Trouble at Treasury: Geithner gets the keys to the henhouse
The Obama Team has a big problem on their hands; Timothy Geithner. Geithner was picked as Treasury Secretary because he is a trusted ally of the big banks and has a good grasp of the intricacies of the financial system. The problem is that Geithner can't handle the public relations part of his job. His big debut in prime-time last Tuesday turned out to be a complete dud. He was thoroughly unconvincing and looked like a nervous teenager at a speech contest. He fizzled on stage for 25 minutes while the little red box in the corner of the TV screen--which shows the current Dow Jones Industrials--plummeted nearly 400 points. It was a total disaster and one that is sure to be repeated over and over as long as Geithner is at Treasury. Not everyone can be a charismatic orator like Obama and nothing short of a personality transplant will fix Geithner. He lacks gravitas and doesn't inspire confidence. That's a problem since, the administration's main objective is to restore public confidence and get people spending again. They're just shooting themselves in the foot by using him as their pitchman. Eventually, Geithner will either have to be tossed overboard or strapped to Obama like a papoose so he can share in the president's popularity. Otherwise he will continue to be a millstone.In truth, Geithner did us all a big favor on Tuesday by exposing himself as a stooge of the banking industry. Now everyone can see that the banks are working the deal from the inside. Geithner has assembled a phalanx of Wall Street flim-flam men to fill out the roster at Treasury. "His chief-of-staff is lobbyist from Goldman Sachs. The new deputy secretary of state is a former CEO of Citigroup. Another CFO from Citigroup is now assistant to the president, and deputy national security adviser for International Economic Affairs. And one of his deputies also came from Citigroup. One new member of the president's Economic Recovery Advisory Board comes from UBS, which is currently being investigated for helping rich clients evade taxes." The Obama White House is a beehive of big money guys and Wall Street speculators whose only goal is to nuzzle up to the public trough while strengthening their grip on political power. The banking lobby has already set the agenda. All the hooplah about "financial rescue" is just a smokescreen to hide the fact that the same scofflaws who ripped off investors for zillions of dollars are back for their next big sting; a quick vacuuming of the public till to save themselves from bankruptcy. It's a joke. Obama floated into office on a wave of Wall Street campaign contributions and now it's payback time. Prepare to get fleeced. Geithner is fine-tuning a "public-private" partnership for his scotch-swilling buddies so they can keep their fiefdom in tack while shifting trillions of dollars of toxic assets onto the people's balance sheet. They've affixed themselves to Treasury like scabs on a leper and are now zeroing in for the kill. Geithner is "their guy", a Trojan Horse for the banking oligarchs. He's already admitted that his main goal is to, "keep the banks in private hands". That says it all, doesn't it?Of course, the administration is not alone in their support for the banks and Wall Street. Congress has its fair share of bank-loyalists, too. That was evident last week at the hearings of the House Financial Services Committee. 8 CEOs of the nations biggest banks were marched off Capital Hill (ostensibly) for public rebuke. For a minute, it looked like Congress might do its job and actually grill the bastards who blew up the financial system. But, no, that's not what happened. The 7 hours of testimony produced few fireworks and no mention of accountability. For the most part, the bankers were treated like honored guests instead of the chiselers they are. That's because nearly every member of the committee rakes in contributions from the same banks that are being investigated. As Bill Moyers points out on Friday's Bill Moyers Journal, "Last year, the securities and investment industry made $146 million in campaign contributions. Commercial banks, another $34 million." The banks own congress just like they own the White House and anything else of value in the USA. They left the hearings unscathed..........
................The TARP funds should not be used to exhume the corpse of a dysfunctional financial system. The money should be used to create more jobs, extend unemployment benefits, provide food stamps, public works projects or cram downs for struggling homeowners trying to avoid foreclosure. People don't need more credit; they need debt relief. That means higher wages and better jobs. Obama should realize this, even if Geithner and Co. don't. The Geithner-Paulson policy of limitless credit expansion is the path to ruin. That's why Geithner is the wrong man for the job. His fundamental worldview leads to economic calamity.Geithner's resume alone should have precluded him from consideration as Treasury Secretary. He started his career at Kissinger and Associates, which speaks for itself. From there, he went to International Affairs division of the Treasury Dept. where he served under Robert Rubin and Lawrence Summers both of who were major proponents of deregulation. He's presently a senior fellow at the Council on Foreign Relations and served as director of Policy Development and Review Department at the IMF. In 2003, he became president of the New York Fed and was Vice Chairman of the FOMC. He's also a member of the G-30, an international body of financiers and powerbrokers, and the former chairman of the Bank for International Settlements. If there's an internationalist organization Geithner doesn't belong to, we haven't found it yet. He's been thoroughly marinated in a globalist culture that wreaks of banking conspiracies and clandestine junkets to Jeckyll Island. Is it really that hard to find a good economist who just wants to serve his country? There was a revealing incident in the Senate Finance Committee last week when Senator Bernie Sanders challenged Geithner. Here's the transcript:
SENATOR BERNARD SANDERS: "In 2006 and 2007, Lloyd Blankfein, the CEO of Goldman Sachs, was the highest paid executive on Wall Street, making over $125 million in total compensation. Due to its risky investments, Goldman Sachs now has over $168 billion in total outstanding debt. It's laid off over 10 percent of its workforce. Late last year, the financial situation at Goldman was so dire that the taxpayers of this country provided Goldman Sachs with a $10 billion bailout.Very simple question that I think the American people want to know. Yes or no, should Mr. Blankfein be fired from his job and new leadership be brought in?"
SECRETARY GEITHNER: "Senator, that's a judgment his board of directors have to make.I want to say one thing which is very important. Everything we do going forward has to be judged against the impact we're going to have on the American people and the prospects for recovery. And every dollar we spend will have to be measured against the benefits we bring in terms of---
"SENATOR SANDERS: "Mr. Secretary, you're not answering my question. You have a person who made hundreds of millions for himself as he led his institution that helped cause a great financial crisis. We have put, as taxpayers, $10 billion to bail him out and we have no say about whether or not he should stay on the job?
"SECRETARY GEITHNER: "No, I didn't say that. I think there will be circumstances, as there have been already, where the government intervention will have to come with very tough conditions, including changes in management and leadership of institutions. And where we believe that makes sense, we will do that.
"Predictably evasive, Geithner refused to say whether or not Blanfein should be fired. That's because Geithner believes that the function of government is to serve the interests of the big banks not the public. The lip-service to democracy is just rhetorical claptrap. It's meaningless. The government's role is to facilitate the exploitation of its people to fatten the bottom line of the top-hat capitalists. This is why Geithner never made any reference to regulations during Tuesday's speech. There was no mention of Glass Steagal, or reducing the amount of leverage financial institutions can use, or forcing all derivatives contracts onto a regulated exchange, or suspending off-balances sheets operations, or reclassifying all Level 3 assets so shareholders know how much garbage the banks have on their books, or even rethinking the whole securitization model which collapsed the financial system and thrust the world towards a 1930s-type slump. He stayed away from regulation entirely, just as he defiantly withheld details about the impending multi-billion dollar bank bailout. But don't think that the slippery Mr. Geithner doesn't have a solution for our present economic malaise. He does! He would like to see Congress appoint an Uber-regulator that has the authority to monitor market activity and decide whether individual players pose a threat to the overall system. Sounds great. And to whom should these sweeping new powers be entrusted?You guessed it; the Federal Reserve, the wealth-shifting, price-fixing, social-engineering scamsters who preside over the bankers cartel which just blew up the financial system. Is there any doubt where Geithner's loyalties really lie?
Wednesday, February 18, 2009
SC86-3 / http://www.theherald.co.uk/business/news/display.var.2489347.0.Warning_for_the_West_as_crisis_spills_onto_streets.php
Warning for the West as crisis spills onto streets
The slump that has swept through developed nations like the UK, the eurozone and the United States is hitting the world's emerging economies with a speed and ferocity that has shocked even the most pessimistic analysts.Until recently, many investors and economists thought such countries could provide a bulwark against the collapse in growth elsewhere. Instead, the latest data suggests that emerging economies as a group actually contracted late last year, and will likely shrink further in 2009.The pace of the turnaround has caught policymakers and investors off guard. In a matter of months, key gauges of growth in trade and industrial production in a number of countries went from acceptable to alarming - even domestic demand is suffering.Asia's economies have posted the starkest drops in economic activity, but the slide is evident from Latin America to Eastern Europe.Economists are particularly concerned about conditions in the Baltic countries, Eastern Europe and Russia, which still has a formidable nuclear arsenal. In all three areas of the former Soviet empire, deteriorating economic conditions, marked by steep falls in the value of national currencies and gross domestic product, has led to weeks of civil unrest............
...........Street clashes have broken out in Moscow and other cities and the government is clearly worried about further outbreaks of violence.Fitch recently downgraded Russia's sovereign rating, citing a wave of corporate refinancings and the government's macroeconomic policy. Standard & Poor's made similar moves late last year and many observers expect Moody's to do the same soon.Downgrades make it more expensive for companies and the government to obtain new debt.The situation is little better in the Baltic states of Latvia, Lithuania and Estonia, where governments have had to cut spending on key programmes.Some experts are concerned that economic difficulties in the Baltic states will spill over into Sweden, Denmark and Norway.There are also worries about larger economies such as Slovakia, Bulgaria, Romania and Ukraine. If they weaken further, it will put banks in Germany and Austria in even deeper trouble. Austrian banks have run up huge debts in neighbouring countries.Last month saw the biggest demonstrations in Latvia and Lithuania for nearly 20 years. In Vilnius, the capital of Lithuania, a mass protest against austerity measures ended up in a riot as protesters hurled eggs, rocks and snowballs at the police.In Latvia's capital Riga, people dug up cobblestones from the street, smashed storefronts and trashed police cars. The protests followed the government's decision to push through massive cuts in social security payments.Angry demonstrations have broken out elsewhere in Eastern Europe. The centre of the Bulgarian capital Sofia was brought to a standstill by protesters who surrounded the country's parliament building.In Romania, thousands of workers walked out of factories and marched against government plans for more privatisation and budget cuts.Tension is rising in Hungary, where unemployment has jumped to above 8%, according to analysts in Budapest. Last year, the government was forced to turn to the International Monetary Fund to avert a debt default, and the economy is forecast to contract as much as 3% this year.Meanwhile, some of the strongest emerging economies outside of Europe are also in trouble. Taiwan said last week that exports in January plunged a record 44% from the same month last year, pushing them down to a level unseen since 2005.Last week, Brazil posted industrial production numbers for December that showed a historic tumble of 12.4% from the previous month, shocking the country and forcing its president to calm nerves.In South Korea, the December fall in industrial output over a year earlier was the largest since the country began keeping records. The South Korean won has shed nearly 10% of its value against the dollar.Malaysia announced last week that its factory output fell at its steepest pace in 15 years in December from a year ago, reinforcing expectations the government will step up spending to fend off a recession.It was the fourth straight month of decline in output in the South-east Asian country, which is grappling with collapsing demand for electronic goods, the biggest export revenue earner for the country."The magnitude of the deterioration (in emerging economies) is nothing short of dramatic," said Amer Bisat, an analyst at US investment firm Traxis Partners. "We're continually catching up with the data, and with continuing downward revisions, at a pace which to my mind is unprecedented."...............
The slump that has swept through developed nations like the UK, the eurozone and the United States is hitting the world's emerging economies with a speed and ferocity that has shocked even the most pessimistic analysts.Until recently, many investors and economists thought such countries could provide a bulwark against the collapse in growth elsewhere. Instead, the latest data suggests that emerging economies as a group actually contracted late last year, and will likely shrink further in 2009.The pace of the turnaround has caught policymakers and investors off guard. In a matter of months, key gauges of growth in trade and industrial production in a number of countries went from acceptable to alarming - even domestic demand is suffering.Asia's economies have posted the starkest drops in economic activity, but the slide is evident from Latin America to Eastern Europe.Economists are particularly concerned about conditions in the Baltic countries, Eastern Europe and Russia, which still has a formidable nuclear arsenal. In all three areas of the former Soviet empire, deteriorating economic conditions, marked by steep falls in the value of national currencies and gross domestic product, has led to weeks of civil unrest............
...........Street clashes have broken out in Moscow and other cities and the government is clearly worried about further outbreaks of violence.Fitch recently downgraded Russia's sovereign rating, citing a wave of corporate refinancings and the government's macroeconomic policy. Standard & Poor's made similar moves late last year and many observers expect Moody's to do the same soon.Downgrades make it more expensive for companies and the government to obtain new debt.The situation is little better in the Baltic states of Latvia, Lithuania and Estonia, where governments have had to cut spending on key programmes.Some experts are concerned that economic difficulties in the Baltic states will spill over into Sweden, Denmark and Norway.There are also worries about larger economies such as Slovakia, Bulgaria, Romania and Ukraine. If they weaken further, it will put banks in Germany and Austria in even deeper trouble. Austrian banks have run up huge debts in neighbouring countries.Last month saw the biggest demonstrations in Latvia and Lithuania for nearly 20 years. In Vilnius, the capital of Lithuania, a mass protest against austerity measures ended up in a riot as protesters hurled eggs, rocks and snowballs at the police.In Latvia's capital Riga, people dug up cobblestones from the street, smashed storefronts and trashed police cars. The protests followed the government's decision to push through massive cuts in social security payments.Angry demonstrations have broken out elsewhere in Eastern Europe. The centre of the Bulgarian capital Sofia was brought to a standstill by protesters who surrounded the country's parliament building.In Romania, thousands of workers walked out of factories and marched against government plans for more privatisation and budget cuts.Tension is rising in Hungary, where unemployment has jumped to above 8%, according to analysts in Budapest. Last year, the government was forced to turn to the International Monetary Fund to avert a debt default, and the economy is forecast to contract as much as 3% this year.Meanwhile, some of the strongest emerging economies outside of Europe are also in trouble. Taiwan said last week that exports in January plunged a record 44% from the same month last year, pushing them down to a level unseen since 2005.Last week, Brazil posted industrial production numbers for December that showed a historic tumble of 12.4% from the previous month, shocking the country and forcing its president to calm nerves.In South Korea, the December fall in industrial output over a year earlier was the largest since the country began keeping records. The South Korean won has shed nearly 10% of its value against the dollar.Malaysia announced last week that its factory output fell at its steepest pace in 15 years in December from a year ago, reinforcing expectations the government will step up spending to fend off a recession.It was the fourth straight month of decline in output in the South-east Asian country, which is grappling with collapsing demand for electronic goods, the biggest export revenue earner for the country."The magnitude of the deterioration (in emerging economies) is nothing short of dramatic," said Amer Bisat, an analyst at US investment firm Traxis Partners. "We're continually catching up with the data, and with continuing downward revisions, at a pace which to my mind is unprecedented."...............
Tuesday, February 17, 2009
SC86-2 / http://www.globalresearch.ca/index.php?context=va&aid=12332
Collapse of the US dollar: Global systemic crisis. The phase of global geopolitical dislocation
Back in February 2006, LEAP/E2020 estimated that the global systemic crisis would unfold in 4 main structural phases: trigger, acceleration, impact and decanting phases. This process enabled us to properly anticipate events until now. However our team has now come to the conclusion that, due to the global leaders’ incapacity to fully realise the scope of the ongoing crisis (made obvious by their determination to cure the consequences rather than the causes of this crisis), the global systemic crisis will enter a fifth phase in the fourth quarter of 2009, a phase of global geopolitical dislocation. According to LEAP/E2020, this new stage of the crisis will be shaped by two major processes happening in two parallel sequences: A. Two major processes: 1. Disappearance of the financial base (Dollar & Debt) all over the world 2. Fragmentation of the interests of the global system’s big players and blocks B. Two parallel sequences: 1. Quick disintegration of the current international system altogether 2. Strategic dislocation of big global players. We had hoped that the decanting phase would give the world’s leaders the opportunity to draw the proper conclusions from the collapse of the global system prevailing since WWII. Alas, at this stage, it is no longer possible to be optimistic in this regard (1). In the United States, as in Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,…) to reboot it. In fact (and this is what LEAP/E2020 means ever since February 2006 using the expression « global systemic crisis”), the global system is simply out of order; a new one needs to be built instead of striving to save what can no longer be saved. History is not known to be patient, therefore the fifth phase of the crisis will ignite this required process of reconstruction, but in a harsh manner: by means of a complete dislocation of the present system, with particularly tragic consequences in the case of several big global players, as described in this 32nd issue of the GEAB (see the two parallel sequences). According to LEAP/E2020, there is only one very small launch window left to prevent this scenario from shaping up: the next four months, before summer 2009. Practically speaking, the April 2009 G20 Summit is probably the last chance to put on the right tracks the forces at play, i.e. before the sequence of UK and then US defaults begin (2). Failing which, they will lose their capacity to control events (3), including those in their own countries for many of them; and the world will enter this phase of geopolitical dislocation like a “drunken boat”. At the end of this phase of geopolitical dislocation, the world will look more like Europe in 1913 rather than our world in 2007. Because they persisted in bearing the ever-increasing weight of the ongoing crisis, most states, including the most powerful ones, failed to realise that they were planning their own trampling under the weight of History, forgetting that they were merely man-made organisations, only surviving because they matched the interest of a large majority. In this 32nd edition of the GEAB, LEAP/E2020 has chosen to anticipate the fallout of this phase of geopolitical dislocation so far as it affects the United-States, EU, China and Russia. It is high time for the general population and socio-political players to get ready to face very hard times during which whole segments of our societies will be modified (4), temporarily disappear or even permanently vanish. For instance, the breakdown of the global monetary system we anticipated for summer 2009 will indeed entail the collapse of the US dollar (and all USD-denominated assets), but it will also induce, out of psychological contagion, a general loss of confidence in paper money altogether (these consequences give rise to a number of recommendations in this issue of the GEAB). Last but not least, our team now estimates that the most monolithic, the most « imperialistic » political entities (5) will suffer the most from this fifth phase of the crisis. Some states will indeed experience a strategic dislocation undermining their territorial integrity and their influence worldwide. As a consequence, other states will suddenly lose their protected situations and be thrust into regional chaos.
