Be careful of what you wish for…
Despite appearing to have a few slightly-differing opinions on just a handful of petty foreign-policy details such as how many meaningless negotiation-bones they should throw at Iran, or how many meaningless knock-off hand-slappings they should throw at Zionist neo-colonials, the routinely cooperative, agreeable and in-sync actual actions of President Obama, Congress, Wall Street and War Street clearly speak for themselves.
Judging by their actions alone, we can immediately tell that Obama, Congress, Wall Street and War Street are clearly in strong, almost-total agreement regarding their basic foreign-policy vision for America. Hey, goodie for them.
However, unfortunately for the rest of us Americans who are actually having to pay for these actions, Obama & Company’s strong vision for America also includes doing everything that they possibly can to start World War III. Ouch!
When it comes to his domestic policy, President Obama has occasionally actually tried to be helpful to his fellow Americans — as compared to John McCain’s domestic policy, for instance. Had McCain been elected in 2008 instead of Obama, he would have tried to financially eviscerate almost every single American in our middle class — if said evisceration would have given even just one more penny of our tax dollars to Wall Street and War Street instead of to us.
However, compared to Obama & Company’s current (both overt and covert) foreign policies, McCain’s 2008 foreign-policy platform appears to have been almost a walk in the park.
Right now, Obama & Company’s actual, action-based foreign policies seem to include:
- Supporting anyone and everyone who can create chaos in the Middle East — including but not limited to Israel, the Saudis and even ISIS and Al Qaeda.
- Hitting the BRICS (especially Russia and China) every chance they can get — including spinning outright lies, spreading false propaganda, using false flags, supplying massive amounts of weaponry to the neo-Nazis in Ukraine and even shooting down civilian aircraft.
- Supporting almost every single despot in the world today and alienating almost every single non-despotic government and/or democratically-elected in the Middle East, South America, Africa and the EU too.
- Preemptive nuclear strikes? Those don’t seem to be off the table at all. Those boys in DC and NATO have been reading far too much Herman Kahn!
But none of these things are cool things to do and all of them can rapidly lead to circumstances far beyond Obama & Company’s (and our) control — up to and including World War III, to be fought both abroad and at home!
Not since 1864 has America known war on its shores. Except for 9-11, the occasional violent suppression of civil rights marches and a few gun battles here and there involving bad guys and/or police, it’s been pretty calm around here for the last one hundred years.
If Obama & Company keeps on pushing their current foreign-policy agendas as hard in the future as they are doing right now in Syria, Ukraine, Yemen, Palestine, Afghanistan, Mexico, Honduras, Africa, Iraq, etc., and rattling their sabres like they were McCain, GWB and Dick Cheney combined, then we may start to know war on our own native soil a whole lot better than we would ever want to.
But perhaps at this point you might be asking yourself, “What is the problem with you, Jane? First, there’s never going to be another war here in America. And, second, even if the denizens of War Street do make a huge profit and even if 50% of American children do go without schools or shoes as a result, won’t it all still be worth it — to see America continue to be the world’s top dog?”
You just keep on telling yourself that — but only if you don’t really mind butchering a few million (or billion) innocent women and children (and subsequently rot in Hell) to get to the top.
Plus not only do we now have to worry about military wars coming to our shores, apparently we now have to worry about economic wars arriving here too! My friend Judy just e-mailed me a whole laundry-list of stuff that is also wrong with Obama & Company’s foreign-policy vision — from a financial perspective. Here is just one small item on that list:
“I myself believe,” wrote Judy, “that the new multinational corporations don’t care about the US any more than they care about any other country. They have proved again and again to us that, for them, it is always and only about making money. And, bearing that reality in mind, consider that on the one hand China’s new banking initiatives could shut down the US empire if or when — and I would say when — the balance of resources shifts away from the dollar. That is what a lot of these military attacks on Russia and China have been about. But on the other hand, however, most likely it will be no problem at all for the multinationals to pivot their markets and financial bases to Asia — leaving America financially high and dry.”
But with the above-described humungous financial calamity also lapping at our shores, it probably won’t even matter whether America wins World War III — or not.
America’s current domestic and foreign policies clearly suck eggs. But why? Because these policies far-too-closely resemble my own definition of fascism/corporatism/ despotism, which is: “Instead of a country spending its government’s money to better the lives of all of its citizens equally, said government’s money is only poured into the coffers of an ‘elite’ few.”
And speaking of false flags, here are the five signs to look for:
- Horrific images are over-used to shock the public
- Drills for a similar attack appear on the same day in the same area.
- Eyewitness accounts do not match the official story
- Conflicting evidence is not repeated by the media
- Used as an excuse to curtail rights or to start a war
And while we’re still on the subject of false flags, excuse me for stating the obvious here — but with so many false flags in the American spy-craft industry having come to light again and again recently, how come 9-11 alone has become the sacrosanct hands-off Lady Madonna that can never ever be properly investigated or even mentioned in the same breath as the words “false” and “flag”?
Also with regard to false flags, let us now paraphrase philosopher Harry G. Frankfurt. “How can we ever truly gauge what dangers we are in — if we are lied to about their existence, their causes and their effects?” For this reason alone, truth is vital to every society — and history has demonstrated again and again that societies based on lies are basically doomed.
How can we Americans use good judgment in order to keep ourselves safe when we are constantly bombarded with lies about Iraq, Syria, Ebola, voting-machine data, Ukraine, weapons lobbies, our post offices, Big Pharma, GMO crops, net neutrality, nuclear safety, what really happened in Palestine, that banks are too big to fail, that Jesus hated poor people — and goodness knows what all else! We can’t even get a clear story about whether or not there is still gold in Fort Knox. And the New York Times, our most vital “newspaper of record,” is constantly getting caught out for their lies.
According to Frankfurt, unless we can reinvent ourselves as a more truthful society ASAP, then we are doomed.
Regular readers of this Corporatocracy series should have a firm grasp on the concept of Corporatism. However, the uninitiated might presume that a corporation is merely a vehicle for protecting the owners of the enterprise from the liability risks of conducting business. Much attention has been devoted to the economic conditions and aspects when examining the corporate structure. But modest effort is found in business journals that discuss the social consequences of consolidating the entire hierarchy of political favoritism, access to capital and protection from competition that is at the heart of the corporatist model.
Corporatism as Theory and Practice by Joseph R. Stromberg offers a historic perspective.
“Corporatism and corporations are not yet the same subject. The key word is “yet.” If there is a relationship, it is historical. Very briefly, corporations — legally privileged from birth, pampered by courts, subsidized by Congress, with a social “in” with the most important state personnel — were likely, as ideal engines for accumulating capital, to produce unbalanced economic outcomes, mass discontent, and political unrest. Combine those engines with inherited dysfunctional institutions such as fractional-reserve banking, eminent domain, primitive military accumulation (e.g., the Indian wars), governmental distribution of resources, a venal party system, and a mighty executive, and you have a recipe for crisis. American elites recognized the danger fairly early. By trial and error they put together “corporate syndicalism” (Williams), “political capitalism” (Kolko), corporatism (varii), or “interest-group liberalism” (Lowi). It remained to be seen who (business or state?) would dominate the partnership. Hoover himself reflected in 1922 on the danger of “a syndicalist nation on a gigantic scale.”
Out of such a context the 21th century version of corporatism maintains little effort to satisfy mass discontent of the populace, because the will to achieve an independent livelihood has been stamped out so wholly by the merged state/corporate system. Viewing this alliance as a partnership vying for dominance is a false outlook. In this new millennium, the globalist economy is under total control by a financial dictate that makes laws, writes regulations, enforces compliance, bankrupts companies not in the club, subsidizes crony ventures, and imposes access to capital as a reward for playing ball.
This is not Capitalism, it is demented Corporatocracy.
Don Quijones writes in Crunch Time for the Global Corporatocracy about the closed door negotiations for the Trans Pacific Partnership (TPP), the US-EU trade deal (TIPP) and TISA.
“The hyper-secret Trade in Services Act (TiSA), which seeks to bind together the U.S., the EU and 22 other Western-aligned nations under a new system of laws and regulations covering telecoms, water, gas, electricity, transport, financial and legal services, software design, electronic data, tourism, healthcare and a whole lot more, is infinitely worse. The treaty’s text is designed to be almost impossible to repeal, and is to be “considered confidential” for at least five years after being signed.”
Basically, the nature of all these destructive trade agreements is reducible to “The fact that we now live in a world dominated by highly undemocratic and unaccountable supranational organizations (the IMF, World Bank, WTO, EU…) is no mere accident.”
Corporatism 101 is not taught in school or even debated in the mass media. It falls to online publications like Naked Capitalism to feature another persuasive argument by Mr. Quijones, which concludes.
“The rise of investor-state dispute settlements and the broad application of arbitration procedures are the ultimate victory in the global corporatocracy’s decades-long coup d’état. If allowed to take universal effect, the system will impose above you, me, and our governments a rigid framework of international corporate law designed to exclusively protect the interests of corporations, relieving them of all financial risk and social and environmental responsibility. From then on, every investment they make will effectively be backstopped by our governments (and by extension, you and me); it will be too-big-to-fail writ on an unimaginable scale.”
It seems that all the attention provided in business news is diverted away from the totality of integration under the auspices of a pseudo and hostile legal framework that only deepen the aggregate control over the social, political, economic and global functions, is silent by design.
So when Suarez-Villa, Luis, publishes in Globalization and Technocapitalism: the political economy of corporate power and technological domination, page 203, we all should take notice.
“It should not surprise, therefore, that a major objective of the fast neo-imperialism is to establish corporatocratic governance whenever and wherever campaigns of conquest happen to be carried out. Fast militarism thereby comes into the scene, whenever aggression is executive. Military conquest for its own sake is pointless, and the fast neo-imperialism has no real reason for being, unless the imposition of corporatocracy is part of the end game of conquest.”
The re-establishment of a neo-feudalism is not a function of privatization, when market forces are unleashed from the choke hold that keeps real competition at bay. Allowing businesses to vie for consumer favor is healthy under a free market economy. Today, there are few examples where the corporatocracy allows for free trading in goods and services.
This is the important lesson that techno corporatism refuses to accept. As the bondage economy expands, the serfs become expendable. Since the consumer economy is shifting into a financial speculation arena, the elites see little reason for continued subsistence of the bottom feeders, since they are not needed to till their estates.
Knowing this object lesson is the actual answer to the Corporatism 101 studies.
Maybe Bruce E. Levine PhD should be teaching class. Get Up, Stand Up: Uniting Populists, Energizing the Defeated, and Battling the Corporate Elite, argues that “individuals must recover self-respect, and a people must regain collective confidence that they can succeed at eliminating top-down controls. Get Up, Stand Up describes how we can recover dignity, confidence, and the energy to do battle.”
It all starts with a required understanding that the Corporatocracy economy is inherently destructive to individual liberty. If people are unable to learn this fact, life on earth will sink into oblivion.
Entrepreneurs’ versus the corporatists’ mode of business culture are separated by a vastly different view of enterprise. The former deems his work as innovative, creative and beneficial to customers. The later see the corporate organization as an institution end of itself. Competition makes the business pioneer sharp and driven, while any competitor is targeted for demise within the corporative culture. Buyouts of ventures that show promise may be a payoff reward for the struggling enterpriser, but the corporatist CEO sees the absorption of new technology as a twofold gain. Acquiring the means to create or advance market share and stamping out any future competitive threats.
This corporatist culture actually has merged with the definitive enforcement partner; namely, the state. The morphing of anti-trust safeguards into a system of crony alliance protection is the current standard for the globalist economy. The implication is that a company needs to pay to play and become “Free Trade” proponents to even remain in business.
Thomas E. Woods Jr. cites a prime example of the contemporary corporate-government fascism that controls the global economy, with the example of Government Electric. In The Cultural Costs of Corporatism: How Government-Business Collusion Denigrates the Entrepreneur and Rewards the Sycophant, the formula is set.
The best case study in political entrepreneurship may be General Electric. CEO Jeffrey Immelt pretty clearly laid out his approach in a letter to stockholders in the depths of the 2008–9 recession, and just days after the inauguration of Barack Obama, who promised to “remake America.”
“The global economy, and capitalism, will be “reset” in several ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner. . . . Successful companies won’t just “hunker down”; they will seek out the new opportunities in a reset world.”
Later in the letter, Immelt stated more directly that GE saw the government as its best potential customer:
“GE’s broad technical portfolio positions us as a natural partner as the role of government increases in the current crisis. Over the past decade, we have positioned GE to lead in the “big themes.” These include emerging market growth, clean energy, and sustainable healthcare. . . .
Governments will invest to stimulate their economies, solve societal problems, and create jobs. GE’s broad portfolio and expertise position us as a natural partner. Tackling important problems together will require teamwork and respect between business, government, and society. We know how to do this and intend to play an important part in solving these essential challenges.”
If success is measured by the amount of retained money or return on assets and especially how little taxes are paid, the GE mold is frightening. Corporatism: The Real World of Corporate Favoritism reports.
