"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Global Economic Crisis’

Cyprus As Canary – It Can Happen Here: The Bank Currency Confiscation Scheme for US & UK Depositors

In Uncategorized on March 30, 2013 at 7:57 pm

http://media.npr.org/assets/img/2013/03/28/cyprusbank282way_wide-8b44df5e0364c2692b832eafdc77152c95ea425d-s6-c10.jpgOldspeak: “While U.S. Corporate media has been focused on Gay marriage and “gun control”, events in Cyprus are giving us a preview of things to come in the rest of Europe and the U.S. Things to come that according to “A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland” What we’re witnessing is the planned demolition of sovereign governments to finance the greed-fueled, reckless and illegal behavior of the international banking cartel. We’ve now reached point in this global economic looting scheme where tax financed bank bailouts are no longer sufficient. Now the hard-earned life savings of bank depositors will be appropriated without their consent. Inequality is at never before seen levels, conditions on Wall Street are basically the same and in many ways worse than they were prior to the last global economic collapse. 2 mega banks, JP Morgan Chase & Bank of America hold more in notional derivatives; 79 TRILLION and 75 TRILLION respectively, than the amount of the ENTIRE GLOBAL GDP of 70 Trillion. Let that sink in. It’s not a matter of if the next collape happens, but when. It’s already begun. Nameless Russian billionaires have been rendered broke, as a result of events in Cyprus. They won’t be the last. Eventually the confiscations will trickle down to people like you and me. Your politicians have already laid the groundwork for banks to legally use your money to bail themselves out. This sort of madness depends on the complacency and indifference of the public to get passed. In this age of Austerity sadly complacency and indifference are abundant. “Propaganda always wins  if you let allow it.”-Leni Riefenstahl . How much longer will we allow it?

By Ellen Brown @ Washingtons’ Blog:

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.  

New Zealand has a similar directive, discussed in my last article here, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19th:

The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

Can They Do That?

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.

No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.  The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only  mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.

An Imminent Risk

If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.  That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives.  She writes:

In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.

One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes:

Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011.

Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:

. . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . .

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

$75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion). The “notional value” of derivatives is not the same as cash at risk, but according to a cross-post on Smith’s site:

By at least one estimate, in 2010 there was a total of $12 trillion in cash tied up (at risk) in derivatives . . . .

$12 trillion is close to the US GDP.  Smith goes on:

. . . Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. . . . Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors.

Perhaps, but Congress has already been burned and is liable to balk a second time. Section 716 of the Dodd-Frank Act specifically prohibits public support for speculative derivatives activities. And in the Eurozone, while the European Stability Mechanism committed Eurozone countries to bail out failed banks, they are apparently having second thoughts there as well. On March 25th, Dutch Finance Minister Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, told reporters that it would be the template for any future bank bailouts, and that “the aim is for the ESM never to have to be used.”

That explains the need for the FDIC-BOE resolution. If the anticipated enabling legislation is passed, the FDIC will no longer need to protect depositor funds; it can just confiscate them.

Worse Than a Tax

An FDIC confiscation of deposits to recapitalize the banks is far different from a simple tax on taxpayers to pay government expenses. The government’s debt is at least arguably the people’s debt, since the government is there to provide services for the people. But when the banks get into trouble with their derivative schemes, they are not serving depositors, who are not getting a cut of the profits. Taking depositor funds is simply theft.

What should be done is to raise FDIC insurance premiums and make the banks pay to keep their depositors whole, but premiums are already high; and the FDIC, like other government regulatory agencies, is subject to regulatory capture.  Deposit insurance has failed, and so has the private banking system that has depended on it for the trust that makes banking work.

The Cyprus haircut on depositors was called a “wealth tax” and was written off by commentators as “deserved,” because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don’t keep most of their money in bank accounts.  They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth.

Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank.  Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.

The Swedish Alternative: Nationalize the Banks

Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote:

It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.

On whether depositors could indeed be forced to become equity holders, Salmon commented:

It’s worth remembering that depositors are unsecured creditors of any bank; usually, indeed, they’re by far the largest class of unsecured creditors.

President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.”

But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.

Comment by Washington’s Blog:  The big banks have already been “nationalized” in the sense that they are state-sponsored institutions .  In fact, the big banks went totally bust in 2008, and are now completely subsidized by the government.

Americans may not like the idea of nationalization, but they are even more  disgusted by crony capitalism … which is what we have now.

Moreover, as we pointed out in 2009:

Many argue that it would be wrong for the government to break up the banks, because we would have to take over the banks in order to break them up.

That may be true. But government regulators in the U.S., Sweden and other countries which have broken up insolvent banks say that the government only has to take over banks for around 6 months before breaking them up.

In contrast, the Bush and Obama administrations’ actions mean that the government is becoming the majority shareholder in the financial giants more or less permanently. That is – truly – socialism.

Breaking them up and selling off the parts to the highest bidder efficiently and in an orderly fashion would get us back to a semblance of free market capitalism much quicker.

Lords of Disorder: Billions For Wall Street, Sacrifice For Everyone Else

In Uncategorized on March 7, 2013 at 5:38 pm

Lloyd C. Blankfein.Oldspeak:”“This bank is anti-fragile, we actually benefit from downturns.”-Jamie Dimon of JPMorgan ChaseThe term “antifragile” was coined by maverick financier & analyst Nassim Taleb, whose book of the same name is subtitled “Things That Gain From Disorder.” That’s a good description of JPMorgan Chase and the nation’s other megabanks… These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldn’t do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.” -Richard Eskow. One look no further than how Mr. Dimon and his sociopathic corporation  profits off the misery of the poverty stricken by administering food stamp benefits to see his demented thought in practice. “A catastrophe for you and I usually presents an opportunity for the Titans of capital. And the grievous economic crisis affecting so many American families is no exception — big business has found a number of ways to profit, directly, from Main Street’s economic pain. Like vultures descending on a rotting corpse, they’ve come up with a variety of innovative methods to pull the last scraps of meat off the bones of America’s middle-class” -Joshua Holland. It’s very clear if one chooses to look. The corprocratic controllers of our political class and economic systems, profit from disorder, downturns, and catastrophes. Money is being redirected  from the people and real economy via austerity programs to prop up and sustain these failed, morally and spiritually bankrupt enterprises.  Knowing this, how logical is it to conclude that obviously deleterious political and economic policies that have us hurtling toward economic and ecological catastrophe will be changed to benefit the people? Not very. The problem is systemic. The systems around which we organize our societies must be fundamentally changed. All the nibbling around the edges that passes for sound policy is largely illusory.If we hope to survive as civilization we can no longer allow merchants of death and disorder who dominate the Military-Financial-Political Industrial Complex to reign as Lords of Disorder.”

By Richard Eskow @ The Campaign For Americas Future:

The President’s “sequester” offer slashes non-defense spending by $830 billion over the next ten years. That happens to be the precise amount we’re implicitly giving Wall Street’s biggest banks over the same time period.

We’re collecting nothing from the big banks in return for our generosity.  Instead we’re demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class – pretty much everybody, in fact, who isn’t “too big to fail.”

That’s injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoints, rather than with scrolls and trumpets and kingly proclamations.

And remember: The White House represents the liberal side of these negotiations.

