Former Treasury Secretary Timothy Geithner, a protege of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the handful of gigantic banks, whose existence attests to the fact that the Anti-Trust Act is a dead-letter law, Geithner has been appointed president and managing director of the private equity firm, Warburg Pincus and is on his way to his fortune.
A Warburg in-law financed Woodrow Wilson’s presidential campaign. Part of the reward was Wilson’s appointment of Paul Warburg to the first Federal Reserve Board. The symbiotic relationship between presidents and bankers has continued ever since. The same small clique continues to wield financial power.
Geithner’s career is illustrative. In the 1980s, Geithner worked for Kissinger Associates. In the mid to late 1990s, Geithner served as a deputy assistant Treasury secretary. Under Rubin and Summers he moved up to undersecretary of the Treasury.
From the Treasury he went to the Council on Foreign Relations and from there to the International Monetary Fund (IMF). From there he was appointed president of the Federal Reserve Bank of New York, where he worked to make banks more profitable by allowing higher ratios of debt to capital, thus contributing to the financial crisis.
Geithner arranged the sale of the failed Wall Street firm of Bear Stearns, helped with the taxpayer bailout of AIG, and rejected saving Lehman Brothers from bankruptcy in order to create the crisis atmosphere needed to more fully subordinate US economic policy to the needs of the few large banks.
Rubin, a 26-year veteran of Goldman Sachs, was rewarded by Citibank for his service to the banks while Treasury Secretary with a $50 million compensation package in 2008 and $126,000,000 between 1999 and 2009.
When a person becomes a Treasury official it is made clear that the choice is between serving the banks and becoming rich or trying to serve the public and becoming poor. Few make the latter choice.
As MIchael Hudson has informed us, the goal of the financial sector has always been to convert all income, from corporate profits to government tax revenues, to the service of debt. From the bankers standpoint, the more debt the richer the bankers. Rubin, Summers, Paulson, Geithner, and now banker Treasury Secretary Jack Lew faithfully serve this goal.
The Federal Reserve describes its policy of Quantitative Easing — the creation of new money with which the Fed purchases Treasury debt and mortgage backed securities — as a low interest rate policy in order to stimulate employment and economic growth. Economists and the financial media have parroted this cover story.
In contrast, I have exposed QE as a scheme for pumping profits into the banks and boosting their balance sheets. The real purpose of QE is to drive up the prices of the debt-related derivatives on the banks’ books, thus keeping the banks with solvent balance sheets.
Writing in the Wall Street Journal (“Confessions of a Quantitative Easer,” November 11, 2013), Andrew Huszar confirms my explanation to be the correct one. Huszar is the Federal Reserve official who implemented the policy of QE. He resigned when he realized that the real purposes of QE was to drive up the prices of the banks’ holdings of debt instruments, to provide the banks with trillions of dollars at zero cost with which to lend and speculate, and to provide the banks with “fat commissions from brokering most of the Fed’s QE transactions.” (See: www.paulcraigroberts.org )
This vast con game remains unrecognized by Congress and the public. At the IMF Research Conference on November 8, 2013, former Treasury Secretary Larry Summers presented a plan to expand the con game.
Summers says that it is not enough merely to give the banks interest free money. More should be done for the banks. Instead of being paid interest on their bank deposits, people should be penalized for keeping their money in banks instead of spending it.
To sell this new rip-off scheme, Summers has conjured up an explanation based on the crude and discredited Keynesianism of the 1940s that explained the Great Depression as a problem caused by too much savings. Instead of spending their money, people hoarded it, thus causing aggregate demand and employment to fall.
Summers says that today the problem of too much saving has reappeared. The centerpiece of his argument is “the natural interest rate,” defined as the interest rate at which full employment is established by the equality of saving with investment. If people save more than investors invest, the saved money will not find its way back into the economy, and output and employment will fall.
Summers notes that despite a zero real rate of interest, there is still substantial unemployment. In other words, not even a zero rate of interest can reduce saving to the level of investment, thus frustrating a full employment recovery. Summers concludes that the natural rate of interest has become negative and is stuck below zero.
How to fix this? The way to fix it, Summers says, is to charge people for saving money. To avoid the charges, people would spend the money, thus reducing savings to the level of investment and restoring full employment.
Summers acknowledges that the problem with his solution is that people would take their money out of banks and hoard it in cash holdings. In other words, the cash form of money provides consumers with a freedom to save that holds down consumption and prevents full employment.
Summers has a fix for this: eliminate the freedom by imposing a cashless society where the only money is electronic. As electronic money cannot be hoarded except in bank deposits, penalties can be imposed that force unproductive savings into consumption.
Summers’ scheme, of course, is a harebrained one. With governments running huge deficits, who would purchase bonds at negative interest rates? How would pension and retirement funds operate? Would they also be subject to an annual percentage confiscation?
We know that the response of consumers to the long term decline in real median family income, to the loss of jobs from labor arbitrage across national borders (jobs offshoring), to rising homelessness, to cuts in the social safety net, to the transformation of their full time jobs to part time jobs (employers’ response to Obamacare), has been to reduce their savings rate. Indeed, few have any savings at all. The US personal saving rate is currently 2 percentage points, about 30%, below the long term average. Retired people, unable to earn any interest on their savings from the Fed’s zero interest rate policy, are being forced to draw down their savings in order to pay their bills.
Moreover, it is unclear whether the savings rate is an accurate measure or merely a residual of other calculations. With so many people having to draw down their savings, I wouldn’t be surprised if an accurate measure showed the personal savings rate to be negative.
But for Summers the plight of the consumer is not the problem. The problem is the profits of the banks. Summers has the solution, and the establishment, including Paul Krugman, is applauding it. Once the economy officially turns down again, watch out.
This column first appeared as a Trend Alert, Trends Research Institute
Source: Paul Craig Roberts
With all that is being written about the national economic collapse, people seem to be waiting for some huge event.
However, for many North Americans, the collapse is here. This isn’t relegated to only lower income neighborhoods. As an article from a Cincinnati new station stated, “Hunger doesn’t know a zip code.”
For many people who were formerly financially comfortable, the economic collapse has already happened in the form of a job loss, hours that have been cut back due to Obamacare requirements for employers, an exorbitant medical bill or other crushing debt, or simply an inflation rate that has outstripped your pay increases. Despite all of the warnings, many people are still going to be absolutely blindsided.
- Which utility can I live without?
- Should I walk away from my mortgage?
- Should I eat something so I can work harder or should I skip meals so my kids have food?
- Should I use the grocery money to take my child to the doctor or should I wait and hope he/she improves without medical intervention?
- Do I risk the IRS-enforced penalties by forgoing enrollment in Obamacare or should I skip that whole grocery shopping thing so I can pay the monthly premiums and enormous deductibles in order to stay in the government’s good graces?
These are the kind of decisions that people across the nation are grappling with every day.
I’m talking about good people, hardworking men and women who have always been employed and paid their bills. A personal financial crisis does not just strike those stereotypical “welfare queens” with the long manicured nails, Gucci knock-off purse, and a grocery cart full of EBT-funded lobster.
I’m talking about the person next door, who seems to have it all together. I’m talking about that quiet family that sits two rows in front of you at church. I’m talking about that two-income family with two children and a car in the driveway that takes them to work and school 5 days a week. I’m talking about people just like you and me.
What is a personal economic collapse?
A personal economic collapse is a little different than the major crises you see all over Europe right now, where huge segments of the population can’t feed their children or stay employed. It is a crisis that just hits your family due to a given set of circumstances. (In actuality North Americans are on the brink of the kind of collapse that is occurring in Europe, but because of easy access to credit and a buy-now, pay-later society, many of us still have the appearance of prosperity.)
Here are some signs that you may be in the midst of a personal economic collapse:
- You can only afford to pay the minimum payment on most of your bills.
- The same dollar amount you used to spend on groceries doesn’t buy enough food to feed your family for the week.
- You can’t afford to go to the doctor when you’re sick.
- You are taking dangerous steps to “stretch” needed medications because you can’t afford the prescriptions.
- Your utility bills are past due and your power is in danger of being cut off.
- You skip meals in order to save money or to have enough food for your kids.
- You’ve lost your job or had your hours cut.
- You have lost property due to foreclosure or repossession (such as your home or your vehicle).
Surviving the crisis
Times are tough but you can survive this.
1.) First you have to see exactly where you are.
It’s time for a brutally honest assessment of your finances. If you use your debit card or credit card for most expenditures, you’ll easily be able to see what you’re spending and bringing in.
Print off your bank account statements for the past 2 months. On a piece of paper, track where your money is going. List the following
- Car payments
- Vehicle operating expenses (fuel, repairs)
- Credit card and other debt payments
- Telephone/Cell phone
- Extracurricular activities for the kids
- Extracurricular activities for the adults
- Dining out
- School expenses
- Recreational spending
- Miscellaneous (anything that doesn’t fall into the above categories gets its own category or goes here)
Don’t say to yourself, “Well, I usually don’t spend $400 on clothing so that isn’t realistic.” If you spent it, then it’s realistic. You are averaging together two months, which should account for those less common expenses. Brutal honesty isn’t fun, but it’s vital for this exercise.
So . . . what do you see when you look at your piece of paper with your average monthly expenditures for the past two months? Are there any surprises? Did you actually realize how much you’ve been spending? Most of us will immediately see places that we can trim the budget. Those $1-$5 purchases can really add up. Reining them in may just allow you to take care of an important need that you thought you could not meet.
It can’t continue like this. The economy will not withstand it. Step one is to see where you can cut things out right now from the above expenditures. Can you reduce your grocery bill? Slash meals out? Budget more carefully for gift-giving and school clothes?
2.) Rethink necessities.
If your finances are out of control, the best possible reality check is a stark look at what necessities really are. It is not necessary to life to have an iPhone, a vehicle in both stalls of your two-car garage, or for your children to all have separate bedrooms. People in Southern and Eastern Europe right now will tell you, as they scramble for food, basic over-the-counter medications like aspirin, and shelter, that necessities are those things essential to life:
- Food (and the ability to cook it)
- Medicine and medical supplies
- Basic hygiene supplies
- Shelter (including sanitation, lights, heat)
- Simple tools
- Defense items
Absolutely everything above those basic necessities is a luxury.
So, by this definition, what luxuries do you have?
3.) Reduce your monthly output
Reduce your monthly payments by cutting frivolous expenses. Look at every single monthly payment that comes out of your bank account and slash relentlessly. Consider cutting the following:
- Cell phones
- Home phones
- Gym memberships
- Restaurant meals
- Unnecessary driving
- Entertainment such as trips to the movies, the skating rink, or the mall
4.) Waste not, want not.
We live in a disposable society. Food comes in throw-away containers. People replace things instead of repairing them. If you throw out more than a couple of bags of garbage each week, that’s a very good sign that you may be wasting resources.
Before throwing anything away, pause and think about how it might be able to be reused.
Food: Many times small amounts of leftovers can be recycled into a brand new meal. Meat bones can be used to make broth or stock. Small amounts of veggies or grains can be frozen and added to a future soup or casserole. Leftovers can be frozen in meal-sized portions to take to work for a brown-bag lunch. (Learn more about repurposing leftovers HERE.)
Clothing: Clothing that is torn or damaged can often be repaired with only rudimentary sewing skills. If it has been outgrown or cannot be repaired, often the fabric or yarn can be reused for other purposes, from cleaning rags to fashionable accessories like scarves and headbands, or home items like throw pillows, potholders or rag rugs. When all else fails, the fabric can be used for cleaning rags or patches to repair other items. Keep jars full of buttons, elastic, and other notions that can easily be removed before you throw a clothing item away or relegate it to the rag bag.
Electronics: Obviously, initially you should attempt to repair (or have repaired) electronic items that are not working. If this is not feasible, are there components of the item that can be reused, either now or in the future? What about hardware such as screws or fasteners?
Containers: Most food comes in a container of some sort. Before throwing the container away, consider whether or not it might be useful. Glass jars, plastic tubs, and plastic bags can often be reused to store food in your refrigerator or to contain food in brown bag lunches. Clean aluminum cans can hold all manner of items, from hardware and tools in a workshop to sewing and craft supplies. Use your imagination.
5.) Take control of your food budget.
The price of food is skyrocketing. Who hasn’t been to the grocery store recently and been shocked at the high price of that cart full of groceries or at the mysterious shrinking food packages that are the same price as yesterday’s larger ones?
Stockpile: Create a stockpile of nutritious, healthy staples at today’s prices to enjoy when the cost goes even higher tomorrow. (Learn how to create a frugal food stockpile HERE.)
Preserve: Learn to preserve food yourself when you come across a windfall. Pressure canning,waterbath canning, freezing, and dehydrating can allow you to take advantage of great sales or end-of-season scores.
Eat less: This suggestion isn’t for everyone, but many of us could stand to shed a few pounds. Perhaps now would be a good time to cut back a little and shrink both your waistline and your weekly food bill. Lots of people eat for the sheer entertainment of it or out of habit. Next time you’re watching TV, grab some mending or a crossword puzzle instead of a bag of potato chips. Dish out slightly smaller servings at dinnertime to leave enough to stretch the leftovers for a brown bag meal the next day.
Drink water: Skip the beverages and drink water instead. At less than $1 per gallon for purchased water you simply can’t beat the price. It’s better for you, also, than sugary drinks. If you are lucky enough to have well water or access to spring water, your drinks don’t have to cost you a penny.
Focus on nutrition instead of convenience: Buy the best quality of food you can, and skip the processed, nutritionless convenience foods.
Grow your own. In the summer, grow the biggest garden you can. In the winter, or if you are an apartment dweller, put some sprouts and greens in a sunny windowsill to add some fresh produce for pennies.
6.) Reduce your dependence on utilities.
Energy rates are skyrocketing. As the prices begin to rise, more and more people will be unable to pay their bills and eventually their power will be shut off. Check your bill each month and as prices increase, use less power. Try some of these ideas to reduce your reliance and drop your bills.
- Hand wash your clothing
- Hang clothes to dry
- Cook on a woodstove or outdoor grill
- Can foods to preserve them instead of relying on a large chest freezer
- Turn the heat down a few degrees and use non-grid methods to keep warm
- Use rain barrels to collect water
- Direct the gray water from your washing machines to reservoirs
- Turn off the lights and open the blinds
- Use solar lighting whenever possible
How do you intend to weather the storm?
There are bleak days ahead. Have you planned for this? What strategies do you intend to use to weather the financial crisis that is coming for all of us? What suggestions do you have for families who are undergoing their own economic collapses? Please post questions and ideas in the comments section below.
Source: The Organic Prepper
“There exists in this country a plot to enslave every man, woman, and child. Before I leave this high and noble office I intend to expose this plot.” John F Kennedy, just before his Assassination…
For those who were of age and alive at the time of the Dallas killing, a fresh memory of the times and era are integral to their assessment. Those who were born later, have no firsthand experience of the actual change that took place to the body politics. Comparing before and after is mostly forgotten by the history accounts. For those who remember, the country started on a downward spiral that continues to the present. The assassination of John F. Kennedy was a political coup d’état and has been described as an enigma with many layers of disinformation. However, peeling back this onion exposes a rot that very much explains the current condition of our country.
When raising the subject of a conspiracy, it is both amusing and tragic that establishment defenders are quick to discredit the investigator, while avoiding facts, evidence and common sense. Solving the mystery to the satisfaction of competing and often conflicting factions is not necessary. However, understanding the course of events that took hold after the Camelot myth was buried is intensely valuable. The end of innocence became an existential awakening to the perceptive, while believing the conclusions of the Warren commission provided reassurance for not facing reality.
Why did powerful elites fear Kennedy? The Entire John F. Kennedy Secret Society Speech provides the motive behind the mask of the media filter.
From this “President and the Press” Speech (April 27, 1961)
“The very word “secrecy” is repugnant in a free and open society; and we are as a people inherently and historically opposed to secret societies, to secret oaths and to secret proceedings. We decided long ago that the dangers of excessive and unwarranted concealment of pertinent facts far outweighed the dangers which are cited to justify it. Even today, there is little value in opposing the threat of a closed society by imitating its arbitrary restrictions. Even today, there is little value in insuring the survival of our nation if our traditions do not survive with it. And there is very grave danger that an announced need for increased security will be seized upon by those anxious to expand its meaning to the very limits of official censorship and concealment. That I do not intend to permit to the extent that it is in my control. And no official of my Administration, whether his rank is high or low, civilian or military, should interpret my words here tonight as an excuse to censor the news, to stifle dissent, to cover up our mistakes or to withhold from the press and the public the facts they deserve to know.”
“The significance of the Stone film, JFK, is demonstrated by the assault that the established order heaped upon his portrayal. Believe it or reject it, but investigate the questions that have never been answered. If logic has meaning, have Arlene Spector explain that magic bullet again. That ‘Man X’ was real – his name, colonel Fletcher Prouty, a true ‘black bag’ magician.”
Lyndon B. Johnson initiated the Reign on Terror that continues to this day. His involvement into the plot is supported in the new book, The Man Who Killed Kennedy: The Case Against LBJ by Roger Stone with Mike Colapietro.
“The notable individuals that knew and said Johnson was involved in murderous acts is also well-documented… they include Oswald murderer Jack Ruby, Dexter Scott King, son of Dr. Martin Luther King, as well as LBJ associate Billy Sol Estes, LBJ mistress Madeleine Brown, Texas Governor Allan Shivers, renowned Texas Ranger Clint Peoples, CIA asset E. Howard Hunt and US Senator and 1964 Republican nominee for President Barry Goldwater. The KGB, fearing that they or their puppet state Cuba would be falsely blamed conducted their own investigation and concluded LBJ killed JFK at the same to time French Intelligence would tell Jackie Kennedy LBJ murdered her husband.”