“General Electric’s annual SEC 10-K filing for 2011 (filed February 24, 2012) reveals that the company paid at most 2.3% of its $81.2 billion in U.S. pretax profits in federal income taxes over the last 10 years.
Indeed, General Electric, the nation’s largest corporation, paid no federal corporate taxes in the United States in 2010, according to a report in The New York Times.”
The book, Rescuing Capitalism from Corporatism by John David Rose documents the long record of GE’s criminal price fixing going back to 1911 anti-trust violations. By any reasonable criteria, over a century of predatory pricing and monopolist market domination is a definite cultural deficiency.
Corp Watch contributor Charlie Cray lists a series of General Electric transgression topics and examples. Some of the more relevant items are:
Defense Contracting Fraud
Violations of Securities Laws
History of GE Labor Relations
Environment and product safety
Anti-competitive and consumer protection
Unlawful Debt Collection Practices
It would be difficult to explain away such a pattern of conduct as merely the side effects of becoming a prevailing behemoth. More to the point, the mentality that allows and encourages such behavior is a fundamental component that invigorates transgressions against ethical business practices. The net effects upon society, encourages the corporatist mindset to consolidate their state sponsor cronyism.
It seems unnecessary to dispute the negative consequences of “too big to fail” after the 2008 collapse. However, the concept of The Economic System of Corporatism offers this assessment.
“Coupled with the anti-market sentiments of the medieval culture there was the notion that the rulers of the state had a vital role in promoting social justice. Thus corporatism was formulated as a system that emphasized the positive role of the state in guaranteeing social justice and suppressing the moral and social chaos of the population pursuing their own individual self-interests. And above all else, as a political economic philosophy corporatism was flexible. It could tolerate private enterprise within limits and justify major projects of the state. Corporatism has sometimes been labeled as a Third Way or a mixed economy, a synthesis of capitalism and socialism, but it is in fact a separate, distinctive political economic system.”
Yes, once again, let’s called this synthesis by its true name; fascism. Just how well has the government achieved this utopian and fantasy notion that government is in the business of dispensing social justice?
At the heart of the corporatist mindset is control of markets and elimination of competitors. Government survives on deceiving the public and transnational corporations thrive on working their partnership relations with official authorities.
GE may be one of the most obvious offenders; nonetheless, the formulation of politics picking winners and losers based upon bribes and favoritism is a dreadful system. Preference for an actual free market based upon a decentralized merchant economy is the only alternative to globalism, which is enslaving the world.
The corporatist culture fuels the despotism, which society is so willing to accept. Voting how to spend your money is one of the few options a consumer has. Business collaborators with government crooks feed the abuses that GE perfects so well. This confederation in crime naturally harms ordinary citizens.
Author’s note: “War Street” is the simplified name that I’ve given to the war-mongers, weapons manufacturers and military-industrial complex members who pretty much own America right now — along with their buddies on Wall Street and K Street of course.
This is my own personal list. Feel free to jump right in with a list of your own.
1. That the Civil War was fought to free the slaves. Nah, that was solely an afterthought. The real reason for the Civil War was the lust for $$$$ and power. Like war always is for.
2. That holding the Union together back in 1860 was a good thing. A good thing for who? Dontcha sometimes just wish that The South had been allowed to go on its own merry way back then — so that we now don’t have to waste billions of Yankee dollars on Red State racists, corrupt senators, war-mongers and welfare queens? Boy, I could surely live without Mitch McConnell. He’s our ultimate grand prize for The North having won the 1860 Civil War? Really?
3. “Remember the Maine!” Yeah right. Apparently the sinking of the Maine was a false-flag operation to force Americans into a brutal war with Spain. http://zinnedproject.org/
4. The 1908 invasion of the Philippines — wherein approximately one-sixth of its population was massacred by the US Army in the name of bringing “Democracy” to Filipinos. They could have lived without that one — literally.
5. World War I? Really? Do you even have to ask why this war was based on lies — such as that the Huns were out to murder our babies? Or that the Lusitania was torpedoed by the evil Kaiser when actually it was illegally carrying six million pounds of explosives on board a munitions transport ship disguised at a cruise liner before it blew up. Or how about the famous “Zimmerman Telegram” lie?
6. Pearl Harbor. Roosevelt knew. Of course he did. And Senator Prescott Bush invested in Nazi Germany bigtime. And after WW II was over, our very own CIA brought 1,000 Nazi officers over here to help J. Edgar Hoover, Allen Dulles and Joe McCarthy organize their new Cold War storm-troopers. And today “Corporatism,” as Mussolini called it, is now king in the USA — and all over the rest of world too. Unbelievable. Was there any reason at all why we fought World War II? http://www.nytimes.com/2014/
7. The invasion of Korea. Again, that phony “Democracy” thing came into play — as it has again and again and again as Wall Street and War Street set up dictator after dictator across the globe and then whitewashed these brutal bad guys to the gullible American public back home:
7.a Chaing Kai-shek, “Our democratic ally in Asia”
7.b The Shah of Iran, “Our democratic ally in the Middle East.”
7.c Fulgencio Batista, “Our democratic ally in Cuba.”
7.d Apartheid South Africa, “Our democratic ally in Africa.”
7.d Francisco Franco, “Our democratic ally in Spain.”
7.e Syngman Rhee, “Our democratic ally in South Korea.”
7.f. Papa Doc Duvalier, “Our democratic ally in Haiti.”
7.g Augusto Pinochet, “Our democratic ally in Chile.”
7.h Manuel Noriega, “Our democratic ally in Panama.”
7.i Mubarak and Sisi, “Our democratic allies in Egypt.” http://www.amec.org.za/
7.i King Salman al Saud, “Our democratic ally in Saudi Arabia.” http://thetyee.ca/Opinion/
Although I must admit that the new Saudi king now appears to be actually lightening up and coming to his senses a bit — not an easy task for someone who allegedly has Alzheimers http://www.huffingtonpost.com/
However, Saudi Arabia still has a “Democratic” track record that would impress even Hitler, Stalin and Genghis Khan. In Saudi Arabia today, for example, the government holds a public beheading on the average of once every four days. No wonder that their ISIS protegees are handy with swords. But don’t even get me started on the Saudis! http://www.iacenter.org/
There are approximately 50 other “Democratic ally” dictators that I could list here too but am running out of space. I don’t wanna be doing this forever you know.
8. The Kennedy assassination. Do you really believe that one lone gunman could have gotten through all that security without any help, or could have made that incredible kill shot with a BB gun from behind Kennedy and very far away — and yet still manage to hit the front of Kennedy’s head? Then I have a bridge to sell you. Lee Harvey Oswald was definitely not Chris Kyle. He was a patsy.
9. Vietnam! The Gulf of Tonkin incident was made-up baloney.
10. Remember all those lies we were told by that “low-life scum” Henry Kissinger during his vicious secret bombings of Cambodian rice paddies in 1969, wherein approximately 600,000 poor Cambodian farmers were massacred from the skies? “Never happened,” said Henry. Plausible deniability is all that matters to him. http://www.
11. The Iran-Contra scandal. The death squads in Central America. And all that BS about “Americans do not torture” — even as War Street was running the School of the Americas right under our noses.
12. What came next? Oh yeah. That Milosevic nightmare. Milosevic was America’s go-to guy — until he wasn’t. Didn’t you ever wonder why no one did anything to stop him until after socialist Yugoslavia was just a hot mess?
13. Saudi Arabia. Again. They told us that the Saudis were the good guys, but actually Saudi Arabia is where most of the 9-11 hijackers came from. http://www.newyorker.com/news/
14. Israel, said to be “Our democratic ally in the Middle East.” But if Israel is a democracy, I’ll eat my hat. Just ask the Moroccan-Israeli Jews living there. http://vimeo.com/60814711 Or the Ethiopian-Israeli Jews.
Violent and shifty Israeli neo-colonialists have also committed despicable crime after despicable crime against humanity in the most undemocratic fashion, including their brutal, traitorous, dastardly and deliberate attempt to sink the USS Liberty, a false-flag operation approved and facilitated by War Street itself https://www.youtube.com/watch?
Just watch this horrifying film of Israeli neo-colonials’ cowardly destruction of a whole city in Gaza, using US weapons and $$$$: https://www.youtube.com/watch?
15. Saddam Husein, who we were told was Ronald Reagan’s hot new Middle East boy wonder — until he wasn’t. See #12.
16. And then there was that first Gulf war, totally based on a lie. The Kuwaitis were slant-drilling into Iraqi oil reserves, a big no-no, and so Pappy Bush told Saddam, “Sure, they deserve it, go ahead and invade…” And remember all those incubator babies too? Lies upon lies.
17. September 11, 2001. Bush knew. And let it happen. http://www.paulcraigroberts.
18. As a result of that infamous “Second Pearl Harbor” on Bush’s watch, we were once again lied to and told that we needed to invade Afghanistan instead of Saudi Arabia. And that we needed to invade Iraq.
18.a. John McCain himself lied right to my face in Baghdad back in 2007 — but I still can’t decide if it was a lie of commission or omission. At a press conference in the Green Zone, McCain told us that it was perfectly safe for him to walk around a marketplace in Baghdad — but neglected to tell us that he was also protected by body armor, humvees and helicopters, and also put a battalion of grunts in harm’s way while he did it. http://jpstillwater.blogspot.
Just that same morning, I had been told by Major Hernandez of CPIC that if I wanted to go outside of the Green Zone without a major armored escort, I would be dead within five minutes after crossing the 14th of July Bridge. Luckily I believed Major Hernandez and not John McCain.
18.b. That, after 9-11, we also needed to invade Libya, Syria, Yemen, Lebanon, I forget where all else, if we were ever to be safe. And that we needed to invade oodles of other countries all over the world in order to “Keep America Safe”. That was the biggest lie so far. Are we safe yet?
19. That Muammar Gaddafi in Libya was standing in the way of “Democracy”. Well, he sure isn’t standing in the way any more! Turns out he was standing in the way of anarchy. But you get what you pay for.
20. That Bashar Assad in Syria is in cahoots with ISIS. Yeah right. NATO, Turkey, Israel, Saudi Arabia and the Pentagon are in cahoots with ISIS. Assad is only the victim here, the one who is getting his country torn apart. Why would he want to support the brigands who are robbing his home? http://www.counterpunch.org/
21. “I am Charlie.” No, you aren’t. “I am the CIA”. Watching that film of the killers getting into their getaway car was just a big joke. They took their time. They even put their AK-47 on the roof of the car while they fiddled with their backpacks and chatted about the weather, obviously knowing that they were protected. But then they weren’t. See # 12. https://www.youtube.com/watch?
22. The debacle in Ukraine. “We’re not involved,” the Pentagon tells me. Then how come when Flight MH17 was tragically shot down by the Ukies, War Street went to such lengths to blame the event on Russia and not on the neo-Nazi stooges they had set up in Kiev? https://consortiumnews.com/
23. That the torture and mass murders at Auschwitz and the “preemptive war” on and occupation of Holland, France, Greece, Norway, Denmark and Poland by Hitler’s minions were obviously war crimes — but the torture and mass murders at Abu Ghraib, Guantanamo and Gaza, and “preemptive war” on and occupation of Afghanistan, Iraq, Libya, Syria, Lebanon and Palestine by Bush and Obama’s minions aren’t. https://www.youtube.com/watch?
That Nuremberg standards apply to war crimes committed 70 years ago but no longer apply to war crimes committed today.
24. That we are always being told the truth by the New York Times and Fox News. Yeah right. Despite the fact that War Street just loves the “Newspaper of record” to pieces, the Times needs to wash its mouth out with soap. And Politifact just announced that 60% of everything Fox News tells us is lies. 60%? Yikes! http://www.politifact.com/
25. That War is better than Peace.
Sorry, that’s all of the War Street lies I can think of right now. But I’m sure there are many more out there, many many more lies that I’ve missed. Transparency is clearly and obviously not an American value — and democracy doesn’t seem to be one either.
But I will tell you one thing that I know for sure: I won’t ever be fooled again. And the rest of America needs to avoid being suckered down the garden path to War Street as well.
Remember the days when an entrepreneur would perfect their whiz kid ideas in a garage and bring them to market? Did Steve Wozniak ever envision the behemoth that Apple would become and the cult camp that worships every new product that flows from their robotic coolie assembly lines? Riots Over Rotten Apple Mania describes an example of the forbidding underbelly of corporatist business model that Apple exemplifies so dramatically. Notwithstanding this record of 21th century sweat factories, do the venture vulture capitalists of Silicon Valley interject added value in the products and services they fund or do this culture of touting IPO offerings simply game a system to print money based upon imaginary dreams?
The Economic Policy Journal article, Silicon Valley Investor Joins The Corporatism March, cites Ron Conway, a Silicon Valley angel investor, who has backed many of the tech companies that we know and love.”
“Conway wrote a piece for Techcrunch where he’s calling for the other Fascism. Remember the Fascist Mussolini from Italy. It was he who said, “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.”