Notes: (1) Barack Obama, like Nicolas Sarkozy or Gordon Brown, spend their time chanting about the historic dimension of the crisis, but they are just hiding the fact that they fully misunderstand its nature in an attempt to clear their names from the future failure of their policies. As to the others, they prefer to persuade themselves that the problem will be solved like any normal technical problem, albeit a little more serious than usual. Meanwhile everyone continues to play by decades old rules, unaware of the fact that the game is vanishing from under their noses.
Back in February 2006, LEAP/E2020 estimated that the global systemic crisis would unfold in 4 main structural phases: trigger, acceleration, impact and decanting phases. This process enabled us to properly anticipate events until now. However our team has now come to the conclusion that, due to the global leaders’ incapacity to fully realise the scope of the ongoing crisis (made obvious by their determination to cure the consequences rather than the causes of this crisis), the global systemic crisis will enter a fifth phase in the fourth quarter of 2009, a phase of global geopolitical dislocation. According to LEAP/E2020, this new stage of the crisis will be shaped by two major processes happening in two parallel sequences: A. Two major processes: 1. Disappearance of the financial base (Dollar & Debt) all over the world 2. Fragmentation of the interests of the global system’s big players and blocks B. Two parallel sequences: 1. Quick disintegration of the current international system altogether 2. Strategic dislocation of big global players. We had hoped that the decanting phase would give the world’s leaders the opportunity to draw the proper conclusions from the collapse of the global system prevailing since WWII. Alas, at this stage, it is no longer possible to be optimistic in this regard (1). In the United States, as in Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,…) to reboot it. In fact (and this is what LEAP/E2020 means ever since February 2006 using the expression « global systemic crisis”), the global system is simply out of order; a new one needs to be built instead of striving to save what can no longer be saved. History is not known to be patient, therefore the fifth phase of the crisis will ignite this required process of reconstruction, but in a harsh manner: by means of a complete dislocation of the present system, with particularly tragic consequences in the case of several big global players, as described in this 32nd issue of the GEAB (see the two parallel sequences). According to LEAP/E2020, there is only one very small launch window left to prevent this scenario from shaping up: the next four months, before summer 2009. Practically speaking, the April 2009 G20 Summit is probably the last chance to put on the right tracks the forces at play, i.e. before the sequence of UK and then US defaults begin (2). Failing which, they will lose their capacity to control events (3), including those in their own countries for many of them; and the world will enter this phase of geopolitical dislocation like a “drunken boat”. At the end of this phase of geopolitical dislocation, the world will look more like Europe in 1913 rather than our world in 2007. Because they persisted in bearing the ever-increasing weight of the ongoing crisis, most states, including the most powerful ones, failed to realise that they were planning their own trampling under the weight of History, forgetting that they were merely man-made organisations, only surviving because they matched the interest of a large majority. In this 32nd edition of the GEAB, LEAP/E2020 has chosen to anticipate the fallout of this phase of geopolitical dislocation so far as it affects the United-States, EU, China and Russia. It is high time for the general population and socio-political players to get ready to face very hard times during which whole segments of our societies will be modified (4), temporarily disappear or even permanently vanish. For instance, the breakdown of the global monetary system we anticipated for summer 2009 will indeed entail the collapse of the US dollar (and all USD-denominated assets), but it will also induce, out of psychological contagion, a general loss of confidence in paper money altogether (these consequences give rise to a number of recommendations in this issue of the GEAB). Last but not least, our team now estimates that the most monolithic, the most « imperialistic » political entities (5) will suffer the most from this fifth phase of the crisis. Some states will indeed experience a strategic dislocation undermining their territorial integrity and their influence worldwide. As a consequence, other states will suddenly lose their protected situations and be thrust into regional chaos.
Notes: (1) Barack Obama, like Nicolas Sarkozy or Gordon Brown, spend their time chanting about the historic dimension of the crisis, but they are just hiding the fact that they fully misunderstand its nature in an attempt to clear their names from the future failure of their policies. As to the others, they prefer to persuade themselves that the problem will be solved like any normal technical problem, albeit a little more serious than usual. Meanwhile everyone continues to play by decades old rules, unaware of the fact that the game is vanishing from under their noses.
Monday, February 16, 2009
SC86-1 / http://informationclearinghouse.info/article22000.htm
Davos Debt & Denial
In an age of illusion, the guise of truth is often heresy
...........Going off the gold standard and giving up fixed exchange rates constituted a momentous step in the history of international economics.Yergin and Stanislaw were right. It was to be a momentous—and ultimately fatal step—for as a result of the US default on its international gold obligations, all currencies in the world instantly became fiat.The security that gold and silver afforded the use of paper money would be no more—and when a con game is being run, nothing, absolutely nothing is more important than confidence.The last and most critical piece in the banker’s carefully constructed charade was eliminated by the US when it overspent it entire gold reserves leaving the international monetary system bereft of any intrinsic value. Only monetary momentum and residual confidence has allowed paper-based capitalist economies to function since the last vestige of gold was removed in 1971.Now, the postponed but inevitable destructive consequences of 1971 are about to make the demolition of the World Trade Center Twin Towers and Building 7 look like a spring day in Paris. A collapse of world economies caused by the default on trillions of dollars of paper debts and obligations has never before happened. Soon, it will.The consequences will be as devastating as they will be widespread as personal savings will be wiped out. Personal savings entrusted to banks have been invested in the same paper IOUs, sic bonds, owned by pension funds, investment funds, and insurance companies all over the world.Savers forced by the constant depreciation of paper money have given their savings to banks, pension funds, insurance companies and investment funds in the hopes of salvaging the value of those savings. But those hopes will prove to be false as the escalating financial collapse reveals such investments, e.g. corporate, government and consumer IOUs, to be increasingly worthless.Governments that allowed this crisis to occur will then be forced to indemnify such losses in order to maintain civil and social order. But, when done, the indemnification of trillions of dollars of lost savings will cause what remains of the international monetary system to collapse. Paper “money” is but a paper tiger and when exposed to the twin disasters of economic deflation and central bank hyperinflation, fiat “money” will ultimately revert to its intrinsic value—zero.
PANDORA’S BOX AND THE RISE AND FALL OF DAVOS
Economies built on credit and debt are by nature unstable. Caught between cycles of expansion and contraction, they are also vulnerable to the vagaries of man and the dictates of nature, i.e. war, famine, greed, drought, etc.When the backing of gold was finally removed from paper money, it was the final straw that was to bring down the bankers’ house of cards. But before the house of cards collapsed, capitalism was to erupt in one last display of shameless glory.The 25 years between 1982 and 2007 was the longest expansion in capitalism’s history. It was, however, to be its last; for the expansion was built on misallocated and historically excessive amounts of credit—and Davos occupied center stage in the display of this excessive “achievement”.It is natural that at the end of the banker’s system, bankers would have garnered the largest share of the spoils and so it was, at least for a short while. The greatest spectacle of Davos was in 2007, the momentary triumph of bankers standing atop the world of global commerce whose profits and productivity they had increasingly purloined as their own.The triumph of the bankers, however, was to be as short as it was spectacular. The era of billion dollar bonuses paid to bankers was to occur at the apogee of their triumph, a triumph that was to be as short as it was lucrative, for soon after, both banks and the capital markets would collapse............
.............WHEN SYSTEMS FAIL
Unstable systems can function for years without serious problems. But over time, unstable systems will always break down. We are witness to such a systemic failure today. Global credit markets are slowing and contracting. The capitalist system responsible for economic expansion and wealth is in disarray.Debt, in capitalist systems, is a wondrous device. That is, until it can’t be paid back. Under capitalism, credit fuels expansion but it does so at a cost. As capitalism expands, credit becomes debt and the greater the expansion, the greater the debt.
EXPANSION BEGETS DEMISE
Capitalism’s fatal flaw is apparent only in its later stages. As capitalism matures, its inherent systemic instability manifests. The very expansion of capitalism sets in motion its demise. The Achilles heel of capitalism is its perpetual need to expand.Only perpetual capital expansion can create sufficient capital flows to service and retire previously created debts, the amounts of which are always increasing because of the accruing compound interest being charged. While any slowdown is cause for worry, a contraction bodes far worse.FEAR IN
DAVOSWHAT A DIFFERENCE A YEAR MAKES
One year ago, the mood at Davos was one of quiet, almost smug, confidence. The on-going economic expansion appeared to be endless, the profits of investment bankers skimmed off the top of productive enterprise was greater than ever. Private equity, the investment banker’s equivalent of flipping real estate, was the hottest game in town.It is no longer. Today in Davos, the scent of Armani is now mixed with the acrid smell of anxiety produced by falling markets and uncertain futures. Concern has replaced confidence. The major phernome in Davos today is fear.Davos will not be the same next year. If you’re planning on going, be sure to take some air freshener.That was then. Now, the major phernome in Davos is panic. Wall Street institutions such as Bear Stearns and Lehman Bros. have vanished into thin air (appropriately Davos is the highest city in Europe) and the financial sector, formerly the king of predators, is struggling to survive. Air freshener will be no more effective at Davos than central bank credit will be successful at reversing now deflating economies............
.........The roots of modern economics are intertwined with institutional deceit on a massive scale because the material rewards are so great. Therefore, the attempt to ascertain the truth about money is not an easy task; and it is not made easier by those who benefit by its deceit.This is why the discussion of ideas antithetical to those in positions of power are now found only at the edges of society. Writers and readers alike must search for truth in books not easily found, such as Buckminster Fuller’s Grunch of Giants (out of print, still available at www.bfi.org, Peter Warburton’s Debt & Delusion—Central Bank Follies That Threaten Economic Disaster (reissued and currently available in a deluxe edition from WorldMetaView Press) and Bernard Lietaer’s The Future of Money (published in 1999 by Random House and never made available in the US, currently out of print).Those in power maintain their power because those without power do not understand the power dynamics operant in the world in which they live. Thus, the economic control over the many for the benefit of the few has continued irrespective of the form the economy takes.We are at the end of an extraordinary epoch, the end of the age of credit. In 1981, Bucky Fuller predicted the collapse of the present power structures in tandem with an unprecedented crisis that would transform humanity.That time, the collapse of the world power structures, has now arrived............
In an age of illusion, the guise of truth is often heresy
...........Going off the gold standard and giving up fixed exchange rates constituted a momentous step in the history of international economics.Yergin and Stanislaw were right. It was to be a momentous—and ultimately fatal step—for as a result of the US default on its international gold obligations, all currencies in the world instantly became fiat.The security that gold and silver afforded the use of paper money would be no more—and when a con game is being run, nothing, absolutely nothing is more important than confidence.The last and most critical piece in the banker’s carefully constructed charade was eliminated by the US when it overspent it entire gold reserves leaving the international monetary system bereft of any intrinsic value. Only monetary momentum and residual confidence has allowed paper-based capitalist economies to function since the last vestige of gold was removed in 1971.Now, the postponed but inevitable destructive consequences of 1971 are about to make the demolition of the World Trade Center Twin Towers and Building 7 look like a spring day in Paris. A collapse of world economies caused by the default on trillions of dollars of paper debts and obligations has never before happened. Soon, it will.The consequences will be as devastating as they will be widespread as personal savings will be wiped out. Personal savings entrusted to banks have been invested in the same paper IOUs, sic bonds, owned by pension funds, investment funds, and insurance companies all over the world.Savers forced by the constant depreciation of paper money have given their savings to banks, pension funds, insurance companies and investment funds in the hopes of salvaging the value of those savings. But those hopes will prove to be false as the escalating financial collapse reveals such investments, e.g. corporate, government and consumer IOUs, to be increasingly worthless.Governments that allowed this crisis to occur will then be forced to indemnify such losses in order to maintain civil and social order. But, when done, the indemnification of trillions of dollars of lost savings will cause what remains of the international monetary system to collapse. Paper “money” is but a paper tiger and when exposed to the twin disasters of economic deflation and central bank hyperinflation, fiat “money” will ultimately revert to its intrinsic value—zero.
PANDORA’S BOX AND THE RISE AND FALL OF DAVOS
Economies built on credit and debt are by nature unstable. Caught between cycles of expansion and contraction, they are also vulnerable to the vagaries of man and the dictates of nature, i.e. war, famine, greed, drought, etc.When the backing of gold was finally removed from paper money, it was the final straw that was to bring down the bankers’ house of cards. But before the house of cards collapsed, capitalism was to erupt in one last display of shameless glory.The 25 years between 1982 and 2007 was the longest expansion in capitalism’s history. It was, however, to be its last; for the expansion was built on misallocated and historically excessive amounts of credit—and Davos occupied center stage in the display of this excessive “achievement”.It is natural that at the end of the banker’s system, bankers would have garnered the largest share of the spoils and so it was, at least for a short while. The greatest spectacle of Davos was in 2007, the momentary triumph of bankers standing atop the world of global commerce whose profits and productivity they had increasingly purloined as their own.The triumph of the bankers, however, was to be as short as it was spectacular. The era of billion dollar bonuses paid to bankers was to occur at the apogee of their triumph, a triumph that was to be as short as it was lucrative, for soon after, both banks and the capital markets would collapse............
.............WHEN SYSTEMS FAIL
Unstable systems can function for years without serious problems. But over time, unstable systems will always break down. We are witness to such a systemic failure today. Global credit markets are slowing and contracting. The capitalist system responsible for economic expansion and wealth is in disarray.Debt, in capitalist systems, is a wondrous device. That is, until it can’t be paid back. Under capitalism, credit fuels expansion but it does so at a cost. As capitalism expands, credit becomes debt and the greater the expansion, the greater the debt.
EXPANSION BEGETS DEMISE
Capitalism’s fatal flaw is apparent only in its later stages. As capitalism matures, its inherent systemic instability manifests. The very expansion of capitalism sets in motion its demise. The Achilles heel of capitalism is its perpetual need to expand.Only perpetual capital expansion can create sufficient capital flows to service and retire previously created debts, the amounts of which are always increasing because of the accruing compound interest being charged. While any slowdown is cause for worry, a contraction bodes far worse.FEAR IN
DAVOSWHAT A DIFFERENCE A YEAR MAKES
One year ago, the mood at Davos was one of quiet, almost smug, confidence. The on-going economic expansion appeared to be endless, the profits of investment bankers skimmed off the top of productive enterprise was greater than ever. Private equity, the investment banker’s equivalent of flipping real estate, was the hottest game in town.It is no longer. Today in Davos, the scent of Armani is now mixed with the acrid smell of anxiety produced by falling markets and uncertain futures. Concern has replaced confidence. The major phernome in Davos today is fear.Davos will not be the same next year. If you’re planning on going, be sure to take some air freshener.That was then. Now, the major phernome in Davos is panic. Wall Street institutions such as Bear Stearns and Lehman Bros. have vanished into thin air (appropriately Davos is the highest city in Europe) and the financial sector, formerly the king of predators, is struggling to survive. Air freshener will be no more effective at Davos than central bank credit will be successful at reversing now deflating economies............
.........The roots of modern economics are intertwined with institutional deceit on a massive scale because the material rewards are so great. Therefore, the attempt to ascertain the truth about money is not an easy task; and it is not made easier by those who benefit by its deceit.This is why the discussion of ideas antithetical to those in positions of power are now found only at the edges of society. Writers and readers alike must search for truth in books not easily found, such as Buckminster Fuller’s Grunch of Giants (out of print, still available at www.bfi.org, Peter Warburton’s Debt & Delusion—Central Bank Follies That Threaten Economic Disaster (reissued and currently available in a deluxe edition from WorldMetaView Press) and Bernard Lietaer’s The Future of Money (published in 1999 by Random House and never made available in the US, currently out of print).Those in power maintain their power because those without power do not understand the power dynamics operant in the world in which they live. Thus, the economic control over the many for the benefit of the few has continued irrespective of the form the economy takes.We are at the end of an extraordinary epoch, the end of the age of credit. In 1981, Bucky Fuller predicted the collapse of the present power structures in tandem with an unprecedented crisis that would transform humanity.That time, the collapse of the world power structures, has now arrived............
SC85-15 / http://www.theaustralian.news.com.au/story/0,25197,25057996-2703,00.html
Warming 'much more rapid' than climate panel predicted
DIRE warnings of future devastation sparked by global warming have not been dire enough, climate scientists warn.
Just over a year ago, the Nobel-winning Intergovernmental Panel on Climate Change published a report warning of rising sea levels, expanding deserts, more intense storms and extinction of up to 30 per cent of plant and animal species. But recent studies suggested the report significantly underestimated the potential severity of global warming over the next 100 years, a senior member of the panel warned yesterday. "We are basically looking now at a future climate that is beyond anything that we've considered seriously in climate policy," said Chris Field, a co-ordinating lead author of the report. Fresh data showed that greenhouse gas emissions had grown by an average of 3.5 per cent a year from 2000 to 2007, Professor Field said at a meeting of the American Association for the Advancement of Science. That was "far more rapid than we expected" and more than three times the 0.9 per cent growth rate in the 1990s, he said. Professor Field, of Stanford University, said it appeared that most the growth was "because developing countries like China and India saw a huge upsurge in electric power generation, almost all of it based on coal". Complicating the problem was that higher temperatures could thaw the Arctic tundra, releasing nitrous oxide, which was 300 times more potent as a greenhouse gas than carbon dioxide. Professor Field said the new estimate of the total amount of carbon frozen in permafrost soils was about 1000 billion tonnes. The amount of CO2 released through burning fossil fuels since the beginning of the Industrial Revolution more than 200 years ago is about 350 billion tonnes. Recent studies have shown that global warming is reducing the ocean's ability to absorb carbon by altering wind patterns in the Southern Ocean. Faster winds blow surface water away, causing water with higher concentrations of carbon dioxide to rise to the surface.
DIRE warnings of future devastation sparked by global warming have not been dire enough, climate scientists warn.
