.
Like California’s pension fund, which lost $1 billion from investments that crashed, and is suing Moody’s, S&P, etc., who blessed those investments with AAA gold-standard ratings on the strength of claims by the very banks whose securities they were!
A number of internal e-mail messages from the companies, suggest[ed] that employees were aware they were giving their blessing to bonds that were all but doomed. In one of those messages, an S.& P. analyst said that a deal “could be structured by cows and we’d rate it.”
Or like Ohio’s pension fund, which lost $457 million, and is also suing.
But the con is on.
It's on when Ohio Governor John Kasich says it's just a coincidence, that in 2002, while he was a Lehman Brothers rep, he lobbied Ohio’s pension fund to invest in Lehman Brothers—specifically, mortgage-backed securities. It's on when in a further coincidence, Lehman is pushing toxic investments to the Ohio pension system as late as August 25th, 2008 - only 21 days before Lehman collapsed.
It's on when the former Lehman executives, the former AIG execs, the regulators who looked the other way in order to grease their later entry though the revolving door, are all doing quite well with the money they obtained by fraud.
It's on when they're doing well at the expense of these folks:
[The] over a quarter of mortgage holders [who] are underwater on their homes. A big chunk of these people were sold houses at artificially inflated prices, courtesy of the bank and captured appraisers.
These little cheated folks are cast as profligate, immoral wastrels, forced to take pay cuts, take benefit cuts, surrender their bargaining rights. Because pensions caused the problem.
Look! Pensions! Benefits that we pay for!
Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers….Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash.
But not before the bankers get another slice of pie:
The average Wisconsin pension is $24,500 a year, which is hardly lavish. But what is stunning is that 15% of the money contributed to the fund each year is going to Wall Street in fees
The con succeeds when the public believes these are just coincidences. When they find it beyond belief that rich and famous men, pillars of the community, could be involved in something so…criminal. Or that the fix is in for them. Or in against us. When they go on voting Republican, and beating their chest about the uniquely just place that is America.
Big-time confidence games are in reality only carefully rehearsed plays in which every member of the cast except the mark knows his part perfectly. –David Maurer, The Big Con