“Gone are the days when the tech community can innovate and run their businesses in spite of government. As we saw with the SOPA/PIPA debate, public policy has a direct and significant impact on startups and the investors who support them.
Whether it is regulations that stifle innovation or tax policies that hinder job creation, government has a major role in the success or failure of a startup. It is critically important for the tech community to engage in public policy.”
Silicon Valley companies are not limited to IT development, just as much as investment funding is not wholly occupied from Wall Street firms. The principle is the same wherever the money comes from, as the Rise of the “venture corporatists” explores in an account about John Doerr of Kleiner Perkins Caufield & Byers.
“None of the alternative energy sources being developed today – solar, wind, geothermal, or biomass–is close to financial sustainability, which means that the supersize returns V.C. funds depend on will require massive government subsidies, regulations, and mandates… So Doerr has launched an audacious campaign to invest millions in handpicked political candidates and influential political action committees, to push for subsidies and pro-greentech policies and require the government to purchase the kinds of fuels and technologies his startups will be marketing. Since 2000, Doerr and his wife, Ann, have contributed more than $31 million to political candidates and causes.
In essence, Doerr is helping to create the biggest new market the world has seen since the dawn of the oil industry–and asking for taxpayer dollars to do it.”
“Green” alternative energy has more to do with replicating money than producing sustainable energy. Instead of writing code for computer-generated speech, the paradigm at play buys the ambassadors of government policy, circuitously as part of the business plan.
Lachlan Markay sums up the paradox for investors and the public in The Venture Corporatists. “As long as green technology remains not simply an economic venture but a moral one, taxpayers will continue to nobly lose money as politically connected “social entrepreneurs” reap a windfall.”
Here lies the rub. What exactly is the moral imperative? The lament of Alex Shud Bayley in No, I still don’t want to work for Google makes a universal point.
“Since I’ve been out of the Silicon-Valley-centred tech industry, I’ve become increasingly convinced that it’s morally bankrupt and essentially toxic to our society. Companies like Google and Facebook — in common with most public companies — have interests that are frequently in conflict with the wellbeing of — I was going to say their customers or their users, but I’ll say “people” in general, since it’s wider than that. People who use their systems directly, people who don’t — we’re all affected by it, and although some of the outcomes are positive a disturbingly high number of them are negative: the erosion of privacy, of consumer rights, of the public domain and fair use, of meaningful connections between people and a sense of true community, of beauty and care taken in craftsmanship, of our very physical wellbeing. No amount of employee benefits or underfunded Google.org projects can counteract that.”
The notion that Silicon Valley business enterprises automatically advance civilization and improve the human condition is one of the most disturbing viewpoints that have infected the smart phone sect. Placing the blame solely on tech executives avoids the reprehensible relationship that Ron Conway is so eager to exploit.
The article, Why DC And Silicon Valley Don’t Mix Well seems to agree.
“The thing that DC should be most focused on is “fixes to previous government efforts that tried but failed to fix a problem that turned out not to need a regulatory solution.” Other industries seem to want handouts and investments and the like, but you don’t see that much in Silicon Valley.”
However, some executives excel in screwing up a once reliable service. Silicon Valley corporatist companies often fail. The next likely candidate for a downfall is Yahoo. Marissa Mayer’s tenure as CEO may be numbered according to Eric Jackson, founder and managing partner of hedge fund Ironfire Capital.
“Jackson says that since Mayer took over she has spent $2 billion buying companies and that most of those acquisitions have been for naught.
“Can you name any other acquisition Yahoo has made besides Tumblr? If not, what does that say about them?” Jackson writes at Forbes. “If these small acquisitions were mostly talent-driven as characterized by management, why was it necessary to spend, say, $30 million to hire 3 people from a dying company? Was this really the best use of shareholder capital? Yahoo should not [be] responsible for bailing out VCs from their failed investments. This isn’t TARP.”
Deplorably, many tech corporatists are mismanaged like Yahoo. Divesting a significant portion of Yahoo’s stake at the Alibaba IPO, raises a much needed current valuation, but what does this transaction do to improve the service? The Corporatists only care about tapping the rigged markets for immediate gain.
No one has ever claimed that the financial markets are a level playing field. Equities, bonds, currencies, options and futures are not arenas that operate by equivalent standards for all parties. Great fortunes were built not by chance, but on superior information, known to the few. Professional traders are not risk gamblers, but operate on the premise of special advantage. Through advance and proprietary techniques that reduce exposure hazards and provide exclusive head start triggers, which virtually guarantee profits, the elite firms dominate Wall Street.
Business Week states in the article, Is High-Frequency Trading Insider Trading?, that
“Classically defined, insider trading means having access to material, non-public information before it reaches the rest of the market; it’s like getting a heads-up about a merger before it’s announced, or maybe a phone call from a Goldman Sachs (GS) board member saying that Warren Buffett is about to invest $5 billion in the bank.”
With the introduction of super computers and Financial Algorithmic Trading, the era of generated trading strategies emerged that fill automatically, when predetermined prices are reached. Some would argue that exchanges were simply applying the latest technology to the time honored system of flipping positions.
Now we live in the High-Frequency matrix, based upon millisecond reactions, which activates on information that is not offered to everyone at the same time. Forbes explains accordingly in High Frequency Insider Trading – And It’s Completely Legal!
“According to a team of Wall Street Journal reporters from an article on June 12, the practice works to the advantage of professional traders. “Economic reports from public universities, trade groups and other nongovernmental organizations can move markets as surely as official data from the U.S. government,” according to the Journal’s team of four reporters: Brody Mullins, Michael Rothfeld, Tom McGinty, Jenny Strasburg. “But unlike government reports, where pains are taken to make certain no one gets them ahead of time, few rules control release of nongovernmental economic reports. Unknown to many investors, selling early access is routine.”
Access to this highly valuable information is the key. And such access comes at a price. Rapid traders pay information companies like Thomson Reuters thousands of dollars each month for a look at such reports, moments before they are widely disseminated. And it’s in those few key seconds, that they make their killing.”
Seemingly, this high-tech access to supercharged information is the newest version of insider information. The following assessment is also from the same Business Week account.
“New York Attorney General Eric Schneiderman has called HFT “insider trading 2.0″ on a number of occasions. His office is looking into the relationships between traders, brokers and exchanges and asking whether it all needs to be reformed. The FBI spent the last year looking to uncover manipulative trading practices among HFT firms; the federal agency is now asking speed traders to come forward as whistleblowers.”
Chicago is not much different from their Wall Street exchange cousins. Litigation over this practice is referenced in the report, CME Sued For Giving “High-Frequency Traders Peek At Market” Since 2007.
“In a lawsuit that was just filed by lead plaintiff William Charles Braman, seeking class-action status, and filed on behalf of all users of real-time futures market data and futures contracts listed on the CBOT and CME from 2007 to now, the CME is alleged to have sold order information to high-frequency traders ahead of other market participants.
Apparently it took the general public a Michael Lewis book to reread out post from October 2012 in which we showed that an estimated over 30% of CME revenues were made from HFT – in other words from selling proprietary data in direct feeds to high-paying subscribers, that hits collocated servers ahead of the consolidated tape.”
Well, what the layman would see as obvious, influential security lawyers see as neat ambiguity. The Forbes story continues.
“But it is legal, and so is trading on the advance peeks,” the Journal reported. “Even as securities rules bar companies from selective data disclosure, and as authorities vigorously pursue insider trading in all its forms, no law prevents investors from trading on nonpublic information they have legally purchased from other private entities. Trading would be illegal only if the information was passed through a breach of trust, said securities lawyers.”
It should be clear that the financial system is designed to accommodate creative and innovative methods of price manipulation. The defenders of “Crony Capitalism” see such stratagems as a 21th century sophisticated version of robber baron corporatism, in the fine tradition of Jay Gould and James Fisk. Clipping an ensured few cents on billions of transactions is surely a slick system.
Fabricating automatic returns is bad enough, but what is the public risk of producing a real panic when High-Frequency momentum turns into a full propelled blow off?
When a robot computer generates buy or sell orders, the difference between winning and losing is based upon the speed of the information used to place and execute orders. If your algobots taps into info, not available to the entire market, the game is rigged.
Matthew O’Brien in Everything You Need to Know About High-Frequency Trading, makes a valid point.
“Every HFT strategy depends on not only being faster than ordinary investors, but being faster than each other too. Anytime somebody comes up with a new way to cut a few microseconds—that is, a millionth of a second—off of trading time, they have to spend whatever it takes to do it. Otherwise, they’ll lose out to their competitors who do.”
Imagine this disconnect with real economic reality that place trades, with little concern if it is a long or short. Only the speed matters. The conclusion from the Negotium essay Financial Algorithmic Trading, holds true. “Banning the interconnect of proprietary programs that amalgamate directly into the systems on the floor of the exchanges is the only way to prevent the integration of systemic collusion among the 1 and 0 computer programs.”
As the US and EU apply sanctions on Russia over its annexation’ of Crimea, JP Sottile reveals the corporate annexation of Ukraine. For Cargill, Chevron, Monsanto, there’s a gold mine of profits to be made from agri-business and energy exploitation.
On 12th January 2014, a reported 50,000 “pro-Western” Ukrainiansdescended upon Kiev’s Independence Square to protest against the government of President Viktor Yanukovych.
Stoked in part by an attack on opposition leader Yuriy Lutsenko, the protest marked the beginning of the end of Yanukovych’s four year-long government.
That same day, the Financial Timesreported a major deal for US agribusiness titan Cargill.
Business confidence never faltered
Despite the turmoil within Ukrainian politics after Yanukovych rejected a major trade deal with the European Union just seven weeks earlier, Cargill was confident enough about the future to fork over $200 million to buy a stake in Ukraine’s UkrLandFarming.
According to the Financial Times, UkrLandFarming is the world’s eighth-largest land cultivator and second biggest egg producer. And those aren’t the only eggs in Cargill’s increasingly ample basket.
On 13th December 2013, Cargill announced the purchase of a stake in a Black Sea grain terminal at Novorossiysk on Russia’s Black Sea coast.
The port — to the east of Russia’s strategically and historically important Crimean naval base — gives them a major entry-point to Russian markets and adds them to the list of Big Ag companies investing in ports around the Black Sea, both in Russia and Ukraine.
Cargill has been in Ukraine for over two decades, investing in grain elevators and acquiring a major Ukrainian animal feed company in 2011. And, based on its investment in UkrLandFarming, Cargill was decidedly confident amidst the post-EU deal chaos.
It’s a stark juxtaposition to the alarm bells ringing out from the US media, bellicose politicians on Capitol Hill and perplexed policymakers in the White House.
Instability?… What Instablility?
It’s even starker when compared to the anxiety expressed by Morgan Williams, President and CEO of the US-Ukraine Business Council — which, according to its website, has been“promoting US-Ukraine business relations since 1995.”
Williams was interviewed by the International Business Times on March 13 and, despite Cargill’s demonstrated willingness to spend, he said, “The instability has forced businesses to just go about their daily business and not make future plans for investment, expansion and hiring more employees.”
In fact, Williams, who does double-duty as Director of Government Affairs at the private equity firm SigmaBleyzer, claimed, “Business plans have been at a standstill.”
Apparently, he wasn’t aware of Cargill’s investment, which is odd given the fact that he could’ve simply called Van A. Yeutter, Vice President for Corporate Affairs at Cargill, and asked him about his company’s quite active business plan.
There is little doubt Williams has the phone number because Mr. Yuetter serves on the Executive Committee of the selfsame US-Ukraine Business Council. It’s quite a cozy investment club, too.
According to his SigmaBleyzer profile, Williams “started his work regarding Ukraine in 1992″ and has since advised American agribusinesses “investing in the former Soviet Union.” As an experienced fixer for Big Ag, he must be fairly friendly with the folks on the Executive Committee.
Big Ag Luminaries — Monsanto, Eli Lilly, Dupont, John Deere…
And what a committee it is — it’s a veritable who’s who of Big Ag. Among the luminaries working tirelessly and no doubt selflessly for a better, freer Ukraine are:
- Melissa Agustin, Director, International Government Affairs & Trade for Monsanto;
- Brigitte Dias Ferreira, Counsel, International Affairs for John Deere;
- Steven Nadherny, Director, Institutional Relations for agriculture equipment-makerCNH Industrial;
- Jeff Rowe, Regional Director for DuPont Pioneer;
- John F. Steele, Director, International Affairs for Eli Lilly & Company.
And, of course, Cargill’s Van A. Yeutter. But Cargill isn’t alone in their warm feelings toward Ukraine. As Reuters reported in May 2013, Monsanto — the largest seed company in the world — plans to build a $140 million “non-GM (genetically modified) corn seed plant in Ukraine.”
And right after the decision on the EU trade deal, Jesus Madrazo, Monsanto’s Vice President for Corporate Engagement, reaffirmed his company’s “commitment to Ukraine”and “the importance of creating a favorable environment that encourages innovation and fosters the continued development of agriculture.”