Just over a year ago, the Nobel-winning Intergovernmental Panel on Climate Change published a report warning of rising sea levels, expanding deserts, more intense storms and extinction of up to 30 per cent of plant and animal species. But recent studies suggested the report significantly underestimated the potential severity of global warming over the next 100 years, a senior member of the panel warned yesterday. "We are basically looking now at a future climate that is beyond anything that we've considered seriously in climate policy," said Chris Field, a co-ordinating lead author of the report. Fresh data showed that greenhouse gas emissions had grown by an average of 3.5 per cent a year from 2000 to 2007, Professor Field said at a meeting of the American Association for the Advancement of Science. That was "far more rapid than we expected" and more than three times the 0.9 per cent growth rate in the 1990s, he said. Professor Field, of Stanford University, said it appeared that most the growth was "because developing countries like China and India saw a huge upsurge in electric power generation, almost all of it based on coal". Complicating the problem was that higher temperatures could thaw the Arctic tundra, releasing nitrous oxide, which was 300 times more potent as a greenhouse gas than carbon dioxide. Professor Field said the new estimate of the total amount of carbon frozen in permafrost soils was about 1000 billion tonnes. The amount of CO2 released through burning fossil fuels since the beginning of the Industrial Revolution more than 200 years ago is about 350 billion tonnes. Recent studies have shown that global warming is reducing the ocean's ability to absorb carbon by altering wind patterns in the Southern Ocean. Faster winds blow surface water away, causing water with higher concentrations of carbon dioxide to rise to the surface.
SC85-14 / http://www.aspousa.org/index.php/2009/02/peak-oilwhat-do-we-do-now/
Peak Oil - What Do We Do Now?
The history of world peak oil production has been truly remarkable. Modern day concerns were rekindled in 1998 when Campbell and Laherrere published their peak oil thinking in Scientific American. Not surprisingly, they were largely ignored. Some in the establishment took the time to utter “Bah-humbug,” but a few independent souls decided to seriously consider the problem. ASPO was formed soon thereafter and began annual meetings, fostering communication and helping to create increasing interest in the subject. Peak oil concernists began to form a community and momentum increased. Counter arguments buttressing the no-problem point of view came from OPEC, CERA, EIA, IEA, and some of the major oil companies. The denier proclamations grew in intensity, indicating that the serious consideration of peak oil was beginning to trouble parts of the establishment. Various new studies supporting the peak oil threat emanated from independent individuals and groups. Forecasts for the onset of peak oil went from being up to 20 years into the future, to roughly 15 years and then to less. The establishment continued to argue that the problem was so distant that people need not worry.There were a number of significant milestones along the way - one of special note being Matt Simmons’ book, Twilight in the Desert. As time went on, IEA and some of the major oil companies began to join the list of those who were openly concerned. Momentum grew, influenced in large part by the remarkable increase in oil prices.In mid-2008 the economic crisis struck. As world economies slowed, oil demand declined. To the surprise of almost everyone, oil prices dropped from near $150 per barrel to less than $40. With gasoline prices in the U.S. retreating to what was considered generally tolerable levels and economic threats avalanching, it’s no wonder that peak oil slid to the back burner of public consciousness.The world is now in a period of epic economic chaos. People are disoriented and unsure of what it will take to restore their economies. Many serious economists, financiers, and executives are loath to even forecast when an economic recovery might begin. It’s easier for me now to understand how my parents and grandparents must have felt during the 1930s.But the peak oil problem has not gone away. World liquid fuels production reached a plateau in mid-2004 and has fluctuated within a relatively narrow range in spite of mighty efforts to increase world production. In mid-2008, benefitting from the work of Campbell, Laherrere, Skrebowski, Aleklett, Simmons, Robelius, Gilbert, Bentley, Al Husseini, Deffeyes, Koppelaar, Birol, and others, I came to believe that world liquids production might stay on the existing plateau for the next 2-5 years and then go into a 3-5% per year declineRecently, OPEC cut back oil production in an attempt to stem the oil price decline. How much might their cutbacks delay the onset of world liquid fuels production decline? Assuming the plateau model and five years to the onset of decline, each million barrels per day of oil production withholding buys roughly three weeks delay, so a steady, continuing reduction of say four million barrels per day over five years might result in a delay in the onset of world oil production decline by maybe three months. That’s not very much.We’re now in a period of major human disorientation, but geology does not become disoriented on the human timescale. The impending peak oil problem may now be generally absent from the media and the public consciousness, but it has not gone away.......
The history of world peak oil production has been truly remarkable. Modern day concerns were rekindled in 1998 when Campbell and Laherrere published their peak oil thinking in Scientific American. Not surprisingly, they were largely ignored. Some in the establishment took the time to utter “Bah-humbug,” but a few independent souls decided to seriously consider the problem. ASPO was formed soon thereafter and began annual meetings, fostering communication and helping to create increasing interest in the subject. Peak oil concernists began to form a community and momentum increased. Counter arguments buttressing the no-problem point of view came from OPEC, CERA, EIA, IEA, and some of the major oil companies. The denier proclamations grew in intensity, indicating that the serious consideration of peak oil was beginning to trouble parts of the establishment. Various new studies supporting the peak oil threat emanated from independent individuals and groups. Forecasts for the onset of peak oil went from being up to 20 years into the future, to roughly 15 years and then to less. The establishment continued to argue that the problem was so distant that people need not worry.There were a number of significant milestones along the way - one of special note being Matt Simmons’ book, Twilight in the Desert. As time went on, IEA and some of the major oil companies began to join the list of those who were openly concerned. Momentum grew, influenced in large part by the remarkable increase in oil prices.In mid-2008 the economic crisis struck. As world economies slowed, oil demand declined. To the surprise of almost everyone, oil prices dropped from near $150 per barrel to less than $40. With gasoline prices in the U.S. retreating to what was considered generally tolerable levels and economic threats avalanching, it’s no wonder that peak oil slid to the back burner of public consciousness.The world is now in a period of epic economic chaos. People are disoriented and unsure of what it will take to restore their economies. Many serious economists, financiers, and executives are loath to even forecast when an economic recovery might begin. It’s easier for me now to understand how my parents and grandparents must have felt during the 1930s.But the peak oil problem has not gone away. World liquid fuels production reached a plateau in mid-2004 and has fluctuated within a relatively narrow range in spite of mighty efforts to increase world production. In mid-2008, benefitting from the work of Campbell, Laherrere, Skrebowski, Aleklett, Simmons, Robelius, Gilbert, Bentley, Al Husseini, Deffeyes, Koppelaar, Birol, and others, I came to believe that world liquids production might stay on the existing plateau for the next 2-5 years and then go into a 3-5% per year declineRecently, OPEC cut back oil production in an attempt to stem the oil price decline. How much might their cutbacks delay the onset of world liquid fuels production decline? Assuming the plateau model and five years to the onset of decline, each million barrels per day of oil production withholding buys roughly three weeks delay, so a steady, continuing reduction of say four million barrels per day over five years might result in a delay in the onset of world oil production decline by maybe three months. That’s not very much.We’re now in a period of major human disorientation, but geology does not become disoriented on the human timescale. The impending peak oil problem may now be generally absent from the media and the public consciousness, but it has not gone away.......
SC85-13 / http://jameshowardkunstler.typepad.com/clusterfuck_nation/
President's Day
A creepy feeling ushers in President's Day this year as the suspicion grows that nobody in charge of anything knows what what to do next. The usual yin-yang consensus has solidified in congress along party lines, both equally idiotic. In the White House, Mr. Obama is under excruciating pressure to "do something" as systems unravel and economies augur into darkness. Amid all the anxiety and raging cluelessness, one thing is clear: we're doing everything possible to evade reality.The reality we can't face is that one way of life is over and a new one is waiting to be born. It's been waiting, really, since the early 1970s, when God whacked the USA upside its head to announce that we'd outgrown our once-stupendous domestic supply of oil. I remember those fervid months following the OPEC oil embargo of 1973 (I covered the story as a young newspaper reporter.) The basic message was this: from now on we'll be running this show on other people's oil so we better start doing things differently. Back then, the not-yet-lost-in-a-fog-of-greed Baby Boom generation rolled up its tie-dyed sleeves and got to work doing a lot of forward-looking things: micro hydro-electric, passive solar houses, rural homesteading, the next generation of public transit (BART, the D.C. Metro), the first wave of urban gentrification....Then, in 1979, the Ayatollah tossed out the Shah of Iran, we got another dose of oil problems, and a year later, President Jimmy Carter's clear-eyed view of the oil situation as "the moral equivalent of war" got overturned in favor of Ronald Reagan's dreadful Hollywood nostalgia projector. As usual in times of severe social stress, the public got delusional. Mr. Reagan was very lucky. During his tenure, two of the last great non-OPEC oil discoveries came into full production -- Prudhoe Bay, Alaska and the North Sea -- and took the leverage away from the Islamic oil nations who had been making us miserable with their threats, embargos, price-jackings, and hostage-takings.Americans drew the false conclusion that Ronald Reagan was an economic genius (a similar thing happened in Great Britain with Margaret Thatcherism). The price of oil went down steeply while they were in office. Britain could kick back and enjoy it's last remaining industry, banking, on a majestic cushion of energy resources. The USA resumed its major post-war industry: suburban sprawl building. Reaganism got elevated to the status of a religion, though it was little more than a twisted version of Eisenhower-on-steroids. Under Reagan, WalMart embarked on its campaign to destroy every main street economy in the nation. The Baby Boomers came back from the land, clipped their pony tails, discovered venture capital, real estate investment trusts, securitization of "consumer" debt, and the Hamptons. Greed was good. (No, really....)The first President Bush's Gulf War jolted the oil markets briefly, but Saudi Arabia was demonstrably on our side in that conflict, while the non-OPEC oil supply was goosed up by production from Mexico's giant Cantarell field. The slight economic shudder caused by the Gulf War was enough, though, to unseat Bush Number One in favor of the Boomer Bill Clinton. A puzzling figure in many ways, articulate and magnetic, Bill Clinton was hardly a reformer, surely not in terms of the national lifestyle. He was in so many ways an exemplar of it. He'd been governor of WalMart's home state (and his wife sat on its board of directors). He was a pure product of the New South, the sunbelt, with its economy literally driven by everything connected to cars -- new suburbs, malls, fast food huts, Nascar. He wasn't about to pull a Jimmy Carter and try to prepare the people for some harsh realities.Really nobody saw what was going on during the Clinton years. The public was sleepwalking in a Martha Stewart nesting fantasy. Clinton was as lucky as Reagan. The only geopolitical conflict he faced was the Balkan gang-war that attended the collapse of Yugoslavia. Baby Boomer greed went into overdrive during the Clinton years as the former hippies hit their mid-life career strides, epitomized in billionaire-worship and the eventual money-grubbing book deals both Clintons made on departure. Does anyone remember Mr. Clinton saying, even once, that an economy based on suburban sprawl building and car dependency might not be such a good thing? Of course not. Under Clinton, the SUV became our new national bird. The price of oil flat-out crashed while Clinton was in office, sinking to the $10-a-barrel range by the time he handed over the White House keys to Bush Number Two.Poor dim "W" rode his generation's last wave of cultural inertia into two terms as little more than custodian of things set into motion by others years before. Reality was shifting starkly "out there" but "W," raised in the protective globe of great wealth, coddled in made-to-order business deals, surrounded by political triumphalists and Jesus Jokers, couldn't see through the brush-piles in his mind. (Maybe it was all that cocaine from the years before.) He paid lip service to a murky notion called "energy independence," but to him that just meant finding a home-grown way to maintain extreme car dependency and all its perilous usufructs. The 9/11 tragedy allowed him to pretend to be a man-of-action, but as the various wars and occupations ground on, "W" more or less disappeared into the deep groove of his own limited programming.During those years, more than a few things happened to inform the American people -- not all of whom were dim, of course -- what was up. For one, a cohort of senior geologists retired out of service to the oil industry and started publishing their own dark thoughts about the world's energy future. The discussion of these matters spread to the internet, where it grew in clarity and insight. We began to understand, for instance, the connection between our energy predicament (peak oil, so-called), and the growing parallel fiasco in hypertrophic debt creation that was driving the banking system and threatening to wreck it.Now we've arrived at the moment of wreckage. Meanwhile, Barack Obama sailed into the White House on a tide of "hope" for "change." The change was unspecified, by both Mr. Obama and the general public (and the news media that audits its thinking). What is dogging many of us who supported Mr. Obama is the delayed entrance of much-vaunted change. At this moment of "stimulus" and TARP-II, it seems to have been about a desperate attempt to preserve the hypertrophic debt economy of "miracle" mortgages, blue-light-special shopping on credit cards, and endless happy motoring at all costs. And by "all costs" I mean literally bankrupting our society at every level to keep on living as if it were still 1999. This naturally alarms those of us who perceive a need for more drastic reprogramming in American life.Mr. Obama is not dim. The euphoria that attended his election was largely about acquiring a leader of first-rate intelligence and sensibility, compared to his lamentable predecessor. I like to think that Mr. Obama really does know what's up -- that "change" means we have to live a lot differently, not mount a campaign to sustain the unsustainable. I suspect that President Obama has learned over the last several weeks that the nation's banking system and economy -- indeed, the whole world's -- are in way worse shape than anyone imagined before January 20. He is faced with the immediate crushing problem of appearing to do something while a tsunami of catastrophic debt deleveraging sweeps away the first outlier nations and their economies and bears down on the G-7. I suspect that in a few weeks, or possibly even a few days, Mr. Obama will have to start announcing all kinds of new and more drastic measures that will shock the stunned American public -- things like bank holidays, nationalizations, possibly even dollar devaluation...........
A creepy feeling ushers in President's Day this year as the suspicion grows that nobody in charge of anything knows what what to do next. The usual yin-yang consensus has solidified in congress along party lines, both equally idiotic. In the White House, Mr. Obama is under excruciating pressure to "do something" as systems unravel and economies augur into darkness. Amid all the anxiety and raging cluelessness, one thing is clear: we're doing everything possible to evade reality.The reality we can't face is that one way of life is over and a new one is waiting to be born. It's been waiting, really, since the early 1970s, when God whacked the USA upside its head to announce that we'd outgrown our once-stupendous domestic supply of oil. I remember those fervid months following the OPEC oil embargo of 1973 (I covered the story as a young newspaper reporter.) The basic message was this: from now on we'll be running this show on other people's oil so we better start doing things differently. Back then, the not-yet-lost-in-a-fog-of-greed Baby Boom generation rolled up its tie-dyed sleeves and got to work doing a lot of forward-looking things: micro hydro-electric, passive solar houses, rural homesteading, the next generation of public transit (BART, the D.C. Metro), the first wave of urban gentrification....Then, in 1979, the Ayatollah tossed out the Shah of Iran, we got another dose of oil problems, and a year later, President Jimmy Carter's clear-eyed view of the oil situation as "the moral equivalent of war" got overturned in favor of Ronald Reagan's dreadful Hollywood nostalgia projector. As usual in times of severe social stress, the public got delusional. Mr. Reagan was very lucky. During his tenure, two of the last great non-OPEC oil discoveries came into full production -- Prudhoe Bay, Alaska and the North Sea -- and took the leverage away from the Islamic oil nations who had been making us miserable with their threats, embargos, price-jackings, and hostage-takings.Americans drew the false conclusion that Ronald Reagan was an economic genius (a similar thing happened in Great Britain with Margaret Thatcherism). The price of oil went down steeply while they were in office. Britain could kick back and enjoy it's last remaining industry, banking, on a majestic cushion of energy resources. The USA resumed its major post-war industry: suburban sprawl building. Reaganism got elevated to the status of a religion, though it was little more than a twisted version of Eisenhower-on-steroids. Under Reagan, WalMart embarked on its campaign to destroy every main street economy in the nation. The Baby Boomers came back from the land, clipped their pony tails, discovered venture capital, real estate investment trusts, securitization of "consumer" debt, and the Hamptons. Greed was good. (No, really....)The first President Bush's Gulf War jolted the oil markets briefly, but Saudi Arabia was demonstrably on our side in that conflict, while the non-OPEC oil supply was goosed up by production from Mexico's giant Cantarell field. The slight economic shudder caused by the Gulf War was enough, though, to unseat Bush Number One in favor of the Boomer Bill Clinton. A puzzling figure in many ways, articulate and magnetic, Bill Clinton was hardly a reformer, surely not in terms of the national lifestyle. He was in so many ways an exemplar of it. He'd been governor of WalMart's home state (and his wife sat on its board of directors). He was a pure product of the New South, the sunbelt, with its economy literally driven by everything connected to cars -- new suburbs, malls, fast food huts, Nascar. He wasn't about to pull a Jimmy Carter and try to prepare the people for some harsh realities.Really nobody saw what was going on during the Clinton years. The public was sleepwalking in a Martha Stewart nesting fantasy. Clinton was as lucky as Reagan. The only geopolitical conflict he faced was the Balkan gang-war that attended the collapse of Yugoslavia. Baby Boomer greed went into overdrive during the Clinton years as the former hippies hit their mid-life career strides, epitomized in billionaire-worship and the eventual money-grubbing book deals both Clintons made on departure. Does anyone remember Mr. Clinton saying, even once, that an economy based on suburban sprawl building and car dependency might not be such a good thing? Of course not. Under Clinton, the SUV became our new national bird. The price of oil flat-out crashed while Clinton was in office, sinking to the $10-a-barrel range by the time he handed over the White House keys to Bush Number Two.Poor dim "W" rode his generation's last wave of cultural inertia into two terms as little more than custodian of things set into motion by others years before. Reality was shifting starkly "out there" but "W," raised in the protective globe of great wealth, coddled in made-to-order business deals, surrounded by political triumphalists and Jesus Jokers, couldn't see through the brush-piles in his mind. (Maybe it was all that cocaine from the years before.) He paid lip service to a murky notion called "energy independence," but to him that just meant finding a home-grown way to maintain extreme car dependency and all its perilous usufructs. The 9/11 tragedy allowed him to pretend to be a man-of-action, but as the various wars and occupations ground on, "W" more or less disappeared into the deep groove of his own limited programming.During those years, more than a few things happened to inform the American people -- not all of whom were dim, of course -- what was up. For one, a cohort of senior geologists retired out of service to the oil industry and started publishing their own dark thoughts about the world's energy future. The discussion of these matters spread to the internet, where it grew in clarity and insight. We began to understand, for instance, the connection between our energy predicament (peak oil, so-called), and the growing parallel fiasco in hypertrophic debt creation that was driving the banking system and threatening to wreck it.Now we've arrived at the moment of wreckage. Meanwhile, Barack Obama sailed into the White House on a tide of "hope" for "change." The change was unspecified, by both Mr. Obama and the general public (and the news media that audits its thinking). What is dogging many of us who supported Mr. Obama is the delayed entrance of much-vaunted change. At this moment of "stimulus" and TARP-II, it seems to have been about a desperate attempt to preserve the hypertrophic debt economy of "miracle" mortgages, blue-light-special shopping on credit cards, and endless happy motoring at all costs. And by "all costs" I mean literally bankrupting our society at every level to keep on living as if it were still 1999. This naturally alarms those of us who perceive a need for more drastic reprogramming in American life.Mr. Obama is not dim. The euphoria that attended his election was largely about acquiring a leader of first-rate intelligence and sensibility, compared to his lamentable predecessor. I like to think that Mr. Obama really does know what's up -- that "change" means we have to live a lot differently, not mount a campaign to sustain the unsustainable. I suspect that President Obama has learned over the last several weeks that the nation's banking system and economy -- indeed, the whole world's -- are in way worse shape than anyone imagined before January 20. He is faced with the immediate crushing problem of appearing to do something while a tsunami of catastrophic debt deleveraging sweeps away the first outlier nations and their economies and bears down on the G-7. I suspect that in a few weeks, or possibly even a few days, Mr. Obama will have to start announcing all kinds of new and more drastic measures that will shock the stunned American public -- things like bank holidays, nationalizations, possibly even dollar devaluation...........