If this is just too much to accept, look at the “Skull and Bones” operative, who just happened to be a Texas Oilman. Similarly, he was Vice President at the time of an assassination attempt that almost was successful. Sure, such a coincidence should be fodder for an Oliver Stone sequel – Reagan.
Now consider the CIA component in the “Big Event”. Did George H.W. Bush Coordinate a JFK Hit Team?
“Next, George Bush can be seen in photos of Dealey Plaza, next to the TSBD doorway and Ed Lansdale, shortly following the assassination (see below). These photos, unmistakably George Bush, tell us where he went after he left the Dallas Sheriff’s Office: back to the crime scene to get an update on all that he had missed. He must have made his call to the FBI reporting James Parrot from the Dallas Sheriff’s Office, at 1:45 PM, because Bush is seen in Dealey Plaza with Lansdale, who would leave the plaza at about 2 PM and walk past “the three tramps” toward the parking lot. Bush obviously had to go straight back to Dealey Plaza for him to be photographed with Lansdale, who remained around Dealey Plaza until Oswald was arrested at the Texas Theater at 1:50 PM.”
J. Edgar Hoover’s FBI was up to his ears in the investigation. He certainly was no friend of the Kennedy’s. Therefore, when eyewitness testimony from scores of witnesses was ignored or discarded by the Bureau, no one should be surprised that the final report will be suspect. The Mary Ferrell Foundation site furnishes the following:
“The Church Committee in the 1970s analyzed the CIA’s role in supporting the Warren Commission, and found it lacking. The Committee “developed evidence which impeaches the process by which the intelligence agencies [CIA and FBI] arrived at their own conclusions about the assassination, and by which they provided information to the Warren Commission.”
Now watch the video from Jim Marrs & St. John Hunt - E. Howard Hunt Deathbed Confession JFK Assassination. A dying admission once held legal merit. But in this disinformation world of government scripted deflection, the public needs to be kept in tranquil ignorance. The Daily Paul site provided additional information.
“One of most explosive under-reported stories of the last 50 years is the deathbed confession of E. Howard Hunt, who was personal assistant to Allen Dulles, head of the CIA at the time, to knowledge that Lee Harvey Oswald did not act alone and that he, Hunt, had been personally involved in the assassination. Hunt said in his written confession that the assassination was code-named “the Big Event.”
Whatever determination you maintain on the actual circumstances, the results from JFK’s elimination are dramatic. Five Fiendish Ways the Kennedy Assassination Warped Our World list is an effective analysis.
1. LBJ Unleashed – Johnson’s profligate Great Society spending strategies, which took the New Deal and accelerated it into hyper-drive.
2. Vietnam – in October of 1963, Kennedy issued National Security Action Memorandum (NSAM) 263, which detailed his plan to withdraw U.S. advisers from Vietnam while gradually scaling back our involvement in Southeast Asia. But within four days of the assassination, Lyndon Johnson had already signed and submitted NSAM 273, which reversed course and basically pledged to stand by the government in South Vietnam come hell or high water.
3. The Federal Reserve Survives – In June of 1963, Kennedy signed Executive Order 11110, which authorized the U.S. Treasury to issue certificates backed by silver as an alternative form of money to Federal Reserve notes. But when President Kennedy was killed, LBJ suspended this program immediately, and the Federal Reserve’s control over the U.S. economy has never once been challenged since.
4. The CIA and Our Culture of Secrecy – Kennedy’s statement to “splinter the CIA into a thousand pieces and scatter it to the wind”, his death allowed the CIA to continue and preserve its culture of secrecy.
5. Mainstream Nonsense and the Mainstream Media – The vast majority of the Fourth Estate took the path of least resistance, and the idea of an independent media that would fearlessly search for the truth no matter where it led died a painful and difficult death.
So what is the significance of the JFK Assassination? In an interview, Roger Stone answers the question: How did JFK’s death affect society, people’s minds? Is the impact still present in your opinion?
“I think it certainly changed our policy very dramatically – I think we moved it back into the Cold War. After the death of John F. Kennedy the important conversations between the Russian State and the United States were damaged. We know, because it was historically recorded that Nikita Khrushchev wept, when he heard of the death of Kennedy. There was an American journalist who was with Fidel Castro, when he was distraught what he learned: he said over and over again “this is very bad, this is very bad”… I think we were engaged – we were beginning to engage in some fruitful conversations in terms of easing the tensions between our countries and I think there were those in the Pentagon, those in the US military, those in our US-based intelligent services who were very unhappy about that direction. I think it is a major factor – not the factor, – but a major factor in getting John F. Kennedy killed.”
It is the contention of this “Reign of Terror” series to provide accounts and evidence that the nation has endured under a shadow government of ruling elites; especially, since the elimination of a President, who dared challenge the interests of the true masters of the establishment.
The deplorable circumstance of a society, so ignorant to make distinctions, of real history from invented official fairy tales, explains largely why Americans are in serial denial. The article JFK retrospectives adnauseam, makes this point.
“People never learn. After the sanctioned assassination, healing the country provided the necessary cover to implement the goals of the coup. Most of the evidence that explains the background that led up to the removal of Kennedy fails to address the breakdown of the entire historic underpinning of the nation, since WWII. The seeds of the Great Society were sown in the idiocy of being dragged into that global contrived conflict. Those who should know best, since they lived during that era, often deny their own blind faith in a misguided allegiance to a central government.”
As for the population that never knew or heard actual accounts of this age, “so called” news reporting usually sugar coats or distorts the facts, ignorance really is not bliss. Today’s electronic media is a hodgepodge of government talking points or press releases.
The constant drumbeat to blame Lee Harvey Oswald solely for the Kennedy assassination intends to make patsies of the American people. The greater fool theory works in elections. In a New poll finds that belief in JFK assassination conspiracy still strong, but slipping slightly may be a trend worth noting. Reflecting the goals of the “Great Society” means, that acceptance of government authoritarianism became easier.
Deconstructing the JFK Myth offers this distinction. ”Ask not what your country can do for you — ask what you can do for your country.“ The invocation needed to read: ”Ask not what you can do for your country — Ask what we can do together to insure individual Liberty”
Propagandists of the ilk of Sargeant Shriver and Arthur Schlesinger Jr., designed a legend that defied factual references”, but the martyrdom of a slain President misses the point. John Kennedy was not a saint, but was an obstacle. What better message to future aspirant reformers that a magic bullet awaits their demise.
Few institutional government critics were known for rocking the boat, especially when Kennedy’s ”a rising tide lifts all boats” might upset his elitist executioners. The system is much bigger than any individual. Bucking the sub-rosa interests that seek greater concentrated control can be deadly. America was condemned to a Reign of Terror on November 22, 1963.
In my last column I emphasized that it was important for American citizens to demand to know what the real agendas are behind the wars of choice by the Bush and Obama regimes. These are major long term wars each lasting two to three times as long as World War II.
Forbes reports that one million US soldiers have been injured in the Iraq and Afghanistan wars.
RT reports that the cost of keeping each US soldier in Afghanistan has risen from $1.3 million per soldier to $2.1 million per soldier.
Matthew J. Nasuti reports in the Kabul Press that it cost US taxpayers $50 million to kill one Taliban soldier. That means it cost $1 billion to kill 20 Taliban fighters. This is a war that can be won only at the cost of the total bankruptcy of the United States.
Joseph Stiglitz and Linda Bilmes have estimated that the current out-of-pocket and already incurred future costs of the Afghan and Iraq wars is at least $6 trillion.
In other words, it is the cost of these two wars that explain the explosion of the US public debt and the economic and political problems associated with this large debt.
What has America gained in return for $6 trillion and one million injured soldiers, many very severely?
In Iraq there is now an Islamist Shia regime allied with Iran in place of a secular Sunni regime that was an enemy of Iran, one as dictatorial as the other, presiding over war ruins, ongoing violence as high as during the attempted US occupation, and extraordinary birth defects from the toxic substances associated with the US invasion and occupation.
In Afghanistan there is an undefeated and apparently undefeatable Taliban and a revived drug trade that is flooding the Western world with drugs.
The icing on these Bush and Obama “successes” are demands from around the world that Americans and former British PM Tony Blair be held accountable for their war crimes. Certainly, Washington’s reputation has plummeted as a result of these two wars. No governments anywhere are any longer sufficiently gullible as to believe anything that Washington says.
These are huge costs for wars for which we have no explanation.
The Bush/Obama regimes have come up with various cover stories: a “war on terror,”
“we have to kill them over there before they come over here,” “weapons of mass destruction,” revenge for 9/11, Osama bin Laden (who died of his illnesses in December 2001 as was widely reported at the time).
None of these explanations are viable. Neither the Taliban nor Saddam Hussein were engaged in terrorism in the US. As the weapons inspectors informed the Bush regime, there were no WMD in Iraq. Invading Muslim countries and slaughtering civilians is more likely to create terrorists than to suppress them. According to the official story, the 9/11 hijackers and Osama bin Laden were Saudi Arabians, not Afghans or Iraqis. Yet it wasn’t Saudi Arabia that was invaded.
Democracy and accountable government simply does not exist when the executive branch can take a country to wars in behalf of secret agendas operating behind cover stories that are transparent lies.
It is just as important to ask these same questions about the agenda of the US police state. Why have Bush and Obama removed the protection of law as a shield of the people and turned law into a weapon in the hands of the executive branch? How are Americans made safer by the overthrow of their civil liberties? Indefinite detention and execution without due process of law are the hallmarks of the tyrannical state. They are terrorism, not a protection against terrorism. Why is every communication of every American and apparently the communications of most other people in the world, including Washington’s most trusted European allies, subject to being intercepted and stored in a gigantic police state database? How does this protect Americans from terrorists?
Why is it necessary for Washington to attack the freedom of the press and speech, to run roughshod over the legislation that protects whistleblowers such as Bradley Manning and Edward Snowden, to criminalize dissent and protests, and to threaten journalists such as Julian Assange, Glenn Greenwald, and Fox News reporter James Rosen?
How does keeping citizens ignorant of their government’s crimes make citizens safe from terrorists?
These persecutions of truth-tellers have nothing whatsoever to do with “national security” and “keeping Americans safe from terrorists.” The only purpose of these persecutions is to protect the executive branch from having its crimes revealed. Some of Washington’s crimes are so horrendous that the International Criminal Court would issue a death sentence if those guilty could be brought to trial. A government that will destroy the constitutional protections of free speech and a free press in order to prevent its criminal actions from being disclosed is a tyrannical government.
One hesitates to ask these questions and to make even the most obvious remarks out of fear not only of being put on a watch list and framed on some charge or the other, but also out of fear that such questions might provoke a false flag attack that could be used to justify the police state that has been put in place.
Perhaps that was what the Boston Marathon Bombing was. Evidence of the two brothers’ guilt has taken backseat to the government’s claims. There is nothing new about government frame-ups of patsies. What is new and unprecedented is the lockdown of Boston and its suburbs, the appearance of 10,000 heavily armed troops and tanks to patrol the streets and search without warrants the homes of citizens, all in the name of protecting the public from one wounded 19 year old kid.
Not only has nothing like this ever before happened in the US, but also it could not have been organized on the spur of the moment. It had to have been already in place waiting for the event. This was a trial run for what is to come.
Unaware Americans, especially gullible “law and order conservatives,” have no idea about the militarization of even their local police. I have watched local police forces train at gun clubs. The police are taught to shoot first not once but many times, to protect their lives first at all costs, and not to risk their lives by asking questions. This is why the 13-year old kid with the toy rifle was shot to pieces. Questioning would have revealed that it was a toy gun, but questioning the “suspect” might have endangered the precious police who are trained to take no risks whatsoever.
The police operate according to Obama’s presidential kill power: murder first then create a case against the victim.
In other words, dear American citizen, you life is worth nothing, but the police whom you pay, are not only unaccountable but also their lives are invaluable. If you get killed in their line of duty, it is no big deal. But don’t you injure a police goon thug in an act of self-defense. I mean, who do you think you are, some kind of mythical free American with rights?
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available
Source: Paul Craig Roberts
Many years ago I knew a couple who adopted the habit of being gratuitously defensive about one another. If you made even the slightest comment questioning one of them in the other’s presence, that party would say something such as “Watch it!” The admonition, however, would lack a certain conviction.
Not long after they were divorced.
Their earlier behavior then made sense: They couldn’t accept that their marriage was in trouble. And each spouse would react defensively to even mildly negative feedback about the other not because he knew it was false, but because he feared it was true. It validated feelings each was having about the other but desperately wanted to keep repressed.
I’m reminded of this when considering the intellectual contortions of liberals who defend Barack Obama. No, it’s not perfectly analogous: liberals are driven more by political ambitions and ego than by a desire to make their “marriage” work. But the denial is similar.
A good example is a Vanity Fair piece by someone named Todd S. Purdum. Titled “The Lonely Guy: He’s a community organizer who works alone. What was once his greatest strength — he kept his cool and didn’t need feedback — is now a liability,” the subtitle says it all. The article is a somewhat tedious apologia, providing this or that example of how Obama doesn’t engage people, of how Daddy Big-Guv thinks he knows best.
In justifying Obama’s attitude, Purdum writes:
Self-containment is not simply Obama’s political default mode. Self-possession is the core of his being, and a central part of the secret of his success. It is Obama’s unwavering discipline to keep his cool when others are losing theirs….
But this quality, perhaps Obama’s greatest strength in gaining office, is his greatest weakness in conducting it.
Nonsense. First, keeping your cool (at least publicly) isn’t unusual for aspirants to higher office. The few thought lacking in this area, such as Bob Dole and John McCain, found it a liability come election time.
Second, Obama’s greatest strength in gaining office was a servile media that suppressed every scandal and ugly truth, every sordid association, every risible mistake and radical position. It’s easy being cool when nine wide phalanxes of fawning human shields stand between you and the flak, but one wonders how cool Obama would’ve been had he not benefitted from the regular affirmative action that got him established and the cultural affirmative action that got him elected. Of course, we’d never have known because his coolness would have been confined to passing the bong with the Choom Gang. We never would’ve heard of him.
Moreover, many forget that in 2008 his campaign was sometimes faulted for amateurish stumbling. The myth of Obama the Great Campaigner was manufactured after the fact.
But the myth of Obama the Nice Guy is only being questioned after the fact. As to this, Purdum writes, “Five years into their tenure, the [First] couple has a social reputation few would have envisioned when they came to town: more standoffish than the Bushes, and ruder than the Clintons.”
Let me correct you, Mr. Purdum: few in your echo chamber of fawning fellow travelers would have envisioned it. Millions of people, however, had Obama’s number all along. Perhaps you’ve heard of them. They’re called traditionalists.
Cutting through the nonsense, the real explanation for Obama’s “self-containment” was provided by former Obama aide Neera Tanden. Explaining her boss’s refusal to call Bill Clinton she said, “The truth is, Obama doesn’t call anyone, and he’s not close to almost anyone. It’s stunning that he’s in politics, because he really doesn’t like people.”
He doesn’t like people.
Ponder that for a moment. It’s sort of a problem because people are exactly who a leader has to govern. But Tanden is wrong on one point: It’s not at all stunning Obama is in politics, as few politicians enter the field because they “like people.” Oh, liking people — or at least being able to fake it — helps you succeed, and if Obama prevailed despite visible misanthropy, it is again a testimonial to the power of media manipulation. But an individual is more likely to enter politics to be lauded by people (glory), or to control people (power), or because he hates the people’s handiwork (society) and wants to punish them and/or reshape them in his own image. Leaders thus disposed have had names such as Robespierre, Lenin, Hitler, Stalin, Mao and Pol Pot.
Returning to Vanity Fair writer Purdum, the reality about Obama he’s struggling to reconcile is explained well by the first part of his magazine’s name. After all, he also wrote, “‘I think that I’m a better speechwriter than my speechwriters,’ Obama told his 2008 campaign political director, Patrick Gaspard…. ‘I know more about policies on any particular issue than my policy directors. And I’ll tell you right now that I’m going to think I’m a better political director than my political director.’” As per his subtitle, Purdum sloughs this attitude off by claiming Obama “didn’t need feedback.” The correct explanation is a bit different.
Obama is a self-centered, arrogant, and quite probably megalomaniacal and narcissistic — and possibly sociopathic — jerk.
Truth: everyone needs feedback. A good leader knows this and is wise enough to both surround himself with competent people and to separate good counsel from bad. He exhibits what Confucius spoke of when saying, “Wisdom is, when you know something, knowing that you know it; and when you do not know something, knowing that you do not know it.” And Obama? He’s not dumb, as some suggest, though his intelligence is overrated. It’s that he doesn’t know much that is true — and, more significantly, he doesn’t know what he doesn’t know.
This is when even intelligent people can do profoundly stupid things. For example, Adolf Hitler, a master manipulator who could mesmerize masses, thought he knew better than his generals and was best suited to choose battlefields, strategies and tactics on the Soviet front. Evil people, you see, tend to be ridden with that intellect-occluding thing called pride; they consequently make bad decisions and eventually sink their own ship. And if at the helm of a nation, it can be a mighty big ship they sink.