The Grandees

The $83 billion ‘subsidy’ for America’s ten biggest banks first appeared in an editorial from Bloomberg News – which, as the creation of New York’s billionaire mayor Michael Bloomberg, is hardly a lefty outfit.  That editorial drew upon sound economic analyses to estimate the value of the US government’s implicit promise to bail these banks out.

Then it showed that, without that advantage, these banks would not be making a profit at all.

That means that all of those banks’ CEOs, men (they’re all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence – they would probably lose their jobs again today.

Tell that to Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of Goldman Sachs, both of whom have told us it’s imperative that we cut social programs for the elderly and disabled to “save our economy.” The elderly and disabled have paid for those programs – just as they paid to rescue Jamie Dimon and Lloyd Blankfein, and just as they implicitly continue to pay for that rescue today.

Dimon, Blankfein and their peers are like the grandees of imperial Spain and Portugal. They’ve been given great wealth and great power over others, not through native ability but by the largesse of the Throne.

Lords of Disorder

Just yesterday, in a rare burst of candor, Dimon said this to investors on a quarterly earnings call: “This bank is anti-fragile, we actually benefit from downturns.”

It’s true, of course. Other corporations – in fact, everybody else – has to survive or fail in real-world conditions. But Dimon and his peers are wrapped in a protective force field which was created by the people, of the people, and for … well, for Dimon and his peers.

The term “antifragile” was coined by maverick financier and analyst Nassim Taleb, whose book of the same name is subtitled “Things That Gain From Disorder.” That’s a good description of JPMorgan Chase and the nation’s other megabanks.

Arbitraging Failure

Dimon’s comment was another way of saying that his bank, and everything it represents, is The Shock Doctrine made manifest. The nation’s megabanks are arbitraging their own failures, and the economic crises that flow from those failures.

These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldn’t do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.

We who have made these banks “antifragile” have crowned their leaders our Lords of Disorder.

Once Dimon told reporters that he explained to his seven-year-old daughter what a financial crisis is – “something that happens … every five to seven years,” which “we need to do a better job” managing.

Thanks to fat political contributions, Dimon manages them well. So do his peers. Misery is the business model. And by Dimon’s reckoning another shock’s coming any day now.

Money For Nothing

Bloomberg’s use of the word ‘subsidy’ in this instance can be slightly misleading. Public institutions don’t issue $83 billion in checks to Wall Street’s biggest banks every year. But they didn’t let them fail as they should have – through an orderly liquidation – after they created the crisis of 2008 through fraud and chicanery. Instead it allowed them to prosper from it, creating that $83 billion implicit guarantee.

As we detailed in 2011, the TARP program didn’t “make money,” either. Banks received a free and easy trillion-plus dollars from our public institution, on terms that amounted to a gift worth tens of billions, and possibly hundreds of billions.

That gift prevented them from failing. In private enterprise, this kind of rescue is only given in return for part ownership or other financial concessions. But our government asked for nothing of the kind.

Unpaid Debts

Breaking up the big banks would have protected the public from more harm at their hands. That didn’t happen.

Government institutions could have imposed a financial transaction tax, whose revenue could be used to repair the harm the banks caused while at the same time discouraging runaway gambling.  They still could.

They could have imposed fees on the largest banks to offset the $83 billion per year advantage we’ve given them. They still could.

But they haven’t. This one-sided giveaway is the equivalent of an $83 billion gift for Wall Street each and every year.

Cut and Paste

$83 billion per year: Our current budget debate is framed in ten-year cycles, which means that’s $830 billion in Sequester Speak.  You’d think our deficit-obsessed capital would be trying to collect that very reasonable amount from Wall Street. Instead the White House is proposing $130 billion in Social Security cuts, $400 in Medicare reductions, $200 billion in “non-health mandatory savings,” and $100 billion in non-defense discretionary cuts.

That adds up to exactly $830 billion.

No doubt there is genuine waste that could be cut. But $830 billion, or some portion of it, could be used to grow our economy and brings tens of millions of Americans out of the ongoing recession that is their daily reality, even as the Lords of Disorder continue to prosper. It could be used for educating our young people and helping them find work, for reducing the escalating number of people in poverty, for addressing our crumbling infrastructure, for giving people decent jobs.

It’s going to Wall Street instead.

Trillion-Dollar Tribute

The right word for that is tribute. As in, “a payment by one ruler or nation to another in acknowledgment of submission …” or “an excessive tax, rental, or tariff imposed by a government, sovereign, lord, or landlord … an exorbitant charge levied by a person or group having the power of coercion.” (Courtesy Merriam-Webster)

In this case the tribute is made possible, not by military occupation, but by the hijacking of our political process by the corrupting force of corporate contributions.

The fruits of that victory are rich: Bank profits are at near-record highs. Most of the country is still struggling to dig out from the wreckage they created but, as Demos’ Policy Shop puts it, “for the banks it’s 2006 all over again.”

On Bended Knee

“Millions for defense,” they said in John Adams’ day, “but not one cent for tribute.”

Today we’re paying for both. That doesn’t leave much for the elderly, the disabled, the impoverished, the children, or anybody else who doesn’t “benefit from disorder.” Nobody’s fighting for them in this budget battle.

That leaves the public with a clear choice: Demand solutions that are more just and democratic – or submit willingly to the Lords of Disorder.

The 1% Doctrine: Will Capitalism Destroy Civilization?

In Uncategorized on March 7, 2013 at 4:45 pm

Dollar burn through EarthOldspeak:” The official doctrines suffer from a number of familiar “market inefficiencies,” among them the failure to take into account the effects on others in market transactions. The consequences of these “externalities” can be substantial. The current financial crisis is an illustration. It is partly traceable to the major banks and investment firms’ ignoring “systemic risk” – the possibility that the whole system would collapse – when they undertook risky transactions.

Environmental catastrophe is far more serious: The externality that is being ignored is the fate of the species. And there is nowhere to run, cap in hand, for a bailout.

In future, historians (if there are any) will look back on this curious spectacle taking shape in the early 21st century. For the first time in human history, humans are facing the significant prospect of severe calamity as a result of their actions – actions that are battering our prospects of decent survival. ” -Noam Chomsky
When this man speaks, we should all listen. While the real economy, crumbles and disintegrates, 1 in 6 people go hungry. 1 in 2 people live at or near the poverty line. High unemployment persists and the number homeless people is at the last depression era levels. The Dow Jones is as it was before the last global economic crash – at a record high. Corporate profits are through the roof, while most people’s wages have been cut. Most profits are being funneled to the controllers of our political systems who’ve demonstrated contempt for the planet and every living thing on it who wont rest until every resource is exploited and maximum profit is derived from them. This powerful vampire capitalist system is, unsustainable; accelerating our progression toward environmental catastrophe. It constitutes an existential threat to the planet and by extension, all life on it. On can only wonder what madness will be wrought after the next global economic crash, but our civilizations first global ecological crash will render economics, politics and power as we know it irrelevant. Our corporate controllers do not want us to recognize this essential reality, even though most of us do. It is the reason “the United States has not adopted any consistent and stable set of policies at the national level to foster the use of renewable energy”. None of the manufactured crises we’re encouraged to focus on matter when there’s no clean water, air or soil. Greed has infected our controllers so thoroughly that this horrifying fact is lost on them. “Profit Is Paramount”

By Noam Chomsky @ Truthout:

There is “capitalism” and then there is “really existing capitalism.”

The term “capitalism” is commonly used to refer to the U.S. economic system, with substantial state intervention ranging from subsidies for creative innovation to the “too-big-to-fail” government insurance policy for banks.