Monsanto’s strategy includes a little “hearts and minds” public relations, too. On the heels of Mr. Madrazo’s reaffirmation, Monsanto announced “a social development program titled ‘Grain Basket of the Future’ to help rural villagers in the country improve their quality of life.”
The initiative will dole out grants of up to $25,000 to develop programs providing“educational opportunities, community empowerment, or small business development.”
Immense Economic Importance
The well-crafted moniker ‘Grain Basket of the Future’ is telling because, once upon a time, Ukraine was known as ‘the breadbasket’ of the Soviet Union. The CIA ranks Soviet-era Ukraine second only to Mother Russia as the “most economically important component of the former Soviet Union.”
In many ways, the farmland of Ukraine was the backbone of the USSR. Its fertile black soil generated over a quarter of the USSR’s agriculture. It exported substantial quantities of food to other republics and its farms generated four times the output of the next-ranking republic.
Although Ukraine’s agricultural output plummeted in the first decade after the break-up of the Soviet Union, the farming sector has been growing spectacularly in recent years.
While Europe struggled to shake-off the Great Recession, Ukraine’s agriculture sector grew 13.7% in 2013.
According to the Centre for Eastern Studies, Ukraine’s agricultural exports rose from $4.3 billion in 2005 to $17.9 billion in 2012 and, harkening the heyday of the USSR, farming currently accounts for 25% of its total exports. Ukraine is also the world’s third-largest exporter of wheat and of corn. And corn is not just food. It is also ethanol.
But people gotta eat — particularly in Europe. As Frank Holmes of US Global Investorsassessed in 2011, Ukraine is poised to become Europe’s butcher. Meat is difficult to ship, but Ukraine is perfectly located to satiate Europe’s hunger.
Just two days after Cargill bought into UkrLandFarming, Global Meat News reported a huge forecasted spike in “all kinds” of Ukrainian meat exports, with an increase of 8.1% overall and staggering 71.4% spike in pork exports.
No wonder Eli Lilly is represented on the US-Ukraine Business Council’s Executive Committee. Its Elanco Animal Health unit is a major manufacturer of feed supplements.
And it is also notable that Monsanto’s planned seed plant is non-GMO, perhaps anticipating an emerging GMO-unfriendly European market and Europe’s growing appetite for organic foods. When it comes to Big Ag’s profitable future in Europe, the stakes couldn’t be higher.
A Long String of Russian Losses
For Russia and its hampered farming economy, it’s another in a long string of losses to US encroachment — from NATO expansion into Eastern Europe to US military presence to its south and onto a major shale gas development deal recently signed by Chevron in Ukraine.
So, why was Big Ag so bullish on Ukraine, even in the face of so much uncertainty and the predictable reaction by Russia?
The answer is that the seeds of Ukraine’s turn from Russia have been sown for the last two decades by the persistent Cold War alliance between corporations and foreign policy. It’s a version of the ‘Deep State‘ that is usually associated with the oil and defense industries, but also exists in America’s other heavily subsidized industry — agriculture.
Morgan Williams is at the nexus of Big Ag’s alliance with US foreign policy. To wit,SigmaBleyzer touts Mr. Williams’ work with “various agencies of the US government, members of Congress, congressional committees, the Embassy of Ukraine to the US, international financial institutions, think tanks and other organizations on US-Ukraine business, trade, investment and economic development issues.”
Freedom — For US Business
As President of the US-Ukraine Business Council, Williams has access to Council cohort — David Kramer, President of Freedom House. Officially a non-governmental organization, it has been linked with overt and covert ‘democracy’ efforts in places where the door isn’t open to American interests — aka US corporations.
Freedom House, the National Endowment for Democracy and National Democratic Institute helped fund and support the Ukrainian ‘Orange Revolution’ in 2004. Freedom House is funded directly by the US Government, the National Endowment for Democracy and the US Department of State.
David Kramer is a former Deputy Assistant Secretary of State for European and Eurasian Affairs and, according to his Freedom House bio page, formerly a Senior Fellow at the Project for the New American Century.
Nuland’s $5 Billion For Ukrainian ‘Democracy’
That puts Kramer and, by one degree of separation, Big Ag fixer Morgan Williams in the company of PNAC co-founder Robert Kagan who, as coincidence would have it, is married to Victoria “F*ck the EU” Nuland, the current Assistant Secretary of State for European and Eurasian Affairs.
Interestingly enough, Ms. Nuland spoke to the US-Ukrainian Foundation last 13th December, extolling the virtues of the Euromaidan movement as the embodiment of “the principles and values that are the cornerstones for all free democracies.”
Nuland also told the group that the United States had invested more than $5 billion in support of Ukraine’s “European aspirations” — meaning pulling Ukraine away from Russia. She made her remarks on a dais featuring a backdrop emblazoned with a Chevron logo.
Also, her colleague and phone call buddy US Ambassador to Ukraine Geoffrey Pyatt helped Chevron cook up their 50-year shale gas deal right in Russia’s kitchen.
Coca-Cola, Exxon-Mobil, Raytheon
Although Chevron sponsored that event, it is not listed as a supporter of the Foundation. But the Foundation does list the Coca-Cola Company, ExxonMobil and Raytheon as major sponsors. And, to close the circle of influence, the US-Ukraine Business Council is also listed as a supporter.
Which brings the story back to Big Ag’s fixer — Morgan Williams.
Although he was glum about the current state of investment in Ukraine, he’s gotta wear shades when he looks into the future. He told the International Business Times:
“The potential here for agriculture / agribusiness is amazing … Production here could double. The world needs the food Ukraine could produce in the future. Ukraine’s agriculture could be a real gold mine.”
Of course, his priority is to ensure that the bread of well-connected businesses gets lavishly buttered in Russia’s former breadbasket. And there is no better connected group of Ukraine-interested corporations than American agribusiness.
Given the extent of US official involvement in Ukrainian politics — including the interesting fact that Ambassador Pyatt pledged US assistance to the new government in investigating and rooting-out corruption — Cargill’s seemingly risky investment strategy probably wasn’t that risky, after all.
J P Sottile is a freelance journalist, radio co-host, documentary filmmaker and former broadcast news producer in Washington, D.C. His weekly show, Inside the Headlines w/ The Newsvandal, co-hosted by James Moore, airs every Friday on KRUU-FM in Fairfield, Iowa. He blogs at Newsvandal.com.
Source: JP Sottile | Ecologist
I just finished reading Malcolm Gladwell’s book, “David and Goliath” — wherein Gladwell says that, in the course of any human interaction, there will always be a graphic curve of diminishing returns when it comes to maximizing the use of force in order to achieve one’s goals.
In other words, always punching other people’s lights out in order to get your own way can very quickly become counterproductive. Good grief, I think that Gladwell might be onto something here.
If the maximum use of force in order to obtain one’s goals had been successful in Iraq (and assuming that said goals were to depose a dictator and not just to create chaos and steal oil), then the Bush-led invasion would never have been such a dismal failure and there never would have been such a disastrous resistance war there — one that still keeps rolling right along to this day. So much for Shock and Awe.
If maximum use of force really worked, then Europe would still be saluting Hitler.
Slavery would still be on the books in Georgia and Alabama because of all those happy slaves it created. Or, alternatively, segregation would still be a huge success and MLK would have had no effect at all on it.
Descendants of Genghis Khan would still be running Russia and China.
There would be no Child Protective Services anywhere and parents would still be beating their kids to within an inch of their lives. And I would still be lovingly obeying my mean older sister.
Women would look forward to being placed in harems and having a dozen babies each and would never demand the right to be pro-choice. “Barefoot and pregnant.” They would know their place as slaves to their husbands and not strive for anything else. Rape would not be a problem for women and girls.
Those viscous stormtroopers who illegally seized control of Palestine 65 years ago by ruthlessly wiping out hundreds of villages and slaughtering Christians and Muslims by the thousands? They would not still be getting resistance from the Occupied Territories even now. And the current Israeli neo-cons’ constant brutal “eye for an eye” faux cleverness wouldn’t have forced Al Qaeda out of the remote caves of Afghanistan where it was holed up in 2001 — and forced it into not-so-remote southern Syria where Al Qaeda is now, right at Israel’s front door.
And there would not have been 30 years of The Troubles in Northern Ireland either.
And in South America, Pinochet’s ghost would still be running Chile, Argentina’s Dirty War would have made Henry Kissinger proud, the billions Reagan spent on killing peasants in Guatemala would not have been wasted, Batista’s grandson (not Castro’s brother) would still be ruling Cuba and all those tin-pot dictators that the CIA supported in Central and South America over the years would be in Heaven right now — not in Hell. And phrases like “Banana Republic” and “Military Junta” and “Drug Cartel” would all stir our hearts with pride instead of just making us queasy.
The Soviet Union would still exist — and Afghans and Chechyans would just love being a part of it. People there would stop praising Tolstoy, Tchaikovsky and Baryshnikov and start even more fan clubs for Stalin.
We would have “Fascism” and “Corporatism” engraved on our dimes now instead of just that stupid old word “Liberty”. And “Mein Kampf” — not “Romeo and Juliette” — would be required reading in all American high schools.
All seven billion of us human beings, when we were babies, would have been spanked every time we cried, been locked in closets for days for the slightest infraction and would have thrived on harsh whippings — and that would have been that. And as a result we would all have grown up to become obedient citizens, not axe-murdering psychopaths.
Jesus would have been just another loser with wild ideas. Even Mohammed and the Buddha would have been buked and scorned (and sent to bed without any Last Supper). http://www.youtube.com/watch?
Everyone in America would be happily welcoming the NSA and the militarization of our police forces with open arms right now. More tanks driving down Main Street? More surveillance on our phones? More destruction of our Constitutional rights? Bring it on!
And Baby Doc and his Bon Ton Macoute would still be running Haiti and Jean-Bertrand Aristide would have been laughed out of the country instead of becoming a hero almost as legendary as Toussaint L’Ouverture.
So why don’t whips and chains and oppression and torture work out so well in the long run? One would think that they would. Isn’t Fear the greatest motivator? According to Gladwell, apparently not.
And why is “Do unto others as you would have others do unto you” still such a hot item? You tell me. Which way would you prefer to be treated? As a friend or as a slave? Which way of being treated would piss you off to the degree that you would take torches and pitchforks in hand rather than live under a tyrant?
Corporatocracy is distinctly the dominate practice when it comes to doing business with the federal government. The once embryonic relationships between favored companies and agency bureaucrats, have germinated into distinctive hybrid organisms. Grafting into self-generating species resistant and virtually immune from pest control methods can be found in every area of government expenditures. The big daddy of cozy dealing is that preverbal military-industrial-security complex.
Who can forget all the government money spent in Iraq and Afghanistan that went to favored corporations with no bid contracts? A prime example of this practice is the notorious Cheney affiliated company, Halliburton Made $39.5 Billion on Iraq War.
“According to the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan, the level of corruption by defense contractors may be as high as $60 billion. Disciplined soldiers that would traditionally do many of the tasks are commissioned by private and publicly listed companies.
Even without the graft, the costs of paying for these services are higher than paying government employees or soldiers to do them because of the profit motive involved. No-bid contracting – when companies get to name their price with no competing bid – didn’t lower legitimate expenses.”
However, this sum is merely chump change when compared to the video report that Rumsfeld Announces $2.3 Trillion Missing from Pentagon. It is one thing to provide contracts to buddy companies, but it quite a different and an outrageous matter to abandon even the appearance of accounting audits of public funds.
Even with this scandal conveniently absent from a much needed accountability the pattern of crony capitalism continues. The left leaning, Center for Public Integrity provides the following stats in Windfalls of war: Pentagon’s no-bid contracts triple in 10 years of war.
“Noncompetitive, sole-source contracts are by no means unique to the Pentagon. Other agencies have been accused of giving short shrift to competition, such as the Federal Emergency Management Agency, which awarded over half of its immediate post-Hurricane Katrina contracts without full competition, according to one congressional report. But based on total dollars, the Pentagon, according to publicly available data analyzed by iWatch News, lags behind all other major departments in competitive contracting. The Pentagon’s competition rate of about 61 percent places it will below other agencies. The State Department in 2010 competed almost 75 percent of its contract dollars, the Department of Homeland Security competed almost 77 percent, and the Energy Department competed 94 percent.”
The NeoCon publication Newsmax in No-Bid Contracts Mark Obama Administration, cites recent figures below, as the Obama, friendly Huffington Press admits the same in No-Bid Contracts Jump 9 Percent Under Obama.
“Federal agencies awarded $115.2 billion in no-bid contracts in fiscal 2012, an 8.9 percent increase from $105.8 billion in 2009, even as total contract spending decreased by 5 percent during the period.”
Citing the absurdity of these abuses, USDA Gives No-Bid Contract to Obama-Connected Marketing Firm, dares expose the wife’s pet projects of Il Duce Obama.