Speaking of pride, G.K. Chesterton once said, “[A] great man knows he is not God, and the greater he is the better he knows it.” This is brought to mind by an interview Obama gave to Chicago Sun-Times religion reporter Cathleen Falsani in 2004. When asked if he prayed often, Obama offered this curious response: “It’s not formal, me getting on my knees. I have an ongoing conversation with God. Throughout the day I’m constantly asking myself questions….”
So a “conversation with God” = “asking [himself] questions”? Literally interpreted, this means Obama considers himself God. Of course, allowing for loose talk, there’s no saying the president is like an Egyptian pharaoh and actually believes he is a deity. But was his comment akin to a Freudian slip? Did it reflect not only how he is at the center of his own world, but how he naturally assumes he should be the center of the world?
Purdum, seeking to explain Obama’s dysfunction — for which he euphemistically uses terms such as “self-sufficiency” — points out that due to parental neglect, Obama has “always been alone.” But this warrants elaboration.
Children have a strong need to bond with their parents, so strong, in fact, that if a mother to whom a toddler is attached must leave him even for a time, he may cry in distress. And when a child is continually abandoned — as Obama was by his father and, to an extent, by a mother who left him with grandparents — the pain can be so severe that to ensure he won’t be hurt again, he will keep people at arm’s length and avoid bonding in the first place. In addition, he can become distrustful of others and even develop a dislike for them; after all, those who should have cared about him most broke his heart. First impressions are powerful, and this child’s first experiences with “people” were bad ones.
Therapist Peter Gerlach, who specializes in “bonding wounds,” had this to say about such individuals:
Such children increasingly depend on themselves to get key needs met. This becomes normal, reflexive, and unremarkable. They neither expect [n]or ask for help.
They observe how loving adults and kids behave, and become skilled at sounding and acting just like them — but they don’t feel attached, empathic, or committed.
These wounded people are often very attractive socially and professionally.
Of course, this is psycho-analysis from a distance, but it certainly would explain why Obama “really doesn’t like people.”
It may sound old-fashioned today, but this is why parents in ages past would try to ensure that a child’s prospective spouse came from a “good family.” But five years ago millions of Americans refused to look beneath the wrapper and married their nation to damaged goods. And he turned out to be an abuser who will leave nothing but damaged goods in his wake.
“The trade in derivatives, using home notes, was designed as a Ponzi scheme. Excel knew it. Cadwalader, Wickersham & Taft (CWT), knew it. My fellow junior associates laughed at me, senior associates got mad at me, and the senior partners ultimately asked me to resign or be fired when I wrote repeated lengthy memoranda explaining this out to them.” – Charles Lincoln, III, PH.D., Harvard, J.D., University of Chicago, School of Law
Who is Charles Lincoln, III?
In October, 1993, Charles Lincoln, III began work as an associate at Cadwalader, Wickersham & Taft (CWT). He had just completed a judicial clerkship for Kenneth L. Ryskamp, U. S. District Judge, Southern District of Florida. During his clerkship with Judge Ryskamp, Lincoln had planned, coordinated, and framed the jury questions for a very large securities fraud trial in Palm Beach against Alan B. Levan’s Florida-based BankAtlantic Bancorp and Subsidiary Bank Atlantic Financial Company (BAFCO), which were heavily involved in Florida Real Estate from 1952-2011.
What he was about to learn, and challenge, would change the course of his life, from one of privilege to destitution.
In many ways, Lincoln might have appeared exactly the kind of associate who could be expected to make partner rapidly. Ambitious, bright, and energetic, CWT hired him because he received top law school grades in Securities, Antitrust, and Banking Law, as well as for his clerkship experience in Securities & Banking cases in the post-S & L Collapse period in Florida. He had also been President of the Environmental Law Society at University of Chicago, School of Law.
In law school, he had become intrigued by the role of securities in establishing, maintaining, and shaping the global-elites of the 20th century. The complexities of hierarchical and socio-political structures had been his greatest interest in Anthropology & History at Harvard.
In his first month at CWT he turned in 393 billable hours wildly exceeding any expectations. First year associates are expected to bill at least 2000 hours per year, Lincoln managed to do this in less than six months. At Cadwalader, Lincoln aspired to a professional specialization in securities litigation, fraud, shareholder’s and directors’ relations, rights and obligations, general agency and relationships of fiduciary duty.
Lincoln had taken up law as a second career after a decade as a working archeologist in Mexico & Central America, during which time he wrote a doctoral dissertation “Ethnicity & Social Organization at Chichen Itza, Yucatan” at Harvard’s Peabody Museum. His dissertation resulted from a project he directed in his 20s, funded by the National Geographic Society, Harvard’s Peabody Museum of Archaeology & Ethnology, and private donors such as Doris Zemurray Stone and novelist James A. Michener.
As an archaeologist, Lincoln had become frustrated, acutely aware of problems mounting in the world, which originated in finance. Determined to use law creatively as a force for positive change, he enrolled at the University of Chicago, School of Law. At the school, he served as President of the Environmental Law Society (ELS), presiding on a year-long symposium at the Law School in 1990-1991, concerning oil spills in the immediate wake of the Exxon Valdez disaster of March 24, 1989.
Raised as the grandson, and effectively adopted son, of a wealthy petro-chemical engineer & military supplier in Highland Park, Dallas, Texas, Lincoln was not a stranger to the better addresses in New York. The welcome dinner held at the Waldorf Astoria for the twenty associates hired at the same time, of which he was one, did not impress him. Cadwalader, Wickersham, & Taft, though claiming to be the oldest, founded in 1792, the same year as the New York Stock Exchange, was by no means the largest.
Lincoln knew Cadwalader’s history and greatest claim to fame and power. This is its status as primary law firm to the Bank of New York (BNY), now BNY-Mellon, founded in 1784 by Alexander Hamilton, 8 years before Cadwalader opened its doors under a different name.
The long relationship between the oldest bank and the oldest Wall Street Law Firm include Cadwalader’s role in setting up BNY to be the very first law firm to be traded on the NYSE. Cadwalader’s historical policies have consistently, matched and supported those of the BNY and the thinking of Alexander Hamilton.
Cadwalader’s flagship office was then at 100 Maiden Lane, in New York 10038, close to the heart of the financial district in New York.
Having been hired on for Cadwalader’s litigation department, Lincoln encountered a department which was essentially inactive in 1993. The only the only active cases involved municipal defense to voting rights act cases in California.
Even the litigators, in 1993, were all working on one project, one particular project which was shrouded in great mystery and secrecy.
The Excel Mortgage Project
Instead of litigation, Lincoln along with all other first year associates, were temporarily to work with the “Structured Finance Department” on preparing the registration statement of Excel Mortgage. Lincoln’s role was to review and assess a series of some 1500 Arizona residential properties in relationship to state and federal environmental law and geographic issues, such as cultural resource management, and other points relating to the entire history and possible condition and liabilities of these properties.
The 1500 or so properties, subject of his study, were earmarked as assets being “deposited” into the Excel Mortgage Bond Fund, along with promissory notes originated by a number of creditors on homes conforming to a certain size and value profile, but having no other relationship. These were not part of the same communities, not part of a single development project, not built by a common builder, or anything else. This struck Lincoln as strange. Why “pool” all these unrelated properties together? And would be in the completed “pool?” Why was the Bank of New York underwriting this project?
Enter the Securitized Derivative
Excel Mortgage, a highly valued client of CWT was about to become part of history, doing something that had never been done before: registering a bond for sale to the public, which bond was based on pooled notes, a hybrid of debt and equity interests in and contingent claims to realty. This type of financial instrument had never before been sold to the public, though it had existed for about 25 years in the “private placement” market.
Lincoln was unwittingly participating in the first initial public offering (IPO) of a bond, a debt instrument, derived in part from promissory notes, ‘debts,’ and in part from contingent pledges of title, ‘secured equity,’ in residential real estate.
Securitized derivatives were being born at 100 Maiden Lane.
Bernard Madoff, who founded the NASDAQ when he was 33, was a prominent client of CWT, walking the floors of Cadwalader late at night.
The entire staff of CWT, underwritten by the Bank of New York, supporting Excel, were charged getting these new-fangled “derivative” instruments past examination by the Securities & Exchange Commission (SEC).
This was an arduous, and expensive task, necessitating a “lint-picking” review, before these ‘derivative instruments’ could be packaged under the name of Excel Mortgage and offered both on the NYSE and NASDAQ. An SEC Registration Statement is an application for Federal Blessings affirming investing in a certain stock, bond, or “other instrument or obligation” is a reasonable investment for an average investor to make.
Supposedly “sophisticated investors” can do whatever they want to do, so long as it’s not expressly fraudulent or otherwise illegal. But the average grandmother investing for her grandkids’ college needs Federal Protection. Like “Social Security”, the concept of “Security” in the “Securities and Exchange Commission” is essentially a matter of “Trust us, We’re the Government.”
SEC Registration Statements require, prior to sale of any debt or equity instrument to the public, disclosure of all a companies’ assets and liabilities along with the qualifications of its officers and directors, and more.
Nobody outside of the law firms who prepare such things and SEC staff, would ever read this, but preparing the registration would bring CWT millions of dollars.
Excel Mortgage, however, was not selling stock in itself as an enterprise or an entity: it was selling a pooled collection of utterly unrelated and unconnected and barely similar promissory notes with contingent interests in, and access to, equity ownership of real property owned by 1500 different people and subject to 1500 separate notes and mortgages.
1993 – Anomalies, and Questions, Emerge
Who was to supervise its operation after “Registration”? What coherence did this “enterprise” have ASIDE FROM the Registration Statement? Would anyone ever recognize it as a “business?” If so, how and why? Lincoln was puzzled and perplexed, and not satisfied with any of the answers he was getting.
The SEC did not appear to inquire into post-issuance management or maintenance of the pool of assets. Once “securitized” the notes would still be handled by individual originators or assigned to servicers. Lincoln asked “what was there left to be assigned or handled once the notes and mortgages were pooled?”
The SEC is charged with protecting small individuals and the corporate investor.
The SEC is expected to be involved in examining and making inquiries about a company’s claims for potential and predictions of earnings or profitability.
On what opinion or data would these be based for the Excel Mortgage Pool, since there weren’t any?
The opinions used were based on the “normal statistical performance of similarly credit rated and similarly valued mortgages in similar markets from studies of a group at MIT Sloan School of Management headed by a then no-name professor Frank J. Fabozzi. Fabozzi, with close ties to the Bank of New York, was also among the occasional Night walkers at Cadwalader.
The process of preparing an SEC registration statement is a gold-mine for lawyers inclined to highly detailed work. Such a process for registration can normally require Lincoln said, over a thousand individual revisions. The Excel Mortgage registration would be subject to over 2,000 revisions, but in all this there was still no attention given to claims of ownership, transfer of title, the laws of agency and fiduciary duty of managers, any of the concerns which normally plague the corporate world and frame the concern of SEC examiners and securities lawyers.
What’s In It for CWT?
The careers of young associates, and even older partners, at firms such as Cadwalader, Wickersham, & Taft, Chadbourne & Park, Sullivan & Cromwell, or Skadden, Arps, depend upon work measured in billable hours. Cadwalader had a “billing goal” of multiple millions of dollars for the Excel Mortgage registration project.
Lincoln recalls three relevant details:
First, the firm was never able to reach it’s own goal of billable hours by the time the project was complete.
Second, the firm sent constant “internal memoranda” by e-mail to all employees, down to the lowliest legal secretaries and paralegals, to work harder and BILL MORE HOURS. It was simply inconceivable that Cadwalader might have to refund any part of enormous retainer paid for the Excel Mortgage, SEC Registration Statement project. The money for this had all been advanced by BNY, who counted on Cadwalader to do the job which needed to be done.
Third, the practical purpose of any billable hours stood quite above and beyond any possibility of doubt or question. In fact, any and all billings, however described, so long as they were assigned to the Excel Mortgage Registration Statement Account, were welcomed.
Lincoln was therefore able to unleash his curiosity, delving late at night after hours into issues which ranged far, far afield from the environmental history, condition, and culturally or historically significant use or contents of the subject properties.
Despite some losses during the 2007-2008, CWT was in 1993-1994, and remains today, the top firm representing the creators and implementing the designs of “structure finance and derivative securitization” world wide. Lincoln wanted to understand what he was doing, and what he was involved in creating. The more he found out, the more troubled he became.
As an entry-level associate at Cadwalader Lincoln received his own office and secretary and paralegal. Little time was spent interacting with others in the office. A quick question might be asked but friends did not come quickly. Each associate knew what mattered was the hours billed, and friendly socialization was hard to itemize even on the Cadwalader charts. Hanging over the heads of all new associates was the goal of “making partner.”
As an anthropologist, Lincoln saw immediately the subculture of the law firm had its own standards, values, and mandates. The firm had high standards for dress which included ties which remained in place all day, regulations for tie clips or tie pins and cufflinks and belts and, of course, shoes, whether white or “normal.”
Standards for women included skirts below the knee and mandated the length for sleeves and the height of necklines and collars. Even the length of hair, for women, was described and outlined in the firm guide, although one paralegal from the litigation department was granted a special exemption, for cause. Known to and noted by everyone in the firm, for his ponytail and paisley shirts, the associate was hired from SDS in California as “our eyes and ears to the lower classes,” as the senior partners consistently and uniformly described him.
Lincoln, as an undergraduate, had twice been voted, “best dressed man on campus”, but the whole Cadwalader atmospheric ethos of bloodless conformity, as noted above, was for him one of stifling suffocation.
The anomalies which began to intrude on Lincoln’s consciousness during his late hours trying to understand the “entity” being sold almost as if it were a company or entity, without actually being one, became an obsession. At first, this lead only to more billable hours, but the trip down the rabbit hole became increasingly disconcerting.
All questions of real value or reasonable expectations, lead the inquirer to the Bank of New York’s Heart, ending any questions.
The Disconnect between Law and Derivatives
Lincoln’s law school classes, under the University of Chicago’s Andrew M. Rosenfield, William Landes, Geoffrey Parsons Miller, and Richard A. Posner, and from his further and ongoing research as a Law Clerk with Ryskamp and now at Cadwalader, had considered the question of real value and reasonable expectations.
Issuing and selling securities, debt or equity, takes place when a company, or group of people who have control over assets they planned to use to make money, or with which they were already doing something generally profitable, or wanted to raise new capital and/or liquidate their ownership and interests in an ongoing and successful venture.
This did not come close to describing what Bank of New York had underwritten for Cadwalader to prepare for Excel Mortgage.
This SEC Registration Statement gave birth to new type of “debt-equity-derivative debt instrument” which had none of the elements or characteristics of a traditional enterprise at all. It was PAPER MADE FROM PAPER, SECURED BY PAPER.
Indeed, the Excel Mortgage Bond, which was soon to be popped onto the market with an SEC certification of Federal conformity was a creation of the lawyers, by the lawyers, for the lawyers.
As one of the most senior associates, now firm Chairman, Christopher White explained to Lincoln when he asked him, “Who will own the interests in these notes once they are securitized?” He grinned boyishly from ear-to-ear and said, “we will, because everyone will have to pay us to tell them.”
Without any unifying manager or common owner for these properties, the pool of notes struck Lincoln as like nothing so much as “res nullius” in Ancient Roman Law—the legal category of “property belonging to no one”, e.g. virgin forests, wild beasts and undomesticated fur and game animals of every kind, the un-owned and un-ownable creatures of the deep.
Excel Mortgage was going to pool all these “derivative” real estate mortgage interests, whose only commonalities marking them as similar were the price, promissory note, range, size and “single-family home-residential” nature of the properties, and the credit or FICO scores of the owners.
Having “pooled” these “cherry picked” assets, Excel was going to create a strange creature without an owner until either default or foreclosure moved someone to homestead these unownable notes back to control and “ownership” again.
In essence, the concept was, “everything belongs to everyone in common” and “debt is not individual but collective.”No one owes his or her debt to any person, but everyone owes it to everyone to pay. This concept seemed, even to Lincoln in 1994, strangely reminiscent of Aldous Huxley’s “Brave New World.”
The Excel Mortgage Bond to be securitized reflected an artificial “derivative” interests in a non-coherent, uncontrolled mass of wealth, which could and would have to be tamed individually, just like hunting the wild game of the woods.
There would be only a pretense of relationship between the notes originated and the notes collected upon.
There was no one to oversee the transfers, no one to audit the exchanges of values; there were quite simply no responsible parties anymore than anyone can take charge of wheat chaff thrown into the wind or the by-products of a paper mill dumped into a river, yet these “derivative by-products” were being STRUCTURED into something said to have value.
Around 1500 or 2000 properties had been collected together and placed in a basket or pool. But no single plan of real estate development or construction or sales was involved, nor was any contemplated. Nothing joined these properties as a class. Most were not new, but merely resales.
Raising the Issues
Lincoln dug in further, producing and circulating to all his fellow associates and the senior partners at Cadwalader his own memoranda: lengthy studies and analysis on issues such as the fiduciary obligations in the Law of Agency.
Fiduciary responsibility of issuers of securities to purchasers, holder in due course doctrine, implied covenants of good faith and fair dealing between parties to a contract, privity of contract itself, and commercial paper doctrines such as endorsement and ownership as holder, and the comparative rights and priorities of “naked” holders vs. “perfected” holders.
As Lincoln’s months stretched out among the whirring circular brushes which polished the green and white marble floors of CWT, he spent more-and-more time with the partners of real estate department, which seemed to understand his worries and concerns better than others, certainly better than the Fourth or Fifth year associate in charge of coordinating the Excel Mortgage Project who kept explaining “this is my road to partner; if I can finish this and make it happen, I won’t have to worry about how to live on these lousy six figure salaries anymore, I’ll finally be making millions, and that’s why we all came here, isn’t it?”