The system is highly monopolized, further limiting reliance on the market, and increasingly so: In the past 20 years the share of profits of the 200 largest enterprises has risen sharply, reports scholar Robert W. McChesney in his new book “Digital Disconnect.”

“Capitalism” is a term now commonly used to describe systems in which there are no capitalists: for example, the worker-owned Mondragon conglomerate in the Basque region of Spain, or the worker-owned enterprises expanding in northern Ohio, often with conservative support – both are discussed in important work by the scholar Gar Alperovitz.

Some might even use the term “capitalism” to refer to the industrial democracy advocated by John Dewey, America’s leading social philosopher, in the late 19th century and early 20th century.

Dewey called for workers to be “masters of their own industrial fate” and for all institutions to be brought under public control, including the means of production, exchange, publicity, transportation and communication. Short of this, Dewey argued, politics will remain “the shadow cast on society by big business.”

The truncated democracy that Dewey condemned has been left in tatters in recent years. Now control of government is narrowly concentrated at the peak of the income scale, while the large majority “down below” has been virtually disenfranchised. The current political-economic system is a form of plutocracy, diverging sharply from democracy, if by that concept we mean political arrangements in which policy is significantly influenced by the public will.

There have been serious debates over the years about whether capitalism is compatible with democracy. If we keep to really existing capitalist democracy – RECD for short – the question is effectively answered: They are radically incompatible.

It seems to me unlikely that civilization can survive RECD and the sharply attenuated democracy that goes along with it. But could functioning democracy make a difference?

Let’s keep to the most critical immediate problem that civilization faces: environmental catastrophe. Policies and public attitudes diverge sharply, as is often the case under RECD. The nature of the gap is examined in several articles in the current issue of Daedalus, the journal of the American Academy of Arts and Sciences.

Researcher Kelly Sims Gallagher finds that “One hundred and nine countries have enacted some form of policy regarding renewable power, and 118 countries have set targets for renewable energy. In contrast, the United States has not adopted any consistent and stable set of policies at the national level to foster the use of renewable energy.”

It is not public opinion that drives American policy off the international spectrum. Quite the opposite. Opinion is much closer to the global norm than the U.S. government’s policies reflect, and much more supportive of actions needed to confront the likely environmental disaster predicted by an overwhelming scientific consensus – and one that’s not too far off; affecting the lives of our grandchildren, very likely.

As Jon A. Krosnick and Bo MacInnis report in Daedalus: “Huge majorities have favored steps by the federal government to reduce the amount of greenhouse gas emissions generated when utilities produce electricity. In 2006, 86 percent of respondents favored requiring utilities, or encouraging them with tax breaks, to reduce the amount of greenhouse gases they emit. Also in that year, 87 percent favored tax breaks for utilities that produce more electricity from water, wind or sunlight. These majorities were maintained between 2006 and 2010 and shrank somewhat after that.

The fact that the public is influenced by science is deeply troubling to those who dominate the economy and state policy.

One current illustration of their concern is the “Environmental Literacy Improvement Act” proposed to state legislatures by ALEC, the American Legislative Exchange Council, a corporate-funded lobby that designs legislation to serve the needs of the corporate sector and extreme wealth.

The ALEC Act mandates “balanced teaching” of climate science in K-12 classrooms. “Balanced teaching” is a code phrase that refers to teaching climate-change denial, to “balance” mainstream climate science. It is analogous to the “balanced teaching” advocated by creationists to enable the teaching of “creation science” in public schools. Legislation based on ALEC models has already been introduced in several states.

Of course, all of this is dressed up in rhetoric about teaching critical thinking – a fine idea, no doubt, but it’s easy to think up far better examples than an issue that threatens our survival and has been selected because of its importance in terms of corporate profits.

Media reports commonly present a controversy between two sides on climate change.

One side consists of the overwhelming majority of scientists, the world’s major national academies of science, the professional science journals and the Intergovernmental Panel on Climate Change.

They agree that global warming is taking place, that there is a substantial human component, that the situation is serious and perhaps dire, and that very soon, maybe within decades, the world might reach a tipping point where the process will escalate sharply and will be irreversible, with severe social and economic effects. It is rare to find such consensus on complex scientific issues.

The other side consists of skeptics, including a few respected scientists who caution that much is unknown – which means that things might not be as bad as thought, or they might be worse.

Omitted from the contrived debate is a much larger group of skeptics: highly regarded climate scientists who see the IPCC’s regular reports as much too conservative. And these scientists have repeatedly been proven correct, unfortunately.

The propaganda campaign has apparently had some effect on U.S. public opinion, which is more skeptical than the global norm. But the effect is not significant enough to satisfy the masters. That is presumably why sectors of the corporate world are launching their attack on the educational system, in an effort to counter the public’s dangerous tendency to pay attention to the conclusions of scientific research.

At the Republican National Committee’s Winter Meeting a few weeks ago, Louisiana Gov. Bobby Jindal warned the leadership that “We must stop being the stupid party. We must stop insulting the intelligence of voters.”

Within the RECD system it is of extreme importance that we become the stupid nation, not misled by science and rationality, in the interests of the short-term gains of the masters of the economy and political system, and damn the consequences.

These commitments are deeply rooted in the fundamentalist market doctrines that are preached within RECD, though observed in a highly selective manner, so as to sustain a powerful state that serves wealth and power.

The official doctrines suffer from a number of familiar “market inefficiencies,” among them the failure to take into account the effects on others in market transactions. The consequences of these “externalities” can be substantial. The current financial crisis is an illustration. It is partly traceable to the major banks and investment firms’ ignoring “systemic risk” – the possibility that the whole system would collapse – when they undertook risky transactions.

Environmental catastrophe is far more serious: The externality that is being ignored is the fate of the species. And there is nowhere to run, cap in hand, for a bailout.

In future, historians (if there are any) will look back on this curious spectacle taking shape in the early 21st century. For the first time in human history, humans are facing the significant prospect of severe calamity as a result of their actions – actions that are battering our prospects of decent survival.

Those historians will observe that the richest and most powerful country in history, which enjoys incomparable advantages, is leading the effort to intensify the likely disaster. Leading the effort to preserve conditions in which our immediate descendants might have a decent life are the so-called “primitive” societies: First Nations, tribal, indigenous, aboriginal.

The countries with large and influential indigenous populations are well in the lead in seeking to preserve the planet. The countries that have driven indigenous populations to extinction or extreme marginalization are racing toward destruction.

Thus Ecuador, with its large indigenous population, is seeking aid from the rich countries to allow it to keep its substantial oil reserves underground, where they should be.

Meanwhile the U.S. and Canada are seeking to burn fossil fuels, including the extremely dangerous Canadian tar sands, and to do so as quickly and fully as possible, while they hail the wonders of a century of (largely meaningless) energy independence without a side glance at what the world might look like after this extravagant commitment to self-destruction.

This observation generalizes: Throughout the world, indigenous societies are struggling to protect what they sometimes call “the rights of nature,” while the civilized and sophisticated scoff at this silliness.

This is all exactly the opposite of what rationality would predict – unless it is the skewed form of reason that passes through the filter of RECD.

© 2012 Noam Chomsky
(Noam Chomsky’s new book is “Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to U.S. Empire. Conversations with David Barsamian.” Chomsky is emeritus professor of linguistics and philosophy at the Massachusetts Institute of Technology in Cambridge, Mass.)