“According to (FOIA) documents, “the USDA awarded SS+K the “unauthorized commitment,” no-bid contract to produce the “Let’s Move” logo, slogan, and artwork for Michelle Obama’s campaign, as well as the creative design for the “Let’s Move” website, which right now features characters from the Muppets as well as photos of Michelle Obama dancing/exercising.”
Also, the look of arrogant favoritism is seen when a First Lady’s College Classmate Linked to No-Bid ObamaCare Contract produced the latest failure of governmental competency.
“A former Princeton classmate of First Lady Michelle Obama is a senior executive at CGI Federal, a company that received a no-bid government contract to set up the ObamaCare website, according to reports by the Daily Caller.”
Thomas Lifson notes in the essay, Unbelievable incompetence led to no-bid contract for healthcare.gov, a very important point. “Any company which screwed up a key product introduction this badly would fire its chief executive. It’s a shame the same remedy does not apply in the public sector.”The political class operates on a continuous need of acquiring an ever increasing level of cash flow. Elected politicians rely upon the donations (translate BRIBES) from their corporate or special interest patrons. Bureaucratic officials maintain and increase their power with expanding the role of their agencies that demand ever-bigger budgets.
There is absolutely no incentive to stop the no bid gravy train as the embattled citizen taxpayers are fleeced with each new overrun contract. However, in an era of permanent budget deficits, monetizing the debt is far more attractive than actually balancing expenditures with real dollar taxes.
Bipartisan acquiescence to this fascist model for pillaging the national treasury is an incontrovertible fact of this continuation of abuses. Then again, the more accurate interpretation is that the entire system is based upon a dishonest culture of perpetual graft and self-enrichment.
Reciprocal preferential treatment is at the core of business dealing with government authorities. No bid contracts are guarantee centers of the funny money circus.
In the article, How to Make Billions Off Government Contracts, the Office of Management and Budget (OMB) references the following.
“Noncompetitive contracting, cost-reimbursement contracts, and time-and-materials and labor-hour (T&M/LH) contracts pose special risks of overspending.
Non-competitive contracts present a risk because there is not a direct market mechanism for setting the contract price. Cost-reimbursement contracts and T&M/LH contracts pose a risk because they provide no direct incentive to the contractor for cost control.”
These systemic problems are even more pronounced with no bid contracts. The lack of comparative pricing is understood by honorable public servants. Nonetheless, the political prostitutes that cook up the sweet heart deals and administer the payoffs are components of the wicked corporatocracy/state alliance.
Benito Mussolini explained that “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”, he is really describing the current functions of today’s establishment.
No bid contracts means a particular company is preapproved to rip off the system. With their governmental partners, the fix is set for splitting the spoils. Welcome to the state/capitalism matrix in the 21th century.
What is the first thing that comes to mind when the term NGO appears? Well, many will respond, the United Nations. Directly from a UN site is their definition for Non-governmental organizations. How uplifting and benign the altruistic effort, the deep-seated purpose and intention of such associations, frequently projects that noble endeavors need to enhance the governance process. The term governance essentially is a loaded political concept that benefits a model of economic activity that requires a managed society as opposed to a free, independent and individualistic economy.
“A non-governmental organization (NGO, also often referred to as “civil society organization” or CSO) is a not-for-profit group, principally independent from government, which is organized on a local, national or international level to address issues in support of the public good. Task-oriented and made up of people with a common interest, NGOs perform a variety of services and humanitarian functions, bring public concerns to governments, monitor policy and programme implementation, and encourage participation of civil society stakeholders at the community level.
Some conduct research and analysis in the legal and other fields (e.g. sociology, economics) relevant to the rule of law. In many cases, they produce reports with policy recommendations, for use in their advocacy.”
Of course, not all NGO’s fall into an identical pattern. Some can and do provide valuable services. However, exponents of coordinated liaison with civil authority that develops legal eminence for a social vision that defies the basic human nature of inherent autonomy, is dangerous. NGO’s seldom practice real charity, although they excel in social engineering.
Looking at the money trail provides evidence of actual intents. Investopedia explains How do NGOs get funding?
“The annual budget of an NGO can be in the hundreds of millions (or even billions) of dollars, fundraising efforts are important for the NGO’s existence and success. Funding sources include membership dues, the sale of goods and services, private sector for-profit companies, philanthropic foundations, grants from local, state and federal agencies, and private donations.”
That sounds all well and good. Nevertheless, when you get into the weeds on how funding actually works, the touchy feely aspects of raising money have a very different look. One example is the United States Agency for International Development (USAID), funding programs.
“Non-governmental organizations (NGOs) are critical change agents in promoting economic growth, human rights and social progress. USAID partners with NGOs to deliver assistance across all regions and sectors in which we work and to promote inclusive economic growth, strengthen health and education at the community level, support civil society in democratic reforms and assist countries recovering from disasters.”
Among the types of NGOs that the Agency partners with are:
1. Cooperative Organizations
3. Local and Regional Organizations
4. Private Voluntary Organizations
5. U.S. and International Organizations
Government grants presumably for promoting or enacting democratic reforms, discloses an ulterior motive behind the funding. That is natural and understandable in an era of competing political and economic systems. However, with the emergence of a unified New World Order agenda, the practice of doling out government money that undercuts the very existence of national sovereignty has taken a nefarious turn.
The always perceptive, Pat Buchanan weighs in and provides the evidence. US Funding NGOs to Advance New World Order?
“Cairo contends that $65 million in “pro-democracy” funding that IRI, NDI, and Freedom House received for use in Egypt constitutes “illegal foreign funding” to influence their elections. Yet this is not the first time U.S. “pro-democracy” groups have been charged with subverting regimes that fail to toe the Washington line.”
The motive to change political, social and economic relationships goes beyond countries influencing foreign policy objectives. When the likes of Ted Turner, George Soros, Warren Buffet and Bill & Melinda Gates use their foundation funds to back NGO’s that carry out the globalist agenda, private sector multi billionaires become an existential threat to humanity.
Add to this band of bandit brothers, who all have transformational goals, fostered with the wealth they accumulated by practicing crony corporatism, that diminishes our domestic standard of living, with their internationalization sentiments – Jeffrey Walker, Vice Chairman, United Nation’s Secretary General’s Envoy for Health Finance and Malaria, who proposes Building Generosity Networks.
“It’s time for us to turn our attention to building and growing Generosity Networks that link the philanthropic passions of major donors with others who share those passions and are willing to work, collaboratively, to address the major causes of our day.”
Oh, that United Nations record of peaceful philanthropy for universal serfdom has worked so well. The pandemic resolutions for eugenic terminations are often the real intent behind many NGO front organizations.
The economics of world population dictate that market based businesses have no place in a world dominated by transnational monopolies and corporatist cartels. Non-governmental organizations are liberated to advance the “philanthropic passions” of the donors that would normally be suspect if implemented by mega corporations.
Those “so called” generosity networks are used as subsiding endowments for the integration of third world communities into the NWO feudal system of minimal expectations.
That old Peace Corp attitude that was based upon helping others to help themselves is now a mission for global vassal induction. So much for the myth of self-determination, in the land of the rationed and expendable economy, where only the conglomerate matters.
As affluence disparity widens from the mega rich, the former middle class recedes into subsistence level, on a path resembling those that international NGO’s are supposed to help. A true merchant based economy, with broad based business ownership, is the only solution to the controlled slave state.
Actual non-governmental organizations, that provide useful functions, must shed their tax-exempt preferences and government subsidies. Helping individuals with volunteer charity under a viable free enterprise economic model is preferable and necessary.
Breaking up monopoly trusts, eliminates the need for generosity networks, because individuals would be able to earn a livable way of life, independent of government and globalist welfare. Most NGO’s schemes are fronts for NWO causes.
The wackos that believe that Barack Hussein Obama is a political rock star are blind to reality. It would be one thing if eccentric characteristics shaped such opinions of social outcasts, but when entire segments of the MTV population speak in a PBS lisp, the liberal popular culture has drunk the kool aid. The zombie rage in flicks is no accident. Converting entire generations of lost souls into National Civilian Service Corps NSA informants is an effortless task, when government schooled illiterates adore Barry Soetoro. Turning a constitutional republic into a collectivist gulag is only possible, when the greater fool principle becomes the law of the land.
By objective standards, Obama is a dismal failure as leader of the free world and defender of the underprivileged. The African-American community voice Tavis Smiley states: ‘Black People Will Have Lost Ground in Every Single Economic Indicator’ Under Obama. “The data is going to indicate sadly that when the Obama administration is over, black people will have lost ground in every single leading economic indicator category.”In spite of this, rational assessment, Obama is a commissar inspiration for commie comrades that indulge in the excesses of elitism power consolidation. The Wall Street moneychanger mentors that picked this CIA trained nobody for the assignment of nation self-annihilation, also funded the Russian Revolution and underwrote the Nazi Third Reich. Therefore, it should surprise no one educated in unfeigned factual history that the target of the last obstacle of globalist control, the residual defiance within the United States of America, is Obama’s assignment.
A good primer to understand the psyops disinformation career of the tutored revolutionary student is the video, Know Saul Alinsky and you Know Barack Obama and his Regime.
For all the unfortunate activists who missed the joy, intensity and exhilaration of street demonstration and Chicago police brutality of the 1968 Democratic convention, just remember that Alinsky, a committed Communist dedicated the forward of his book, Rules for Radicals to Lucifer. A little ironic, just recall those satanic images from the History Channel’s hit series ‘The Bible‘. Now ask which Alinsky pupil most fits the portrait?
Below is Appendix E from Matthew Vadum’s book, Subversion Inc.: How Obama’s ACORN Red Shirts are Still Terrorizing and Ripping Off American Taxpayers.
Contrary to popular belief, Saul Alinsky did not state only 13 rules in his seminal community organizing work, Rules for Radicals. He had 24 rules.
Saul Alinsky describes 24 rules in Rules for Radicals. Of those 24 rules, 13 are rules of “power tactics”:
1. “Power is not only what you have but what the enemy thinks you have.”
2. “Never go outside the experience of your people.”
3. “Wherever possible go outside of the experience of the enemy.”
4. “Make the enemy live up to their own book of rules.”
5. “Ridicule is man’s most potent weapon.”
6. “A good tactic is one that your people enjoy.”
7. “A tactic that drags on too long becomes a drag.”
8. “Keep the pressure on, with different tactics and actions, and utilize all events of the period for your purpose.”
9. “The threat is usually more terrifying than the thing itself.”
10. “The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.”
11. “If you push a negative hard and deep enough it will break through into its counterside.”
12. “The price of a successful attack is a constructive alternative.”
13. “Pick the target, freeze it, personalize it, and polarize it.”
The remaining 11 rules Alinsky describes are concerned with “the ethics of means and ends”:
1. “One’s concern with the ethics of means and ends varies inversely with one’s personal interest in the issue … Accompanying this rule is the parallel one that one’s concern with the ethics of means and ends varies inversely with one’s distance from the scene of conflict.”
2. “The judgment of the ethics of means is dependent upon the political position of those sitting in judgment.”
3. “In war the end justifies almost any means.”
4. “Judgment must be made in the context of the times in which the action occurred and not from any other chronological vantage point.”
5. “Concern with ethics increases with the number of means available and vice versa.”
6. “The less important the end to be desired, the more one can afford to engage in ethical evaluations of means.”
7. “Generally success or failure is a mighty determinant of ethics.”
8. “The morality of a means depends upon whether the means is being employed at a time of imminent defeat or imminent victory.”
9. “Any effective means is automatically judged by the opposition as being unethical.”
10. “You do what you can with what you have and clothe it with moral garments.”
11. “Goals must be phrased in general terms like ‘Liberty, Equality, Fraternity,’ ‘Of the Common Welfare,’ ‘Pursuit of Happiness,’ or ‘Bread and Peace.’”
If you come to appreciate the utter disregard of moral principles and ethical values, the Machiavelli manifestation of the habitual lies out of the Obama administration, stands as sound demonic practices.
John Fund elaborates in Still the Alinsky Playbook, on this theme.
“Alinsky argued for moral relativism in fighting the establishment: “In war the end justifies almost any means. . . . The practical revolutionary will understand [that] in action, one does not always enjoy the luxury of a decision that is consistent both with one’s individual conscience and the good of mankind.
Where did Alinsky get this amorality? Clues can be found in a Playboy magazine interview he gave in 1972, just before his death.
Alinsky recalled that he “learned a hell of a lot about the uses and abuses of power from the mob,” and that he applied that knowledge “later on, when I was organizing.” The Playboy interviewer asked, “Didn’t you have any compunction about consorting with — if not actually assisting — murderers?” Alinsky replied: “None at all, since there was nothing I could do to stop them from murdering. . . . I was a nonparticipating observer in their professional activities, although I joined their social life of food, drink, and women. Boy, I sure participated in that side of things — it was heaven.”