Sunday, February 15, 2009
SC85-12 / http://www.globalresearch.ca/index.php?context=va&aid=12272
The War on Terror is a Hoax
...........The “war on terror” is a hoax that fronts for American control of oil pipelines, the profits of the military-security complex, the assault on civil liberty by fomenters of a police state, and Israel’s territorial expansion. There were no al Qaeda in Iraq until the Americans brought them there by invading and overthrowing Saddam Hussein, who kept al Qaeda out of Iraq. The Taliban is not a terrorist organization, but a movement attempting to unify Afghanistan under Muslim law. The only Americans threatened by the Taliban are the Americans Bush sent to Afghanistan to kill Taliban and to impose a puppet state on the Afghan people.Hamas is the democratically elected government of Palestine, or what little remains of Palestine after Israel’s illegal annexations. Hamas is a terrorist organization in the same sense that the Israeli government and the US government are terrorist organizations. In an effort to bring Hamas under Israeli hegemony, Israel employs terror bombing and assassinations against Palestinians. Hamas replies to the Israeli terror with homemade and ineffectual rockets.Hezbollah represents the Shi’ites of southern Lebanon, another area in the Middle East that Israel seeks for its territorial expansion.The US brands Hamas and Hezbollah “terrorist organizations” for no other reason than the US is on Israel’s side of the conflict. There is no objective basis for the US Department of State’s “finding” that Hamas and Hezbollah are terrorist organizations. It is merely a propagandistic declaration.Americans and Israelis do not call their bombings of civilians terror. What Americans and Israelis call terror is the response of oppressed people who are stateless because their countries are ruled by puppets loyal to the oppressors. These people, dispossessed of their own countries, have no State Departments, Defense Departments, seats in the United Nations, or voices in the mainstream media. They can submit to foreign hegemony or resist by the limited means available to them.The fact that Israel and the United States carry on endless propaganda to prevent this fundamental truth from being realized indicates that it is Israel and the US that are in the wrong and the Palestinians, Lebanese, Iraqis, and Afghans who are being wronged.The retired American generals who serve as war propagandists for Fox “News” are forever claiming that Iran arms the Iraqi and Afghan insurgents and Hamas. But where are the arms? To deal with American tanks, insurgents have to construct homemade explosive devices out of artillery shells. After six years of conflict the insurgents still have no weapon against the American helicopter gunships. Contrast this “arming” with the weaponry the US supplied to the Afghans three decades ago when they were fighting to drive out the Soviets.The films of Israel’s murderous assault on Gaza show large numbers of Gazans fleeing from Israeli bombs or digging out the dead and maimed, and none of these people are armed. A person would think that by now every Palestinian would be armed, every man, woman, and child. Yet, all the films of the Israeli attack show an unarmed population. Hamas has to construct homemade rockets that are little more than a sign of defiance. If Hamas were armed by Iran, Israel’s assault on Gaza would have cost Israel its helicopter gunships, its tanks, and hundreds of lives of its soldiers.Hamas is a small organization armed with small caliber rifles incapable of penetrating body armor. Hamas is unable to stop small bands of Israeli settlers from descending on West Bank Palestinian villages, driving out the Palestinians, and appropriating their land. The great mystery is: why after 60 years of oppression are the Palestinians still an unarmed people? Clearly, the Muslim countries are complicit with Israel and the US in keeping the Palestinians unarmed.The unsupported assertion that Iran supplies sophisticated arms to the Palestinians is like the unsupported assertion that Saddam Hussein had weapons of mass destruction. These assertions are propagandistic justifications for killing Arab civilians and destroying civilian infrastructure in order to secure US and Israeli hegemony in the Middle East..........
The " war on terror " is a fiction created by the powers that be, their corporation controlled media, and the military industrial complex ( talk about job security ) to provide cover and justification for their ongoing agenda's which seek to gain an increasing worldwide dominance over resources and regions for the benifit of the rich elite and for their corporations ( the vehicles of their massive plundering ). A more truthful way to put it would be a " war on all who oppose our looting of your countries wealth of people and resources , by any means and deceptive ways we can think of ". If you stand against their plans, then you are a prime target for their " war on terror " ploy, a means to defeat those that would threaten their system, their position. The PTB even gave it a name, Full Spectrum Dominance, and it has nothing to do with bringing freedom and democracy to the world. It is about controlling the masses to what extent possible, so that elite interest can prevail. The use of Terror has many dimensions, and the US has used this tactic in larger measure than arguably any other nation in history. Terrorism - The use of force or threats to intimidate, especially as a political policy. Just one example out of countless others used by the US, the Shock And Awe operation in Iraq, the purpose, to Terrorize a people into submission through the US Empires vast show of force.
...........The “war on terror” is a hoax that fronts for American control of oil pipelines, the profits of the military-security complex, the assault on civil liberty by fomenters of a police state, and Israel’s territorial expansion. There were no al Qaeda in Iraq until the Americans brought them there by invading and overthrowing Saddam Hussein, who kept al Qaeda out of Iraq. The Taliban is not a terrorist organization, but a movement attempting to unify Afghanistan under Muslim law. The only Americans threatened by the Taliban are the Americans Bush sent to Afghanistan to kill Taliban and to impose a puppet state on the Afghan people.Hamas is the democratically elected government of Palestine, or what little remains of Palestine after Israel’s illegal annexations. Hamas is a terrorist organization in the same sense that the Israeli government and the US government are terrorist organizations. In an effort to bring Hamas under Israeli hegemony, Israel employs terror bombing and assassinations against Palestinians. Hamas replies to the Israeli terror with homemade and ineffectual rockets.Hezbollah represents the Shi’ites of southern Lebanon, another area in the Middle East that Israel seeks for its territorial expansion.The US brands Hamas and Hezbollah “terrorist organizations” for no other reason than the US is on Israel’s side of the conflict. There is no objective basis for the US Department of State’s “finding” that Hamas and Hezbollah are terrorist organizations. It is merely a propagandistic declaration.Americans and Israelis do not call their bombings of civilians terror. What Americans and Israelis call terror is the response of oppressed people who are stateless because their countries are ruled by puppets loyal to the oppressors. These people, dispossessed of their own countries, have no State Departments, Defense Departments, seats in the United Nations, or voices in the mainstream media. They can submit to foreign hegemony or resist by the limited means available to them.The fact that Israel and the United States carry on endless propaganda to prevent this fundamental truth from being realized indicates that it is Israel and the US that are in the wrong and the Palestinians, Lebanese, Iraqis, and Afghans who are being wronged.The retired American generals who serve as war propagandists for Fox “News” are forever claiming that Iran arms the Iraqi and Afghan insurgents and Hamas. But where are the arms? To deal with American tanks, insurgents have to construct homemade explosive devices out of artillery shells. After six years of conflict the insurgents still have no weapon against the American helicopter gunships. Contrast this “arming” with the weaponry the US supplied to the Afghans three decades ago when they were fighting to drive out the Soviets.The films of Israel’s murderous assault on Gaza show large numbers of Gazans fleeing from Israeli bombs or digging out the dead and maimed, and none of these people are armed. A person would think that by now every Palestinian would be armed, every man, woman, and child. Yet, all the films of the Israeli attack show an unarmed population. Hamas has to construct homemade rockets that are little more than a sign of defiance. If Hamas were armed by Iran, Israel’s assault on Gaza would have cost Israel its helicopter gunships, its tanks, and hundreds of lives of its soldiers.Hamas is a small organization armed with small caliber rifles incapable of penetrating body armor. Hamas is unable to stop small bands of Israeli settlers from descending on West Bank Palestinian villages, driving out the Palestinians, and appropriating their land. The great mystery is: why after 60 years of oppression are the Palestinians still an unarmed people? Clearly, the Muslim countries are complicit with Israel and the US in keeping the Palestinians unarmed.The unsupported assertion that Iran supplies sophisticated arms to the Palestinians is like the unsupported assertion that Saddam Hussein had weapons of mass destruction. These assertions are propagandistic justifications for killing Arab civilians and destroying civilian infrastructure in order to secure US and Israeli hegemony in the Middle East..........
The " war on terror " is a fiction created by the powers that be, their corporation controlled media, and the military industrial complex ( talk about job security ) to provide cover and justification for their ongoing agenda's which seek to gain an increasing worldwide dominance over resources and regions for the benifit of the rich elite and for their corporations ( the vehicles of their massive plundering ). A more truthful way to put it would be a " war on all who oppose our looting of your countries wealth of people and resources , by any means and deceptive ways we can think of ". If you stand against their plans, then you are a prime target for their " war on terror " ploy, a means to defeat those that would threaten their system, their position. The PTB even gave it a name, Full Spectrum Dominance, and it has nothing to do with bringing freedom and democracy to the world. It is about controlling the masses to what extent possible, so that elite interest can prevail. The use of Terror has many dimensions, and the US has used this tactic in larger measure than arguably any other nation in history. Terrorism - The use of force or threats to intimidate, especially as a political policy. Just one example out of countless others used by the US, the Shock And Awe operation in Iraq, the purpose, to Terrorize a people into submission through the US Empires vast show of force.
Saturday, February 14, 2009
SC85-11 / http://www.postcarbon.org/zero_sum_game
Zero-Sum Game
Oops!—bad timing. The announcement that California taxpayers will have to pay most of the costs for raising the famous octuplets born recently near Los Angeles is provoking widespread indignation about what is often taken to be a fundamental human right—i.e., the right to reproduce ad infinitum. The story might have raised eyebrows a year ago or five. But the fact that the 33-year-old single, unemployed mother’s plight is capturing headlines at the very moment when the State of California is in effect declaring bankruptcy (and laying off teachers and other state workers) not only provides grist for irate radio call-ins, it also highlights a profound shift taking place just beneath the surface of our collective awareness.For most of the last century or two, economic growth has lifted all boats and temporarily increased Earth’s effective carrying capacity. Though the human population was growing relentlessly and at an unprecedented rate, few worried: every year there were more jobs, more opportunities, new careers. The pie was expanding, so the fact that there were always more people at the table was perceived as a plus. With more folks to talk to, life was becoming richer! Whatever area of skill you might be interested in, you could see records being broken, unheard-of achievements being made: there were better pianists and violinists than anyone had ever heard before, better athletes than anyone had ever seen, more brilliant mathematicians, surgeons—you name it—just because there were so many people competing with one another to develop excellence in their areas of expertise. What a time to be alive!Now suddenly the game has changed. The pie has stopped getting bigger. As more people arrive at the table, everyone nervously eyes the remaining crumbs, anxious to avert a free-for-all but also keen to avoid being left out. Welcome to the post-peak economic meltdown! A lot is going to change due to the fact that we have reached the end of economic growth as we’ve known it. One non-trivial item concerns our attitude toward population.Environmentalists like Paul Ehrlich have for decades been pointing out the obvious truism that the Earth can support only so many humans, and that the more of us there are, the more likely we are to undermine our planetary life-support systems, perhaps eventually triggering a humanitarian as well as an ecological crisis of apocalyptic dimensions. Some listened; most did not. Efforts were made world-wide to reduce fertility through family planning; in China a one-child policy successfully reduced (but failed to end) population growth. However, on the whole our species continued to pursue its opportunities for expansion, and our numbers continued to grow (current total: 6.7 billion and counting).Without more cheap energy, without cheap credit, and without economic growth, feelings will change. Are changing. Fewer people will want to bring a large family into the world knowing that economic opportunities are dwindling—but some will still do so. Attitudes toward parenthood are deep-seated, culturally sensitive, and controversial. But they are not immutable. Here’s the rub: Unless previous beliefs about the sacredness of unlimited fertility (and the corresponding proof-of-masculinity afforded by the siring of many offspring) can be openly questioned and honestly discussed in these new circumstances, the cognitive dissonance between long-held beliefs and deep-seated biological urges on one hand, and the painful awareness of ecological and economic limits on the other, is likely to lead to a kind of societal explosion that will take the forms of heightened demographic competition and intercultural violence.............
Oops!—bad timing. The announcement that California taxpayers will have to pay most of the costs for raising the famous octuplets born recently near Los Angeles is provoking widespread indignation about what is often taken to be a fundamental human right—i.e., the right to reproduce ad infinitum. The story might have raised eyebrows a year ago or five. But the fact that the 33-year-old single, unemployed mother’s plight is capturing headlines at the very moment when the State of California is in effect declaring bankruptcy (and laying off teachers and other state workers) not only provides grist for irate radio call-ins, it also highlights a profound shift taking place just beneath the surface of our collective awareness.For most of the last century or two, economic growth has lifted all boats and temporarily increased Earth’s effective carrying capacity. Though the human population was growing relentlessly and at an unprecedented rate, few worried: every year there were more jobs, more opportunities, new careers. The pie was expanding, so the fact that there were always more people at the table was perceived as a plus. With more folks to talk to, life was becoming richer! Whatever area of skill you might be interested in, you could see records being broken, unheard-of achievements being made: there were better pianists and violinists than anyone had ever heard before, better athletes than anyone had ever seen, more brilliant mathematicians, surgeons—you name it—just because there were so many people competing with one another to develop excellence in their areas of expertise. What a time to be alive!Now suddenly the game has changed. The pie has stopped getting bigger. As more people arrive at the table, everyone nervously eyes the remaining crumbs, anxious to avert a free-for-all but also keen to avoid being left out. Welcome to the post-peak economic meltdown! A lot is going to change due to the fact that we have reached the end of economic growth as we’ve known it. One non-trivial item concerns our attitude toward population.Environmentalists like Paul Ehrlich have for decades been pointing out the obvious truism that the Earth can support only so many humans, and that the more of us there are, the more likely we are to undermine our planetary life-support systems, perhaps eventually triggering a humanitarian as well as an ecological crisis of apocalyptic dimensions. Some listened; most did not. Efforts were made world-wide to reduce fertility through family planning; in China a one-child policy successfully reduced (but failed to end) population growth. However, on the whole our species continued to pursue its opportunities for expansion, and our numbers continued to grow (current total: 6.7 billion and counting).Without more cheap energy, without cheap credit, and without economic growth, feelings will change. Are changing. Fewer people will want to bring a large family into the world knowing that economic opportunities are dwindling—but some will still do so. Attitudes toward parenthood are deep-seated, culturally sensitive, and controversial. But they are not immutable. Here’s the rub: Unless previous beliefs about the sacredness of unlimited fertility (and the corresponding proof-of-masculinity afforded by the siring of many offspring) can be openly questioned and honestly discussed in these new circumstances, the cognitive dissonance between long-held beliefs and deep-seated biological urges on one hand, and the painful awareness of ecological and economic limits on the other, is likely to lead to a kind of societal explosion that will take the forms of heightened demographic competition and intercultural violence.............