Top Economists Agree: The U.S. Is In A Depression

In Uncategorized on May 8, 2012 at 2:07 pm

Oldspeak:”You know it’s grim when the prevailing debate among economists and historians is whether the world economy faces the “Great” depression of the 1930s or the “Long” depression of the 1870s.” I like to call it a “Stealth Great Depression” The bread lines have been replaced with EBT cards, and the banks are too bigger to fail, but many of the other conditions that existed in the 1930′s and 1870′s exist today. Tent cities, high unemployment, high poverty, high homelessness, wage stagnation, high debt, mass bankruptcy etc, etc, etc… A profound difference between today’s depression and those of the past is the propaganda. It’s so exquisitely and insidiously crafted that people actually believe it over what it happening all around them in the real world. Meanwhile “Institutions (banks) that know how and why to prevent things from falling apart and which nonetheless sit back and do nothing. A global collapse is being engineered. We need a radically new way forward to avert catastrophe but all we’re being offered by our political classes is tried and false ways of the past that are clearly leading to catastrophe. A ‘sustainable future’ is being monetized. More and more people awakening to the reality that those old ways are no longer acceptable. Our civilization needs a new operating system. Or a crash is not a matter of if, but when. Greed will be our downfall.

By Washington’s Blog:

Paul Krugman released a new book yesterday called “End This Depression Now“. In the introduction, Krugman writes:

The best way to think about this continued slump, I’d argue, is to accept that we’re in a depression …. It’s nonetheless essentially the same kind of situation that John Maynard Keynes described in the 1930s: “a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.”

Robert Shiller said yesterday that the world is in a state of “late Great Depression”.

Many other top economists also say that were in a Depression.

We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.

For example:

  • The government is doing everything else wrong. See this and this

This isn’t an issue of left versus right … it’s corruption and bad policies which help the top .1% but are causing a depression for the vast majority of the American people.

Bipartisan Support As U.S. Congress Rolls Back Toothless, “Financial Reforms” On Complex Financial Instruments, Derivatives

In Uncategorized on April 3, 2012 at 6:34 pm

Oldspeak: “A nation of sheep begets a government of wolves” -Edward R. Murrow.  Exhibit Z of how thoroughly the U.S. government has been captured by casino capitalists/corporatists. Voting by and overwhelming margin to roll back already feeble regulations of the very same OTC derivatives a.k.a. “Financial Weapons Of Mass Destruction”that caused the last global economic crash. Legalized gambling with other peoples money, resources, and livelihoods and having no ability to cover bets is free to continue unfettered once again. I was casually chatting with an investment banker a couple days ago, who was talking about how much more money there was in that field than in education and non-profits and that he hoped to retire by 35, and I remarked “Well you better get it while the gettins good, because it’s all going down again and the crash is gonna be alot worse this time.” he said “Yeah, you know what you’re talkin about, it’s true. It’s going to happen again. How do you know that, do you have a background in finance?” I told him I didn’t I just read and stay informed. The conditions have been created, against all logic, with the help of your corporate-controlled selected representatives to precipitate a bigger and more devastating global economic collapse that will divest many more Americans of their alleged inalienable rights to life liberty and the pursuit of happiness. Hold on tight kids it’s gonna be a bumpy ride. “Profit Is Paramout”

Related Story:

The Mathematical Equation That Caused The Banks To Crash

Related Video:

Credit Default Swaps

By Washington’s Blog:

Out-of-control derivatives were one of the main causes of the economic crisis … and nothing has really been done to solve the problem.

Is Washington finally about to fix the problem?

Of course not … they’re going to make it worse, and roll back even the toothless psuedo-reforms which they pretended to make.

As the Washington Post notes:

To the chagrin of consumer groups, the House gave overwhelming bipartisan approval Monday to two bills easing requirements that President Barack Obama’s overhaul of financial regulations impose on some exotic financial instruments blamed for helping trigger the 2008 financial crisis.

Lawmakers of both parties said they were relaxing rules that would otherwise inhibit the ability of companies to manage the risks of prices and investments, ultimately reducing their profitability and job creation. Consumer groups said legislators were bowing to the interests of their corporate and finance-world contributors and taking steps that might prove harmful to the public.

***

The instruments are called derivatives ….

***

“End users, you know, were not the cause of the financial crisis,” said Rep. Scott Garrett, R-N.J.

Democrats praised the bills as well.

“We should allow American businesses, acting in good faith, to effectively manage risk,” said Rep. Marcia Fudge, D-Ohio.

Truth is even funnier than satire. Congresswoman Fudge, indeed …

 

Government Accountability Office Federal Reserve Audit Reveals Numerous Intimate Ties To Financial Industry; Disturbing Conflicts Of Interest

In Uncategorized on October 19, 2011 at 6:05 pm

Oldspeak:“More evidence that corporatocray has replaced democracy in the U.S. Your government and economy is owned and operated a couple hundred mostly white men; private international bankers and corporate CEOs. While corporate media tries to divert attention to meaningless political melodrama and co-opt the message of  anti-corporate movements like occupy wall street, we are seeing the root causes of our societal, political and financial collapse. Greed, illegality, immorality, cronyism, among a small group of men, shrouded in a veil of secrecy. We see that the Federal Reserve is about as federal as Federal Express. It is in reality a giant private bank, whose purpose is to finance and backstop a select few casino capitalists. Corporate officers and bankers sit on its board, while employed by the companies to which they direct billions, at the same time profiting from the flagrantly irresponsible and dangerous business decisions which benefit the select few and devastate the vast majority. This is why people feel compelled to occupy wall street. People are beginning to see that the small secretive cabal of globalists have grown more and more brazen in their flouting of the law. Their amorality and fundamental disrespect for human dignity is too severe to ignore any longer with billions debt-ladden, starving, homeless, sick, marginalized and leading lives of misery and despair.  Their systems of governance, politics, business and finance are on the verge of crashing the world. Take heart though. The tide of resistance to their ecocidally insane tyranny is rising. When it crests, it will be a beautiful thing.”

By Senator Bernie Sanders @ Bernie Sanders:

As a result of an amendment by Sen. Bernie Sanders to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Government Accountability Office completed its second audit of the Federal Reserve. This report focuses on the enormous conflicts of interest that existed at the Federal Reserve during the financial crisis.
Here is what the GAO found:

  •  The affiliations of the Federal Reserve’s board of directors with financial firms continue to pose “reputational risks” to the Federal Reserve System.
  • The policy of the Federal Reserve to give members of the banking industry the power to both elect and serve on the Federal Reserve’s board of directors creates “an appearance of a conflict of interest.”
  •  The GAO identified 18 former and current members of the Federal Reserve’s board affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis including General Electric, JP Morgan Chase, and Lehman Brothers.
  •  There are no restrictions on directors of the Federal Reserve Board from communicating concerns about their respective banks to the staff of the Federal Reserve.
  •  Many of the Federal Reserve’s board of directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. These board members oversee the Federal Reserve’s operations including salary and personnel decisions.
  •  Under current regulations, Fed directors who are employed by the banking industry or own stock in financial institutions can participate in decisions involving how much interest to charge to financial institutions receiving Fed loans; and the approval or disapproval of Federal Reserve credit to healthy banks and banks in “hazardous” condition.
  •  The Federal Reserve does not publicly disclose its conflict of interest regulations or when it grants waivers to its conflict of interest regulations.
  •  21 members of the Federal Reserve’s board of directors were involved in making personnel decisions in the division of supervision and regulation at the Fed.