Thus, when Obama sets loose ACORN affiliates to do the dirty work in electoral campaigns, he is just following Alinsky’s deceit model. Let the hip-hop in the street urbanity video RULES FOR RADICALS – Obama’s Bible and Saul Alinsky, explain further.Mr. Funds adds:
“What exactly are the connections between Obama and Saul Alinsky’s thought? In 1985, the 24-year-old Obama answered a want ad from the Calumet Community Religious Conference, run by Alinsky’s Chicago disciples. Obama was profoundly influenced by his years as a community organizer in Chicago, even if he ultimately rejected Alinsky’s disdain for electoral politics and, like Hillary Clinton, chose to work within the system. “Obama embraced many of Alinsky’s tactics and recently said his years as an organizer gave him the best education of his life,” wrote Peter Slevin of the Washington Post in 2007. That same year, The New Republic’s Ryan Lizza found Obama still “at home talking Alinskian jargon about ‘agitation’” and fondly recalling organizing workshops where he had learned Alinsky concepts such as “being predisposed to other people’s power.”
In The Rule for Radicals that Alinsky Skipped, author J. Robert Smith analyses the destructive results of believing in your own supremacy. Not that much difference from old Serpent’s rebellion.
“For Mr. Obama and his Alinsky fellows, it’s one thing to sport a mask to gull voters and whoever else needs gulling; it’s another thing to get caught up in the web of your own lies.
Barack Obama has fallen prey to his own and his handlers’ propaganda; to wit, that he’s a Nubian sun god come to earth to minister to the little people. His reasoning and decisions are as unerring as a pope’s (ex cathedra might be inadequate to describe Barack’s authority, though, since it originates with himself and not the office). The president was cocooned and nurtured by race-based preferences from his adolescence on. He came to adulthood primed for hubris. And hubris — well, hoary hubris, it may finally be a-coming for Barack.”
It is crucial to put into proper perspective that Obama has coordinated political chaos, works to the advantage of the establishment elites, who benefit from the final obliteration of free market enterprise. Totalitarian governance hinges upon the dependence of zombie dupes, who follow their fearless leader into hell, as an obedient pledge of submission. Obama is the servant of the globalist creed and the revolutionary policies that his minions are implementing directly further the strangle hold over the economy.
The Corporatism Fascist merging with the Tyrannous State is the terminal objective that will cause the New World Order to complete its ultimate goal. Alinsky‘s spirit hovering over the satanic disciple of darkness, is the Obama credo. Obama-mania followers are a flock of fools.
Clarksville High School in Arkansas will be the first high school to utilize state laws that allow armed security guards in schools to arm teachers.
Training is underway now that will facilitate teachers carrying concealed weapons when classes resume.
David Hopkins, superintendent for Clarksville explained: “The plan we’ve been given in the past is, ‘Well, lock your doors, turn off your lights and hope for the best.’ That’s not a plan.”
Twenty teachers, including volunteers and other facility are training with a private security firm to turn them into licensed guards. Those in the program will receive 9-mm Walter PPS and holster; including $1,100 for a total of $50,000 the school in spending.
To make sure these participants are full trained, they will receive 53 hours which is 5 times the requirements for security guards in Arkansas.
Hopkins said : “They’re not gonna be in a uniform, and they’re not gonna be wagging their gun on their side. We’re going to be very discrete about it, but yet we’re going to be trained professionals, and we’re going to be able to provide security for our kids in a matter of seconds instead of minutes.”
Instead of hiring an independent security firm, Hopkins asserts : “We’re not tying our money up in a guard 24/7 that we won’t have to have unless something happens. We’ve got these people who are already hired and using them in other areas. Hopefully we’ll never have to use them as a security guard.”
Students will not know which teachers are armed and which are not to ensure that Community Emergency Response Teams (CERT) are able to assist at a moment’s notice.
CERT is part of the Federal Emergency Management Agency (FEMA). These are trained members of each community educated in “disaster preparedness for hazards that may impact their area and trains them in basic disaster response skills, such as fire safety, light search and rescue, team organization, and disaster medical operations.”
Donna Morey, former president of the Arkansas Education Association (AEA) said: “We just think educators should be in the business of educating students, not carrying a weapon.”
Arkansas and 6 other states; such as Ohio, Colorado, New Jersey, Pennsylvania, Connecticut and Washington State have adopted measures to place armed guards in public schools.
School districts in Florida, Rhode Island, Pennsylvania, Alabama and New Jersey have hired armed police officers to patrol and protect their campuses based on Vice President Joe Biden’s national recommendations last January.
Like those other schools, Sidwell Friends School, where President Obama’s two daughters attend, have 11 security officers and is seeking tohire armed police officers to patrol the campus.
The Department of Justice (DoJ) School Resource Officer program offers government certified law enforcement officers to patrol campuses as part of a national initiative.
Sheriff Douglas Harp of Nobile County, Indiana suggested deputizing teachers in order to carry handguns in classrooms just after the shooting in Newtown, Connecticut.
Last January, a scheduled Code Red lockdown was performed at Cary-Grove High School in Illinois.
This drill was complete with the firing of blanks into a hallway to give the students the very real impression that they were being attacked. Officialsclaimed that this exercise would help teachers and students “recognize the sound and react quickly should an active gunman situation occur.”
According the school website: “The drill will begin with a public address announcement about the lockdown. After staff have secured their rooms, Cary police and administrators will sweep the building to ensure all students made it into secure locations and assess any potential issues that may become apparent from the practice. Following this, a second PA announcement will be made informing students and staff that gunfire will be simulated so that they might be able to recognize the sound and react quickly, should an active gunman situation occur.”
They went on to explain: “Following the drill, a discussion will ensue between the students and their classroom teacher. We will utilize this feedback as a building and police department to assess our security and make any necessary adjustments to our building plan. Our sole purpose for utilizing the blanks is to fully prepare our students and staff.”
Parents whose children attend the school were concerned that the simulated gunfire was going beyond necessities. One parent said: “If you need to run a drill, you run a drill. They run fire drills all the time, but they don’t run up and down the hallway with a flamethrower.”
Students were upset by the crassness of the drill. Some participants pointed out that not all guns sound the same when fired. And a substitute teacher suggested that there be proactive training on what do to in such a situation instead of the terrifying drill that was conducted by school officials.
Jeff Puma, spokesperson for the high school explained that the administration is working with the Cary Police Department who recommended that this drill take place. Puma said: “It was their recommendation that we do this in order to create the knowledge necessary to keep our students safe in an active crisis situation.”
Puma said that the police referred to the students as “sitting ducks” while in their classrooms should a shooter enter the building. The police intimated that the students remain in their classrooms for “safety reasons” rather than try to escape through a window or run out a door.
Source: Susanne Posel | Occupy Corporatism
Speculation is mounting that “Helicopter Ben” will exit the Fed at the end of his current term. When the Bernanke era ends, what expectation will the next head of the central bank face? Remember the In Greenspan We Trust experience, and the designed pump and dump, crash and burn markets that led to the need to inflate the debt bubble. Bernanke did not save the economy; he merely bailed out the international banksters at the expense of productive main street enterprises. Throwing money to the air currents, when the prevailing winds only blow to Wall Street is the true legacy of Ben Bernanke.
Peter Schroeder from The Hill reports in the article, Federal Reserve’s Ben Bernanke dodges questions on his future, that Quantitative Infinity will end, “Bernanke said the Fed will gradually reduce the size of its purchases if the economy continues to improve as expected, with the goal of wrapping up purchases by mid-2014.”Politico contributors Ben White and MJ Lee in Preparing for life after Ben Bernanke, postulate much the same.
“It will almost certainly fall to Bernanke’s successor to eventually unwind the extraordinary measures the Fed has taken in recent years to try and drag a sluggish economy out of its brutal financial crisis hangover. The end of easy money won’t come right away, but it will end, no matter who follows Bernanke.”
But will the faucet tighten on cue, especially when the conventional wisdom rests upon the assumption that the economy will improve as advertized? Why would the Fed end the best theft scheme since Charles Ponzi perfected the con game? As long as the rest of the world treats Fed Dollar notes as the reserve currency, there is no need to pay savers a fair interest rate return on their rapidly diminishing capital.
Examine the popular rivals for the Fed Chairman and Central Bank Godfather position.
John Carney of NBC News chimes in along with the Gulf News essay, US Federal Reserve: Preparing for life after Ben Bernanke, gives the following rundown.
Janet Yellen – A forceful advocate of the aggressive steps taken under Bernanke to spur US economic growth, earning her a reputation as a policy “dove” who would tolerate a bit more inflation to drive down unemployment that she deemed too high.
Lawrence Summers – Is a Harvard economist who was Obama’s first National Economic Council director, a post within the president’s inner circle.
Timothy Geithner – Tapped for Treasury, he was already at the centre of the nation’s emergency response to the financial crisis as head of the New York Fed.
Roger Ferguson – Another Harvard-educated economist and lawyer who was Fed vice-chairman from 1999 to 2006, Ferguson was regarded within the Fed as a very smart and thorough policymaker.
Donald Kohn – Retired as Fed vice-chair in 2010 after 40 years at the central bank and was a top staff lieutenant to then chairman Alan Greenspan.
Christina Romer – Served as one of the principal architects of the Obama Administration’s economic recovery plan and chairwoman of the White House’s Council of Economic Advisers.
Alan Krueger – Is the chairperson of President Obama’s Council of Economic Advisors.
Surely, an insider to protect the interests of the plutocrats needs to be willing to play ball with the Obama style of criminality.
The Financial Times columnist, Edward Luce concludes in, Larry Summers top pick to replace Ben Bernanke as Federal Reserve chief, “Mr. Summers has made more than his share of enemies. Any of the other contenders for Fed chairman, including Ms. Yellen, would make a good choice. But if Mr. Obama wants to fill the job solely on merit, Mr. Summers ought to have the edge.” What is left unsaid is that Summers joined D.E. Shaw Group in late 2006 as a managing director, which has business and political links to Rahm Emanuel.Significantly, the New York Times publishes, “Mr. Summers and Shaw executives say his role there was to be a sounding board for Shaw’s traders. But interviews with friends and former colleagues suggest that Mr. Summers’s role at D. E. Shaw was wider and more complex.” Review the entire details in the two-part article, Industrial Wind and the Wall Street Cap and Trade Fraud.
Alas, the Obama Chicago Mafia Outfit has an undaunted record of extortion and financial pillage. What better choice to head the supreme paper-printing machine, than a trusted associate, skilled in the working of crony corporatism?The presidential puppet has his strings pulled by the money interests that selected him in the first place. It stands to reason that member bankers want Obama to pick a bean counter, who is experienced in the way monetary policy actually operates. Moreover, it certainly makes sense to the Chicago gang to have a trusted capo in charge of the loot.
Theorizing, comparing and contrasting credentials to head up the Fed after Bernanke, is reminiscent of the same exercise when Greenspan relinquished the reins. How many predicted “Gentle Ben”, to get the nod? What is certain is that a fiat money practitioner will continue the paper roll over of government bonds as long as dollar coercion, upon world currency markets, is the only game in town.
Keep monitoring the progress of the BRICS Development Bank. Competition to the dollar-dominated monopoly banking system is the actual challenge to central banking after the Bernanke tour of duty.
With the uninterrupted, increase in federal debt, much of which is held by the Federal Reserve, the prospects of achieving prosperity by growing the economy, when interests rates have been near zero, failed miserably. It becomes almost absurd to believe that higher rates on Treasury Bonds will succeed. The new chair of the Fed will be hard pressed shutting down Quantitative Easing.
What is the saying, caught “between a rock and a hard place”? Expect no other outcome until the entire fractional reserve banking system is abolished. The replacement must be based upon a sound money economy that is not dependent upon bank funding for public financing.
After decades of documenting the mad consequences of an “Open Borders” policy, voices of rational and sane immigration, ready themselves for definitive betrayal from their phony conservative brethren. Mark Krikorian, Roy Beck, Peter Brimelow and Pat Buchanan have waged the crusade to save the nation from the forces of greedy corporatists and demented egalitarianism. Proponents of limitless immigration are committed to the unilateral destruction of what once made America, “A City upon a Hill“.The inauspicious application of previous illegal immigration amnesty is irrefutable. Even the Gipper resigned himself to Ronald Reagan’s Biggest Mistake – According to Reagan Himself on Ronald Reagan immigration amnesty, “Ronald Reagan was not comfortable with amnesty. He was pro-enforcement, and he admitted to Edwin Meese that the biggest mistake of his presidency was to sign the 1986 amnesty.”
The Radical Reactionary essay, The Gang of Eight Immigration Constituency, sums up the plight thusly, “The hype that meaningful security of the borders would be an important aspect of this Senate initiative ignores the countless promises previously pronounced that the first duty of the federal government is to secure the nation.”
A report in the Washington Times, Border security deal boosts immigration bill’s chances in Senate, signals Iacta alea est – translated, “The die is cast.”
“Senators struck a deal Thursday to boost border security in the immigration bill, including building 700 miles of fence and adding 20,000 Border Patrol agents to the Southwest, in a move those on both sides say could clear the way for a bipartisan vote next week.”