Monday, February 9, 2009
SC85-10 / http://informationclearinghouse.info/article21943.htm
Ship of Fools
Is there intelligent life in Washington, DC? Not a speck of it.The US economy is imploding, and Obama is being led by his government of neconservatives and Israeli agents into a quagmire in Afghanistan that will bring the US into confrontation with Russia, and possibly China, American’s largest creditor. The January payroll job figures reveal that last month 20,000 Americans lost their jobs every day. In addition, December’s job losses were revised up by 53,000 jobs from 524,000 to 577,000. The revision brings the two-month job loss to 1,175,000. If this keeps up, Obama’s promised three million new jobs will be wiped out by job losses.Statistician John Williams (shadowstats.com) reports that this huge number is an understatement. Williams notes that built-in biases in seasonal adjustment factors caused a 118,000 understatement of January job losses, bringing the actual January job loss to 716,000 jobs. The payroll survey counts the number of jobs, not the number of employed as some people have more than one job. The Household Survey counts the number of people who have jobs. The Household Survey shows that 832,000 people lost their jobs in January and 806,000 in December, for a two month reduction of Americans with jobs of 1,638,000.The unemployment rate reported in the US media is a fabrication. Williams reports that “during the Clinton Administration, ‘discouraged workers’ those who had given up looking for a job because there were no jobs to be had--were redefined so as to be counted only if they had been ‘discouraged’ for less than a year. This time qualification defined away the bulk of the discouraged workers. Adding them back into the total unemployed, actual unemployment, [according to the unemployment rate methodology used in 1980] rose to 18% in January, from 17.5% in December.”In other words, without all the manipulations of the data from a government that lies to us every time it opens its mouth, the US unemployment rate is already at depression levels.How could it be otherwise given the enormous job loss from offshored jobs. It is impossible for a country to create jobs when its corporations are moving production for the American consumer market offshore. When they move the production offshore, theyshift US GDP to other countries. The US trade deficit over the past decade has reduced US GDP by $1.5 trillion dollars. That is a lot of jobs.I have been reporting for years that American university graduates have had to take jobs as waitresses and bartenders. As over-indebted American consumers lose their jobs, they will visit restaurants and bars less frequently. Consequently, Americans with university degrees will not even have jobs waiting on tables and mixing drinks.US policymakers have ignored the fact that consumer demand in the 21st century has been driven, not by increases in real income, but by increased consumer indebtedness. This fact makes it pointless to try to stimulate the economy by bailing out banks so that they can lend more to consumers. The American consumers have no more capacity to borrow.With the decline in the values of their principal assets--their homes--with the destruction of half of their pension assets, and with joblessness facing them, Americans cannot and will not spend.Why bail out GM and Citibank when the firms are moving as many operations offshore as they possibly can?Much of US infrastructure is in poor shape and needs renewing. However, infrastructure jobs do not produce goods and services that can be sold abroad. The massive commitment to infrastructure does nothing to help the US reduce its massive trade deficit, the financing of which is becoming a major problem. Moreover, when the infrastructure projects are completed, so are the jobs. At best, assuming Mexicans do not get most of the construction jobs, all Obama’s stimulus program can do is to reduce the number of unemployed temporarily.Unless US corporations can be required to use American labor to produce the goods and services that they sell in American markets, there is no hope for the US economy. No one in the Obama administration has the wits to address this problem. Thus, the economy will continue to implode.Adding to the brewing disaster, Obama has been deceived by his military and neoconservative advisers into expanding the war in Afghanistan, a large mountainous country. Obama intends to use the draw-down of US soldiers in Iraq to send 30,000 more American troops to Afghanistan. This would bring the US forces to 60,000--600,000 fewer than US Marine Corps and US Army counterinsurgency guidelines define as the minimum number of soldiers necessary to bring success in Afghanistan--and less than half as many as the army that was unable to occupy Iraq. The Iranians had to bail out the Bush regime by restraining its Shi’ite allies and encouraging them to use the ballot box to attain power and push out the Americans. In Iraq the US troops only had to fight a small Sunni insurgency drawn from a minority of the population. Even so, the US “prevailed” by putting the insurgents on the US payroll and paying them not to fight. The withdrawal agreement was dictated by the Shi’ites. It was not what the Bush regime wanted.One would think that the experience with the “cakewalk” in Iraq would make the US hesitant to attempt to occupy Afghanistan, an undertaking that would require the US to occupy parts of Pakistan. The US was hard pressed to maintain 150,000 troops in Iraq. Where is Obama going to get another half million soldiers to add to the 150,000 to pacify Afghanistan?One answer is the rapidly growing massive US unemployment. Americans will sign up to go kill abroad rather than be homeless and hungry at home. But this solves only half of the problem. Where does the money come from to support an army in the field of 650,000, an army 4.3 times larger than US forces in Iraq, a war that has cost us $3 trillion in out-of-pocket and already incurred future costs. This money would have to be raised in addition to the $3 trillion US budget deficit that is the result of Bush’s financial sector bailout, Obama’s stimulus package, and the rapidly failing economy. When economies tank, as the American one is doing, tax revenues collapse. The millions of unemployed Americans are not paying Social Security, Medicare, and income taxes. The stores and businesses that are closing are not paying federal and state income taxes. Consumers with no money or credit to spend are not paying sales taxes. The Washington Morons, and morons they are, have given no thought as to how they are going to finance a fiscal year 2009 budget deficit of some two to three trillion dollars.The practically nonexistent US saving rate cannot finance it.The trade surpluses of our trading partners, such as China, Japan, and Saudi Arabia, cannot finance it.The US government really has only two possibilities for financing its budget deficit. One is a second collapse in the stock market, which would drive the surviving investors with what they have left into “safe” US Treasury bonds. The other is for the Federal Reserve to monetize the Treasury debt.Monetizing the debt means that when no one is willing or able to purchase the Treasury’s bonds, the Federal Reserve buys them by creating bank deposits for the Treasury’s account. In other words, the Fed “prints money” with which to buy the Treasury’s bonds.Once this happens, the US dollar will cease to be the reserve currency. In addition, China, Japan and Saudi Arabia, countries that hold enormous quantities of US Treasury debt in addition to other US dollar assets, will sell, hoping to get out before others. The US dollar will become worthless, the currency of a banana republic.The US will not be able to pay for its imports, a serious problem for a country dependent on imports for its energy, manufactured goods, and advanced technology products. Obama’s Keynesian advisers have learned with a vengeance Milton Friedman’s lesson that the Great Depression resulted from the Federal Reserve permitting a contraction of the supply of money and credit. In the Great Depression good debts were destroyed by monetary contraction. Today bad debts are being preserved by the expansion of money and credit, and the US Treasury is jeopardizing its credit standing and the dollar’s reserve currency status with enormous quarterly bond auctions as far as the eye can see.Meanwhile, the Russians, overflowing with energy and mineral resources, and not in debt, have learned that the US government is not to be trusted. Russia has watched Reagan’s successors attempt to turn former constituent parts of the Soviet Union into US puppet states with US military bases. The US is trying to ring Russia with missiles that neutralize Russia’s strategic deterrent. Putin has caught on to “comrade wolf.” He has succeeded in having the president of Kyrgyzstan, a former part of the Soviet Union, evict the US from its military base. This base is essential to America’s ability to supply its soldiers in Afghanistan. To stop America’s meddling in Russia’s sphere of influence, the Russian government has created a collective security treaty organization comprised of Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan. Uzbekistan is a partial participant.In other words, Russia has organized central Asia against US penetration.To whose agenda is President Obama being hitched? Writing in the English language version of the Swiss newspaper, Zeit-Fragen, Stephen J. Sniegoski reports that leading figures of the neocon conspiracy--Richard Perle, Max Boot, David Brooks, and Mona Charen--are ecstatic over Obama’s appointments. They don’t see any difference between Obama and Bush/Cheney.Not only are Obama’s appointments moving him into an expanded war in Afghanistan, but the powerful Israel Lobby is pushing Obama toward a war with Iran. The unreality in which he US government operates is beyond belief. A bankrupt government that cannot pay its bills without printing money is rushing headlong into wars in Afghanistan, Pakistan, and Iran. According to the Center for Strategic and Budgetary Analysis, the cost to the US taxpayers of sending a single soldier to fight in Afghanistan or Iraq is $775,000 per year! The world has never seen such total mindlessness. Napoleon’s and Hitler’s march into Russia were rational acts compared to the mindless idiocy of the United States government.Obama’s war in Afghanistan is the Mad Hatter’s Tea Party. After seven years of conflict, there is still no defined mission or endgame scenario for US forces in Afghanistan. When asked about the mission, a US military official told NBC News, “Frankly, we don’t have one.” NBC reports: “they’re working on it.”Speaking to House Democrats on February 5, President Obama admitted that the US government does not know what its mission is in Afghanistan and that to avoid “mission creep without clear parameters,” the US “needs a clear mission.”How would you like to be sent to a war, the point of which no one knows, including the commander-in-chief who sent you to kill or be killed? How, fellow taxpayers, do you like paying the enormous cost of sending soldiers on an undefined mission while the economy collapses?
Is there intelligent life in Washington, DC? Not a speck of it.The US economy is imploding, and Obama is being led by his government of neconservatives and Israeli agents into a quagmire in Afghanistan that will bring the US into confrontation with Russia, and possibly China, American’s largest creditor. The January payroll job figures reveal that last month 20,000 Americans lost their jobs every day. In addition, December’s job losses were revised up by 53,000 jobs from 524,000 to 577,000. The revision brings the two-month job loss to 1,175,000. If this keeps up, Obama’s promised three million new jobs will be wiped out by job losses.Statistician John Williams (shadowstats.com) reports that this huge number is an understatement. Williams notes that built-in biases in seasonal adjustment factors caused a 118,000 understatement of January job losses, bringing the actual January job loss to 716,000 jobs. The payroll survey counts the number of jobs, not the number of employed as some people have more than one job. The Household Survey counts the number of people who have jobs. The Household Survey shows that 832,000 people lost their jobs in January and 806,000 in December, for a two month reduction of Americans with jobs of 1,638,000.The unemployment rate reported in the US media is a fabrication. Williams reports that “during the Clinton Administration, ‘discouraged workers’ those who had given up looking for a job because there were no jobs to be had--were redefined so as to be counted only if they had been ‘discouraged’ for less than a year. This time qualification defined away the bulk of the discouraged workers. Adding them back into the total unemployed, actual unemployment, [according to the unemployment rate methodology used in 1980] rose to 18% in January, from 17.5% in December.”In other words, without all the manipulations of the data from a government that lies to us every time it opens its mouth, the US unemployment rate is already at depression levels.How could it be otherwise given the enormous job loss from offshored jobs. It is impossible for a country to create jobs when its corporations are moving production for the American consumer market offshore. When they move the production offshore, theyshift US GDP to other countries. The US trade deficit over the past decade has reduced US GDP by $1.5 trillion dollars. That is a lot of jobs.I have been reporting for years that American university graduates have had to take jobs as waitresses and bartenders. As over-indebted American consumers lose their jobs, they will visit restaurants and bars less frequently. Consequently, Americans with university degrees will not even have jobs waiting on tables and mixing drinks.US policymakers have ignored the fact that consumer demand in the 21st century has been driven, not by increases in real income, but by increased consumer indebtedness. This fact makes it pointless to try to stimulate the economy by bailing out banks so that they can lend more to consumers. The American consumers have no more capacity to borrow.With the decline in the values of their principal assets--their homes--with the destruction of half of their pension assets, and with joblessness facing them, Americans cannot and will not spend.Why bail out GM and Citibank when the firms are moving as many operations offshore as they possibly can?Much of US infrastructure is in poor shape and needs renewing. However, infrastructure jobs do not produce goods and services that can be sold abroad. The massive commitment to infrastructure does nothing to help the US reduce its massive trade deficit, the financing of which is becoming a major problem. Moreover, when the infrastructure projects are completed, so are the jobs. At best, assuming Mexicans do not get most of the construction jobs, all Obama’s stimulus program can do is to reduce the number of unemployed temporarily.Unless US corporations can be required to use American labor to produce the goods and services that they sell in American markets, there is no hope for the US economy. No one in the Obama administration has the wits to address this problem. Thus, the economy will continue to implode.Adding to the brewing disaster, Obama has been deceived by his military and neoconservative advisers into expanding the war in Afghanistan, a large mountainous country. Obama intends to use the draw-down of US soldiers in Iraq to send 30,000 more American troops to Afghanistan. This would bring the US forces to 60,000--600,000 fewer than US Marine Corps and US Army counterinsurgency guidelines define as the minimum number of soldiers necessary to bring success in Afghanistan--and less than half as many as the army that was unable to occupy Iraq. The Iranians had to bail out the Bush regime by restraining its Shi’ite allies and encouraging them to use the ballot box to attain power and push out the Americans. In Iraq the US troops only had to fight a small Sunni insurgency drawn from a minority of the population. Even so, the US “prevailed” by putting the insurgents on the US payroll and paying them not to fight. The withdrawal agreement was dictated by the Shi’ites. It was not what the Bush regime wanted.One would think that the experience with the “cakewalk” in Iraq would make the US hesitant to attempt to occupy Afghanistan, an undertaking that would require the US to occupy parts of Pakistan. The US was hard pressed to maintain 150,000 troops in Iraq. Where is Obama going to get another half million soldiers to add to the 150,000 to pacify Afghanistan?One answer is the rapidly growing massive US unemployment. Americans will sign up to go kill abroad rather than be homeless and hungry at home. But this solves only half of the problem. Where does the money come from to support an army in the field of 650,000, an army 4.3 times larger than US forces in Iraq, a war that has cost us $3 trillion in out-of-pocket and already incurred future costs. This money would have to be raised in addition to the $3 trillion US budget deficit that is the result of Bush’s financial sector bailout, Obama’s stimulus package, and the rapidly failing economy. When economies tank, as the American one is doing, tax revenues collapse. The millions of unemployed Americans are not paying Social Security, Medicare, and income taxes. The stores and businesses that are closing are not paying federal and state income taxes. Consumers with no money or credit to spend are not paying sales taxes. The Washington Morons, and morons they are, have given no thought as to how they are going to finance a fiscal year 2009 budget deficit of some two to three trillion dollars.The practically nonexistent US saving rate cannot finance it.The trade surpluses of our trading partners, such as China, Japan, and Saudi Arabia, cannot finance it.The US government really has only two possibilities for financing its budget deficit. One is a second collapse in the stock market, which would drive the surviving investors with what they have left into “safe” US Treasury bonds. The other is for the Federal Reserve to monetize the Treasury debt.Monetizing the debt means that when no one is willing or able to purchase the Treasury’s bonds, the Federal Reserve buys them by creating bank deposits for the Treasury’s account. In other words, the Fed “prints money” with which to buy the Treasury’s bonds.Once this happens, the US dollar will cease to be the reserve currency. In addition, China, Japan and Saudi Arabia, countries that hold enormous quantities of US Treasury debt in addition to other US dollar assets, will sell, hoping to get out before others. The US dollar will become worthless, the currency of a banana republic.The US will not be able to pay for its imports, a serious problem for a country dependent on imports for its energy, manufactured goods, and advanced technology products. Obama’s Keynesian advisers have learned with a vengeance Milton Friedman’s lesson that the Great Depression resulted from the Federal Reserve permitting a contraction of the supply of money and credit. In the Great Depression good debts were destroyed by monetary contraction. Today bad debts are being preserved by the expansion of money and credit, and the US Treasury is jeopardizing its credit standing and the dollar’s reserve currency status with enormous quarterly bond auctions as far as the eye can see.Meanwhile, the Russians, overflowing with energy and mineral resources, and not in debt, have learned that the US government is not to be trusted. Russia has watched Reagan’s successors attempt to turn former constituent parts of the Soviet Union into US puppet states with US military bases. The US is trying to ring Russia with missiles that neutralize Russia’s strategic deterrent. Putin has caught on to “comrade wolf.” He has succeeded in having the president of Kyrgyzstan, a former part of the Soviet Union, evict the US from its military base. This base is essential to America’s ability to supply its soldiers in Afghanistan. To stop America’s meddling in Russia’s sphere of influence, the Russian government has created a collective security treaty organization comprised of Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan. Uzbekistan is a partial participant.In other words, Russia has organized central Asia against US penetration.To whose agenda is President Obama being hitched? Writing in the English language version of the Swiss newspaper, Zeit-Fragen, Stephen J. Sniegoski reports that leading figures of the neocon conspiracy--Richard Perle, Max Boot, David Brooks, and Mona Charen--are ecstatic over Obama’s appointments. They don’t see any difference between Obama and Bush/Cheney.Not only are Obama’s appointments moving him into an expanded war in Afghanistan, but the powerful Israel Lobby is pushing Obama toward a war with Iran. The unreality in which he US government operates is beyond belief. A bankrupt government that cannot pay its bills without printing money is rushing headlong into wars in Afghanistan, Pakistan, and Iran. According to the Center for Strategic and Budgetary Analysis, the cost to the US taxpayers of sending a single soldier to fight in Afghanistan or Iraq is $775,000 per year! The world has never seen such total mindlessness. Napoleon’s and Hitler’s march into Russia were rational acts compared to the mindless idiocy of the United States government.Obama’s war in Afghanistan is the Mad Hatter’s Tea Party. After seven years of conflict, there is still no defined mission or endgame scenario for US forces in Afghanistan. When asked about the mission, a US military official told NBC News, “Frankly, we don’t have one.” NBC reports: “they’re working on it.”Speaking to House Democrats on February 5, President Obama admitted that the US government does not know what its mission is in Afghanistan and that to avoid “mission creep without clear parameters,” the US “needs a clear mission.”How would you like to be sent to a war, the point of which no one knows, including the commander-in-chief who sent you to kill or be killed? How, fellow taxpayers, do you like paying the enormous cost of sending soldiers on an undefined mission while the economy collapses?
SC85-9 / http://www.globalresearch.ca/index.php?context=va&aid=12205
The American ruling class
On Wednesday, President Barack Obama announced measures that purport to restrict executive compensation to $500,000 at financial institutions receiving billions in government assistance. The figure does not include stock options, which could be redeemed after financial firms pay back loans from the federal government. Nor does it apply to the original recipients of tens of billions in TARP (Troubled Asset Relief Program) money.
The measures are essentially a public relations exercise. Their aim is to provide political cover for a new and even larger Wall Street bailout, which Treasury Secretary Timothy Geithner will unveil next week.
Yet the discussion that has emerged in the wake of Obama’s announcement sheds light on the domination of government by a tiny financial elite and the increasingly threadbare pretense of democracy in the US. This financial aristocracy, the episode reveals, is a power to be approached on bended knee.
The media have responded to Obama’s proposal of a $500,000 limit on executive compensation, which would affect only a handful of firms, as though this were a severe and astonishing punishment. Yet the figure represents approximately 12 times the annual salary of the typical worker. To the majority of the population, a salary of a half million dollars is a staggering amount of money.
Obama’s servility before the financial aristocracy was summed up by the reassurances he gave it in announcing his limits on executive pay. “This is America,” Obama said. “We don't disparage wealth. We don't begrudge anybody for achieving success.”
Such a vision of America is at odds with both its present circumstances and its history, which has been characterized by deep democratic and egalitarian traditions that date back to before the Jeffersonian democracy of the early Republic. And while liberals are busy attempting to equate Obama to Franklin Roosevelt, the latter, in the midst of the Great Depression, attempted to capitalize on the tremendous contempt for the rich in the population at large by regularly issuing bromides against the “money changers.”
Indeed, Obama’s obsequiousness stands in sharp contrast to the anger of the working masses, who find it incomprehensible that the same executives who are responsible for ruining the economy and squandering trillions in taxpayer money are now presented with pay “limits” of a half million dollars. Workers are wondering why there haven’t been criminal indictments and television scenes of handcuffed executives frog-marched from their offices.
But on Wall Street, $500,000 is considered a pittance. The New York Times reports that executives felt cheated by taking home “only” $18 billion in collective bonuses in 2009. “I feel like I got a doorman’s tip, compared to what I got in previous years,” an investment banker with Citigroup told the Times.
The Financial Times reported on Wall Street’s opposition to the largely token measures. “Senior bankers were quick to warn the plans would cause a ‘brain drain’ from the profession as top executives seek more rewarding jobs out of the public eye,” it wrote. “Unlike other careers where job satisfaction and other considerations play a part, finance tends to attract people whose main motivation is money.”
“‘The cap is a lousy idea,’ complained one top Wall Street executive. ‘If there is no monetary upside, who would want to do these jobs?’”
Andrew Ward, a University of Georgia professor and specialist on corporate boards and management, told the Financial Times that executives could respond to Obama’s measure by calling his bluff—refusing to allow their firms to accept a bailout that would in any way limit their personal enrichment. “One of the potentially unintended consequences is that executives might try and hold off asking for government assistance until it is too late,” Ward said.