The GAO included several instances of specific individuals whose membership on the Fed’s board of directors created the appearance of a conflict of interest including:
Stephen Friedman, the former chairman of the New York Fed’s board of directors

During the end of 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap loans from the Federal Reserve. During this time period, Stephen Friedman, the Chairman of the New York Fed, sat on the Board of Directors of Goldman Sachs, and owned shares in Goldman’s stock, something that was prohibited by the Federal Reserve’s conflict of interest regulations. Mr. Friedman received a waiver from the Fed’s conflict of interest rules in late 2008. This waiver was not publically disclosed. After Mr. Friedman received this waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009. According to the GAO, the Federal Reserve did not know that Mr. Friedman continued to purchases Goldman’s stock after his waiver was granted.
Jeffrey Immelt, the CEO of General Electric, and board director at the New York Fed

The GAO found that the Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility established during the financial crisis. The Fed later provided $16 billion in financing to General Electric under this emergency lending program. This occurred while Jeffrey Immelt, the CEO of General Electric, served as a director on the board of the Federal Reserve Bank of New York.
Jamie Dimon, the CEO of JP Morgan Chase and board director at the New York Federal Reserve

Jamie Dimon, the CEO of JP Morgan Chase, served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and while his bank was used by the Fed as a clearinghouse for the Fed’s emergency lending programs.

In March of 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns. During this time period, Jamie Dimon was successful in getting the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. Dimon also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.

Other central banks do a much better job than the Fed in mitigating conflicts of interest.

The GAO found that compared with central banks in other countries, the Federal Reserve does not do a good job in disclosing potential conflicts of interest and other important transparency issues. The GAO found that such transparency is “essential to the effective and credible functioning of a healthy democracy” and fulfilling the government’s responsibility to citizens and taxpayers.
For example, the central bank in Australia prohibits its directors from working for or having a material financial interest in private financial companies located in its country. If such regulations were in place at the Fed, the CEO of JP Morgan Chase and many other bank executives would be prohibited from serving on the Fed’s board of directors.

The central bank in Canada requires its directors to disclose any potential conflicts of interest as soon as they are discovered; avoid or withdraw from participation in any real, potential, or apparent conflicts of interest; and cannot vote on any matters in which there is a conflict of interest. If these regulations existed at the Fed, Stephen Friedman would have been required to immediately resign from Goldman’s board, sell his Goldman stock, or resign from the Fed’s board of directors. Instead, Mr. Friedman was allowed to financially benefit from the increase in Goldman’s stock while it received approval from the Fed to become a bank holding company and received billions in emergency Fed loans.

The central bank in Canada also prohibits its directors from having affiliations with entities that perform clearing and settlement responsibilities in the financial services industry or serve as dealers in government securities. The Fed does not. These regulations would have prevented both Friedman and Dimon from serving on the Fed’s board of directors.

The directors of central banks in Australia, Canada, England and the European Union all have to disclose potential conflicts of interest and must disclose its conflict of interest policies on the internet. The Federal Reserve does not.

The European Central Bank and the central bank in Australia both require its directors to annually disclose their financial interests. The Fed does not because it does not want to make it “burdensome” for people to serve on its board.

Federal Reserve Banks do not publish public information about vacant director positions. Instead of allowing the public to actively seek to apply to its board, the banking industry recruits most of the candidates to serve on the Federal Reserve’s board of directors in private.

In contrast, the central bank in England publicly advertises when it is seeking applications for board directors. The central bank in Canada allows the public to apply for vacant board member positions on the internet.
The GAO also found the following:

  •  In 2010, the 108 members of the Federal Reserve’s board of directors are predominately white men who are senior executives of financial institutions.
  •  While Congress has mandated that the Federal Reserve’s board of directors consist of experts in labor, consumer protection, agriculture, commerce, and industry, only 11 of the 202 members of the Federal Reserve’s board of directors represented labor and consumer interests from 2006-2010.
  •  When choosing who will serve on its board of directors, the Federal Reserve generally focuses its search on senior executives, usually CEOs or presidents in the financial industry. Of the 108 Federal Reserve board directors, 82 were the President or CEO of their company.
  •  The Federal Reserve claims that it is hard to recruit labor and consumer representatives to its board because many are “politically active,” and the Federal Reserve has restrictions on a director’s “political activity.” Sanders called this “laughable,” compared to the political action of CEOs of large financial institutions serving on the Fed’s board. For example, Jamie Dimon, the CEO of JP Morgan Chase currently serves on the board of directors at the Federal Reserve Bank of New York. According to the Center for Responsive Politics, Dimon has made over $620,000 in campaign contributions since 1990

IMF Advisor: Global Financial Meltdown in 2 – 3 Weeks Without Bank “Recapitalizaton”; Sovereign Debt “Stabilization”

In Uncategorized on October 10, 2011 at 1:28 pm

Oldspeak:”A little over a week after their explosive interview with trader Alessio Rastani predicting global economic collapse, BBC interviewed IMF advisor Dr. Robert Shapiro. The bailout expert said “If they can not address [the financial crisis] in a credible way, I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system…All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serious than the crisis in 2008″ - UNLESS the International Banking Cartels are “recapitalized” with hundreds of billions of Euros. Sounds eerily similar to what was said in the lead up and during the last great crash of the global financial system in 08. Only this time there’s even less money for bailouts. I’m sure they’ll get it anyway. All these gloom and doom predictions belie the basic fundamental problem, that no one wants to address. The monetary system is failing, and will keep failing if people insist on making changes around the edges. You can’t have made miniscule changes to regulations to reign in the casino capitalism and expect different results. You can’t keep throwing fiat money at the problem. This economic system is about the furthest thing from true ‘economy’, (thrifty and efficient use of material resources : frugality in expenditures; also : an instance or a means of economizing : saving) there is. It’s driven by a base & immoral concept: Greed. We would do well to implement an economy like that articulated by Dr. Manfred Max-Neef:based in five postulates and one fundamental value principle. 

One, the economy is to serve the people and not the people to serve the economy. 

Two, development is about people and not about objects. 

Three, growth is not the same as development, and development does not necessarily require growth. 

Four, no economy is possible in the absence of ecosystem services. 

Five, the economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible. 

And the fundamental value to sustain a new economy should be that no economic interest, under no circumstance, can be above the reverence of life.”

If we forgave all debt, reset to zero, retired greed as the dominant value in the world, re-worked the global economy to adhere to these postulates and values, we could focus on collectively preserving and distributing the earth’s finite resources in an equitable way. We’d all be a lot better off.

Related Video:

IMF Adviser Says We Face A Worldwide Banking Meltdown

By Tyler Durden @ Zero Hedge:

In an interview with IMF advisor Robert Shapiro, the bailout expert has pretty much said what, once again, is on everyone’s mind: “If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serrious than the crisis in 2008…. What we don’t know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems.”