Questions Find Answers
Since it was not why Lincoln had arrived at 100 Maiden Lane this presented a dead end for him.
The real estate connection, and an aborted plan to open a CWT office in California, permitted him to compare the Excel Mortgage project with another, more traditional real estate development Sacramento, California.
An extremely prominent CWT client based in Los Angeles was complaining and encountering major problems because of a parallel but separate and distinct set of misapplications of the law of agency, fiduciary duty, and obligation, also originating from the same historical “Cadwalader Memorandum” on transfer of interests which had triggered the explosion of derivative innovations in the securities realm.
With CWT acting as counsel for an old and distinguished California family and collection of enterprises, the Ahmansons, tracts totaling several dozen suburban “townships” in El Dorado, Placer, Sacramento, Sutter, Yolo, and Yuba Counties had sold by the Ahmanson family to a Japanese firm and retained an “Ahmanson Construction Group.”
The intention was to build a resort in the area for the benefit of the Japanese owners acting as “construction agents.”
Normally construction is performed pursuant to agreements with “independent contractors” who make estimates but are not obligated to continue working if their estimated budgets prove insufficient to complete a project. The Japanese investors were seeking to securitize all the sales in this immense, almost unimaginable project.
Involved, were the Bank of New York, with Cadwalader’s long-time California based H.F. Ahmanson holding Company, parent company both to Ahmanson Construction and the since failed Home Savings of America Bank.
The “construction agency relationship” which Cadwalader had created imposed devastating duties and obligations on Ahmanson. As agents, Ahmanson Construction was obligated to use its own money to achieve the ends of the principal, in this case the Japanese company which had purchased the real estate but woefully underfunded the construction of the vast tracts of homes. Ahmanson could not make a profit or even break even. In effect, they had become slaves to the Japanese and might never be compensated.
Lincoln, having reviewed the facts, pointed out to Stephen Meyer, Richard C. Field, and John McDermott, the partners most closely associated with Ahmanson, that by not only failing to protect Ahmanson, but in fact, selling them into quasi-slavery as agents under a contract without guarantees of adequate funding to execute agency obligations, the firm had made a ghastly mistake amounting to nothing less than legal malpractice. This was a breach of fiduciary duty in and of itself.
Lincoln was told, “This firm has a policy of doing no wrong. Therefore, you are wrong. The firm is never wrong. You should reevaluate your conclusions.”
This happened in 1994, only two and a half years after the sensational October 1991 confirmation hearings for Justice Clarence Thomas. The Paula Jones allegations against the new President Clinton, were beginning. “Sexual harassment” became a great boogie-man haunting law firms all over America.
Consequences are Clarified
After reading his memorandum on the Ahmanson project, these senior partners asked Lincoln to leave the room.
When they called Lincoln back in, they told him, very solemnly,
“you know you need to keep your nose clean around here. We have all received reports that you have taken your secretary Alex to lunch more than once and what’s more you gave Holly, the Senior Secretary in recruitment & personnel, flowers for her birthday and Valentines Day. So just remember: never ever do anything, anything at all, that you would not want to see published on the front page of the New York Times. Anything here can be, you know, and anything will be, at the drop of a pin, because everyone is very sensitive to questions of decorum these days, and, after all, you are a married man.”
Lincoln reports he did not even bother to ask how they happened to think of this only after a three hour meeting concerning the Ahmanson contract of construction agency, when he had never heard about any concerns of this nature before.
At work, Lincoln continued to pile up daunting billable hours doing research on a growing list of issues, each going back to the dissection of the elements of value, which were being “deposited” into the derivative pool. He was determined to understand what was really happening. Why were they doing this?
Confirming what Christopher White had told him before, a Properties Department attorney named Stephen Meyer, advised Lincoln to keep his mouth shut, this happening shortly before Lincoln was asked to resign. Both men had made it clear, in nearly the same words, that Lincoln should be careful about questioning or criticizing firm’s plan for transforming the economy of the Western World, “this is how things are being done these days. We do because we get to charge everybody. This is how the whole world will be managed by 2020, we have a plan.”
As Lincoln was to discover, there was a plan. A book called “Cadwalader 2020” contained a comprehensive manifesto of how the world would be changed by the year 2020. Unsecuritized individual debt would no longer exist.
During Lincoln’s entire time at CWT, the firm maintained a high level of security over the Excel Mortgage work, work which finally involved everyone at the firm. All who worked at the firm had to submit to a frisk on leaving work. No papers or laptop computers or diskettes, this still the era of 3.5 inch diskettes, were to be taken home or removed from the premises, and no external e-mail was allowed connecting to firm e-mail. All firm e-mail was in fact carefully monitored.
To entirely use up the retainer on the Excel work, Lincoln and all the other first and second year associates found themselves in a large conference room supervised by some of the partners pasting labels on files.
The partners had to review the signature pages before officers of Excel would sign the documents, and the associates were there to prepare and affix signature tabs, saying “sign here, Mr. So-and-So, on to the final pages of Statement before final submission.
Lincoln said it seemed odd to use attorney billable time to prepare, double-check, and verify signature tabs, even on a super important document until you considered the driving desire of CWT to maximize their billable hours.
Billing rates were $150.00 an hour for new associates, $60 – 80 an hour for paralegals, and $40 – 50 an hour for secretaries. On being told that he had failed to bill his secretary’s and paralegals’ time for bringing him after hours meals and snacks, Lincoln asked the senior associate in charge of organizing the Excel Mortgage Project how much the firm billed out for the hourly operators of the automated circular marble floor polishers which whirred seemingly ceaselessly day and night throughout the offices. Epstein just glared at Lincoln silently. Those hours were not billable.
CWT was determined to drain every possible penny from the work done for Excel Mortgage, and did. This appeared to be consistent with the Bank of New York’s plan in financing the project in the first place.
As Lincoln’s research continued, the business plan being followed by Excel Mortgage also emerged, in all of its complexity and disturbing detail. The company had seen the potential to redefine a debt, recreating it as equity, and equity can be used as collateral for originating and extending more debt, which can be hybridized with contingent interests in an ever expanding pyramid of debt, doubled into equity, doubled into debt…. And again, this was the CWT-BNY plan for perpetual inflation.
There was quite simply no plan other than to pool and securitize the notes to issue X millions of dollars in bonds. These would be sold on the major stock exchanges, generating equity. The equity would be used to extend or originate more money to the borrowing public who then “sell” or give their new notes. This then generates more equity through debt, a constantly pooling and production of derivatives then sell to continue the cycle.
Ponzi Scheme Emerges
After his first month of painful research, it took Charles an additional 6 weeks to figure out and map the nature of the pyramid, another 6 weeks to check his work and accept the results, and then he started writing memoranda, one after the other, each one critiqued by other associates or the senior partners and getting longer and longer.
His first memorandum was entitled “The Law of Fiduciary Duty in Agency.”
His second was “Transfer and acceptance of instruments by endorsement and receipt: who is responsible?”
There were at least four others, the longest of which was over 500 pages.
Lincoln’s conclusion was breathtakingly simple: “merger of identities destroys the identities merged, there is no individual liability for debt in the absence of privity of contract, and no privity of contract without individual identity of contracting parties.”
It was clear from the elated attitude of the Senior Partners that designing and implementing the Excel Registration Statement, as the first IPO of its kind, stood in their minds as their most important contribution to western civilization, as envisioned through the world of “Cadwalader 2020”.
Finally, Lincoln was asked to resign, about six weeks shy of his first anniversary. His questions and concerns had not ended and the Partners were becoming hostile.
Leaving with a not quite “Golden Parachute” consisting of a $50,000 severance payment, he had vocally identified a series of challenges which the management of Cadwalader had no intention of addressing. It was now clear to Lincoln these were not any kind of mistake or oversight.
Lincoln’s final memorandum at Cadwalader opined, perhaps overestimating general knowledge of the law, “no mortgage note included in the Excel mortgage pool will ever be lawfully collected in the event of borrower/credit-debtor default, because the pooling of identities obliterates individual obligations and rights, and discrete transactions lie at the foundation of our system of contract and debt.”
At the meeting where he finally resigned, the Senior partners, perhaps understanding the American public better than Lincoln, said to him, “Who is ever going to notice lack of privity of contract besides you? They teach you all those archaic “Elements of Law” at the University of Chicago, we know all about it, but nobody does business that way anymore. The economy of the future is now, nobody cares about endorsements and signatures anymore, it’s all going to be electronic, anyhow.”
Lincoln responded, “well, then, you’re going to have to change the law.” And the masters of the CWT universe said, “Don’t let the door hit you on your way out, we write the law, we interpret the law, we tell everyone in America what the law means, that’s what we do.
The Price Paid
The next nineteen years of Lincoln’s life have been filled with constant attacks from the legal establishment from directions and in ways which exacted a hideous toll on him and those he loves. He has repeatedly learned what it is to be hated, rejected, despised, a man of sorrows and acquainted with grief. In those two decades he lost his wife, his birth family, and his son, all his inherited property, including several homes and a gigantic private library and personal collections of fossils, numismatic, painted, and sculptural art, his law licenses in three states and even his own not-at-all-insubstantial investments.
Lincoln notes that, after what can only be called a blessed beginning in life with his loving grandparents supporting him, an exceptional education, and basically a privileged and charmed first three decades of life, his consistent pattern of loss only began when he was 33-34 years with his entry into private law practice at Cadwalader, in what, quite simply should have been “the best of all possible worlds.”
Left with nothing, he refused to quit.
All of these events began after those critical months, less than a year, that he had spent at Cadwalader, Wickersham, & Taft.
As historical events unfolded, parallel to his own life, his worst projections regarding the impact of the new market in mortgage derivatives proved to be frighteningly accurate. Lincoln began to research how the runaway Ponzi Scheme could be halted, and reversed.
According to Lincoln, for the past ten years, his life has been entirely shaped by the mortgage crisis and its origin in securitization. The question which, he says, drove him is how private property and integrity of contract could restored in the face of the “New World Order” Plan. This is the plan Lincoln first became aware from the internal firm booklet “Cadwalader 2020,” while he was working at CWT in 1993-1994.
Lincoln believes such restoration is possible. The systemic fraud has not gone unnoticed, as CWT and BNY clearly thought would be the case. Their concern is registering through the rising wave of settlements which are now extinguishing the cases they deem most threatening. These cases are now settling on the courthouse steps for significant amounts and return of the real estate, free and clear of mortgage related liens.
Banks understand the ominous possibilities they face if juries realize what really happened. And today, it is not just Cadwalader. Nearly every major financial law firm in the United States who is involved, directly or indirectly, in the implementation, defense, or coverup of securitization is potentially liable.
This potential for liability makes the settlements paid out by cigarette companies seem like chump change.
As long as such settlements are few and remain outside the view of the courts, the banks are safe. But the moment juries hear the facts, and see the reality, the banks are toast, and they know it.
And here, Lincoln said, is the leverage point from which change can be enacted. More cases must be litigated using the facts so cases won in the light of day can become case law and precedent. The war can be won, but will be costly. This challange requires, along with several lines of attack, the means for funding litigation.
One possible solution is to solicit private direct investment in litigation for individual cases in exchange for a share of the awards by the jury. Another is to design an “anti-derivative derivative” plan which bundles and pools both investments and potential awards, allowing Americans at all income levels to invest in the effort.
For this derivative, investors would understand both the risk and the benefits of investing.
Lincoln’s team, they know, cannot fund its efforts as the banks do, by an out of control pyramid scheme piling debt on equity to create more debt, but Lincoln sees a certain symmatry achieved by using the weapons created by the originators of the problem against them.
Either solution, Lincoln says, lies directly in the hands of Americans. If the money is available, litigation can go forward. He and the team see a build out across the country, with litigation taking place in every state as attorneys sign on and funds are available.
They have already begun. Lincoln’s team is now working with homeowners and the currently small number of attorneys willing to litigate. They have no illusions. They are aware they are going up against the most powerful institutions in the world. But they also know that, if they are successful, the crack now forming in the protections constructed by CWT, BNY, and so many others, makes it possible to reverse the ominous trends in the American housing market while proving it is possible to enact accountability for a corrupt establishment and good for the people.
If houses now held by banks go on the market, or are returned to their owners, the heavily inflated prices of homes will drop to its natural market level based on supply and demand. Communities will stabilize, as will the lives of Americans.
The America which emerges from this crisis can be very different. No stability will ever result from the current expectations of perpetual economic growth relying on perpetual inflation and perpetual motion in the market place, and the resultant social instability.
The 99% need to bring the 1% home to live with the rest of us in peace, Lincoln says.
Given the propensity of the legal establishment to go after activist attorneys, Lincoln admits this will not be without risk, but public involvement can help here, too. He remains confident, many will step forward. They did so in 1775 and in other times of crisis in America.
Failing to act, he said, means abandoning Americans to the cartels and monopolies who are responsible for what has happened to our country.
Lincoln and other members of the team believe strongly most attorneys and judges, when asked to make a choice in the light of day, will do the right thing.
The effort has already begin in New Jersey. Right now he has a case in motion in the Garden State, just across the river from Manhattan, where Cadwalader still holds sway at the ominously named “One World Financial Center.”
Now, they are looking for more attorneys who love and respect the law, and investors who know what matters most and want to make a difference. His website is, homeownersjustice.com.
The establishment has an entrenched interest in convincing the public that their vote in elections actually decides who is selected for public office. That same power elite runs and controls both Republican and Democratic political parties. Only a neophyte or a delusional idealist believes that the voting cycle reflects the will of the people. When reform candidates engage in the primary process, hoping to win the nomination from either of the two major parties, they face the stark reality that playing ball with the money bundlers means obeying the directives of masters of the universe. These overlords own politicians, especially those who continue in office by winning predetermined elections.
Democracy as expressed by the ballot box is a fairy tale. Anyone with experience within the Tweedledum and Tweedledee party organizations, understands that the comic book characters, who populate the ranks of politics just want to become a Mini-Me version of “Boss” Tweed.
Dispensing the fruits of power and patronage, while fostering the crony corporatist culture, is integral to maintaining the levers of political administration over a society of inconsequential serfs. When people’s frustration mounts, and party leadership blocks even modest attempts of populist reform, voting participation declines.
The GOP once was described, as Rockefeller or Country Club Republicans, is really a deranged asylum of NeoCons whose primary purpose is to purge genuine conservatives and libertarians from their ranks. A party that would nominate a John McCain for President and continue to support him in Senate elections is not worthy of trust. Written in 2004, John McCain: The Man Who Would Be President sums up the dilemma.
“McCain’s a full fledged phony without an ounce of conservative values running in his veins. Bush has proven himself to be a fraud and the tool of the NeoCons. This election is a charade of a sham called democracy. There are no surprises left, only the substitution of a name; while the same policies remain. Spell it Bush or McCain; but don’t use the designation conservative. Kerry is Bush’s brother, in the only society that selects those who are granted the nominations. McCain can only settle for second place, in service of the powers, that host the parlor game – picking a President.”
Now that the New Jersey Governor Chris Christie is the toast of the town, the praises and speculation begins. Chris Christie landslide: Template for a Republican presidential win in 2016? “The governor won an impressive 57 percent of women and took a majority of Latino voters. He even garnered 21 percent of black voters – a significant inroad for a Republican. He also won nearly half of union voters and those under the age of 30.”
The press would have you believe that the next Republican candidate for President needs to adopt a “political correctness” love fest to be elected. Please . . . dump on the Tea Party and disparage traditional conservatives is no formula for any politicians who deserves support.
That Republican 2010 Landslide and What It Means concludes.”The Republican Party’s attempt to co-opt the spontaneous spirit of the Tea Party geneses illustrates the panic that both entrenched parties have from a true populist movement. The mind dead voters who continually vote for the lesser of two evils, or adhere to the squishy William Buckley rule guarantee perpetual servitude. “The Buckley Rule is, ostensibly, that you vote for the most electable conservative option (in the primary) against a Democrat in November”.
The quest for that illusory electability is the trouble with every recent election. When will a true conservative/libertarian populist win the nomination? The apparent answer is never in a party of RINO’s and establishment gatekeepers.
Where can a true believer turn? That leaves Hillary Clinton as the apparent frontrunner nominee for the Democrats. The problem with that presumption is that she got the cold shoulder in 2008 in favor of Barry Soetoro, the CIA’s Manchurian Candidate. The Republicans are supposed to be the party of next in line Presidential torch carriers.
So why would the Democrats want HilLAIRy as their, Woman of the Year, or is it? The obvious appeal does not go unnoticed. “All you have to do is look under the dress and you will find the stuff that dreams are made from. Hillary is a man’s woman that appeals to the trendy tender gender on both coasts. She’s has a lock on the fear factor and will be the survivor of all the village people.”What better way to succeed Obama, the beyond race President, with a legendary bisexual voice, who will distribute her racism against white rural America as a condition of perpetuating the multicultural collectivism, which is so necessary for the total destruction of traditional values.
Just how well did all those underprivileged minorities do under Barack Hussein Obama? Surely, a first female President Clinton would add to such striking gains in the quality of life and standard of government dependency income.
All this Great Society II would make the LBJ administration look like spendthrifts.
The people, all the people no matter their race, ethnicity or social identity are not benefiting from a New World Order economy and political authoritarianism. Yet, with each election cycle the grip of both outlaw parties continue to expand their extortion policies. Every ten years the gerrymandering of redistricting divides the territory so that the spoils will continue to be shared.