Media and academic figures who have tried to argue that the massive pay packages of the Wall Street executives are somehow legitimate, or even rational, succeed only in revealing the rot that characterizes intellectual life in the US. Their central argument—that the same CEOs who have driven their companies and the economy as whole into the ground are worthy of remuneration in the tens of millions—is so absurd it is almost an embarrassment to answer.
The immense power of the financial elite is revealed by the case of Bernard Madoff, the investor who squandered more than $50 billion in wealth in a giant Ponzi scheme. While working class Americans are arrested and spend years in prison for far lesser offenses, Madoff remains ensconced in his Manhattan penthouse.
For nearly a decade, a whistleblower named Harry Markopolos, who had uncovered Madoff’s scheme, attempted to draw the attention of the Securities and Exchange Commission (SEC), the federal regulatory agency ostensibly tasked with policing the securities and stock industries. Instead, the SEC ran interference for Madoff. Rather than being applauded for his efforts, Markopolos feared for his safety. “We knew that he was one of the most powerful men on Wall Street and in a position to easily end our careers or worse,” he said.
The social psychology and physiognomy of the financial elite—with its wealth, special privileges and its control over the organs of public opinion—resembles nothing so much as a modern aristocracy.
Any discussion of a rational attempt to find a solution to the economic crisis runs immediately into the ferocious opposition of this elite. Similarly, in the 18th century the aristocracy of the French ancien regime precipitated a financial crisis through its avarice and wars. When the aristocracy convened the Estates General in 1789, it was to demand that the Third Estate, the commoners, bail the aristocracy out of the crisis of its own making. But the monarchy and nobility refused to cede a bit of its power and privileges. This set the stage for the great French Revolution.
The odious subjective characteristics of the US financial aristocracy—its greed, arrogance, stupidity and decadence—are themselves deeply rooted in objective historical developments, the social expression of an underlying economic process. The rise of this narrow social layer with its obscene levels of accumulation is inextricably bound up with the decline of American capitalism in the world market and the gutting of its domestic industrial base. Indeed, what makes the whole process so filthy, what imparts to it such a decadent and repulsive character, is the degree to which this wealth is unconnected to any progressive economic process. It is in every sense destructive and reactionary.
In an earlier period of history the US had its “robber barons,” such as Cornelius Vanderbilt, Andrew Carnegie and John D. Rockefeller. As brutal and greedy as these men were, their wealth was bound up with the creation of enormous industrial empires. The latter-day robber barons of Wall Street, on the other hand, have made their billions from the destruction of the industry and productive capacity built up over decades.
The staggering wealth accumulated in the top one percent of American society over last 25 years is directly bound up with the deterioration of the economy, the decline of industry and the impoverishment of the working class. The enormous personal fortunes of the elite have been built up on hedge funds, the leveraging of debt and other forms of financial speculation. This has entailed an enormous transfer of resources out of manufacturing and into finance, and out of the working class and into the pockets of those who have played the critical role not only in destroying living standards, but in setting the stage for the present disaster.
The fortunes that grew on this basis at a certain point assumed a dynamic of their own. Their sheer scale assumes a malignant character that becomes an insurmountable obstacle to any rational policy coming from within the confines of bourgeois politics.
It follows that there is no solution to the crisis without a direct and massive assault on social inequality, and thus the wealth and privileges of the financial and business aristocracy. This cannot be carried out by pressuring the Democratic Party. The Obama administration’s meager rules on executive pay shows that it will not consider any policies that even hint at the redistribution of wealth.
The American political elite, Obama included, is tied by a thousand strings to the financial aristocracy. The Obama administration is populated by individuals who have parlayed their political positions into lucrative positions in finance. Virtually the entire cabinet fits this billing—not only Tom Daschle, the former senator who withdrew his nomination for the Secretary of Health and Human Services amidst revelations that he had withheld tens of thousands in taxes owed on payments he received from his corporate sponsors.
Yesterday it came to light that Leon Panetta, Obama’s nominee for chief of the Central Intelligence Agency, took home more than $1 million last year through payments from corporations for consulting, speaking appearances and through his membership on corporate boards. He was paid handsomely for speeches by financial firms that have since collapsed, including $56,000 by Merrill Lynch and $28,000 by Wachovia. Chief of Staff Rahm Emanuel and Secretary of State Hillary Clinton have also used their political connections to make millions from the same financial elite that would ostensibly be targeted by Obama’s rules on executive pay.
Obama knows very well that when he leaves office he will be able to make millions of dollars, as Bill Clinton, the last Democratic president, and countless other leading politicians have done. Nor would this be a departure for Obama, whose career was taken into hand early on by leading financial and political figures in Chicago.
The subordination of the whole of society to the financial aristocracy is most clearly expressed in the massive bailout of Wall Street. Its political representatives, Democrats and Republican alike, hand over trillions to the biggest banks, while providing no provisions for the masses of people who have lost their jobs and homes.
Millions of workers who voted for Obama are now coming face to face with the fact that his administration will defend the interests of the financial elite every bit as ruthlessly, if with a slightly different presentation, as the Bush administration.
The solution to the economic crisis is not a technical question but a social, political and revolutionary settling of accounts, and a historical necessity. At a certain point in the late 18th century, it became necessary for the oppressed classes of France to rise up and destroy the power and privileges of the nobility. In the America of the 1860s, the only resolution to the “irrepressible conflict” was the destruction of the “slave power” in the South.
At this point it is necessary to destroy the political and economic power of the financial aristocracy. A resolution to the economic crisis can only begin with an independent mass movement of the working class that aims to break the political stranglehold of the financial elite over society; the development, to be blunt, of a revolutionary movement.
On Wednesday, President Barack Obama announced measures that purport to restrict executive compensation to $500,000 at financial institutions receiving billions in government assistance. The figure does not include stock options, which could be redeemed after financial firms pay back loans from the federal government. Nor does it apply to the original recipients of tens of billions in TARP (Troubled Asset Relief Program) money.
The measures are essentially a public relations exercise. Their aim is to provide political cover for a new and even larger Wall Street bailout, which Treasury Secretary Timothy Geithner will unveil next week.
Yet the discussion that has emerged in the wake of Obama’s announcement sheds light on the domination of government by a tiny financial elite and the increasingly threadbare pretense of democracy in the US. This financial aristocracy, the episode reveals, is a power to be approached on bended knee.
The media have responded to Obama’s proposal of a $500,000 limit on executive compensation, which would affect only a handful of firms, as though this were a severe and astonishing punishment. Yet the figure represents approximately 12 times the annual salary of the typical worker. To the majority of the population, a salary of a half million dollars is a staggering amount of money.
Obama’s servility before the financial aristocracy was summed up by the reassurances he gave it in announcing his limits on executive pay. “This is America,” Obama said. “We don't disparage wealth. We don't begrudge anybody for achieving success.”
Such a vision of America is at odds with both its present circumstances and its history, which has been characterized by deep democratic and egalitarian traditions that date back to before the Jeffersonian democracy of the early Republic. And while liberals are busy attempting to equate Obama to Franklin Roosevelt, the latter, in the midst of the Great Depression, attempted to capitalize on the tremendous contempt for the rich in the population at large by regularly issuing bromides against the “money changers.”
Indeed, Obama’s obsequiousness stands in sharp contrast to the anger of the working masses, who find it incomprehensible that the same executives who are responsible for ruining the economy and squandering trillions in taxpayer money are now presented with pay “limits” of a half million dollars. Workers are wondering why there haven’t been criminal indictments and television scenes of handcuffed executives frog-marched from their offices.
But on Wall Street, $500,000 is considered a pittance. The New York Times reports that executives felt cheated by taking home “only” $18 billion in collective bonuses in 2009. “I feel like I got a doorman’s tip, compared to what I got in previous years,” an investment banker with Citigroup told the Times.
The Financial Times reported on Wall Street’s opposition to the largely token measures. “Senior bankers were quick to warn the plans would cause a ‘brain drain’ from the profession as top executives seek more rewarding jobs out of the public eye,” it wrote. “Unlike other careers where job satisfaction and other considerations play a part, finance tends to attract people whose main motivation is money.”
“‘The cap is a lousy idea,’ complained one top Wall Street executive. ‘If there is no monetary upside, who would want to do these jobs?’”
Andrew Ward, a University of Georgia professor and specialist on corporate boards and management, told the Financial Times that executives could respond to Obama’s measure by calling his bluff—refusing to allow their firms to accept a bailout that would in any way limit their personal enrichment. “One of the potentially unintended consequences is that executives might try and hold off asking for government assistance until it is too late,” Ward said.
Media and academic figures who have tried to argue that the massive pay packages of the Wall Street executives are somehow legitimate, or even rational, succeed only in revealing the rot that characterizes intellectual life in the US. Their central argument—that the same CEOs who have driven their companies and the economy as whole into the ground are worthy of remuneration in the tens of millions—is so absurd it is almost an embarrassment to answer.
The immense power of the financial elite is revealed by the case of Bernard Madoff, the investor who squandered more than $50 billion in wealth in a giant Ponzi scheme. While working class Americans are arrested and spend years in prison for far lesser offenses, Madoff remains ensconced in his Manhattan penthouse.
For nearly a decade, a whistleblower named Harry Markopolos, who had uncovered Madoff’s scheme, attempted to draw the attention of the Securities and Exchange Commission (SEC), the federal regulatory agency ostensibly tasked with policing the securities and stock industries. Instead, the SEC ran interference for Madoff. Rather than being applauded for his efforts, Markopolos feared for his safety. “We knew that he was one of the most powerful men on Wall Street and in a position to easily end our careers or worse,” he said.
The social psychology and physiognomy of the financial elite—with its wealth, special privileges and its control over the organs of public opinion—resembles nothing so much as a modern aristocracy.
Any discussion of a rational attempt to find a solution to the economic crisis runs immediately into the ferocious opposition of this elite. Similarly, in the 18th century the aristocracy of the French ancien regime precipitated a financial crisis through its avarice and wars. When the aristocracy convened the Estates General in 1789, it was to demand that the Third Estate, the commoners, bail the aristocracy out of the crisis of its own making. But the monarchy and nobility refused to cede a bit of its power and privileges. This set the stage for the great French Revolution.
The odious subjective characteristics of the US financial aristocracy—its greed, arrogance, stupidity and decadence—are themselves deeply rooted in objective historical developments, the social expression of an underlying economic process. The rise of this narrow social layer with its obscene levels of accumulation is inextricably bound up with the decline of American capitalism in the world market and the gutting of its domestic industrial base. Indeed, what makes the whole process so filthy, what imparts to it such a decadent and repulsive character, is the degree to which this wealth is unconnected to any progressive economic process. It is in every sense destructive and reactionary.
In an earlier period of history the US had its “robber barons,” such as Cornelius Vanderbilt, Andrew Carnegie and John D. Rockefeller. As brutal and greedy as these men were, their wealth was bound up with the creation of enormous industrial empires. The latter-day robber barons of Wall Street, on the other hand, have made their billions from the destruction of the industry and productive capacity built up over decades.
The staggering wealth accumulated in the top one percent of American society over last 25 years is directly bound up with the deterioration of the economy, the decline of industry and the impoverishment of the working class. The enormous personal fortunes of the elite have been built up on hedge funds, the leveraging of debt and other forms of financial speculation. This has entailed an enormous transfer of resources out of manufacturing and into finance, and out of the working class and into the pockets of those who have played the critical role not only in destroying living standards, but in setting the stage for the present disaster.
The fortunes that grew on this basis at a certain point assumed a dynamic of their own. Their sheer scale assumes a malignant character that becomes an insurmountable obstacle to any rational policy coming from within the confines of bourgeois politics.
It follows that there is no solution to the crisis without a direct and massive assault on social inequality, and thus the wealth and privileges of the financial and business aristocracy. This cannot be carried out by pressuring the Democratic Party. The Obama administration’s meager rules on executive pay shows that it will not consider any policies that even hint at the redistribution of wealth.
The American political elite, Obama included, is tied by a thousand strings to the financial aristocracy. The Obama administration is populated by individuals who have parlayed their political positions into lucrative positions in finance. Virtually the entire cabinet fits this billing—not only Tom Daschle, the former senator who withdrew his nomination for the Secretary of Health and Human Services amidst revelations that he had withheld tens of thousands in taxes owed on payments he received from his corporate sponsors.
Yesterday it came to light that Leon Panetta, Obama’s nominee for chief of the Central Intelligence Agency, took home more than $1 million last year through payments from corporations for consulting, speaking appearances and through his membership on corporate boards. He was paid handsomely for speeches by financial firms that have since collapsed, including $56,000 by Merrill Lynch and $28,000 by Wachovia. Chief of Staff Rahm Emanuel and Secretary of State Hillary Clinton have also used their political connections to make millions from the same financial elite that would ostensibly be targeted by Obama’s rules on executive pay.
Obama knows very well that when he leaves office he will be able to make millions of dollars, as Bill Clinton, the last Democratic president, and countless other leading politicians have done. Nor would this be a departure for Obama, whose career was taken into hand early on by leading financial and political figures in Chicago.
The subordination of the whole of society to the financial aristocracy is most clearly expressed in the massive bailout of Wall Street. Its political representatives, Democrats and Republican alike, hand over trillions to the biggest banks, while providing no provisions for the masses of people who have lost their jobs and homes.
Millions of workers who voted for Obama are now coming face to face with the fact that his administration will defend the interests of the financial elite every bit as ruthlessly, if with a slightly different presentation, as the Bush administration.
The solution to the economic crisis is not a technical question but a social, political and revolutionary settling of accounts, and a historical necessity. At a certain point in the late 18th century, it became necessary for the oppressed classes of France to rise up and destroy the power and privileges of the nobility. In the America of the 1860s, the only resolution to the “irrepressible conflict” was the destruction of the “slave power” in the South.
At this point it is necessary to destroy the political and economic power of the financial aristocracy. A resolution to the economic crisis can only begin with an independent mass movement of the working class that aims to break the political stranglehold of the financial elite over society; the development, to be blunt, of a revolutionary movement.
SC85-8 / http://jameshowardkunstler.typepad.com/clusterfuck_nation/
Poverty of Imagination
Venturing out each day into this land of strip malls, freeways, office parks, and McHousing pods, one can't help but be impressed at how America looks the same as it did a few years ago, while seemingly overnight we have become another country. All the old mechanisms that enabled our way of life are broken, especially endless revolving credit, at every level, from household to business to the banks to the US Treasury.Peak energy has combined with the diminishing returns of over-investments in complexity to pull the "kill switch" on our vaunted "way of life" -- the set of arrangements that we won't apologize for or negotiate. So, the big question before the nation is: do we try to re-start the whole smoking, creaking hopeless, futureless machine? Or do we start behaving differently?The attempted re-start of revolving debt consumerism is an exercise in futility. We've reached the limit of being able to create additional debt at any level without causing further damage, additional distortions, and new perversities of economy (and of society, too). We can't raise credit card ceilings for people with no ability make monthly payments. We can't promote more mortgages for people with no income. We can't crank up a home-building industry with our massive inventory of unsold, and over-priced houses built in the wrong places. We can't ramp back up the blue light special shopping fiesta. We can't return to the heyday of Happy Motoring, no matter how many bridges we fix or how many additional ring highways we build around our already-overblown and over-sprawled metroplexes. Mostly, we can't return to the now-complete "growth" cycle of "economic expansion." We're done with all that. History is done with our doing that, for now.So far -- after two weeks in office -- the Obama team seems bent on a campaign to sustain the unsustainable at all costs, to attempt to do all the impossible things listed above. Mr. Obama is not the only one, of course, who is invoking the quest for renewed "growth." This is a tragic error in collective thinking. What we really face is a comprehensive contraction in our activities, especially the scale of our activities, and the pressing need to readjust the systems of everyday life to a level of decreased complexity.For instance, the myth that we can become "energy independent and yet remain car-dependent is absurd. In terms of liquid fuels, we're simply trapped. We import two-thirds of the oil we use and there is absolutely no chance that drill-drill-drilling (or any other scheme) will change that. The public and our leaders can not face the reality of this. The great wish for "alternative" liquid fuels (bio fuels, algae excreta) will never be anything more than a wish at the scales required, and the parallel wish to keep all our cars running by other means -- hydrogen fuel cells, electric motors -- is equally idle and foolish. We cannot face the mandate of reality, which is to do everything possible to make our living places walkable, and connect them with public transit. The stimulus bills in congress clearly illustrate our failure to understand the situation.The attempt to restart "consumerism" will be equally disappointing. It was a manifestation of the short peak energy decades of history, and now that we're past peak energy, it's over. That seventy percent of the economy is over, especially the part that allowed people to buy stuff with no money. From now on people will have to buy stuff with money they earn and save, and they will be buying a lot less stuff. For a while, a lot of stuff will circulate through the yard sales and Craigslist, and some resourceful people will get busy fixing broken stuff that still has value. But the other infrastructure of shopping is toast, especially the malls, the strip malls, the real estate investment trusts that own it all, many of the banks that lent money to the REITs, the chain-stores and chain eateries, of course, and, alas, the non-chain mom-and-pop boutiques in these highway-oriented venues.Washington is evidently seized by panic right now. I don't know anyone who works in the White House, but I must suppose that they have learned in two weeks that these systems are absolutely tanking, that the previous way of life that everybody was so set on not apologizing for has reached the end of the line. We seem to be learning a new and interesting lesson: that even a team that promises change is actually petrified of too much change, especially change that they can't really control. The argument about "change" during the election was sufficiently vague that no one was really challenged to articulate a future that wasn't, materially, more-of-the-same. I suppose the Obama team may have thought they would only administer it differently than the Bush team -- but basically life in the USA would continue being about all those trips to the mall, and the cubicle jobs to support that, and the family safaris to visit Grandma in Lansing, and the vacations at Sea World, and Skipper's $20,000 college loan, and Dad's yearly junket to Las Vegas, and refinancing the house, and rolling over this loan and that loan... and that has all led to a very dead end in a dark place.If this nation wants to survive without an intense political convulsion, there's a lot we can do, but none of it is being voiced in any corner of Washington at this time. We have to get off of petro-agriculture and grow our food locally, at a smaller scale, with more people working on it and fewer machines. This is an enormous project, which implies change in everything from property allocation to farming methods to new social relations. But if we don't focus on it right away, a lot of Americans will end up starving, and rather soon. We have to rebuild the railroad system in the US, and electrify it, and make it every bit as good as the system we once had that was the envy of the world. If we don't get started on this right away, we're screwed. We will have tremendous trouble moving people and goods around this continent-sized nation. We have to reactivate our small towns and cities because the metroplexes are going to fail at their current scale of operation. We have to prepare for manufacturing at a much smaller (and local) scale than the scale represented by General Motors.The political theater of the moment in Washington is not focused on any of this, but on the illusion that we can find new ways of keeping the old ways going. Many observers have noted lately how passive the American public is in the face of their dreadful accelerating losses. It's a tragic mistake to tell them that they can have it all back again. We'll see a striking illustration of "phase change" as the public mood goes from cow-like incomprehension to grizzly bear-like rage. Not only will they discover the impossibility of getting back to where they were, but they will see the panicked actions of Washington drive what remains of our capital resources down a rat hole.A consensus is firming up on each side of the "stimulus" question, largely along party lines -- simply those who are for it and those who are against it, mostly by degrees. Nobody in either party -- including supposed independents such as Bernie Sanders or John McCain, not to mention President Obama -- has a position for directing public resources and effort at any of the things I mentioned above: future food security, future travel-and-transport security, or the future security of livable, walkable dwelling places based on local networks of economic interdependency. This striking poverty of imagination may lead to change that will tear the nation to pieces.