But no, Morgan Stanley does, or so they swear an unlimited number of times each day. And they say not to worry about anything because, you see, it is not like they have any upside in telling anyone the truth. Which is why for everyone hung up on the latest rumor of a plan about a plan about a plan spread by a newspaper whose very viability is tied in with that of the banks that pay for its advertising revenue, we have one thing to ask: “show us the actual plan please.” Because it is easy to say “recapitalize” this, and “bad bank” that. In practice, it is next to impossible. So yes, ladies and gentlemen, enjoy this brief relief rally driven by the fact that China is offline for the week and that the persistent source of overnight selling on Chinese “hard/crash landing” concerns has been gone simply due to an extended national holiday. Well, that holiday is coming to an end.

Half Of U.S. Households Receive Government Aid, While One-Third of Americans Are One Paycheck Away From Homelessness

In Uncategorized on October 7, 2011 at 6:50 pm

Oldspeak:”O_o At what point does extreme inequality become not ok? As more and more resources are gobbled up by the war machine, the corporate oligarchs & the national security/surveillance state, there’s less and less being invested in America and it’s people. There are people in very powerful positions in this society who are programmed it seems to extract and hoard as many resources as possible, by as many means as possible until there is nothing left to extract. Millions of homes, jobs & savings lost, doesn’t matter, keep extracting. Banks are putting the extraction process in overdrive now with their recent announcements of charging 5 dollar fees to use their debit cards, yet another exorbitant fee to use your hard-earned money. Enough is never enough. This is basically our national ethos. With the money worship, celebrity idolatry  & virulent consumerism/monetization. We must always always want more. Equilibrium has no place in this society, must get bigger, must get stronger, must get faster, must get smarter, must get sexier, must get followers… The problem with that worldview is we live in a finite world. There are a finite amount of resources. And everyday there are fewer and fewer to go around. An infinite consumption ethos is the surest pathway to destruction.

By Washington’s Blog:

The Wall Street Journal notes:

Nearly half, 48.5%, of the population lived in a household that received some type of government benefit in the first quarter of 2010, according to Census data.

And yet – as NakedCapitalism notes – One Third of Americans One Paycheck Away From Homelessness.

What Does It Mean?

We are in very tough times.

As I noted last year:

Food Stamps Replace Soup Kitchens 

1 out of every 7 Americans now rely on food stamps.

While we don’t see soup kitchens, it may only be because so many Americans are receiving food stamps.

Indeed, despite the dramatic photographs we’ve all seen of the 1930s, the 43 million Americans relying on food stamps to get by may actually be much greater than the number who relied on soup kitchens during the Great Depression.

In addition, according to Chaz Valenza (a small business owner in New Jersey who earned his MBA from New York University’s Stern School of Business) millions of Americans are heading to foodbanks for the first time in their lives.

Occupy Wall Street “Counterinsurgency” Has Infiltrated Protests; Seeks To Diffuse Message

In Uncategorized on October 1, 2011 at 2:54 pm

Oldspeak:” If a movement pretends to have no leaders, then it is the corporate media, themselves controlled by Wall Street, who will choose the leaders. A few days ago, a Wall Street protester named Kelly Heresy was anointed as principal honcho by Keith Olbermann, who used to work for the hedge fund called General Electric, and who now works for Al Gore. This is no way to select leaders. The organizers of the Wall Street action say they want to imitate recent protests in other countries. Their favorite is the Tahrir Square agitation in Egypt in February. But if you go to Cairo today, veterans of those demonstrations will tell you that these efforts accomplished relatively little, and mainly had the effect of ousting an oppressive civilian government in favor of an even more oppressive military government of weak CIA puppets which is still operating under martial law, even as benighted religious fanatics gather strength. In a severe world economic depression of the kind we have today, mere protest is not enough. Desperate populations are looking for political leadership with solutions capable of solving the life or death issues facing nations today. A movement which is incapable of specifying what it intends to fight for is an immature movement which no intelligent person will take seriously. The secret of a mass strike upsurge is that crisis conditions will propel many apolitical people into activism. This makes them vulnerable to manipulation by demagogues, including those of the extreme right. The mass strike upsurge by itself solves nothing. The question is whether any coherent group of people can intervene into the mass upsurge and push aside bankrupt and failed leaders with the kind of radical reform program that can actually get the society out of the crisis. The masses cannot discover this program on their own – they are too busy with the struggle for daily existence. College students therefore have a special responsibility to provide ideas for the benefit of the entire society. If an adequate program becomes dominant, the nation can survive. Otherwise, nothing guarantees that civilization itself will not collapse – look at the Tea Party if you don’t believe this. Soros, Koch, and the other finance capitalists have a good working understanding of how these things work, which is why they are sending in their operatives to make sure that this movement will have only the vaguest demands, or no demands at all, to fight for. Let that happen, and Wall Street will rule the day once again. Despite what Michael Moore may think, the political power of Wall Street is considerable, and an effective attack on the bankers will demand the unified efforts of key sectors of the population. This unity must be expressed in the program itself. Students must broaden the sociological scope of the movement to include all walks of life.”-Webster G. Tarpley Something to keep in mind in the nascent stages of this anti-corporate action. The gatekeepers of the status quo are always at work, sabotaging, flummoxing, co-opting, radical movements for change which pose a credible threat to continued operation of the Great Happiness Machine that is Casino Capitalism. Relentlessly grinding up individuality, critical thoughts, hopes and dreams amid gauzy and sensuous clouds of greed, consumption, self-absorption, hedonism, un-reality based entertainment, faux patriotism, faux populism, and infinite variations of pro-corporate education and propaganda.” “Ignorance Is Strength”

By Webster G. Tarpley @ Tarpley.net:

An Emergency Program for Anti-Wall Street Protestors: Don’t Let Soros Hijack the Movement

Political mass strike dynamics have been at work in the United States since the Wisconsin and Ohio mobilizations of February and March. Now, there are demonstrations in lower Manhattan and Boston specifically directed against the Wall Street banks. Another protest demonstration is scheduled for Washington, DC, starting on October 6. Good: a political challenge to Wall Street is indeed long overdue.

The Occupy Wall Street demonstrators are skeptical in regard to Obama. There is no sizable constituency for Ron Paul, and the crackpot Austrian school of economics is hardly represented. Above all, there is a desire to break the power of Wall Street. This much is promising, but still not enough to win.

The demonstrations appear initially as leaderless groups, engaged in an organic process of discussion from which specific demands are supposed to emerge. But so far, these demonstrations have put forth no specific demands, reforms, or concrete measures whatsoever to fight Wall Street. This is a fatal political weakness. A movement that attempts to go forward with vague slogans like “Freedom” or “Abolish capitalism” is likely to become easy prey for foundation-funded operatives on the left wing of the Democratic Party.

If a movement pretends to have no leaders, then it is the corporate media, themselves controlled by Wall Street, who will choose the leaders. A few days ago, a Wall Street protester named Kelly Heresy was anointed as principal honcho by Keith Olbermann, who used to work for the hedge fund called General Electric, and who now works for Al Gore. This is no way to select leaders.

The demonstrations may appear spontaneous, but it is easy to see gatekeepers and countergangs operating in their midst, often with a frank counterinsurgency agenda. Occupy Wall Street in particular shows the heavy influence of union bureaucrats from the Service Employees International Union, as well as Acorn – both parts of the Obama machine. The goal of these operatives is to keep the focus of the protests vague and diffuse, so that no demands emerge that might be embarrassing to the Wall Street puppet Obama and his reelection campaign. Their ultimate goal is to absorb the protests as the left wing of the Obama 2012 effort. That means supporting an administration which not only refuses to fight Wall Street, but which is packed with Wall Street executives in its highest positions.