How dumb are the electorate to allow this corrupt process to continue? Inevitably, stupidity knows no bounds. The Meaning of Third Parties in America describes the dilemma.
“If elections are an expression of consent, why is turn out so low for Third Parties? And if discontent was heightened, why are there not more Third Parties? The answer lies in the election returns. The fact that a majority of eligible voters no long take part in the process speaks volumes of their support. The public is stating their choice loud and clear: “NONE of the ABOVE”. This is the Third Party that wins the election. When the public deems that there is no ‘real’ difference between the two parties and that their self-interests cannot be furthered with their vote, the electoral system breaks down. Yes, the public is frustrated; but they conclude that their vote will never, effectively, change the status quo among the choices that are available. Their lack of participation, should not be misread as satisfaction for the current condition.”
The misuse of power by both parties illustrates the breakdown in the two tier party system. Having twins with different spots only means that the look of the predator will camouflage their direction for the kill. The Third Parties segment on “Dueling Twins” reminds the nature of the feeding frenzy.
“The duopoly rivalry that emerged over the centuries, grew from the reality of being ‘in or out’ of power, more than deep seeded ideological principles. For in its bare raw brute reality, politics is about power. How you get it, what you do when you have it, and how you keep it.”
When the Obama administration targets conservative Christian groups with IRS retribution, progressive ideologues remain silent. Protecting civil liberties only apply for the faithful of the congregation of state worship.
In addition, when the RINO’s mark patriotic groups and activist individuals for banishment from the ranks of the loyal opposition within their own party, they serve the masters of the same establishment that want a pervasive police state.
U.S. Elections are all too often a joke. The election commissions that administer the ballot process are nothing but extensions of the two corrupt parties.
What if a real grassroots national movement emerged that supersedes all ideology with a singular purpose – remove all careerist ”pols” from office. Forget about the phony No Labels effort to diffuse popular disgust. The solution is to attract the very citizens who NEVER vote in elections.A national campaign – No Confidence – would be the clear message that the arrogant confidence game crooks could understand.
Term limits will never be voted upon much less adopted until the entire nation strikes against the establishment with a unified proclamation of revolt.
The organization Grassfire urges that people need to confront the system. Time is short and if the following scandals are allowed to be swept under the rug, the candidates in 2014 and 2016 will just continue with their lying ways.
1. “Fast and Furious”
2. The deadly Benghazi attacks
3. The IRS targeting of Tea Party Americans
4. The NSA security breaches
5. The truth about ObamaCare
Populism requires citizen involvement. Elections are meaningless without active accountability.
With the Citizens United v. Federal Election Commission decision, corporations and labor unions can spend as much as they want to convince people to vote for or against a candidate. With all this money going into media campaigns between sibling spotted leopards, the public never gets to choose honest and transformational constitutional candidates. A vote for a Third Party aspirant is never a waste. Consent for RepubliCANTS and DemocRATS is idiotic.
As U.S. corporate profits soar to record highs, food stamps for the neediest were quietly cut. The politicians who are demanding endless cuts to social programs — Democrats and Republicans alike — insist that the U.S. is broke, all the while conveniently ignoring the mountains of tax-free wealth piling up in the pockets of the super rich.
This newest flood of cash for the nation’s wealthiest 1% is a blatant government subsidy: the Federal Reserve continues to pump out an extra $75 billion a month, the vast majority of which fattens the already-bursting overseas bank accounts of the rich. Since Obama has been president this pro-corporate policy has helped funnel 95 percent of the nation’s new income to the wealth-soaked rich.
And while it’s true that the global super rich have an estimated $32 trillion [!] stashed away abroad in off shore tax havens, an even newer way to avoid taxes has gripped the endlessly-greedy minds of U.S.-based billionaires.
Instead of shielding themselves behind the classic ‘C’ corporation structure — and all the burdensome taxes and regulations associated with it — two-thirds of new corporations have “evolved” into pseudo-legal “partnership” structures, commonly referred to as “pass throughs,” the idea being that the corporate-partnership instantly passes the profits through to the shareholders, no corporate tax necessary.
The most common form of pass throughs are “innovative” variations of a Limited Liability Company, a tax structure created in 1975 for narrowly regulated purposes. But now rich investors are performing accounting and legalistic somersaults to exploit the tax structure, practices that were illegal before the regulators were “captured” by the big banks.
The pro-billionaire Economist magazine recently discussed the pass through fad:
“A mutation in the way companies are financed and managed will change the distribution of the wealth they create…The corporation is becoming the distorporation…More businesses are now twisting themselves into forms that allow them to qualify as pass throughs.”
So, for example, imagine that nine rich guys get together and call themselves a pass through corporation of some variety. They do this because they want to avoid personal liability in case things go awry. Their partnership only buys and sells stocks and goes on to make billions, while paying zero corporate taxes. When their risky bets go bust and the partnership is sued by hoodwinked investors, the company instantly declares bankruptcy, since all profits were quickly “passed through.” The partners (the nine guys) cheerfully go home to swim through their sea of cash.
In real life shady pass throughs make massive wealth. Richard Kinder, who co-founded the biggest pass through, named Kinder Morgan, personally received $376 million in dividends last year alone [!], according to the Economist.
The pass through fad is on track to becoming the dominant way that the super rich get together to make huge amounts of money — pass throughs were 63 percent of all corporate profits in 2008, and are likely higher now, since many of the big private-equity companies making a killing by the cheap fed dollars are organized under pass through umbrella structures.
There is a huge society-wide risk for this type of behavior, which resembles the reckless gambling that destroyed the economy in 2008. As an ever-larger share of wealth is poured into these risky, non-regulated vehicles, the potential grows for them to self-destruct and pull down the broader economy with them. Pass throughs — which include most private-equity firms — function “efficiently” when the government is handing them cheap money; when interest rates go up, the pass throughs go bust, with predictable outcomes.
“But wait,” the billionaire will protest, “we pay individual taxes, which help fund social services.” Not necessarily. If the billionaire investor paid their legal obligation of “capital gains” taxes, they’d already be paying far less than the average worker. But the pass-through billionaires excel at avoiding all taxes. The Economist again:
“For a [pass through] partner a payout can be considered merely a return of capital rather than a profit, and consequently no tax is due until the sale of the underlying security. When tied to nuances of estate law, this may mean no tax at all.”
This type of blatantly criminal behavior used to be actually illegal, but as Wall Street bought Congress, the rules were either bent or ignored.
The Economist explains:
“The limitations on becoming [a pass through] seem to be tied more to legal dexterity [!] and influence [buying politicians] than any underlying principle. Politicians want to extend the benefits of [pass through] partnerships to industries they have come to favor either on the basis of ideology [of the corporate type], or astute lobbying [bribery], or a bit of both.”
The rest of society is affected because public services are being starved of funds, while these new pass throughs face vastly less regulation than the standard C corporations, and push wealth inequality to new heights while threatening a deeper recession.
Historically, government began regulating corporations because everyone realized the profound effects these institutions were having on the rest of society; the nation was becoming more unequal, the labor force more exploited and the environment torn to shreds.
As the super wealthy organized themselves into corporations they took most of society’s wealth with them; government realized that a semi-functioning country would need to tax these institutions and regulate their behavior, since the “natural” behavior of the capitalist — greed — was capable of pushing the rest of society into the dregs.
The new pass through fad is also indicative of the current state of U.S. capitalism; instead of investing profits in a company to buy machines or hire new workers, all the cash is either sitting in overseas bank accounts, or is being instantly funneled, via pass throughs, into the hands of ever-richer billionaires, who are proving to everyone that there is no bounds to the amount of cash they can accumulate. Where there are barriers to accumulation (regulations and taxes), they will supersede them while paying politicians of both major parties to ignore it or make it legal.
This dynamic occurs, in part, because the wealthy are basically refusing to invest in the real economy, as they fear the unstable economic conditions are not safe enough to make long term investments, which they believe won’t yield long term higher rates of profits. Safer to speculate on risky stocks, pocket the money and be the first one out when things go bust, as they did in 2008.
Of course the big name C corporations are up to their eyes in fraud too. Apple made big news when it only paid 2 percenttaxes on $74 billion in profits, by “declaring” its profits in Ireland, a corporate tax haven.
This occurs while other giant companies simply use clever accounting tricks to pay zero taxes, including giants like WellsFargo, Boeing, Verizon and General Electric. In fact, General Electric even finagled a rebate.
When it comes to oversea tax havens, it’s estimated that the U.S. national budget is annually starved of $280 billion in tax revenue.
Politicians have been struggling with ways to deal with the problem, since even in their mind some amount of tax collection needs to happen, if only to fund the military, provide more subsidies to corporations, and please the public by appearing to try to reduce the billionaire’s obscene behavior.
One popular idea among the politicians is to declare a corporate “tax holiday,” where the trillions of off-shore profits can be ceremoniously brought back to the U.S. while the feds look the other way. The idea is that, once the money is actually back in the U.S., the wealthy will want to spend it on something which will eventually help the economy — trickle down economics at its finest.
What seems certain to happen is that lowering corporate taxes will be a central piece of any “grand bargain” that eventually emerges, since there is a clear bi-partisan consensus that corporations need to pay lower taxes.
Some argue that if corporate taxes are low enough — and regulations removed — the corporations will reward the nation by not stockpiling their profits abroad and not creating pass through loopholes.
Of course all of this implies that the wealthy have a stranglehold over the U.S. economy. It’s telling that politicians want to deal with corporate tax evasion by lowering the corporate tax rate, instead of actually sending the IRS after them and throwing them in jail, as they do with working and middle class people.
The above dynamics create an ever-increasing wealth inequality that claws at the thinning strings holding society together. The bankruptcy and social disintegration of Detroit is a foreshadowing event for the rest of the country, unless this dynamic is stopped.
When the next crash happens the nation will have learned its lessons: the big banks and wealthy investors who destroyed the economy in 2008 are back at it, encouraged by Obama’s pro-corporate behavior and the Federal Reserve’s money flooding.
It’s becoming increasingly obvious that breaking the power of the super wealthy is the first step towards balancing the budget, job growth, protecting the safety net, and creating a semblance of a rational society. Until then the U.S. will lurch from one crisis to another, while blaming everyone but the real culprits.
Acute water shortages, aquifers exhausted, contaminated rivers…
Few Americans understand what their children face within 37 years with the addition of 100 million immigrants to the United States of America. The ramifications of passage of mass Amnesty Bill S.744 guarantee devastating consequences to our country. I hope, as you read this series, you understand that your children will become victims of your apathy and inaction.
Instead of this crisis standing front and center at the national leadership and media levels—America’s population predicament remains the most ignored, evaded and suppressed issue of our time.
I’m not exactly certain why we stand in denial of the effects of adding 100 million immigrants. You could ask the average American on the street about the implications of S744 and he or she wouldn’t possess the slightest idea of what you’re talking about.
As a reminder validating the reason for this series: demographic experts project the United States adding 100 million immigrants to this country by 2050—a scant 37 years from now. All totaled, since we reached 300 million in October of 2007, we will add 138 million people by 2050 to total 438 million people—enough to duplicate 20 of our top cities’ populations to our country. That 100 million people will have to be watered, fed, housed, transported and provided medical services. The enormity of it transcends understanding. The Pew Research Center, U.S. Population Projections by Fogel/Martin and the U.S. Census Bureau document those demographic facts.
Today in America, seven states suffer water shortages in 2013: Florida, Georgia, Texas, New Mexico, Arizona, Nevada and California. They may be able to water their populations at this time, but they stand on the edge of acute water shortages.
Florida sustains 18 million people in 2013, but demographic projections show them doubling to 36 million within 37 years—all of it because of legal immigration. Texas, at 26 million, expects to hit 36 million by 2050. The whopper granddaddy of them all: California holds 38 million on their way to 58 million.
What amazes me: no one whispers a word. Somebody with a brain in the media or government must be pulling their hair out while wondering why the media always reports “downstream” or after the catastrophic event already occurred.
But when the “Water footprint” disaster hits, we will have already added 100 million immigrants. At that point, everyone becomes victims.
(We pollute our drinking water with trash and chemicals all over the planet. Notice the mountain of plastic debris; but you can’t see the chemical contamination within the water. Not until, of course, you contract cancer.) Photography www.lightstalkers.org
“Without sustainability, ’severe’ water scarcity by 2050” By Andrew Nusca
“Today, 36% of the global population — approximately 2.4 billion people — already live in water-scarce regions and 22% of the world’s GDP ($9.4 trillion at 2000 prices) is produced in water-short areas,” said Nusca. “Moreover, 39% of current global grain production is not sustainable in terms of water use.
“According to IFPRI’s analysis, current “business as usual” water management practices and levels of water productivity will put at risk approximately $63 trillion, or 45 percent of the projected 2050 global GDP (at 2000 prices), equivalent to 1.5 times the size of today’s entire global economy. Moreover, 4.8 billion people (52 percent of the world population) will be exposed to severe water scarcity by 2050.”
(This is the kind of water contamination I have seen in my world travels. Many beaches around the world feature knee deep plastic trash. Worse, most of it sinks to the bottom and disrupts ocean, river and lake eco-systems. Yet, not one world leader or corporations calls for a 25 cent deposit-return law.) Photography by www.lightstalkers.org
As their water shortages slam home, where do you think they flee? Answer: first world countries.
Interestingly enough: these figures stand for our current 7.1 billion humans. Projections show another 3.1 billion added to that to reach 10 billion by 2050.
Something will happen and it won’t be pretty.
- 1 out of 6 people in the world lack access to clean water – that equals 1.1 billion people
- 9 million people will die this year from lack of access to clean water
- Every 15 seconds a child dies from water related illness
Exactly how do we Americans think we will escape those realities by adding 100 million immigrants?
(Imagine millions gallons of chemicals being dumped into America’s lakes and streams 24/7 because that’s what’s happening. Leaking gas tanks from gas stations and individual oil dumps poison our ground water. Dairy, beef, pig and chicken farms cause enormous ground water pollution. Add another 100 million immigrants and we face humongous consequences that will become irreversible and unsolvable.) Photography by www.wikipedia.org
Facts about Pollution from Livestock Farms
Livestock pollution and public health
- California officials identify agriculture, including cows, as the major source of nitrate pollution in more than 100,000 square miles of polluted groundwater.
- In 1996 the Centers for Disease Control established a link between spontaneous abortions and high nitrate levels in Indiana drinking water wells located close to feedlots.
- Manure from dairy cows is thought to have contributed to the disastrous Cryptosporidiumcontamination of Milwaukee’s drinking water in 1993, which killed more than 100 people, made 400,000 sick and resulted in $37 million in lost wages and productivity.
Water expert Ken Midkiff said, “In just a few short decades in the US, we have depleted our water supply. In the eastern states, which once had an abundance of water, bitter disputes and legal battles have become commonplace over water shortages caused by overpopulation. In the western states, where water has always been in short supply, population growth in dry areas has led to water shortages that threaten to severely restrict or perhaps even bar further growth.”
How do you “bar growth” by adding over 100 million people to America inside of four decades?
Just imagine with me: within 37 years, endless immigration will add 20 million immigrants to California. Anyone want to guess the outcome of that many people on the water supplies?
Water is essential for all dimensions of life. Over the past few decades, use of water has increased, and in many places water availability is falling to crisis levels. More than eighty countries, with forty percent of the world’s population, are already facing water shortages, while by year 2020 the world’s population will double. The costs of water infrastructure have risen dramatically. The quality of water in rivers and underground has deteriorated, due to pollution by waste and contaminants from cities, industry and agriculture. Ecosystems are being destroyed, sometimes permanently. Over one billion people lack safe water, and three billion lack sanitation; eighty per cent of infectious diseases.
November 7 and 8 nuclear talks at most may offer Iran modest temporary relief in return for major concessions.
How they’re presented remains to be seen. How they’re implemented is another matter.
Longstanding anti-Iranian hostility remains unresolved. Washington wants it that way. So does Israel.
Netanyahu wants no concessions offered. He calls any deal a bad one. It’s “very dangerous for peace and the international community,” he claims. It’s hard imagining more convoluted thinking.
Temporary modest relief, if offered, is too little. Reports suggest Washington may unfreeze a portion of billions of dollars of Iranian assets held in foreign banks. It may allow some international trade.
In return, reports say stiff demands require Iran to halt uranium enrichment to 20%, render most of its nuclear fuel unusable, agree not to use high speed IR-2 centrifuges, and not activate its Arak facility when completed.
Details aren’t finalized. Terms discussed are temporary. They represent step one along a long road toward resolving longstanding anti-Iranian hostility.
John Kerry, French Foreign Minister Laurent Fabius, Britain’s William Hague and Germany’s Guido Westerwelle arrived in Geneva. They participated in Friday talks.
A November 8 State Department statement said:
“In an effort to help narrow the differences in negotiations, Secretary Kerry will travel to Geneva, Switzerland today at the invitation of EU High Representative Ashton to hold a trilateral meeting with High Representative Ashton and Foreign Minister Zarif on the margins of the P5+1 negotiations.”
On arrival, Fabius said “(t)here has been progress, but nothing is hard and fast yet.” Late afternoon Friday Geneva time, Kerry added:
“I want to emphasize there is not an agreement at this point. I don’t think anybody should mistake that there are some important gaps that have to be closed.”
Precisely what emerges remains to be seen. Most important is what follows.
Agreements are easily broken. Washington’s history reflects duplicity. It’s word isn’t its bond. Hold the cheers.
Headlines may belie reality. US rapprochement with Iran isn’t likely. Why after all these years? Why now?