Venturing out each day into this land of strip malls, freeways, office parks, and McHousing pods, one can't help but be impressed at how America looks the same as it did a few years ago, while seemingly overnight we have become another country. All the old mechanisms that enabled our way of life are broken, especially endless revolving credit, at every level, from household to business to the banks to the US Treasury.Peak energy has combined with the diminishing returns of over-investments in complexity to pull the "kill switch" on our vaunted "way of life" -- the set of arrangements that we won't apologize for or negotiate. So, the big question before the nation is: do we try to re-start the whole smoking, creaking hopeless, futureless machine? Or do we start behaving differently?The attempted re-start of revolving debt consumerism is an exercise in futility. We've reached the limit of being able to create additional debt at any level without causing further damage, additional distortions, and new perversities of economy (and of society, too). We can't raise credit card ceilings for people with no ability make monthly payments. We can't promote more mortgages for people with no income. We can't crank up a home-building industry with our massive inventory of unsold, and over-priced houses built in the wrong places. We can't ramp back up the blue light special shopping fiesta. We can't return to the heyday of Happy Motoring, no matter how many bridges we fix or how many additional ring highways we build around our already-overblown and over-sprawled metroplexes. Mostly, we can't return to the now-complete "growth" cycle of "economic expansion." We're done with all that. History is done with our doing that, for now.So far -- after two weeks in office -- the Obama team seems bent on a campaign to sustain the unsustainable at all costs, to attempt to do all the impossible things listed above. Mr. Obama is not the only one, of course, who is invoking the quest for renewed "growth." This is a tragic error in collective thinking. What we really face is a comprehensive contraction in our activities, especially the scale of our activities, and the pressing need to readjust the systems of everyday life to a level of decreased complexity.For instance, the myth that we can become "energy independent and yet remain car-dependent is absurd. In terms of liquid fuels, we're simply trapped. We import two-thirds of the oil we use and there is absolutely no chance that drill-drill-drilling (or any other scheme) will change that. The public and our leaders can not face the reality of this. The great wish for "alternative" liquid fuels (bio fuels, algae excreta) will never be anything more than a wish at the scales required, and the parallel wish to keep all our cars running by other means -- hydrogen fuel cells, electric motors -- is equally idle and foolish. We cannot face the mandate of reality, which is to do everything possible to make our living places walkable, and connect them with public transit. The stimulus bills in congress clearly illustrate our failure to understand the situation.The attempt to restart "consumerism" will be equally disappointing. It was a manifestation of the short peak energy decades of history, and now that we're past peak energy, it's over. That seventy percent of the economy is over, especially the part that allowed people to buy stuff with no money. From now on people will have to buy stuff with money they earn and save, and they will be buying a lot less stuff. For a while, a lot of stuff will circulate through the yard sales and Craigslist, and some resourceful people will get busy fixing broken stuff that still has value. But the other infrastructure of shopping is toast, especially the malls, the strip malls, the real estate investment trusts that own it all, many of the banks that lent money to the REITs, the chain-stores and chain eateries, of course, and, alas, the non-chain mom-and-pop boutiques in these highway-oriented venues.Washington is evidently seized by panic right now. I don't know anyone who works in the White House, but I must suppose that they have learned in two weeks that these systems are absolutely tanking, that the previous way of life that everybody was so set on not apologizing for has reached the end of the line. We seem to be learning a new and interesting lesson: that even a team that promises change is actually petrified of too much change, especially change that they can't really control. The argument about "change" during the election was sufficiently vague that no one was really challenged to articulate a future that wasn't, materially, more-of-the-same. I suppose the Obama team may have thought they would only administer it differently than the Bush team -- but basically life in the USA would continue being about all those trips to the mall, and the cubicle jobs to support that, and the family safaris to visit Grandma in Lansing, and the vacations at Sea World, and Skipper's $20,000 college loan, and Dad's yearly junket to Las Vegas, and refinancing the house, and rolling over this loan and that loan... and that has all led to a very dead end in a dark place.If this nation wants to survive without an intense political convulsion, there's a lot we can do, but none of it is being voiced in any corner of Washington at this time. We have to get off of petro-agriculture and grow our food locally, at a smaller scale, with more people working on it and fewer machines. This is an enormous project, which implies change in everything from property allocation to farming methods to new social relations. But if we don't focus on it right away, a lot of Americans will end up starving, and rather soon. We have to rebuild the railroad system in the US, and electrify it, and make it every bit as good as the system we once had that was the envy of the world. If we don't get started on this right away, we're screwed. We will have tremendous trouble moving people and goods around this continent-sized nation. We have to reactivate our small towns and cities because the metroplexes are going to fail at their current scale of operation. We have to prepare for manufacturing at a much smaller (and local) scale than the scale represented by General Motors.The political theater of the moment in Washington is not focused on any of this, but on the illusion that we can find new ways of keeping the old ways going. Many observers have noted lately how passive the American public is in the face of their dreadful accelerating losses. It's a tragic mistake to tell them that they can have it all back again. We'll see a striking illustration of "phase change" as the public mood goes from cow-like incomprehension to grizzly bear-like rage. Not only will they discover the impossibility of getting back to where they were, but they will see the panicked actions of Washington drive what remains of our capital resources down a rat hole.A consensus is firming up on each side of the "stimulus" question, largely along party lines -- simply those who are for it and those who are against it, mostly by degrees. Nobody in either party -- including supposed independents such as Bernie Sanders or John McCain, not to mention President Obama -- has a position for directing public resources and effort at any of the things I mentioned above: future food security, future travel-and-transport security, or the future security of livable, walkable dwelling places based on local networks of economic interdependency. This striking poverty of imagination may lead to change that will tear the nation to pieces.
Sunday, February 8, 2009
SC85-7 / http://www.ricefarmer.blogspot.com/
Panarin’s Crystal Ball
The prediction of Russia’s Igor Panarin on the breakup of the United States is still making the rounds, no doubt because it seems real and inevitable to some, or perhaps because of morbid fascination among some Americans. So it seems useful to examine the linked article and make a few comments where I think he got it right and wrong. Not that I have a crystal ball, but a little realistic thinking and common sense can help us evaluate his prediction more accurately.First, is the US going to break up, and will it happen in 2010? Because all empires and their homelands eventually disintegrate, this is in part a no-brainer: there is no question that it will happen eventually. However, calling the year is trickier. There are so many variables that it would be hard to say when the breakup will actually begin, in what manner it will proceed, and how long it will take before we can say unequivocally that “the United States of America no longer exists,” or at least that the US as we know it no longer exists.Why the US will disintegrate is becoming clearer every day. It takes a lot of energy, money, and strong central control to hold a large country together. Peak oil has triggered energy decline, perceived wealth is disappearing quickly, infrastructure is crumbling, the economy is in the sewer, unrest is growing in many countries, and around the world globalization is pulling back as industrial civilization starts to decline. Preexisting and new initiatives toward secession will add to the forces trying to tear the country apart.Let’s focus on Pararin’s map. He has the states marked off in neat blocks. Obviously such neat divisions are highly unlikely. Although state lines may be used in some situations or in the initial stage, it is more likely that new divisions will eventually form along bioregional lines, major rivers, mountain ranges, and other natural features.Second, Panarin says that each block will go to another power or fall under its influence. This prediction highlights a big mistake: he is assuming that other countries will not disintegrate. Clearly he’s wrong about this because Russia, China, Canada, Mexico, and the EU all have the same problems as the US does in varying degrees, and worse in some cases. China and Mexico are veritable powder kegs ready to blow up, so they’ll certainly be in no position to take and hold US territory. Ultimately what we now know as the Mexican government will likely end up in the same position as the current “government” of Afghanistan: maintaining tenuous control over the downtown area of the capital city. Beijing will at the least lose control over Tibet and the western regions and be hard-pressed to maintain control over the traditional Han region amid food shortages, mass unemployment, and civil uprisings. Russia, as we’ve seen in the news, has problems of its own, while EU unity is already being tested, and the international economic meltdown is just getting started. Hence, although some of these powers might at first have territorial ambitions in North America, they will soon find themselves overtaken by events at home.“Mexican influence” in the US southwest will not be from the Mexican government (or whatever is left of it when this is all over), but rather from Mexican drug/warlords. Similarly, “Chinese influence” will more than likely be from China-based privateers or pirates.So, where Panarin got it wrong is assuming that only the US will be seriously affected by the destructive global forces already at work.
The prediction of Russia’s Igor Panarin on the breakup of the United States is still making the rounds, no doubt because it seems real and inevitable to some, or perhaps because of morbid fascination among some Americans. So it seems useful to examine the linked article and make a few comments where I think he got it right and wrong. Not that I have a crystal ball, but a little realistic thinking and common sense can help us evaluate his prediction more accurately.First, is the US going to break up, and will it happen in 2010? Because all empires and their homelands eventually disintegrate, this is in part a no-brainer: there is no question that it will happen eventually. However, calling the year is trickier. There are so many variables that it would be hard to say when the breakup will actually begin, in what manner it will proceed, and how long it will take before we can say unequivocally that “the United States of America no longer exists,” or at least that the US as we know it no longer exists.Why the US will disintegrate is becoming clearer every day. It takes a lot of energy, money, and strong central control to hold a large country together. Peak oil has triggered energy decline, perceived wealth is disappearing quickly, infrastructure is crumbling, the economy is in the sewer, unrest is growing in many countries, and around the world globalization is pulling back as industrial civilization starts to decline. Preexisting and new initiatives toward secession will add to the forces trying to tear the country apart.Let’s focus on Pararin’s map. He has the states marked off in neat blocks. Obviously such neat divisions are highly unlikely. Although state lines may be used in some situations or in the initial stage, it is more likely that new divisions will eventually form along bioregional lines, major rivers, mountain ranges, and other natural features.Second, Panarin says that each block will go to another power or fall under its influence. This prediction highlights a big mistake: he is assuming that other countries will not disintegrate. Clearly he’s wrong about this because Russia, China, Canada, Mexico, and the EU all have the same problems as the US does in varying degrees, and worse in some cases. China and Mexico are veritable powder kegs ready to blow up, so they’ll certainly be in no position to take and hold US territory. Ultimately what we now know as the Mexican government will likely end up in the same position as the current “government” of Afghanistan: maintaining tenuous control over the downtown area of the capital city. Beijing will at the least lose control over Tibet and the western regions and be hard-pressed to maintain control over the traditional Han region amid food shortages, mass unemployment, and civil uprisings. Russia, as we’ve seen in the news, has problems of its own, while EU unity is already being tested, and the international economic meltdown is just getting started. Hence, although some of these powers might at first have territorial ambitions in North America, they will soon find themselves overtaken by events at home.“Mexican influence” in the US southwest will not be from the Mexican government (or whatever is left of it when this is all over), but rather from Mexican drug/warlords. Similarly, “Chinese influence” will more than likely be from China-based privateers or pirates.So, where Panarin got it wrong is assuming that only the US will be seriously affected by the destructive global forces already at work.
SC85-6 / http://www.msnbc.msn.com/id/29040063/
Olbermann: Cheney doing the work of terrorists
The former V.P. is using fear mongering and lies to manipulate Americans
Finally tonight, as promised, a Special Comment on former Vice President Cheney's remarks about the prospects of future terrorist attacks in this country. Flatly, it may be time for Mr. Cheney to leave this country.The partisanship, divisiveness and naiveté to which he ascribed every single criticism of his and President Bush's delusional policies of the last eight years, have now roared forth in a destructive and uninformed diatribe from Mr. Cheney, that can only serve to undermine the nation's new president, undermine the nation's effort to thwart terrorism, and undermine the nation itself.Mr. Cheney's remarks were posted yesterday at Politico.com. They are a reiteration of all the manias of his vice presidency. Only they now come without the authority of office. They insist, he insists, on the imminence of attack, of the maintenance of Gitmo, of the necessity of waterboarding, of the efficacy of torture.Time does not stale nor custom wither your infinite variety, Mr. Cheney. You will say it, and be wrong and you will still say it anew. You will say it, and undercut a President 17 days on the job and you will still say it anew. You will say it, and help terrorists and you will still say it anew."The United States needs to be not so much loved as it needs to be respected. Sometimes, that requires us to take actions that generate controversy. I'm not at all sure that that's what the Obama administration believes."The first glimmer, in years, of sanity in any your remarks, Sir. That's not at all what the Obama administration appears to believe. It seems to be ready to use all avenues and all emotions, seeking love, respect, fear, diplomacy, shared experience, education, principle, and, yes, even rational thought. This President, unlike yours, seems intent on living in the real world rather than trying to re-shape an imaginary one, by force."When we get people who are more concerned about reading the rights to an al-Qaida terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry." More concerned, Mr. Cheney? What delusion of grandeur makes you think you have the right to say anything like that? Because a president, or an ordinary American, demands that we act as Americans and not as bullies; demands that we play by our rules; that we preserve, protect, and defend the Constitution of the United States; you believe we have chosen the one and not the other? We can be Americans, or we can be what you call "safe" — but not both?"If it hadn't been for what we did — with respect to the terrorist surveillance program, or enhanced interrogation techniques for high-value detainees, the Patriot Act, and so forth — then we would have been attacked again. Those policies we put in place, in my opinion, were absolutely crucial to getting us through the last seven-plus years without a major-casualty attack on the U.S."Mr. Cheney, you are lying. As the cloud of fear you deliberately fostered in this good-hearted and courageous nation finally begins to dissipate, the nonsense that you and Mr. Bush presented as "evidence" of this childish claim, this perverse example of wishful-nightmare-thinking, has become apparent, and it should shame you.The "major-casualty attacks" on the U.S. you think you stopped, involved would-be hijackers who were under constant surveillance and had neither passports nor plane tickets. They involved feeble-minded braggarts so clueless as to even the most obvious steps of organization that they believed they could enter Fort Dix in New Jersey disguised as delivery men, and kill hordes of Americans, and get out alive, even though Fort Dix teems with soldiers who have an almost inexhaustible supply of weapons.They involved embittered ex-Airport-employees so uninformed about where they used to work, that they thought dropping a match in a fuel supply line thirty miles away would cause the airport to explode. These are the plots that by your own proud, strutting, crazy admissions, were the ones you "got us through."You and Mr. Bush, sir—you are the old men who cried wolf. The Politico story continues: "Citing intelligence reports, Cheney said at least 61 of the inmates who were released from Guantanamo during the Bush administration - "that's about 11 or 12 percent" - have "gone back into the business of being terrorists." Mr. Cheney, you made this statistic up. Perhaps not you personally, but your people made this statistic up! As the new reality-based administration has discovered, there are not enough records of detainees still at Gitmo to suggest that there is any reliable database on those released. That McCarthy-esque number, Sir, is also as fluid as the infamous Senator's was. As Professor Mark Denbeaux of Seton Hall University noted on this network last month: "The government has given its 43rd attempt to describe the number of people who have left Guantanamo and returned to the battlefield. Forty-one times they have done it orally as they have this last time. And their numbers have changed from 20 to 12 to seven to more than five to two to a couple to a few - 25, 29, 12 to 24. Every time, the number has been different. In fact, every time they give a number, they don't identify a date, a place, a time, a name or an incident to support their claim."Mr. Cheney, which orifice are you pulling these numbers from? Y'know, in the movie "The Manchurian Candidate," the character based loosely on Joe McCarthy had trouble remembering all the different numbers. His Lady Macbeth-like-wife pointed out to him that the reason she kept changing the number of purported communists in the state department, was so that people would no longer be asking "are there communists in the state department?" but would begin only asking "how many communists are there?"And, six years and more since General Powell, and Dr. Rice, and all the rest, played the trump card of terrorizing this nation, the mighty Cream of Mushroom Cloud soup, you played it again... nuclear weapon, biological agent, deaths of perhaps hundreds of thousands. "I think there's a high probability of such an attempt. Whether or not they can pull it off depends whether or not we keep in place policies that have allowed us to defeat all further attempts, since 9/11, to launch mass-casualty attacks against the United States.""The Bush System," as John Yoo so aptly re-christened it the other day. Start the wrong war, detain the wrong people, employ the wrong methods, pursue the wrong leads, utilize the wrong emotions. Beat up first, ask questions later. You know, just like Al-Qaeda does, or Iran. Save this nation from terrorists by doing the terrorists' work for them, Mr. Cheney. To your credit, sir, you have added a new monster under a new bed, to try to continue to foment a national policy of panic. It's the Terrorists-on-our-streets ploy."Is that really a good idea to take hardened al-Qaida terrorists who've already killed thousands of Americans and put 'em in San Quentin or some other prison facility where they can spread their venom even more widely than it already is?" As opposed to keeping them in an extra-legal facility mixed in with some unknown number of innocents mistaken for terrorists. Who's likelier to be more influenced by terrorist venom, Mr. Cheney? The characters from the TV series "Oz?" Or a bunch of guys who we're holding in chains without trial and without even some token attempt at rehabilitation? And by the way, what about Ahmed Ressam, sir? Benni Noris, if you prefer. The Millennium Bomber. Caught at a ferry crossing from Canada to Washington State in December, 1999, on his way to blow up Los Angeles International Airport. He had a car, a legit passport, nitroglycerin, and timing devices. And what did we do to him, Mr. Cheney? Did we send him to Gitmo? Or Pre-Gitmo? As "high a value" terrorist as ever we've caught in this country. Trained by Abu Zubaydah. Days away from his target and ready to go. We tried him. In U.S. courts. With U.S. lawyers. Part of the case went to the U.S. Supreme Court. He got 22 years in U.S. prisons.No torture, no Gulag, no stories of him proselytizing fellow prisoners. Oh, but he did cooperate long enough to tell prosecutors about al-Qaida cells in this country.That was his info they stuck in the President's Daily Brief of August 6th, 2001. That's probably news to you, since obviously you and Mr. Bush didn't read it, stalking Saddam Hussein as you were. Of course, none of that mattered to Mr. Cheney, just as none of this matters to Mr. Cheney. Because, at heart, Mr. Cheney is not interested foremost in protecting this country. He is interested foremost in protecting Mr. Cheney. And the business of being Dick Cheney, of rationalizing one's own existence after one of the most reprehensible, myopic, unprincipled, and even un-American careers in the history of our government, depends on continuing to convince the gullible of us to live in abject fear and not with vigilance and common sense and principles.We, sir, will most completely assure our security not by maintaining the endless, demoralizing, draining, life-denying blind fear and blind hatred which you so thoroughly embody. We will most easily purchase our safety by repudiating the "Bush System." We will reserve the violence for which you are so eager, Sir, for any battlefield to which we truly must take, and not for unconscionable wars which people like you goad and scare and lie us into.You, Mr. Cheney, you terrified more Americans than did any terrorist in the last seven years, and now it is time for you to desist, or to be made to desist. With damnable words like these, Sir, you help no American, you protect no American, you serve no American — you only aid and abet those who would destroy this nation from within or without. More than 400 years ago, when a British Parliament attempted to govern after its term had expired, it was dispersed by the actions, and words, of Oliver Cromwell."You have sat too long for any good you have been doing lately," he told them — exactly as, Mr. Cheney, exactly as a nation now tells you: "Depart, I say, and let us have done with you. "In the name of God… go!"