The next complicity cover comes from the bureaucratic CBO accomplice.
For the White House spin on the CBO Report: Immigration Reform Will Shrink the Deficit and Grow the Economy, the rosy fruits of the globalist economy are never mentioned. The projected convalescence in public debt is beyond credulity.
“CBO estimates that fixing our broken immigration system will reduce federal deficits by about $200 billion over the next 10 years, and about $700 billion in the second decade. The CBO analysis made clear that the additional taxes paid by new and legalizing immigrants would not only offset any new spending, but would be substantial enough to reduce the deficit over the 20-year window.”
In an accurate assessment of this same account, Neil Munro points out the obvious in the Daily Caller article; CBO says immigration bill aids investors, not wage earners.
“The Senate’s pending immigration bill would boost investors’ and owners’ share of the economy for at least twenty years, and shrink some Americans’ wages and salaries for at least 10 years, according to a report from the Congressional Budget Office.”The rate of return on capital would be higher [than on labor] under the legislation than under current law throughout the next two decades,” says the report, titled “The Economic Impact of S. 744.”
Now review the video from the Heritage Foundation on Scoring the Immigration Reform Bill: An Analysis of the CBO’s Numbers. You can trust Krikorian, Beck, Brimelow and Buchanan on the immigration issue, so why not acknowledge that the Heritage’s assessment on the actual costs from the amnesty legislation is the valid appraisal.
Kudos to one Senator, Ted Cruz Launches National Petition Against Gang of Eight’s Bill, who is rallying grassroots opposition to this amnesty bill. He urges citizens to sign the petition demanding REAL border security. What is the saying – a little short and a couple of generation too late?So, who has the guts to stop this lunacy?
Usually, fair-minded citizens look to the House of Representatives to safeguard the national interest. Even so, what does the Speaker say: John Boehner: ‘Bipartisan’ immigration reform only way, “And while the rest of his party maligns the Congressional Budget Office’s report on the economic benefits of immigration reform, Boehner said: “If in fact those numbers are anywhere close to being accurate, it’ll be a real boon for the country.”It should be apparent that the entire political process, held hostage to international corporatism, wants to destroy the domestic economy. Slave labor wages, ensured by an endless flow of low skilled immigrants is a formula for national destruction.
The Washington Watcher in VDARE article, Conservatism Inc. Using IRS Scandal To Mask Amnesty Drive, laments the cold hard facts that the establishment speaks with one voice on destroying the remains of a common law republic.
“After the Citizens United ruling, I warned on VDARE.com: “No matter what the constitutional merits of the Supreme Court’s decision, this could be a disaster for patriotic immigration reform.”
If you listen to conservative talk radio, you will certainly be familiar with ads from the 501(c)4, Americans for a Conservative Direction, funded by that great conservative Mark Zuckerberg, claiming that Gang of 8 Amnesty-Surge bill is really “toughest immigration-enforcement measures in the history of the United States” and gives us “border security on steroids.” And, of course, Crossroads has its own blitz of pro-amnesty ads, and a coalition of big money GOP donors who support amnesty.”
Amnesty is tantamount to the elimination of the last remains of the middle class. The prospect of derailing this juggernaut through Congressional action is inconceivable as long as cowardly conservatives capitulate to their corporate donors. Even more absurd are the lobotomized liberals. They purport to be champions of the worker, but are willing and eager to destroy any meaningful employment for their own compatriots.
Where is that elusive fairness for our own citizens? Soon the remnant economy will be reduced to the same level of third world exploitation, with the United States being the biggest loser. No wonder that the media presstitutes over at NBC, push their hit program – by the same name – to a dullard public.
Facts no longer matter to most masses. Understanding their self-interest is even more obscure. Exploiters use these shortcomings to their advantage. Accepting an amnesty capitulation illustrates the triumph of global corporatists over the merchant class that built the wealth creation economy. For this reason alone, it is imperative that sane citizens demand a reasonable and rational rejection of the proposed Senate bill.
The latest appeal from NumbersUSA says: Hold Nothing Back.
“Now, amnesty proponents know they have to shake up the game. The latest trick is an amendment by Sens. Corker (R-TN) and Hoeven (R-SD). The amendment solves nothing; the amnesty will still come before enforcement. It’s simply a ruse to give the impression that the bill has changed since all of your calls and faxes were sent.
We now expect a vote on the Corker-Hoeven amendment on Monday and a final vote on Thursday. Both need 60 votes for passage. Before Thursday’s vote, we need all our members to call their senators and tell them you still oppose amnesty before enforcement!
There has NEVER been a vote in Congress as critical for preserving America and its prosperity. This bill simply cannot pass. We’re glad that hundreds of thousands of you have used NumbersUSA’s toll-free calls, free services, and we are so grateful for your activism.”
How many Americans will gets off their back side and challenge their Senators? Register an ultimatum. A vote in favor of amnesty means all out political war. Any incumbent that refuses to secure the borders needs to face a serious primary challenge. Nevertheless, perceptive political onlookers have a chilling feeling that this round of legislation will be the toughest to defeat.
The reason is simple. The secular society is rooted in self-destruction. Common sense no longer has a place in the immigration hysteria. Relinquishing traditional standards and historic values in representative government has produced a Congress that walk lock step in unison with big business.
The opportunity culture has become the entitlement society.
Even a militant NeoCon like Ann Coulter can be correct once in a while, when she acknowledges, U.S. ‘finished’ if amnesty passes.
“If amnesty passes, is it time to ditch the GOP and start a new party? (Or would it already be too late?)
Too late. If the Rubio amnesty bill passes, the country will be finished. There will be no point in fighting for anything anymore. All we will have left to do is take revenge on the people who destroyed this country, starting with desecrating Teddy Kennedy’s grave and moving on to primarying every Republican who voted for it.”
There is a death wish bent on collapsing the productive economy. Transnational businesses want an implosion and the inevitable reduction and permanent subsistence level of wage scales. The mercantilist is in the business of manufacturing monopolies.
After eons of debating the particulars of the negative consequences inevitable from accepting any and all of those hallowed huddled masses, by skipping the Ellis Island examination, the final extermination of the American experiment is in sight. That profound are the stakes.
The public fears the label of racist, and shuns a healthy aspiration that earns the respect of defenders of our noble heritage. For many, surrendering to authoritarian progressivism is a badge of dishonor, but most view such submission as a small price to pay to be accepted.
In II Samuel 19 there is the story about an often-overlooked man by the name of Barzillai. He was a Gileadite who helped save King David’s life. The Scripture says of him: “He was a very great man.” Today, I’m going to tell you about a very great man. In fact, I’m going to talk about several great men.
I am reminded of these men, because tomorrow I have the distinct honor of speaking at a giant freedom rally on Lexington Green, Massachusetts, on the occasion of the 238th anniversary of the famous Battle of Lexington and Concord. If you live within driving distance, please come and join us. Oath Keepers founder, Stewart Rhodes, will also be speaking at this event. I believe the rally begins at 2pm local time.
In truth, April 19, 1775, should be regarded as important a date to Americans as July 4, 1776. It’s a shame that we don’t celebrate it as enthusiastically as we do Independence Day. It’s even more shameful that many Americans don’t even remember what happened on this day back in 1775. For the record, historians call this day, “Patriot’s Day.” More specifically, it was the day that the shot heard ’round the world was fired. It was the day America’s War for Independence began.
Being warned of approaching British troops by Dr. Joseph Warren and Paul Revere, Pastor Jonas Clark and his male congregants of the Church of Lexington (numbering 60-70) were the ones that stood with their muskets in front of the Crown’s troops (numbering over 800), who were on orders to seize a cache of arms which were stored at Concord and arrest Sam Adams and John Hancock (who were known to be in the area, and who had actually taken refuge in Pastor Clark’s home).
According to eyewitnesses, the king’s troops opened fire on the militiamen without warning, immediately killing eight of Pastor Clark’s parishioners. In self defense, the Minutemen returned fire. These were the first shots of the Revolutionary War. This took place on Lexington Green, which was located directly beside the church-house where those men worshipped each Sunday. Adams and Hancock were not apprehended. A few of Pastor Clark’s men led them to safety as their Christian brothers were preparing to stand in front of the British troops. Sam Adams and John Hancock owed their lives to Pastor Clark and his brave Minutemen.
According to Pastor Clark, these are the names of the eight men who died on Lexington Green as the sun rose on April 19, 1775: Robert Munroe, Jonas Parker, Samuel Hadley, Jonathan Harrington, Jr., Isaac Muzzy, Caleb Harrington, and John Brown, all of Lexington, and one Mr. Porter of Woburn.
However, by the time the British troops arrived at the Concord Bridge, hundreds of colonists had amassed a defense of the bridge. A horrific battle took place, and the British troops were routed and soon retreated back to Boston. America’s War for Independence had begun!
Yes, ladies and gentlemen, these two elements of American history are lost to the vast majority of historians today: 1) it was the attempted gun confiscation and seizure of two patriot leaders by British troops that ignited America’s War for Independence; and, 2) it was a local church pastor and his male congregants that mostly comprised the Minutemen who fired the shots that started our great Revolution.
With that thought in mind, I want to devote today’s column to honoring the brave preachers of Colonial America–these “children of the Pilgrims,” as one colonial pastor’s descendent put it.
It really wasn’t that long ago. However, with the way America’s clergymen act today, one would think that preachers such as James Caldwell, John Peter Muhlenberg, Joab Houghton, and Jonas Clark never existed. But they did exist; and without them, this country we call the United States of America would not exist.
Caldwell was a Presbyterian; Muhlenberg was a Lutheran; Houghton was a Baptist; and no one really seems to know what denomination (if any) Jonas Clark claimed, although one historian referred to Clark as a Trinitarian and Calvinist. But these men had one thing in common (besides their faith in Jesus Christ): they were all ardent patriots who participated in America’s War for Independence, and in the case of Jonas Clark, actually ignited it.
James Caldwell was called “The Rebel High Priest” or “The Fighting Chaplain.” Caldwell is most famous for the “Give ’em Watts!” story.
During the Springfield (New Jersey) engagement, the Colonial militia ran out of wadding for their muskets. Quickly, Caldwell mounted his horse and galloped to the Presbyterian church, and returning with an armload of hymnals, threw them to the ground, and hollered, “Now, boys, give ’em Watts!” He was referring to the famous hymn writer, Isaac Watts, of course.
The British hated Caldwell so much, they murdered his wife, Hannah, in her own home, as she sat with her children on her bed. Later, a fellow American was bribed by the British to assassinate Pastor Caldwell–which is exactly what he did. Americans loyal to the Crown burned both his house and church. No less than three cities and two public schools in the State of New Jersey bear his name.
John Peter Muhlenberg
John Peter Muhlenberg was pastor of a Lutheran church in Woodstock, Virginia, when hostilities erupted between Great Britain and the American colonies. When news of Bunker Hill reached Virginia, Muhlenberg preached a sermon from Ecclesiastes 3 to his congregation. He reminded his parishioners that there was a time to preach and a time to fight. He said that, for him, the time to preach was past and it was time to fight. He then threw off his vestments and stood before his congregants in the uniform of a Virginia colonel.
Muhlenberg was later promoted to brigadier-general in the Continental Army, and then to major general. He participated in the battles of Brandywine, Germantown, Monmouth, and Yorktown. He went on to serve in both the US House of Representatives and US Senate.
Joab Houghton was in the Hopewell (New Jersey) Baptist Meeting House at worship when he received the first information regarding the battles at Lexington and Concord. His great-grandson gives the following eloquent description of the way he treated the tidings:
“[M]ounting the great stone block in front of the meeting-house, he beckoned the people to stop. Men and women paused to hear, curious to know what so unusual a sequel to the service of the day could mean. At the first, words a silence, stern as death, fell over all. The Sabbath quiet of the hour and of the place was deepened into a terrible solemnity. He told them all the story of the cowardly murder at Lexington by the royal troops; the heroic vengeance following hard upon it; the retreat of Percy; the gathering of the children of the Pilgrims round the beleaguered hills of Boston; then pausing, and looking over the silent throng, he said slowly, ‘Men of New Jersey, the red coats are murdering our brethren of New England! Who follows me to Boston?’ And every man in that audience stepped out of line, and answered, ‘I!’ There was not a coward or a traitor in old Hopewell Baptist Meeting-House that day.” (Cathcart, William. Baptists and the American Revolution. Philadelphia: S.A. George, 1876, rev. 1976. Print.)
As I said at the beginning of this column, Jonas Clark was pastor of the Church of Lexington, Massachusetts, on April 19, 1775, the day that British troops marched on Concord with orders to arrest Sam Adams and John Hancock, and to seize a cache of firearms. It was Pastor Clark’s male congregants who were the first ones to face-off against the British troops as they marched through Lexington. When you hear the story of the Minutemen at the Battle of Lexington, remember those Minutemen were mostly Pastor Jonas Clark and the men of his congregation.