Dubious Hollywood figures like Susan Sarandon and Michael Moore are attempting to gain publicity for themselves by showing up at the demonstrations. Michael Moore, who is not very popular with the demonstrators, was instrumental in leading the antiwar and impeachment movements of the past decade back into the Democratic Party to support Obama. Journalist Matt Taibbi, another newly minted expert on the movement, is remembered for his hatchet jobs in favor of the Bush administration theory of terrorism.

The organizers of the Wall Street action say they want to imitate recent protests in other countries. Their favorite is the Tahrir Square agitation in Egypt in February. But if you go to Cairo today, veterans of those demonstrations will tell you that these efforts accomplished relatively little, and mainly had the effect of ousting an oppressive civilian government in favor of an even more oppressive military government of weak CIA puppets which is still operating under martial law, even as benighted religious fanatics gather strength. In Greece, it is true that the trade unions have mounted a dozen general strikes, but all of these have failed to oust Prime Minister Papandreou, the main enforcer of austerity cuts demanded by the International Monetary Fund, and so the brutal austerity continues. The same thing applies to Spain, where the indignados became so self-absorbed in their discussion and consensus process that they never put forward a program to save Spanish society from the bankers. In Iceland too, the anti-bank movement was never able to go beyond mere protest to advance a series of concrete measures that would allow them to contend for power, take power, and hold onto it for the public good.

The lesson of all of these situations is that, in a severe world economic depression of the kind we have today, mere protest is not enough. Desperate populations are looking for political leadership with solutions capable of solving the life or death issues facing nations today. A movement which is incapable of specifying what it intends to fight for is an immature movement which no intelligent person will take seriously.

The secret of a mass strike upsurge is that crisis conditions will propel many apolitical people into activism. This makes them vulnerable to manipulation by demagogues, including those of the extreme right. The mass strike upsurge by itself solves nothing. The question is whether any coherent group of people can intervene into the mass upsurge and push aside bankrupt and failed leaders with the kind of radical reform program that can actually get the society out of the crisis. The masses cannot discover this program on their own – they are too busy with the struggle for daily existence. College students therefore have a special responsibility to provide ideas for the benefit of the entire society. If an adequate program becomes dominant, the nation can survive. Otherwise, nothing guarantees that civilization itself will not collapse – look at the Tea Party if you don’t believe this. Soros, Koch, and the other finance capitalists have a good working understanding of how these things work, which is why they are sending in their operatives to make sure that this movement will have only the vaguest demands, or no demands at all, to fight for. Let that happen, and Wall Street will rule the day once again.

Despite what Michael Moore may think, the political power of Wall Street is considerable, and an effective attack on the bankers will demand the unified efforts of key sectors of the population. This unity must be expressed in the program itself. Students must broaden the sociological scope of the movement to include all walks of life.

In order to fight Wall Street, it is necessary for the American people to understand the basic idea of shifting the cost of the world economic depression off of the backs of working people and the poor where it is now, and onto Wall Street banks and super-rich speculators. Depressions are very expensive. Who should pay for the current depression? The bankers demand that the American people must pay. We want the bankers to pay, and we must specify how. A movement that wants to defend working people against the class warfare of the bankers has the responsibility of putting forward a program to defend middle-class and other working people. In order to win, the anti-Wall Street protests must agitate for a series of demands including the following:

1. Student Loan Amnesty. The common experience of many of the protesters is that of being crushed by an outrageous burden of high interest student loans. Today it is common for graduating seniors to carry $50,000, $75,000, or even $100,000 of debt. Add the costs of an advanced degree in teaching, law, or medicine, and the debt burden becomes astronomical. The exorbitant cost of a college education reflects the increasing immiseration of the United States over the past 40 years, as the overall standard of living has declined by two thirds or more in terms of real wages and other considerations. These debts are owed to the same zombie bankers who cashed in on the Bush bailout of 2008, and the even larger loans issued by Ben Bernanke of the Federal Reserve over recent years. This is a system of brutal primitive accumulation against the life chances everyone who knows that they need a college degree to be employable in the 21st century. Total students loan indebtedness is now approaching $1 trillion. This grinding debt is destroying the futures, the lives, and the hopes of college students and recent graduates.
When a debtor country like Greece is unable to pay its debts, it is normal to hear talk of a haircut for the bondholders and bankers. It is time for the Wall Street zombie banks to take a haircut on student loan debt. Most of this debt cannot be paid off, but an entire generation can be ruined by a futile attempt to pay it back.

A leading demand must therefore be a total cancellation of all outstanding student loan debt, meaning a total and immediate forgiveness of all payments of principal and interest coming from this category of borrowing. Carter granted Vietnam draft resisters an amnesty. If Obama wants to keep his job, he must deliver a student loan amnesty to save not just a single generation, but the entire future of the United States and beyond. Otherwise, dump Obama in 2012! The zombie bankers have been pampered enough. It is time for them to take a bath, so that a generation might live. This is also the best stimulus program possible.

2. Stop Foreclosures. Since students alone will never be enough to make a revolution, it is necessary to put forward additional measures to defend other parts of the population from the depredations of Wall Street. In the area of home foreclosures, the bankers have trampled on the law to seize millions of homes, some of which never had a mortgage, and many of which were current in their payments. The banks have used corrupt robo-signers, robo-cops, and robo-judges to carry out these fraudclosure thefts. The answer is to make foreclosure a federal crime, so that anyone who throws an American family out on the street will end up in Leavenworth. Again, the zombie bankers can eat the losses, which are unavoidable in any case. This is not an impossible demand: under the New Deal, the Frazier-Lemke Act stopped all foreclosures on homes, provided only that the owners could get a minimal payment plan approved by any judge in any court. With the help of popular pressure and public opinion, foreclosures virtually came to a halt. This is what we need to be demanding today.

3. Defend and fully fund the social safety net. Wall Street and Washington elites agree that the American people ought to be subjected to genocidal austerity – cuts so draconian that they will kill people. The goal is obviously to fund bigger and better bailouts of Goldman Sachs and J.P. Morgan Chase when they go bankrupt the next time around. Real unemployment in the United States is now about 25%, meaning that 30 million people cannot find work, and many have been looking for years. Therefore, we need to extend jobless benefits to all unemployed, including those who have been out of a job for 99 weeks and more. 46 million Americans are now surviving thanks to Food Stamps, but the reactionary Republicans are demanding savage cuts, and Obama is more than likely to cave. We also need to defend programs that specifically help children and young. These include S-CHIP, which gives health care to poor children; Head Start, which provides breakfast and preschool for poor kids; and WIC, which provides high-protein meals for pregnant women, nursing mothers, and infants. Older people have special problems, including that Wall Street speculators have destroyed the value of their 401(k) and IRA retirement plans. This means that Social Security pensions should be increased, and not cut, as the Republicans and Obama both want. Obama has already cut $500 billion out of Medicare, but he wants to cut it even more, and the Tea Party is eager to help him. The best healthcare would be to open Medicare to all Americans, while making the investments needed to maintain quality. Medicaid gives healthcare to poor people of any age, and these payments must be maintained.