The former V.P. is using fear mongering and lies to manipulate Americans
Finally tonight, as promised, a Special Comment on former Vice President Cheney's remarks about the prospects of future terrorist attacks in this country. Flatly, it may be time for Mr. Cheney to leave this country.The partisanship, divisiveness and naiveté to which he ascribed every single criticism of his and President Bush's delusional policies of the last eight years, have now roared forth in a destructive and uninformed diatribe from Mr. Cheney, that can only serve to undermine the nation's new president, undermine the nation's effort to thwart terrorism, and undermine the nation itself.Mr. Cheney's remarks were posted yesterday at Politico.com. They are a reiteration of all the manias of his vice presidency. Only they now come without the authority of office. They insist, he insists, on the imminence of attack, of the maintenance of Gitmo, of the necessity of waterboarding, of the efficacy of torture.Time does not stale nor custom wither your infinite variety, Mr. Cheney. You will say it, and be wrong and you will still say it anew. You will say it, and undercut a President 17 days on the job and you will still say it anew. You will say it, and help terrorists and you will still say it anew."The United States needs to be not so much loved as it needs to be respected. Sometimes, that requires us to take actions that generate controversy. I'm not at all sure that that's what the Obama administration believes."The first glimmer, in years, of sanity in any your remarks, Sir. That's not at all what the Obama administration appears to believe. It seems to be ready to use all avenues and all emotions, seeking love, respect, fear, diplomacy, shared experience, education, principle, and, yes, even rational thought. This President, unlike yours, seems intent on living in the real world rather than trying to re-shape an imaginary one, by force."When we get people who are more concerned about reading the rights to an al-Qaida terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry." More concerned, Mr. Cheney? What delusion of grandeur makes you think you have the right to say anything like that? Because a president, or an ordinary American, demands that we act as Americans and not as bullies; demands that we play by our rules; that we preserve, protect, and defend the Constitution of the United States; you believe we have chosen the one and not the other? We can be Americans, or we can be what you call "safe" — but not both?"If it hadn't been for what we did — with respect to the terrorist surveillance program, or enhanced interrogation techniques for high-value detainees, the Patriot Act, and so forth — then we would have been attacked again. Those policies we put in place, in my opinion, were absolutely crucial to getting us through the last seven-plus years without a major-casualty attack on the U.S."Mr. Cheney, you are lying. As the cloud of fear you deliberately fostered in this good-hearted and courageous nation finally begins to dissipate, the nonsense that you and Mr. Bush presented as "evidence" of this childish claim, this perverse example of wishful-nightmare-thinking, has become apparent, and it should shame you.The "major-casualty attacks" on the U.S. you think you stopped, involved would-be hijackers who were under constant surveillance and had neither passports nor plane tickets. They involved feeble-minded braggarts so clueless as to even the most obvious steps of organization that they believed they could enter Fort Dix in New Jersey disguised as delivery men, and kill hordes of Americans, and get out alive, even though Fort Dix teems with soldiers who have an almost inexhaustible supply of weapons.They involved embittered ex-Airport-employees so uninformed about where they used to work, that they thought dropping a match in a fuel supply line thirty miles away would cause the airport to explode. These are the plots that by your own proud, strutting, crazy admissions, were the ones you "got us through."You and Mr. Bush, sir—you are the old men who cried wolf. The Politico story continues: "Citing intelligence reports, Cheney said at least 61 of the inmates who were released from Guantanamo during the Bush administration - "that's about 11 or 12 percent" - have "gone back into the business of being terrorists." Mr. Cheney, you made this statistic up. Perhaps not you personally, but your people made this statistic up! As the new reality-based administration has discovered, there are not enough records of detainees still at Gitmo to suggest that there is any reliable database on those released. That McCarthy-esque number, Sir, is also as fluid as the infamous Senator's was. As Professor Mark Denbeaux of Seton Hall University noted on this network last month: "The government has given its 43rd attempt to describe the number of people who have left Guantanamo and returned to the battlefield. Forty-one times they have done it orally as they have this last time. And their numbers have changed from 20 to 12 to seven to more than five to two to a couple to a few - 25, 29, 12 to 24. Every time, the number has been different. In fact, every time they give a number, they don't identify a date, a place, a time, a name or an incident to support their claim."Mr. Cheney, which orifice are you pulling these numbers from? Y'know, in the movie "The Manchurian Candidate," the character based loosely on Joe McCarthy had trouble remembering all the different numbers. His Lady Macbeth-like-wife pointed out to him that the reason she kept changing the number of purported communists in the state department, was so that people would no longer be asking "are there communists in the state department?" but would begin only asking "how many communists are there?"And, six years and more since General Powell, and Dr. Rice, and all the rest, played the trump card of terrorizing this nation, the mighty Cream of Mushroom Cloud soup, you played it again... nuclear weapon, biological agent, deaths of perhaps hundreds of thousands. "I think there's a high probability of such an attempt. Whether or not they can pull it off depends whether or not we keep in place policies that have allowed us to defeat all further attempts, since 9/11, to launch mass-casualty attacks against the United States.""The Bush System," as John Yoo so aptly re-christened it the other day. Start the wrong war, detain the wrong people, employ the wrong methods, pursue the wrong leads, utilize the wrong emotions. Beat up first, ask questions later. You know, just like Al-Qaeda does, or Iran. Save this nation from terrorists by doing the terrorists' work for them, Mr. Cheney. To your credit, sir, you have added a new monster under a new bed, to try to continue to foment a national policy of panic. It's the Terrorists-on-our-streets ploy."Is that really a good idea to take hardened al-Qaida terrorists who've already killed thousands of Americans and put 'em in San Quentin or some other prison facility where they can spread their venom even more widely than it already is?" As opposed to keeping them in an extra-legal facility mixed in with some unknown number of innocents mistaken for terrorists. Who's likelier to be more influenced by terrorist venom, Mr. Cheney? The characters from the TV series "Oz?" Or a bunch of guys who we're holding in chains without trial and without even some token attempt at rehabilitation? And by the way, what about Ahmed Ressam, sir? Benni Noris, if you prefer. The Millennium Bomber. Caught at a ferry crossing from Canada to Washington State in December, 1999, on his way to blow up Los Angeles International Airport. He had a car, a legit passport, nitroglycerin, and timing devices. And what did we do to him, Mr. Cheney? Did we send him to Gitmo? Or Pre-Gitmo? As "high a value" terrorist as ever we've caught in this country. Trained by Abu Zubaydah. Days away from his target and ready to go. We tried him. In U.S. courts. With U.S. lawyers. Part of the case went to the U.S. Supreme Court. He got 22 years in U.S. prisons.No torture, no Gulag, no stories of him proselytizing fellow prisoners. Oh, but he did cooperate long enough to tell prosecutors about al-Qaida cells in this country.That was his info they stuck in the President's Daily Brief of August 6th, 2001. That's probably news to you, since obviously you and Mr. Bush didn't read it, stalking Saddam Hussein as you were. Of course, none of that mattered to Mr. Cheney, just as none of this matters to Mr. Cheney. Because, at heart, Mr. Cheney is not interested foremost in protecting this country. He is interested foremost in protecting Mr. Cheney. And the business of being Dick Cheney, of rationalizing one's own existence after one of the most reprehensible, myopic, unprincipled, and even un-American careers in the history of our government, depends on continuing to convince the gullible of us to live in abject fear and not with vigilance and common sense and principles.We, sir, will most completely assure our security not by maintaining the endless, demoralizing, draining, life-denying blind fear and blind hatred which you so thoroughly embody. We will most easily purchase our safety by repudiating the "Bush System." We will reserve the violence for which you are so eager, Sir, for any battlefield to which we truly must take, and not for unconscionable wars which people like you goad and scare and lie us into.You, Mr. Cheney, you terrified more Americans than did any terrorist in the last seven years, and now it is time for you to desist, or to be made to desist. With damnable words like these, Sir, you help no American, you protect no American, you serve no American — you only aid and abet those who would destroy this nation from within or without. More than 400 years ago, when a British Parliament attempted to govern after its term had expired, it was dispersed by the actions, and words, of Oliver Cromwell."You have sat too long for any good you have been doing lately," he told them — exactly as, Mr. Cheney, exactly as a nation now tells you: "Depart, I say, and let us have done with you. "In the name of God… go!"
Friday, February 6, 2009
SC85-5 / http://solari.com/blog/?p=2058
Financial Coup d’Etat
In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.The presentation documented my experience with a Washington-Wall Street partnership that had:Engineered a fraudulent housing and debt bubble; Illegally shifted vast amounts of capital out of the U.S.; Used “privitization” as form or piracy - a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder. Other presenters at the conference included distinguished reporters covering privatization in Eastern Europe and Russia. As the portraits of British ancestors stared down upon us, we listened to story after story of global privatization throughout the 1990s in the Americas, Europe, and Asia.Slowly, as the pieces fit together, we shared a horrifying epiphany: the banks, corporations and investors acting in each global region were the exact same players. They were a relatively small group that reappeared again and again in Russia, Eastern Europe, and Asia accompanied by the same well-known accounting firms and law firms.Clearly, there was a global financial coup d’etat underway.The magnitude of what was happening was overwhelming. In the 1990’s, millions of people in Russia had woken up to find their bank accounts and pension funds simply gone – eradicated by a falling currency or stolen by mobsters who laundered money back into big New York Fed member banks for reinvestment to fuel the debt bubble.Reports of politicians, government officials, academics, and intelligence agencies facilitating the racketeering and theft were compelling. One lawyer in Russia, living without electricity and growing food to prevent starvation, was quoted as saying, “We are being de-modernized.”Several years earlier, I listened to three peasant women describe the War on Drugs in their respective countries: Colombia, Peru, and Bolivia. I asked them, “After they sweep you into camps, who gets your land and at what price?” My question opened a magic door. They poured out how the real economics worked on the War on Drugs, including the stealing of land and government contracts to build housing for the people who are displaced.At one point, suspicious of my understanding of how this game worked, one of the women said, “You say you have never been to our countries, yet you understand exactly how the money works. How is this so?” I replied that I had served as Assistant Secretary of Housing at the US Department of Housing and Urban Development (HUD) in the United States where I oversaw billions of government investment in US communities. Apparently, it worked the same way in their countries as it worked in mine.I later found out that the government contractor leading the War on Drugs strategy for U.S. aid to Peru, Colombia and Bolivia was the same contractor in charge of knowledge management for HUD enforcement. This Washington-Wall Street game was a global game. The peasant women of Latin America were up against the same financial pirates and business model as the people in South Central Los Angeles, West Philadelphia, Baltimore and the South Bronx.Later, courageous reporting by Naomi Klein and Greg Palast confirmed in detail that the privitization and economic warfare model I discussed in London had deep roots in Latin America.We were experiencing a global “heist”: capital was being sucked out of country after country. The presentation I gave in London revealed a piece of the puzzle that was difficult for the audience to fathom. This was not simply happening in the emerging markets. It was happening in America, too.I described a meeting that had occurred in April 1997, more than four years before that day in London. I had given a presentation to a distinguished group of U.S. pension fund leaders on the extraordinary opportunity to reengineer the U.S. federal budget. I presented our estimate that the prior year’s federal investment in the Philadelphia, Pennsylvania area had a negative return on investment.We presented that it was possible to finance places with private equity and reengineer the government investment to a positive return and, as a result, generate significant capital gains. Hence, it was possible to use U.S. pension funds to significantly increase retirees’ retirement security by successfully investing in American communities, small business and farms — all in a manner that would reduce debt, improve skills, and create jobs.The response from the pension fund investors to this analysis was quite positive until the President of the CalPERS pension fund — the largest in the country — said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.”Sure enough, that fall, significant amounts of moneys started leaving the US, including illegally. Over $4 trillion went missing from the US government. No one seemed to notice. Misled into thinking we were in a boom economy by a fraudulent debt bubble engineered with force and intention from the highest levels of the financial system, Americans were engaging in an orgy of consumption that was liquidating the real financial equity we needed urgently to reposition ourselves for the times ahead.The mood that afternoon in London was quite sober. The question hung in the air, unspoken: once the bubble was over, was the time coming when we, too, would be “de-modernized?”In 2009 — more than seven years later — this is a question that many of us are asking ourselves.
In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.The presentation documented my experience with a Washington-Wall Street partnership that had:Engineered a fraudulent housing and debt bubble; Illegally shifted vast amounts of capital out of the U.S.; Used “privitization” as form or piracy - a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder. Other presenters at the conference included distinguished reporters covering privatization in Eastern Europe and Russia. As the portraits of British ancestors stared down upon us, we listened to story after story of global privatization throughout the 1990s in the Americas, Europe, and Asia.Slowly, as the pieces fit together, we shared a horrifying epiphany: the banks, corporations and investors acting in each global region were the exact same players. They were a relatively small group that reappeared again and again in Russia, Eastern Europe, and Asia accompanied by the same well-known accounting firms and law firms.Clearly, there was a global financial coup d’etat underway.The magnitude of what was happening was overwhelming. In the 1990’s, millions of people in Russia had woken up to find their bank accounts and pension funds simply gone – eradicated by a falling currency or stolen by mobsters who laundered money back into big New York Fed member banks for reinvestment to fuel the debt bubble.Reports of politicians, government officials, academics, and intelligence agencies facilitating the racketeering and theft were compelling. One lawyer in Russia, living without electricity and growing food to prevent starvation, was quoted as saying, “We are being de-modernized.”Several years earlier, I listened to three peasant women describe the War on Drugs in their respective countries: Colombia, Peru, and Bolivia. I asked them, “After they sweep you into camps, who gets your land and at what price?” My question opened a magic door. They poured out how the real economics worked on the War on Drugs, including the stealing of land and government contracts to build housing for the people who are displaced.At one point, suspicious of my understanding of how this game worked, one of the women said, “You say you have never been to our countries, yet you understand exactly how the money works. How is this so?” I replied that I had served as Assistant Secretary of Housing at the US Department of Housing and Urban Development (HUD) in the United States where I oversaw billions of government investment in US communities. Apparently, it worked the same way in their countries as it worked in mine.I later found out that the government contractor leading the War on Drugs strategy for U.S. aid to Peru, Colombia and Bolivia was the same contractor in charge of knowledge management for HUD enforcement. This Washington-Wall Street game was a global game. The peasant women of Latin America were up against the same financial pirates and business model as the people in South Central Los Angeles, West Philadelphia, Baltimore and the South Bronx.Later, courageous reporting by Naomi Klein and Greg Palast confirmed in detail that the privitization and economic warfare model I discussed in London had deep roots in Latin America.We were experiencing a global “heist”: capital was being sucked out of country after country. The presentation I gave in London revealed a piece of the puzzle that was difficult for the audience to fathom. This was not simply happening in the emerging markets. It was happening in America, too.I described a meeting that had occurred in April 1997, more than four years before that day in London. I had given a presentation to a distinguished group of U.S. pension fund leaders on the extraordinary opportunity to reengineer the U.S. federal budget. I presented our estimate that the prior year’s federal investment in the Philadelphia, Pennsylvania area had a negative return on investment.We presented that it was possible to finance places with private equity and reengineer the government investment to a positive return and, as a result, generate significant capital gains. Hence, it was possible to use U.S. pension funds to significantly increase retirees’ retirement security by successfully investing in American communities, small business and farms — all in a manner that would reduce debt, improve skills, and create jobs.The response from the pension fund investors to this analysis was quite positive until the President of the CalPERS pension fund — the largest in the country — said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.”Sure enough, that fall, significant amounts of moneys started leaving the US, including illegally. Over $4 trillion went missing from the US government. No one seemed to notice. Misled into thinking we were in a boom economy by a fraudulent debt bubble engineered with force and intention from the highest levels of the financial system, Americans were engaging in an orgy of consumption that was liquidating the real financial equity we needed urgently to reposition ourselves for the times ahead.The mood that afternoon in London was quite sober. The question hung in the air, unspoken: once the bubble was over, was the time coming when we, too, would be “de-modernized?”In 2009 — more than seven years later — this is a question that many of us are asking ourselves.
Subscribe to:
Posts (Atom)