Why after five years of deep-seated Obama administration hostility? Why in an administration infested with hardliners? Why despite a change in Iranian leadership?
Positive reports overstate reality. What’s given can easily be taken away. America’s so-called deal is reversible. Ahead of arriving in Geneva, John Kerry said:
“We are asking them to step up and provide a complete freeze over where they are today. Iran knows that if they don’t meet the standards of the international community, the sanctions could be increased and even worse.”
Iran’s good intentions may not matter. Washington and Israel are obstacles. On November 8, Haaretz headlined “Netanyahu warns Kerry: Israel not bound by any deal between Iran and West.”
They met in Jerusalem. They did so before Kerry left for Geneva. Netanyahu said “Israel utterly rejects” a deal. It’s “not obliged” to respect one.
It’ll “do everything it needs to do to defend itself and the security of its people.” Iran threatens no one. Its nuclear program is peaceful. Israel and Western officials know it. They claim otherwise.
On Wednesday, Obama said negotiations “are not about easing sanctions. (They’re) about how Iran begins to meet its international obligations and provide assurances not just to us but to the entire world.”
An administration spokesperson said:
“In the months since the Iranian election, we have continued to pursue our unwavering goal of preventing Iran from obtaining a nuclear weapon.”
“We have not let up on vigorous sanctions enforcement one iota.”
“This includes new designations of sanctions evaders as well as other steps to address potential sanctions evasion.”
Anti-Iranian organizations are masters at inventing nonexistent threats.
The Jewish Institute for National Security Affairs (JINSA) calls itself “the most influential group on the issue of US-Israel military relations.”
It supports Israel’s worst crimes. It’s in lockstep with its hegemonic regional agenda.
Its Iran Task Force includes a rogue’s gallery of members. Its October 29 Los Angeles Times op-ed headlined “How to negotiate with Iran,” saying:
“The most pressing national security threat facing the United States remains preventing a nuclear-capable Iran.”
Washington “should only pursue an agreement within certain parameters:”
(1) “Iran must resolve outstanding international concerns.”
(2) It must “suspend all enrichment-related and reprocessing activities.”
(3) “(D)eny Iran nuclear weapons capability.” Doing so involves severely restricting its legitimate operations.
(4) Mandate “strict inspections.”
(5) Negotiate “from a position of strength.” Doing so requires intensified sanctions, leaving open a military option, “initiat(ing) new military deployments,” and supporting “Israeli military action if conducted.”
(6) Don’t “waste time. Iran will likely attain an undetectable nuclear capability by mid-2014, and perhaps earlier.”
Imposing “a strict deadline for talks can dissuade Iran from using diplomacy as a cover while sprinting for the bomb, and reassure Israel so it does not feel compelled to act alone.”
Negotiators “must walk away from any agreement” deviating from the above terms.
An earlier JINSA commentary called sanctions “dangerously ineffective.” It urged military force at an “optimal time regardless of elections or other political considerations.”
The American Enterprise Institute (AEI) exerts enormous influence in Washington. It’s pro-business, pro-war and pro-unchallenged US dominance. It’s militantly anti-Iranian.
Danielle Pletka is vice president for foreign and defense studies. On November 7, sheheadlined ”A Lousy Iran Deal,” asking:
“What’s a ‘modest rollback’ exactly? How much ‘suspension’ is suspension?” Why isn’t a total “freeze” imposed?
“What will the Iranians have given? Nothing. Every single offer reportedly out there from the Iranians is less than what was offered mere months ago in earlier negotiations.”
“In exchange, every concession contemplated by the Obama team is more than what was offered in earlier negotiations. Who’s the better negotiator here? Did you have any doubt?”
Reports suggest Washington demands major concessions. In return, Iran appears being offered modest, temporary relief at best.
Obama has little wiggle room on congressionally imposed sanctions. He can’t stop stiffer ones if enacted. They’ll stick with a virtual two-thirds or greater majority in both houses assured to pass them.
Congressional hardliners from both parties want them. Perhaps they’ll be forthcoming regardless of Geneva’s outcome.
Imposing them will unravel whatever is agreed on. Maybe Obama plans it that way. He can say we tried. We failed. He’ll blame Iran for US duplicity. It won’t surprise.
Sanctions imposed under the International Emergency Economic Powers Act (IEEPA) are at Obama’s discretion. They include frozen Iranian assets.
He can lift them all with a stoke of his pen. Doing so would send an important signal. Unfreezing a modest amount temporarily is much different.
It’s tokenism. It can be withdrawn with the same pen stroke. It can happen without warning. It can be with no justification.
According to Pletka, Iranian concessions merely slow its nuclear program. She wants significant rollback.
“(S)low down is fine with Iran,” she says, “because it has EVERYTHING IT NEEDS FOR A NUCLEAR WEAPON, or even several.”
What once was “a demand to end (its) entire nuclear weapons program has become a demand to make it smaller and hide it better.”
Pletka and likeminded hardliners know Iran’s nuclear program has no military component. They duplicitously claim otherwise. They’re in lockstep with longstanding US and Israeli policy.
They want the Islamic Republic eliminated. They want it replaced. They want Western control restored. They want war short of other ways to get it.
They’ll support an Israeli attack. It’s unlikely but possible. America and Israel have longstanding plans readied. Both countries represent the greatest threat to world peace.
In June 1981, Israeli warplanes attacked Iraq’s Osirak nuclear reactor. It was under construction. It was nearly completed.
Israeli Prime Minister Menachem Begin, Defense Minister Ariel Sharon, and other hardliners called Iraq an existential threat. Independent observers said otherwise.
Anticipatory self-defense doesn’t wash. It’s lawless. George Bush asserted America’s right to “impose preemptive, unilateral military force when and where it chooses.” Obama governs by the same standard.
In 1981, the Security Council said ”the military attack by Israel was in clear violation of the Charter of the United Nations and the norms of international conduct.”
It didn’t matter. Recrimination didn’t follow. America gets away with murder and then some. So does Israel.
Iraq was a Nuclear Non-Proliferation Treaty signatory since 1968. It remains one. Israel is a nuclear outlaw. It falsely calls Iran an existential threat.
Will a future attack follow? Will Washington support it? Will they attack together? Dick Cheney calls war on Iran inevitable. He urges it. He’s not alone.
Lunatics infest Washington. Likeminded ones govern Israel. Anything ahead is possible. Both countries want sovereign independent Iran eliminated. So do rogue regional allies.
An interim deal at best delays possible military force. Employing it remains on the table.
So does potentially striking Iran with bunker buster or other nuclear weapons.They’re deployed close by. They’re ready to be launched on command.
Iran’s under no illusions. Washington and Israel can’t be trusted. Neither country negotiates in good faith. They’re all take and no give.
Agreements they reach are often breached. Regional tensions remain high.
Israeli German-supplied submarines carry nuclear missiles. Its warplanes are equipped to launch them. So can its long range missiles.
In mid-October, the IDF held war games. They included long-range warplane exercises. Air-to-air refueling was practiced. Drills over the Mediterranean were unusually extensive.
War games aren’t unusual. At the same time, practicing offensive tactics are worrisome. Israel notoriously attacks preemptively. It struck Syrian targets five times this year.
Perhaps it plans something major against Iran. If not now, maybe later. Maybe jointly with Washington.
Maybe at a more strategic time. Nuclear talks may be more subterfuge than real. The fullness of time will tell.
Stephen Lendman lives in Chicago. He can be reached at firstname.lastname@example.org.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
Visit his blog site at sjlendman.blogspot.com.
Bitcoin virtual currency might be more than just a passing fad. In fact, it could be a worthwhile investment, according to experts. The virtual currency was launched in 2008 by an anonymous developer known only as ‘Satoshi Nakamoto’. The creator has since disappeared, leaving a trail of questions about his identity and motives.
Bitcoin is not issued by any government and is not controlled by a central bank or regulators. In contrast to conventional currencies, which offer a theoretically limitless volume, there can only be a specific number of Bitcoins generated worldwide. Critics say this limit is more representational of a commodity than any currency.
The total number of Bitcoins is limited to 21 million, however there are only 12 million Bitcoins in circulation today. The process of creating new Bitcoins is controlled by a mathematical algorithm that reduces the number of generated Bitcoins each year until the year 2040.
The value of a Bitcoin has nearly tripled since November 1st and today it hit an all time high of $358.00 on Mt. Gox, the world’s largest Bitcoin exchange. In June of 2010, one Bitcoin was worth $0.004
Earlier this year. Bitcoin attracted the attention of Tyler and Cameron Winklevoss, the brothers best known for their battle with Mark Zuckerberg over the origins of Facebook. After investing $11m in the virtual currency, they filed paperwork with the SEC to start a fund that would invest in, and track the value of, Bitcoins.
In order to get your hands on this shiny new currency you will have to start by getting a digital Bitcoin wallet, software that allows you to store and trade your Bitcoins. Your digital wallet will give you access to the Bitcoin network and works much like a peer-to-peer file sharing service.
Once you have a digital wallet, you can move on to the next step to get your first Bitcoin. You can purchase coins, “mine’” coins, or sell something for payment in Bitcoin. In order to purchase a coin you will need to find an individual or a currency exchange willing to accept your payment method. If you aren’t concerned with anonymity, reputable Bitcoin exchanges typically accept credit cards or PayPal payments. If you want to keep your transaction private, you can meet with a local Bitcoin dealer who is willing to trade Bitcoins for cash, or something else of value.
A coffee shop in Vancouver went live last week with an ATM machine that trades cash for Bitcoin. According Robocoin, the ATM manufacturer, the machine did over $100,000 worth of business and handled 348 transactions in its first eight days of operation. Jordan Kelley, CEO of Robocoin, said that an estimated 70 percent of the ATM users created new wallets — suggesting they were mostly first-time Bitcoin users.
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About the author…
The only part of the government that really listens to what you have to say…
The New York Times (November 2) ran a long article based on NSA documents released by Edward Snowden. One of the lines that most caught my attention concerned “Sigint” – Signals intelligence, the term used for electronic intercepts. The document stated:
“Sigint professionals must hold the moral high ground, even as terrorists or dictators seek to exploit our freedoms. Some of our adversaries will say or do anything to advance their cause; we will not.”
What, I wondered, might that mean? What would the National Security Agency – on moral principle – refuse to say or do?
I have on occasion asked people who reject or rationalize any and all criticism of US foreign policy: “What would the United States have to do in its foreign policy to lose your support? What, for you, would be too much?” I’ve yet to get a suitable answer to that question. I suspect it’s because the person is afraid that whatever they say I’ll point out that the United States has already done it.
The United Nations vote on the Cuba embargo – 22 years in a row
For years American political leaders and media were fond of labeling Cuba an “international pariah”. We haven’t heard that for a very long time. Perhaps one reason is the annual vote in the United Nations General Assembly on the resolution which reads: “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba”. This is how the vote has gone (not including abstentions):
|Year||Votes (Yes-No)||No Votes|
|1993||88-4||US, Israel, Albania, Paraguay|
|1995||117-3||US, Israel, Uzbekistan|
|1996||138-3||US, Israel, Uzbekistan|
|1997||143-3||US, Israel, Uzbekistan|
|2000||167-3||US, Israel, Marshall Islands|
|2001||167-3||US, Israel, Marshall Islands|
|2002||173-3||US, Israel, Marshall Islands|
|2003||179-3||US, Israel, Marshall Islands|
|2004||179-4||US, Israel, Marshall Islands, Palau|
|2005||182-4||US, Israel, Marshall Islands, Palau|
|2006||183-4||US, Israel, Marshall Islands, Palau|
|2007||184-4||US, Israel, Marshall Islands, Palau|
|2008||185-3||US, Israel, Palau|
|2009||187-3||US, Israel, Palau|
|2012||188-3||US, Israel, Palau|
Each fall the UN vote is a welcome reminder that the world has not completely lost its senses and that the American empire does not completely control the opinion of other governments.
Speaking before the General Assembly, October 29, Cuban Foreign Minister Bruno Rodriguez declared: “The economic damages accumulated after half a century as a result of the implementation of the blockade amount to $1.126 trillion.” He added that the blockade “has been further tightened under President Obama’s administration”, some 30 US and foreign entities being hit with $2.446 billion in fines due to their interaction with Cuba.
However, the American envoy, Ronald Godard, in an appeal to other countries to oppose the resolution, said:
“The international community … cannot in good conscience ignore the ease and frequency with which the Cuban regime silences critics, disrupts peaceful assembly, impedes independent journalism and, despite positive reforms, continues to prevent some Cubans from leaving or returning to the island. The Cuban government continues its tactics of politically motivated detentions, harassment and police violence against Cuban citizens.”1
So there you have it. That is why Cuba must be punished. One can only guess what Mr. Godard would respond if told that more than 7,000 people were arrested in the United States during the Occupy Movement’s first 8 months of protest 2 ; that their encampments were violently smashed up; that many of them were physically abused by the police.
Does Mr. Godard ever read a newspaper or the Internet, or watch television? Hardly a day passes in America without a police officer shooting to death an unarmed person?
As to “independent journalism” – what would happen if Cuba announced that from now on anyone in the country could own any kind of media? How long would it be before CIA money – secret and unlimited CIA money financing all kinds of fronts in Cuba – would own or control most of the media worth owning or controlling?
The real reason for Washington’s eternal hostility toward Cuba? The fear of a good example of an alternative to the capitalist model; a fear that has been validated repeatedly over the years as Third World countries have expressed their adulation of Cuba.
How the embargo began: On April 6, 1960, Lester D. Mallory, US Deputy Assistant Secretary of State for Inter-American Affairs, wrote in an internal memorandum: “The majority of Cubans support Castro … The only foreseeable means of alienating internal support is through disenchantment and disaffection based on economic dissatisfaction and hardship. … every possible means should be undertaken promptly to weaken the economic life of Cuba.” Mallory proposed “a line of action which … makes the greatest inroads in denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.” 3 Later that year, the Eisenhower administration instituted the suffocating embargo against its everlasting enemy.
The Cold War Revisited
I’ve written the Introduction to a new book recently published in Russia that is sort of an updating of my book Killing Hope. 4 Here is a short excerpt:
The Cold War had not been a struggle between the United States and the Soviet Union. It had been a struggle between the United States and the Third World, which, in the decade following the dissolution of the Soviet Union, continued in Haiti, Somalia, Iraq, Yugoslavia and elsewhere.
The Cold War had not been a worldwide crusade by America to halt Soviet expansion, real or imaginary. It had been a worldwide crusade by America to block political and social changes in the Third World, changes opposed by the American power elite.
The Cold War had not been a glorious and noble movement of freedom and democracy against Communist totalitarianism. It had typically been a movement by the United States in support of dictatorships, authoritarian regimes and corrupt oligarchies which were willing to follow Washington’s party line on the Left, US corporations, Israel, oil, military bases, et al. and who protected American political and economic interests in their countries in exchange for the American military and CIA keeping them in power against the wishes of their own people.
In other words, whatever the diplomats at the time thought they were doing, the Cold War revisionists have been vindicated. American policy had been about imperialism and military expansion.
Apropos the countless other myths we were all taught about the Soviet Union is this letter I recently received from one of my readers, a Russian woman, age 49, who moved to the United States eight years ago and now lives in Northern Virginia:
I can’t imagine why anybody is surprised to hear when I say I miss life in the Soviet Union: what is bad about free healthcare and education, guaranteed employment, guaranteed free housing? No rent or mortgage of any kind, only utilities, but they were subsidized too, so it was really pennies. Now, to be honest, there was a waiting list to get those apartments, so some people got them quicker, some people had to wait for years, it all depended on where you worked. And there were no homeless people, and crime was way lower. As a first grader I was taking the public transportation to go to school, which was about 1 hour away by bus (it was a big city, about the size of Washington DC, we lived on the outskirts, and my school was downtown), and it was fine, all other kids were doing it. Can you even imagine this being done now? I am not saying everything was perfect, but overall, it is a more stable and socially just system, fair to everybody, nobody was left behind. This is what I miss: peace and stability, and not being afraid of the future.
Problem is, nobody believes it, they will say that I am a brainwashed “tovarish” [comrade]. I’ve tried to argue with Americans about this before, but just gave up now. They just refuse to believe anything that contradicts what CNN has been telling them for all their lives. One lady once told me: “You just don’t know what was going on there, because you did not have freedom of speech, but we, Americans, knew everything, because we could read about all of this in our media.” I told her “I was right there! I did not need to read about this in the media, I lived that life!”, but she still was unconvinced! You will not believe what she said: “Yes, maybe, but we have more stuff!”. Seriously, having 50 kinds of cereal available in the store, and walmarts full of plastic junk is more valuable to Americans than a stable and secure life, and social justice for everybody?
Of course there are people who lived in the Soviet Union who disagree with me, and I talked to them too, but I find their reasons just as silly. I heard one Russian lady whose argument was that Stalin killed “30, no 40 million people”. First of all it’s not true (I don’t in any way defend Stalin, but I do think that lying and exaggerating about him is as wrong)*, and second of all what does this have to do with the 70s, when I was a kid? By then life was completely different. I heard other arguments, like food shortages (again, not true, it’s not like there was no food at all, there were shortages of this or that specific product, like you wouldn’t find mayo or bologna in the store some days, but everything else was there!). So, you would come back next day, or in 2-3 days, and you would find them there. Really, this is such a big deal? Or you would have to stay in line to buy some other product, (ravioli for example). But how badly do you want that ravioli really that day, can’t you have anything else instead? Just buy something else, like potatoes, where there was no line.