4. Pay for healthcare and social services with a 1% Wall Street Sales Tax. When they hear demands like these, Fox news commentators will demand to know how these programs can be paid for. The answer is simple: the Tobin tax or Wall Street sales tax. Today the total financial turnover of the banksters in terms of buying, selling, and other trading comes to well over three quadrillion dollars yearly – that’s more than 3,000 trillion dollars. The rest of us pay sales tax on most purchases, often including the groceries, but Wall Street zombie bankers and hedge fund hyenas pay absolutely zero on that colossal sum. The most unfair aspect of the entire US tax system is that Wall Street pays virtually no taxes. It is time for the bankers to cough up 1% of every stock, bond, and derivatives transaction, be it program trading, high frequency trading, or computerized flash trading at the rate of one million transactions per second. The total revenue could be split between the federal government and the states, and would amount to hundreds of billions of dollars, perhaps even trillions – depending on how determined the speculators are to keep up their dirty deals. There is nothing impossible about this demand: the federal government had a financial transaction tax from the time of World War I in 1967. And even today, the largely right wing governments of the European Union are about to enact their own Tobin tax. Why can’t it be done here as well?

These are immediate agitational demands that can be readily understood by any person. They can form the leading edge of a struggle to break the political power of Wall Street. In addition, a full recovery from depression and the attainment of full employment for the first time since 1945 will require the nationalization of the Federal Reserve, and the issuing of successive tranches of $1 trillion of 0%, very long-term Federal credit for the building of infrastructure, with a goal of creating 30 million new productive jobs with adequate capital investment per job.

Another essential point is that Wall Street is the biggest nest of warmongers anywhere in the world. Anyone seeking to gain influence over the anti-Wall Street movement should be willing to condemn and denounce Obama’s wanton aggression against Libya, as well as to call for an immediate pullout of US troops from Afghanistan and Iraq. Anyone who refuses to do this should be regarded with grave suspicion.

The alternative to such concrete demands is, whether we like it or not, to remain in the orbit of Obama’s Democratic Party. Earlier this year, students, workers, and others occupied the state capitol in Madison, Wisconsin in response to attacks on working people coming from the fascist governor, Walker. The resistance against Walker was betrayed first of all by the Democratic Party, which announced that it would not fight for wages and benefits, but only for trade union rights in the abstract. That is a good program for trade union bureaucrats, but not so good for working people, who bore the brunt of Walker’s austerity. A president who was on the side of the people would have gone immediately to Madison, Wisconsin to hold a town hall on the occupied grounds of the state capitol, an event that would have looked much different than the canned, pre-screened teleprompter town halls Obama likes to address. A real president would have taken Attorney General Holder and Labor Secretary Solis along to investigate the denial of civil rights and labor violations by Walker. Obama did none of these things. Rather, he damned the movement with a few words of faint praise, and cut it loose. The lesson is that the Democratic Party is more than willing to sell out mass struggles anytime it can. And it is only by having your own program of anti-Wall Street demands that you can become independent of the rotten two-party system.

BBC Speechless As Trader Tells The Truth: “Governments Don’t Rule The World, Goldman Sachs Rules The World.”

In Uncategorized on September 27, 2011 at 8:03 pm

Oldspeak:”The collapse is coming…The market is toast, the stock market is finishedThe savings of millions of people is going to vanish….This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late. -Alessio Rastani. In a moment of utter candor, we glimpse a sliver or reality than very few publicly acknowledge. While this man is in all probability a sociopath, he’s articulating an elusive truth. Making incessant changes around the edges of a fatally flawed monetary system will do nothing to change or improve it. It will just postpone its inevitable collapse. This man and many like him would like nothing better than to see a full-fledged global depression. So they can profit from it. These are the people who control governments, topple them, build them up, manipulate them with hidden in plain sight financial terrorism. These amoral, anti-humanistic, ‘happiness machines’ care very little about people. They trade ‘commodities’ like food, energy, water, and farmland, with little regard for the devastatingly real life impacts their digitized keystrokes have on the lives of billions of human beings. This is why people are camped out on Wall Street. As Mr. Rastini says, their job is to make money. The rest of us, can get on board with their nihilistic, sociopathic worldview, or get fucked. “Profit Is Paramount.”

Madison Ruppert @ Activist Post:

In a surprisingly blunt interview aired on the BBC, an independent trader admits that he “dreams of another recession” since some people can prepare and treat a market crash as an opportunity to “make a lot of money from this.”

What exactly is “this”? Well, according to Alessio Rastani, “this” is the inevitable crash in the markets that is headed our way. Rastani, an independent trader, does not treat the crash of the Euro and the stock market as a possibility. He treats it as an inevitability.

He pulls no punches in this interview and it is clear that the BBC presenter is shocked by what he has to say.  When asked what would keep investors happy and mitigate the economic crisis currently unfolding, Rastani reveals, “Personally, it doesn’t matter. See, I’m a trader. Uh, I don’t really care about that kind of stuff.”

He continues, “If I see an opportunity to make money, I go with that. So, for mosttraders, it’s not about… we don’t really care that much how they’re going to fix the economy, how they’re going to fix the, uh, the whole situation. Our job is to make money from it.”

I’ve never heard a trader come right out on mainstream media and lay it out in such a plain way.

Indeed he is correct, a traders job is to make money. Period. A trader need not worry about what will be done to fix an economic crash because as long as they are making money, they couldn’t care less.

This is something that the mainstream media likes to pretend is not the case, as though investors actually have an interest in keeping the stock market and the global economy afloat. This is simply untrue as Rastani reveals.

Traders and investors are just like corporations, they are only interested in the bottom line. If this means profiting off of an economic downturn while their neighbors are foreclosed on and their entire nation is robbed blind then so be it. As long as the cash keeps coming in, who cares?

Speaking of the current global economic meltdown unfolding around us, Rastani says, “I’ve been dreaming of this one for three years.”

He also reveals the mindset of many a trader in saying, “I go to bed every night, I dream of another recession. I dream of another moment like this.”

He then gives the example of the market crash of the 1930s which was not only a market crash, but an opportunity for some people to make a lot of money.

After his frank statements the presenter says, “If you could see the people around me, jaws have collectively dropped at what you’ve just said.” I guess she wasn’t expecting him to tell the truth.

She says, “We appreciate your candor, however it doesn’t help the rest of us, the rest of the Eurozone.”

Rastani then likens the economic crisis to a cancer, telling us that if we wait and wait, it will be too late.

He recommends that everyone prepare while also saying that this is not a time for wishful thinking, hoping for government to ride in like a white knight and save the day.

Then he drops the biggest bombshell of the entire interview.

In a statement that likely sent BBC producers into a frenzy, Rastani stated, “The governments don’t rule the world, Goldman Sachs rules the world. Goldman Sachs does not care about this rescue package, neither does the big funds.”

He gives the average person a bit of hope in saying that it isn’t just traders and investors that can make money off of an economic downturn.

Rastani says that average people need to learn how to make money from a downward market. The first thing people need to do is protect their assets, what they already have.

Rastani concludes with this grim projection, “In less than 12 months, my prediction is, the savings of millions of people is going to vanish. And this is just the beginning.”

He continues, “I would say, be prepared and act now. The biggest risk people can take right now is not acting.”

You can find Alessio Rastani on Facebook here.

Update: Some are saying this was a Yes Men hoax.

Madison Ruppert is the Editor and Owner-Operator of the alternative news and analysis database End The Lie and has no affiliation with any NGO, political party, economic school, or other organization/cause. If you have questions, comments, or corrections feel free to contact him at admin@EndtheLie.com
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