On the One Year Anniversary of the Battle of Lexington, Clark preached a sermon based upon his eyewitness testimony of the event. He called his sermon, “The Fate of Blood-Thirsty Oppressors and God’s Tender Care of His Distressed People.” His sermon has been republished by Nordskog Publishing under the title, “The Battle of Lexington, A Sermon and Eyewitness Narrative, Jonas Clark, Pastor, Church of Lexington.”
Order the book containing Clark’s sermon at:
Of course, these four brave preachers were not the only ones to participate in America’s fight for independence. There were Episcopalian ministers such as Dr. Samuel Provost of New York, Dr. John Croes of New Jersey, and Robert Smith of South Carolina. Presbyterian ministers such as Adam Boyd of North Carolina and James Armstrong of Maryland, along with many others, also took part.
Numerous Baptist preachers participated in America’s War for Independence, so many that at the conclusion of the war, President George Washington wrote a personal letter to the Baptist people saying, “I recollect with satisfaction that the religious societies of which you are a member have been, throughout America, uniformly and almost unanimously, the firm friends to civil liberty, and the preserving promoters of our glorious Revolution.” It also explains how Thomas Jefferson could write to a Baptist congregation and say, “We have acted together from the origin to the end of a memorable Revolution.” (McDaniel, George White. The People Called Baptists. The Sunday School Board of the Southern Baptist Convention, 1918. Print.)
And although not every pastor was able to actively participate in our fight for independence, because so many pastors throughout colonial America preached the principles of liberty and independence from their pulpits, the Crown created a moniker for them: The Black Regiment (referring to the long, black robes that so many colonial clergymen wore in the pulpit). Without question, the courageous preaching and example of colonial America’s patriot-pastors provided the colonists with the inspiration and resolve to resist the tyranny of the Crown and win America’s freedom and independence.
I invite readers to visit my Black Regiment web page to learn more about my attempt to resurrect America’s Black-Robed Regiment. Go to:
Readers should know, too, that a brand new book co-authored by me and my constitutional attorney son, Tim, entitled, “To Keep Or Not To Keep: Why Christians Should Not Give Up Their Guns,” will be released in just a few days. This book examines the entire Bible, both Old and New Testaments, and proves conclusively that nowhere does God expect His people to surrender their arms in the face of any would-be tyrant. With hundreds of references, we show from both Natural and Revealed Law that the right of self-defense, the right to keep and bear arms, is a God-ordained right and responsibility. This book is sure to be a blockbuster. To order the book, go to:
This is the fighting heritage of America’s pastors and preachers. So, what has happened? What has happened to that fighting spirit that once existed, almost universally, throughout America’s Christian denominations? How have preachers become so timid, so shy, and so cowardly that they will stand apathetic and mute as America faces the destruction of its liberties? Where are the preachers to explain, expound, and extrapolate the principles of liberty from Holy Writ?
I am absolutely convinced that one of the biggest reasons America is in the sad condition that it is in today is because the sermons Americans frequently hear from modern pulpits deal mostly with prosperity theology, entertainment evangelism, feelgoodism, emotionalism, and Aren’t-I-Wonderful ear tickling! One man recently wrote and told me that his ears had been tickled so much in church that he had calluses on them.
This milquetoast preaching, along with a totally false “obey-the-government-no-
Tim and I also wrote a book entitled, “Romans 13: The True Meaning of Submission.” This book examines Romans 13, and the rest of Scripture, and shows that nowhere does God demand that His people yield to wicked and unjust government. To order this book, to go:
As we celebrate Patriot’s Day tomorrow, please remember Jonas Clark (along with James Caldwell, John Peter Muhlenberg, Joab Houghton, and the other brave pastors of colonial America). “He was a very great man.”
Derivatives turn the financial system into a casino. And the House always wins.
Photo Credit: Jean Lee/ Shutterstock.com
Cyprus-style confiscation of depositor funds has been called the “new normal.” Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk. Derivatives have “super-priority” status in bankruptcy, and Dodd Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line.
Shock waves went around the world when the IMF, the EU, and the ECB not only approved but mandated the confiscation of depositor funds to “bail in” two bankrupt banks in Cyprus. A “bail in” is a quantum leap beyond a “bail out.” When governments are no longer willing to use taxpayer money to bail out banks that have gambled away their capital, the banks are now being instructed to “recapitalize” themselves by confiscating the funds of their creditors, turning debt into equity, or stock; and the “creditors” include the depositors who put their money in the bank thinking it was a secure place to store their savings.
The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles here and here. “Too big to fail” now trumps all. Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks.
Why Derivatives Threaten Your Bank Account
The big risk behind all this is the massive $230 trillion derivatives boondoggle managed by US banks. Derivatives are sold as a kind of insurance for managing profits and risk; but as Satyajit Das points out in Extreme Money, they actually increase risk to the system as a whole.
In the US after the Glass-Steagall Act was implemented in 1933, a bank could not gamble with depositor funds for its own account; but in 1999, that barrier was removed. Recent congressional investigations have revealed that in the biggest derivative banks, JPMorgan and Bank of America, massive commingling has occurred between their depository arms and their unregulated and highly vulnerable derivatives arms. Under both the Dodd Frank Act and the 2005 Bankruptcy Act, derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured. In a major derivatives fiasco, derivative claimants could well grab all the collateral, leaving other claimants, public and private, holding the bag.
The tab for the 2008 bailout was $700 billion in taxpayer funds, and that was just to start. Another $700 billion disaster could easily wipe out all the money in the FDIC insurance fund, which has only about $25 billion in it. Both JPMorgan and Bank of America have over $1 trillion in deposits, and total deposits covered by FDIC insurance are about $9 trillion. According to an article on Bloomberg in November 2011, Bank of America’s holding company then had almost $75 trillion in derivatives, and 71% were held in its depository arm; while J.P. Morgan had $79 trillion in derivatives, and 99% were in its depository arm. Those whole mega-sums are not actually at risk, but the cash calculated to be at risk from derivatives from all sources is at least $12 trillion; and JPM is the biggest player, with 30% of the market.
It used to be that the government would backstop the FDIC if it ran out of money. But section 716 of the Dodd Frank Act now precludes the payment of further taxpayer funds to bail out a bank from a bad derivatives gamble. As summarized in a letter from Americans for Financial Reform quoted by Yves Smith:
Section 716 bans taxpayer bailouts of a broad range of derivatives dealing and speculative derivatives activities. Section 716 does not in any way limit the swaps activities which banks or other financial institutions may engage in. It simply prohibits public support for such activities.
There will be no more $700 billion taxpayer bailouts. So where will the banks get the money in the next crisis? It seems the plan has just been revealed in the new bail-in policies.
All Depositors, Secured and Unsecured, May Be at Risk
The bail-in policy for the US and UK is set forth in a document put out jointly by the Federal Deposit Insurance Corporation (FDIC) and the Bank of England (BOE) in December 2012, titled Resolving Globally Active, Systemically Important, Financial Institutions.
In an April 4th article in Financial Sense, John Butler points out that the directive does not explicitly refer to “depositors.” It refers only to “unsecured creditors.” But the effective meaning of the term, says Butler, is belied by the fact that the FDIC has been put on the job. The FDIC has direct responsibility only for depositors, not for the bondholders who are wholesale non-depositor sources of bank credit. Butler comments:
Do you see the sleight-of-hand at work here? Under the guise of protecting taxpayers, depositors of failing institutions are to be arbitrarily, de-facto subordinated to interbank claims, when in fact they are legally senior to those claims!
. . . [C]onsider the brutal, unjust irony of the entire proposal. Remember, its stated purpose is to solve the problem revealed in 2008, namely the existence of insolvent TBTF institutions that were “highly leveraged and complex, with numerous and dispersed financial operations, extensive off-balance-sheet activities, and opaque financial statements.” Yet what is being proposed is a framework sacrificing depositors in order to maintain precisely this complex, opaque, leverage-laden financial edifice!
If you believe that what has happened recently in Cyprus is unlikely to happen elsewhere, think again. Economic policy officials in the US, UK and other countries are preparing for it. Remember, someone has to pay. Will it be you? If you are a depositor, the answer is yes.
The FDIC was set up to ensure the safety of deposits. Now it, it seems, its function will be the confiscation of deposits to save Wall Street. In the only mention of “depositors” in the FDIC-BOE directive as it pertains to US policy, paragraph 47 says that “the authorities recognize the need for effective communication to depositors, making it clear that their deposits will be protected.” But protected with what? As with MF Global, the pot will already have been gambled away. From whom will the bank get it back? Not the derivatives claimants, who are first in line to be paid; not the taxpayers, since Congress has sealed the vault; not the FDIC insurance fund, which has a paltry $25 billion in it. As long as the derivatives counterparties have super-priority status, the claims of all other parties are in jeopardy.
That could mean not just the “unsecured creditors” but the “secured creditors,” including state and local governments. Local governments keep a significant portion of their revenues in Wall Street banks because smaller local banks lack the capacity to handle their complex business. In the US, banks taking deposits of public funds are required to pledge collateral against any funds exceeding the deposit insurance limit of $250,000. But derivative claims are also secured with collateral, and they have super-priority over all other claimants, including other secured creditors. The vault may be empty by the time local government officials get to the teller’s window. Main Street will again have been plundered by Wall Street.
Super-priority Status for Derivatives Increases Rather Than Decreases Risk
Harvard Law Professor Mark Row maintains that the super-priority status of derivatives needs to be repealed. He writes:
. . . [D]erivatives counterparties, . . . unlike most other secured creditors, can seize and immediately liquidate collateral, readily net out gains and losses in their dealings with the bankrupt, terminate their contracts with the bankrupt, and keep both preferential eve-of-bankruptcy payments and fraudulent conveyances they obtained from the debtor, all in ways that favor them over the bankrupt’s other creditors.
. . . [W]hen we subsidize derivatives and similar financial activity via bankruptcy benefits unavailable to other creditors, we get more of the activity than we otherwise would. Repeal would induce these burgeoning financial markets to better recognize the risks of counterparty financial failure, which in turn should dampen the possibility of another AIG-, Bear Stearns-, or Lehman Brothers-style financial meltdown, thereby helping to maintain systemic financial stability.
In The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences, David Skeel agrees. He calls the Dodd-Frank policy approach “corporatism” – a partnership between government and corporations. Congress has made no attempt in the legislation to reduce the size of the big banks or to undermine the implicit subsidy provided by the knowledge that they will be bailed out in the event of trouble.
Undergirding this approach is what Skeel calls “the Lehman myth,” which blames the 2008 banking collapse on the decision to allow Lehman Brothers to fail. Skeel counters that the Lehman bankruptcy was actually orderly, and the derivatives were unwound relatively quickly. Rather than preventing the Lehman collapse, the bankruptcy exemption for derivatives may have helped precipitate it. When the bank appeared to be on shaky ground, the derivatives players all rushed to put in their claims, in a run on the collateral before it ran out. Skeel says the problem could be resolved by eliminating the derivatives exemption from the stay of proceedings that a bankruptcy court applies to other contracts to prevent this sort of run.
Putting the Brakes on the Wall Street End Game
Besides eliminating the super-priority of derivatives, here are some other ways to block the Wall Street asset grab:
(1) Restore the Glass-Steagall Act separating depository bankingfrom investment banking. Support Marcy Kaptur’s H.R. 129.
(2) Break up the giant derivatives banks. Support Bernie Sanders’ “too big to jail” legislation.
(3) Alternatively, nationalize the TBTFs, as advised in the New York Times by Gar Alperovitz. If taxpayer bailouts to save the TBTFs are unacceptable, depositor bailouts are even more unacceptable.
(4) Make derivatives illegal, as they were between 1936 and 1982 under the Commodities Exchange Act. They can be unwound by simply netting them out, declaring them null and void. As noted by Paul Craig Roberts, “the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system.”
(5) Support the Harkin-Whitehouse bill to impose a financial transactions tax on Wall Street trading. Among other uses, a tax on all trades might supplement the FDIC insurance fund to cover another derivatives disaster.
(5) Establish postal savings banks as government-guaranteed depositories for individual savings. Many countries have public savings banks, which became particularly popular after savings in private banks were wiped out in the banking crisis of the late 1990s.
(6) Establish publicly-owned banks to be depositories of public monies, following the lead of North Dakota, the only state to completely escape the 2008 banking crisis. North Dakota does not keep its revenues in Wall Street banks but deposits them in the state-owned Bank of North Dakota by law. The bank has a mandate to serve the public, and it does not gamble in derivatives.
A motivated state legislature could set up a publicly-owned bank very quickly. Having its own bank would allow the state to protect both its own revenues and those of its citizens while generating the credit needed to support local business and restore prosperity to Main Street.
For more information on the public bank option, see here. Learn more at thePublic Banking Institute conference June 2-4 in San Rafael, California, featuring Matt Taibbi, Birgitta Jonsdottir,Gar Alperovitz and others.
Source: Ellen Brown | Alternet