Was this annoying, yes, and at the time I was annoyed too, but only now I realized that I would much prefer this nuisance to my present life now, when I am constantly under stress for the fear that I can possibly lose my job (as my husband already did), and as a result, lose everything else – my house? You couldn’t possibly lose your house in Soviet Union, it was yours for life, mortgage free. Only now, living here in the US, I realized that all those soviet nuisances combined were not as important as the benefits we had – housing, education, healthcare, employment, safe streets, all sort of free after school activities (music, sports, arts, anything you want) for kids, so parents never had to worry about what we do all day till they come home in the evening.
* We’ve all heard the figures many times … 10 million … 20 million … 40 million … 60 million … died under Stalin. But what does the number mean, whichever number you choose? Of course many people died under Stalin, many people died under Roosevelt, and many people are still dying under Bush. Dying appears to be a natural phenomenon in every country. The question is how did those people die under Stalin? Did they die from the famines that plagued the USSR in the 1920s and 30s? Did the Bolsheviks deliberately create those famines? How? Why? More people certainly died in India in the 20th century from famines than in the Soviet Union, but no one accuses India of the mass murder of its own citizens. Did the millions die from disease in an age before antibiotics? In prison? From what causes? People die in prison in the United States on a regular basis. Were millions actually murdered in cold blood? If so, how? How many were criminals executed for non-political crimes? The logistics of murdering tens of millions of people is daunting. 5
Let’s not repeat the Barack fuckup with Hillary
Not that it really matters who the Democrats nominate for the presidency in 2016. Whoever that politically regressive and morally bankrupt party chooses will be at best an uninspired and uninspiring centrist; in European terms a center-rightist; who believes that the American Empire – despite the admittedly occasional excessive behavior – is mankind’s last great hope. The only reason I bother to comment on this question so far in advance of the election is that the forces behind Clinton have clearly already begun their campaign and I’d like to use the opportunity to try to educate the many progressives who fell in love with Obama and may be poised now to embrace Clinton. Here’s what I wrote in July 2007 during the very early days of the 2008 campaign:
Who do you think said this on June 20? a) Rudy Giuliani; b) Hillary Clinton; c) George Bush; d) Mitt Romney; or e) Barack Obama?
“The American military has done its job. Look what they accomplished. They got rid of Saddam Hussein. They gave the Iraqis a chance for free and fair elections. They gave the Iraqi government the chance to begin to demonstrate that it understood its responsibilities to make the hard political decisions necessary to give the people of Iraq a better future. So the American military has succeeded. It is the Iraqi government which has failed to make the tough decisions which are important for their own people.” 6
Right, it was the woman who wants to be president because … because she wants to be president … because she thinks it would be nice to be president … no other reason, no burning cause, no heartfelt desire for basic change in American society or to make a better world … she just thinks it would be nice, even great, to be president. And keep the American Empire in business, its routine generating of horror and misery being no problem; she wouldn’t want to be known as the president that hastened the decline of the empire.
And she spoke the above words at the “Take Back America” conference; she was speaking to liberals, committed liberal Democrats and others further left. She didn’t have to cater to them with any flag-waving pro-war rhetoric; they wanted to hear anti-war rhetoric (and she of course gave them a bit of that as well out of the other side of her mouth), so we can assume that this is how she really feels, if indeed the woman feels anything. The audience, it should be noted, booed her, for the second year in a row.
Think of why you are opposed to the war. Is it not largely because of all the unspeakable suffering brought down upon the heads and souls of the poor people of Iraq by the American military? Hillary Clinton couldn’t care less about that, literally. She thinks the American military has “succeeded”. Has she ever unequivocally labeled the war “illegal” or “immoral”? I used to think that Tony Blair was a member of the right wing or conservative wing of the British Labour Party. I finally realized one day that that was an incorrect description of his ideology. Blair is a conservative, a bloody Tory. How he wound up in the Labour Party is a matter I haven’t studied. Hillary Clinton, however, I’ve long known is a conservative; going back to at least the 1980s, while the wife of the Arkansas governor, she strongly supported the death-squad torturers known as the Contras, who were the empire’s proxy army in Nicaragua. 7
Now we hear from America’s venerable conservative magazine, William Buckley’s National Review, an editorial by Bruce Bartlett, policy adviser to President Ronald Reagan; treasury official under President George H.W. Bush; a fellow at two of the leading conservative think-tanks, the Heritage Foundation and the Cato Institute – You get the picture? Bartlett tells his readers that it’s almost certain that the Democrats will win the White House in 2008. So what to do? Support the most conservative Democrat. He writes: “To right-wingers willing to look beneath what probably sounds to them like the same identical views of the Democratic candidates, it is pretty clear that Hillary Clinton is the most conservative.” 8
We also hear from America’s premier magazine for the corporate wealthy, Fortune, whose recent cover features a picture of Clinton and the headline: “Business Loves Hillary”. 9
Back to 2013: In October, the office of billionaire George Soros, who has long worked with US foreign policy to destabilize governments not in love with the empire, announced that “George Soros is delighted to join more than one million Americans in supporting Ready for Hillary.” 10
There’s much more evidence of Hillary Clinton’s conservative leanings, but if you need more, you’re probably still in love with Obama, who in a new book is quoted telling his aides during a comment on drone strikes that he’s “really good at killing people”. 11 Can we look forward to Hillary winning the much-discredited Nobel Peace Prize?
I’m sorry if I take away all your fun.
- Democracy Now!, “U.N. General Assembly Votes Overwhelmingly Against U.S. Embargo of Cuba”, October 30, 2013 ↩
- Huffingfton Post, May 3, 2012 ↩
- Department of State, Foreign Relations of the United States, 1958-1960, Volume VI, Cuba (1991), p.885 ↩
- Copies can be purchased by emailing email@example.com ↩
- From William Blum, Freeing the World to Death: Essays on the American Empire (2005), p.194 ↩
- Speaking at the “Take Back America” conference, organized by the Campaign for America’s Future, June 20, 2007, Washington, DC; this excerpt can be heard on Democracy Now!’s website ↩
- Roger Morris, former member of the National Security Council, Partners in Power (1996), p.415 ↩
- National Review Online, May 1, 2007 ↩
- Fortune magazine, July 9, 2007 ↩
- Washington Post, October 25, 2013 ↩
- Washington Post, November 1, 2013, review of “Double Down: Game Change 2012” ↩
In 2009, Jim Rickards, a lawyer, investment banker and adviser on capital markets to the Director of National Intelligence and the Office of the Secretary of Defense, participated in a secret war game sponsored by the Pentagon at the Applied Physics Laboratory (APL). The game’s objective was to simulate and explore the potential outcomes and effects of a global financial war. At the end of the war game, the Pentagon concluded that the U.S. dollar was at extreme risk of devaluation and collapse in the near term, triggered either by a default of the U.S. Treasury and the dumping of bonds by foreign investors or by hyperinflation by the private Federal Reserve.
These revelations, later exposed by Rickards, were interesting not because they were “new” or “shocking.” Rather, they were interesting because many of us in the field of alternative economics had ALREADY predicted the same outcome for the American financial system years before the APL decided to entertain the notion. At least, that is what the public record indicates.
The idea that our government has indeed run economic collapse scenarios, found the United States in mortal danger, and done absolutely nothing to fix the problem is bad enough. I have my doubts, however, that the Pentagon or partnered private think tanks like the RAND Corporation did not run scenarios on dollar collapse long before 2009. In fact, I believe there is much evidence to suggest that the military industrial complex has not only been aware of the fiscal weaknesses of the U.S. system for decades, but they have also been actively engaged in exploiting those weaknesses in order to manipulate the American public with fears of cultural catastrophe.
History teaches us that most economic crisis events are followed or preceded immediately by international or domestic conflict. War is the looming shadow behind nearly all fiscal disasters. I suspect that numerous corporate think tanks and the Department Of Defense are perfectly aware of this relationship and have war gamed such events as well. Internal strife and civil war are often natural side effects of economic despair within any population.
Has a second civil war been “gamed” by our government? And are Americans being swindled into fighting and killing each other while the banksters who created the mess observe at their leisure, waiting until the dust settles to return to the scene and collect their prize? Here are some examples of how both sides of the false left/right paradigm are being goaded into turning on each other.
Conservatives: Taunting The Resting Lion
Conservatives, especially Constitutional conservatives, are the warrior class of American society. The average conservative is far more likely to own a firearm, have extensive tactical training with that firearm, have military experience and have less psychological fear of conflict; and he is more apt to take independent physical action in the face of an immediate threat. Constitutional conservatives are also more likely to fight based on principal and heritage, rather than personal gain, and less likely to get wrapped up in the madness of mob activity.
What’s the greatest weakness of conservatives? It’s their tendency to entertain leadership by men who claim exceptional warrior status, even if those men are not necessarily honorable.
Constitutional conservatives are the most substantial existing threat to the establishment hierarchy because, unlike dissenting groups of the past, we know exactly who the guiding hand is behind economic and social calamity. In response, the overall conservative culture has come under relentless attack by the establishment using the Administration of Barack Obama as a middleman. The goal, I believe, is to misdirect conservative rage toward the Democratic left and away from the elites. The actions of the White House have become so absurd and so openly hostile as of late that I can only surmise that this is a deliberate strategy to lure conservatives into ill-conceived retaliation against a puppet government, rather than the men behind the curtain.
Department of Defense propaganda briefings with military personnel have been exposed. These briefings train current serving soldiers to view Tea Party conservatives and even Christian organizations as “dangerous extremists.” Reports from sources within Fort Hood andFort Shelby confirm this trend.
The DOD has denied some of the allegations or claimed that it has “corrected” the problem; however, Judicial Watch has obtained official training documents through a Freedom of Information Act request that affirm that extremist profiling is an integral part of these military briefings. The documents also cite none other than the Southern Poverty Law Center (SPLC) as a primary resource for the training classes. The SPLC is nothing more than an outsourced propaganda wing for the DHS that attacks Constitutional organizations and associates them with terrorist and racist groups on a regular basis. (Check pages 32-33.)
This indoctrination program has accelerated since January 2013, after Professor Arie Perliger, a member of a West Point think tank called Combating Terrorism Center (and according to the sparse biographical information available, a man with NO previous U.S. military experience), published and circulated a report called “Challengers From The Sidelines: Understanding America’s Violent Far Right” at West Point. The report classified “far right extremists” as “domestic enemies” who commonly “espouse strong convictions regarding the federal government , believing it to be corrupt and tyrannical, with a natural tendency to intrude on individuals’ civil and constitutional right.” The profile goes on to list supporting belief in “civil activism, individual freedoms, and self government” as the dastardly traits of evil extremists.
Soldiers have been told that associating with “far right extremist groups” could be used as grounds for court-martial. A general purge of associated symbolism has ensued, including new orders handed down to Navy SEALs that demand that operators remove the “Don’t Tread On Me” Navy Jack patch from their uniforms.
The indoctrination of the military also follows on the heels of a massive media campaign to demonize Constitutional conservatives who fought against Obamacare in the latest debt ceiling debate as “domestic enemies” and “terrorists.” I documented this in my recent article “Are Constitutional Conservatives Really the Boogeyman?”
Obama and his ilk have been caught red-handed in numerous conspiracies, including Fast and Furious, which shipped American arms through the Bureau of Alcohol, Tobacco, Firearms and Explosives into the hands of Mexican drug cartels. And how about the exposure of the IRS using its bureaucracy as a weapon to harass Tea Party organizations and activists? And what about Benghazi, Libya, the terrorist attack that Barack Obama and Hillary Clinton allowed to happen, if they didn’t directly order it to happen? And let’s not forget about the Edward Snowden revelations, which finally made Americans understand that mass surveillance of our population is a constant reality.
To add icing to the cake, a new book called Double Down, which chronicles the Obama campaign of 2012, quotes personal aides to the President who relate that Obama, a Nobel Peace Prize winner, when discussing his use of drone strikes, bragged that he was “really good at killing people.”
Now, my question is, why would the Obama Administration make so many “mistakes,” attack conservatives with such a lack of subtlety, and attempt to openly propagandize rank-and-file soldiers, many of whom identify with conservative values? Is it all just insane hubris, or is he serving his handlers by trying to purposely create a volatile response?
Liberals: Taking Away The Cookie Jar
Many on the so-called “left” are socially oriented and find solace in the functions of the group, rather than individualism. They seek safety in administration, centralization and government welfare. Wealth is frowned upon, while “redistribution” of wealth is cheered. They see government as necessary to the daily survival of the nation, and they work to expand Federal influence into all facets of life. Some liberals do this out of a desire to elevate the poverty-stricken and ensure certain educational standards. However, they tend to ignore the homogenizing effect this strategy has on society, making everyone equally destitute and equally stupid. Their faith in government subsidies also makes them vulnerable to funding cuts and reductions in entitlements. The left normally fights only when their standard of living and comfort to which they have grown accustomed plummets below a certain threshold, and mob methods are usually their fallback form of retaliation.
Austerity cuts, which the mainstream media calls the “sequester,” are beginning to take effect. But, they are being applied in areas that are clearly meant to create the most public anger. Reductions in welfare programs are also being implemented in a way that will certainly agitate average left-leaning citizens. The debt debate itself revolved around those who want the government to spend within its means versus those who want the government to spend even more on welfare programs no matter the consequence. The loss of subsidies is at bottom the greatest fear of the left.
A sudden and inexplicable shutdown of electronic benefit transfer cards (EBT cards or food stamps) occurred in more than 17 States while the debt debate just happened to be climaxing. This month, cuts to existing food stamp funds have taken effect, and food pantries across the country are scrambling against a sharp spike in demand.
Remember, about 50 million Americans are currently dependent on EBT welfare in order to feed themselves and their families. The response to the relatively short EBT shutdown last month was outright fury. Imagine the response in the event of a long-term shutdown, or if extraneous cuts were to occur? And where would that anger be directed? Since the entire debt debacle has been blamed on the Tea Party, I suspect conservatives will be the main target of welfare mobs.
The left, once just as opposed to government stimulus and banker bailouts as the right, is now unwittingly throwing its support behind infinite stimulus in order to cement the continued existence of precious Federal handouts. The issue of Obamacare has utterly blinded liberals to fiscal responsibility. Universal healthcare, perhaps the ultimate Federal handout, is a prize too titillating for them to ignore. Democrats will now go to incredible lengths to defend the Obama White House regardless of past crimes.
They are willing to ignore his offenses against the 4th Amendment and personal privacy. They are willing to look past his offenses against the 1st Amendment, including the Constitutional right to trial by jury for all Americans, and Obama’s secret war against the free speech of whistle-blowers. They are willing to shrug off his endless warmongering in the Mideast, his attempts to foment new war in Syria and Iran, and his support for predator drone strikes in sovereign nations causing severe civilian collateral damage. They are willing to forget Snowden, mass surveillance and executive assassination lists — all for Obamacare.
And the saddest thing of all? It is likely that Obamacare was never meant to be successful in the first place.
Does anyone really believe that the White House, with billions of dollars at its disposal, could not get a website off the ground if it really wanted to? Does anyone really believe that Obama would launch the crowning jewel of his Presidency without making certain that it was fully operational, unless this was part of a greater scheme? And how about his promise that pre-existing health care plans would not be destroyed by Obamacare mandates? Over 900,000 people in the state of California alone are about to lose their health care insurance due to the Affordable Healthcare Act. Why would Obama go back on such a vital pledge unless he WANTED to piss off constituents?
Already, liberal websites and forums across the blogosphere are abuzz with talk of sabotage of the Obamacare website by “the radical right” and the diabolical Koch Brothers (liberals had no idea who they were a year ago, but now, they the go to scapegoat for everything). Once again, conservatives are presented as the culprits behind all the left’s troubles.
As I have stated in the past, Obamacare is designed to fail. The government has no capacity to fund it, and never will. Its only conceivable purpose is to further divide the country and excite both sides of the false paradigm into attacking each other as the reason the system is failing, when both sides should be questioning whether the current system should exist at all.
As the situation stands today, at least 50 million welfare recipients and who knows how many others exist as a resource pool for the establishment to be used to wreak havoc on the rest of us. All they have to do is take away the cookie jar.
Who Would Win?
Who would prevail in a second American civil war? Tactically speaking, conservatives have the upper hand and are far better prepared. Food rioters wouldn’t last beyond three to six weeks as starvation takes its toll, and mindless mobs would not last long against seasoned riflemen. The military, though suffering purges by the White House, still contains numerous conservatives within its ranks. Outside influences, including NATO or the United Nations, are a possibility. There are numerous factors to consider. But I would point out that the most dangerous adversary Constitutional conservatives face is not the left, Obama, or a Federal government gone rogue. Rather, our greatest adversary is ourselves.
If lured into a left/right civil war, would most conservatives be able to see beyond the veil and recognize that the fight is not about Obama, or the Left, or tyrannical government alone? Could we be co-opted by devious influences disguised as friends and compatriots? Will we end up following neocon salesmen and military elites who materialize out of the woodwork at the last minute to “lead us to victory” while actually leading us towards globalization with a slightly different face?
If a civil conflict has been war gamed by the establishment, you can bet they have contingency plans regardless of which side attains the upper hand. In the end, if we do not make the fight about the bankers and globalists, the Federal Reserve, the International Monetary Fund, the Council On Foreign Relations, etc., then everyone loses. Who wins in a new American civil war? If we become blinded by the trespasses of a certain White House jester, only the globalists will win.
Source: Brandon Smith | Alt-Market
Paul Craig Roberts thinks the Fed has backed itself into corner. A rise in interest rates would strengthen the dollar, give the dollar new life as world reserve currency, and halt the movement into gold, but a rise in rates would collapse the bond and stock markets and reduce the value of derivatives on the banks’ balance sheets. I asked Dr. Roberts if the Fed would sacrifice the dollar in order to save the banks and what the effect would be on Washington’s power viv-a-vis the rest of the world. His answers to these three questions suggest that Washington’s days of financial hegemony and world leadership are numbered.
Mike Whitney: Is the US dollar at risk of losing its position as reserve currency? How would this loss affect US leadership and other countries?
Paul Craig Roberts: In a way the dollar has already lost its reserve currency status, but this development has not yet been officially realized; nor has it hit the currency markets. Consider that the BRICS (Brazil, Russia, India, China, and South Africa) have announced their intention to abandon the use of the US dollar for the settlement of trade imbalances between themselves, instead settling their accounts in their own currencies. (There is now a website, the BRICSPOST, that reports on the developing relations between the five large countries.) There are also reports that Australia and China and Japan and China are going to settle their trade accounts without recourse to the dollar.
Different explanations are given. The BRICS imply that they are tired of US financial hegemony and have concerns about the dollar’s stability in view of Washington’s excessive issuance of new debt and new money to finance it. China, Australia, and Japan have cited the avoidance of transaction fees associated with exchanging their currencies first into US dollars and then into the other currencies. They say it is a cost-saving step to reduce transaction costs. This may be diplomatic cover for discarding the US dollar.
The October 2013 US government partial shutdown and (exaggerated) debt default threat resulted in the unprecedented currency swap agreements between the Chinese central bank and the European central bank and between the Chinese central bank and the Bank of England. The reason given for these currency swaps was necessary precaution against dollar disruption. In other words, US instability was seen as a threat to the international payments system. The dollar’s role of reserve currency is not compatible with the view that precautions must be taken against the dollar’s possible failure or disruption. China’s call for “a de-Americanized world” is a clear sign of growing impatience with Washington’s irresponsibility.
To summarize, there has been a change in attitudes toward the US dollar and acceptance of US financial hegemony. As the October deficit and debt ceiling crisis has not been resolved, merely moved to January/February, 2014, a repeat of the October impasse would further erode confidence in the dollar.
Regardless, most countries have come to the conclusion that not only has the US abused the reserve currency role, but also the power of Washington to impose its will and to act outside of law stems from its financial hegemony and that this financial power is more difficult to resist than Washington’s military power.
As the world, including US allies, made clear by standing up to Washington and blocking Washington’s military attack on Syria, Washington’s days of unchallenged hegemony are over. From China, Russia, Europe, and South America voices are rising against Washington’s lawlessness and recklessness. This changed attitude toward the US will break up the system of dollar imperialism.
Mike Whitney: How is the Federal Reserve’s Quantitative Easing impacting the dollar and financial instruments?
Paul Craig Roberts: The Federal Reserve’s policy of creating large amounts of new money in order to support the balance sheets of “banks too big to fail” and to finance continuing large budget deficits is another factor undermining the dollar’s reserve currency role. The liquidity that the Federal Reserve has pumped into the financial system has created enormous bubbles in bond and stock markets. US bond prices are so high as to be incompatible with the Federal Reserve’s balance sheet and massive creation of new dollars.
Moreover, central banks and some investors have realized that the Federal Reserve is locked into the policy of supporting bond prices. If the Federal Reserve ceases to support bond prices, interest rates will rise, the prices of debt-related derivatives on the banks’ balance sheets will fall, and the stock and bond markets would collapse. Therefore, a tapering off of quantitative easing risks a financial panic.
On the other hand, continuing the policy of supporting bond prices further erodes confidence in the US dollar. Vast amounts of dollars and dollar-denominated financial instruments are held all over the world. Holders of dollars are watching the Federal Reserve dilute their holdings by creating 1,000 billion new dollars per year. The natural result of this experience is to lighten up on dollar holdings and to look for different ways in which to hold reserves.
The Federal Reserve can print money with which to purchase bonds, but it cannot print foreign currencies with which to purchase dollars. As concerns over the dollar rise, the dollar’s exchange value will fall as more dollars are sold in currency markets. As the US is import-dependent, this will translate into higher domestic prices. Rising inflation will further spook dollar holders.
According to recent reports, China and Japan have together reduced their holdings of US Treasuries by some $40 billion. This is not a large sum compared to the size of the market, but it is a change from continuing accumulation. In the past, Washington has been able to count on China and Japan recycling their trade surpluses with the US into US Treasury debt. If foreign willingness to acquire Treasury debt declines and the federal budget deficit does not, the Federal Reserve would have to increase quantitative easing, thus putting even more pressure on the dollar.
In other words, in order to avoid an immediate crisis, the Federal Reserve has to continue a policy that will produce a crisis down the road. It is either a financial crisis now or a dollar crisis later.
Eventually, the Federal Reserve’s hand will be forced. As the dollar’s exchange value declines, so will the value of dollar-denominated financial instruments regardless of how many bonds the Federal Reserve purchases.
Mike Whitney: How is China likely to respond to America’s changing economic position?
Paul Craig Roberts: When I met with Chinese policymakers in 2006, I advised them that there was a limit to how long they could rely on the US consumer market as jobs offshoring was destroying it. I pointed out that China’s large population provided policymakers with the potential for an enormous economy. They replied that the one-child policy, which had been necessary in early years to keep population from outrunning social infrastructure, was blocking the development of a domestic consumer economy. As peasant farmers no longer could rely on multiple children for old age insurance, they hoarded their earnings in order to provide for their old age. Chinese policymakers said that they intended to develop a social security system that would give the population confidence to spend more of their earnings. I do not know to what extent China has moved in this direction.
Since 2006 the Chinese government has let the yuan appreciate 25% or 33%, depending on the choice of base. The increase in the currency’s exchange value has not hurt exports or the economy. Moreover, the US no longer manufactures many of the items for which it is dependent on China, and other developing countries do not have the combination of the technology that US corporations have given to China and China’s large excess supply of labor. So it is unlikely that China faces any threat to its development except for US policies designed to cut China off from resources, such as the new US military focus on the Pacific announced by the Obama regime.
China’s large dollar holdings are the consequence of the technological prowess that China acquired from Western corporations offshoring jobs to China. What is important to China is the technology and business know-how, which they have now acquired. The paper wealth represented by dollar holdings is not the important factor.
China could destabilize the US dollar by converting its holdings into dollar currency and dumping the dollars into the exchange markets. The Federal Reserve would not be able to arrange currency swaps with other countries large enough to buy up the dumped dollars, and the dollar’s exchange value would fall. Such an action could be a Chinese response to military encirclement by Washington.
In the absence of a confrontation, the Chinese government is more likely to gradually convert its dollars into gold, other currencies and real assets such as oil and mineral deposits and food businesses.
Quantitative easing is rapidly increasing the supply of dollars, but as other countries move to other arrangements for settling their trade imbalances, the demand for dollars is not rising with the supply. Thus, the dollar’s price must fall. Whether the fall is slow over time or sudden due to an unanticipated Black Swan event remains to be seen.
Linguistic chaos and tension…
As a reminder validating the reason for this series: demographic experts project the United States adding 100 million immigrants to this country by 2050—a scant 37 years from now. All totaled, since we reached 300 million in October of 2007, we will add 138 million people by 2050 to total 438 million people—enough to duplicate 20 of our top cities’ populations to our country. The Pew Research Center, U.S. Population Projections by Fogel/Martin and the U.S. Census Bureau document those demographic facts.
From the dawn of time, ethnic tribes created languages to fit their understanding of their surroundings. Eskimos created words that defined ice, cold, caribou, whales and frozen seasons. Tribes in Africa created languages that described their trees, rivers, monkeys, elephants and zebras. Tribes in the desert of the Middle East formed entirely different languages based on heat, camels and sand storms.
Each language not only allowed tribes to communicate, language defined their “worldview” or how they perceived existence. That same language also formed their religions. They created their religions based on their fears of the unknown—to give them a sense of hope, community and purpose. Each language defined how a tribal member understood and interpreted the meaning of life.
Language also allowed human beings to become self-aware, pursue understandings of the world around them and form family and community bonds. It served them well and humanity advanced in word, thought and concepts.
Language also separated tribes because they could not understand one another. Back in those times, civilizations grew, but never mixed because few seldom stepped outside their territorial boundaries. However, when they stepped out of their “turf”, they fought in wars for dominance. History reads as one Great War or conflict after another right up to 2013. In the last 10 years, the USA fought two wars. Another 20 wars wage in different areas of the planet as you read this series.
Isolation of tribes changed with mass transportation first with the sailing ship, locomotive, automobile and finally the airplane. Today, we see cultures, civilizations and individual humans crossing over onto all seven continents.
The one thing they take with them with a powerful sense of meaning remains their culture and their language. It defines them and offers them meaning.
However, when they cross over into countries with totally different languages, cultures and meanings—they become ostracized, confused, marginalized, out of place and ultimately, angry.
No multicultural and multilingual country in the world today enjoys a peaceful state of being. Today, Canada struggles with French, Arabic, Chinese and other Asian languages overwhelming their schools via immigration.
Belgium, Lebanon and Malaysia suffer conflicts and tension from multiple languages. In those countries, minorities with different languages vie for autonomy. Pakistan separated from India and Cyprus divided because of language, religion and culture. Nigeria suppressed ethnic rebellion. France faces difficulties with Basques, Bretons, Corsicans and a growing Muslim demographic.
With hundreds of languages in the world today, we see a clashing of civilizations, which ultimately come down to culture and language. A country without a single language in the 21st century faces ultimate disintegration of its culture, worldview and language.
With different languages come different ideas on how political “things” should proceed in a country. Some languages suppress all women’s rights. Other languages condone “honor killings” of women as a normal way of life.
Immanuel Kant said, “Language and religion are the great dividers.” You can see his wisdom working all over the planet in violent confrontations: Iraq, Afghanistan, Pakistan, Sweden, France, UK, Tunisia and many more.
A country, culture and language constitute more than a place to live. A language creates a state of mind, a worldview and distinct understanding of a person’s standing in life. His or her culture defines how he or she operates in the world. If a person in a country loses language and culture—they lose their ability to function in a viable manner.
If you notice all the terrorist attacks on the USA in the last 11 years, they came from people who speak other languages, come from other cultures—yet injected themselves into America via our immigration policies. From the 9/11 maniacs, to the Fort Dix Six, to the Times Square Bomber, to the Shoe Bomber, to the Underpants Bomber, to the Denver bomber, to the Fort Hood killer, to the Korean shooter at Virginia Tech, to the Boston Marathon Bomber, to the New Jersey Muslim who beheaded and be-handed two people last year—all of them arrived from a different language.
Unfortunately, at the present rate of 1.0 million legal immigrants annually and the proposed 2.0 million immigrants annually via Senate Bill 744 Amnesty, Americans guarantee themselves more bombings, more mass murderers and more language breakdown that descends on this country at blinding speed. Especially in education! Once we lose our literacy, we lose our ability to maintain a first world civilization.
Already, America faces a complete language change with Spanish when the Mexican tribe becomes the new majority in 2042, a scant 29 years from now. You can bet they will force their language onto America. In 2013, every business in America offers a phone recorder with “Press 1 for Spanish” and “Press 2 for English.” Already in Detroit, Michigan, a recorder says, “Press 1 for Arabic.”
This linguistic chaos speeds into America at such a rate of speed, that once it lands in greater numbers, we will not be able to turn back. When Caesar crossed the Rubicon, he sealed his face. If we citizens allow Congress to pass S744, we seal our fate as a multicultural and multi-linguistic nation guaranteed to fracture every community, our culture and our future.
You see, as former Colorado Governor Richard D. Lamm said, “Different languages create a deeper and more intractable separating factor. America has been successful because we have become one people. Language is the social glue, shared history and uniting symbols that tie us together.”
We need one language to bind us, one culture to sustain us. When a host country such as Canada, Australia, Sweden, Norway, Europe and Holland lose their language, they lose their foundation.
If we continue on this current path, by 2050, America faces 100 million more immigrants with at least 100 to 150 new languages and they will press for their right to speak, learn and establish their languages in their tribal enclaves. They will crush English, crush our schools and create chaos in our culture. By 2050, America cannot help but become a multicultural morass, linguistic battlefield and suffer 100 million immigrants attempting to make their language THE language of America. It’s not going to be pretty for anybody because no one will be able to understand anyone else.
If you remember the Biblical Tower of Babel, God changed one language into multiple languages. They disagreed, fought, separated and finally abandoned the tower.
America faces the same fate with multiple languages.
Humanity’s Umbilical Cord…
Have we forgotten the source of our sustenance? Have we allowed the apodictic evolutionary theoreticians to define our beginnings with convoluted nonsense? Have we assumed that the world should pursue the proliferation of remarkable labor saving and entertaining devices as if they are essential to the human race? We seek to travel faster and farther, communicate quicker and more completely, have more leisure and less work, and accumulate more knowledge and more power.
In past essays I wrote about the disconnection between the population and the land. Land provides the elements of life and when we fail to properly associate the population with the land we jeopardize a balance that is essential to our peaceful existence.
The Industrial Revolution created a drastic change in Western culture a change that has always been considered beneficial. Life in the Western World slowly became remote from the land and we forgot that the work that consumes our day is supported by the same dirt that our ancestors prayed would supply their food.
Indian writer Satish Kumar has written a book entitled “Soil, Soul, Society”. He describes the problem as anthropocentric: a worldview that human beings are at the center of the universe. He writes, “So if you want to take care of the universe, start with your soul. Care of the soul is for self-realisation. When you are at home within, you are at home in the universe. Taking care of yourself, being at ease with yourself, being happy within yourself, being fulfilled in yourself is a prerequisite, an imperative for self-realisation. Everything you truly need and want is within you. You are capable of solving every problem in the world with your inner wisdom.”
Kumar is on track with his concern about the danger of thinking the universe centers on human beings but he is wrong about our ability to “solve every problem” with “inner wisdom”
The Bible informs us that we were created from dust and to dust we shall return. There has never been a better description of our origin and condition! Part of the tendency to support an evolutionary creation stems from our disconnection from the land Though it is impossible to contend with the fact that our human bodies will ultimately return to dust anthropocentric theorists refuse to acknowledge reality.
When God created human beings from dust He created them in His own image. The Christian Bible confirms this fact but we do not need the Bible to determine our universal nature. With the birth blood still on their body’s babies claim their centrality. They cry loudly and harshly for love and sustenance. This elevation of self does not recede with time; children demand their toys and yours too; adolescents are tediously self-centered; the world revolves around the affairs of young men and women and in the middle years hidden methods of personal gain thrive. We have a God-like nature without His stature, wisdom, power, and righteousness.
It was our failure to see ourselves as we really are that allowed us to bless the Industrial Revolution without properly considering its dangers. Today, demi-gods experiment with human life as if they are vested with a right to tamper with Someone Else’s creation. They venture into an arena they are incapable of understanding as if there were no consequences to their actions. They leap without looking.
Humans are designed for physical work. As we invent additional devices to give us more leisure time with parallel efficiency we invent more jogging shoes and exercise machines to replace the physical work we are not doing.
There is nothing wrong with increasing knowledge and inventing labor saving devices as long as short term positive results do not result in long term disaster. We exist by the will of another on a planet that we did not create, in a universe too big for our apprehension, in a time span that is a speck in unfathomable infinity. We are wonderfully made and some of us are extremely brilliant but when we allow our god-like nature too overshadow our humble circumstance we are prone to major error.
Did human beings evolve through an evolutionary process that defies the obvious time/deterioration process or were they created by the same God that crafted the universe? There are numerous prolixity filled esoteric discussions of the Second Law of Thermodynamics and the meaning of the word “entropy”. Many of these dissertations are carefully crafted to protect Darwin’s theory of Evolution. “Highly energetic chemistry is thought to have produced a self-replicating molecule around 4 billion years ago, and half a billion years later the last common ancestor of all life existed. The current scientific consensus is that the complex biochemistry that makes up life came from simpler chemical reactions. The beginning of life may have included self-replicating molecules such as RNA and the assembly of simple cells.” (From Wikipedia)
The truth is that human beings are prisoners on a tiny planet located in a vast (maybe infinite) universe, limited by time, size, mental ability, physical ability, and capacity to completely comprehend the milieu in which they live.
When we ignore the restraints our Creator has set forth in His Word Darwin’s theory of Natural Selection gains validity. The strongest and smartest dominate, survive, and reproduce. Unending war for survival can be witnessed in the animal kingdom and continues with occasional modifications in the human realm.
The world’s leaders are overwhelmingly anthropocentric. They value their false conception of human capacity more than freedom, peace, and prosperity. So, since peace and freedom depend on our obedience to God’s Law, tyrants have risen to the fore.
When God gave His Law to Moses He gave us the formula for replacing the jungle code of natural selection with a life of purpose, peace, and prosperity. Today we have wandered so far from His intent that fantasy has overcome the lives of our leaders. We are being governed by people who no longer see the world as it is; people who would rather live a lie than confront the truth. They have gained their office through an electorate that has failed to properly assess the human condition; people who believe that the feeble intellect of our most brilliant can devise a formula for freedom. They are both wrong and instead of creating a better world they have become witnesses to its continued deterioration.
Tyrants rule America and our freedoms are quickly vanishing.
“To learn who rules over you, simply find out who you are not allowed to criticize.” – – Voltaire (1694-1778)