Join a New Way Forward Protest on April 11th to Break up Banks "Too Big to Fail"

By Donny Shaw

BuzzFlash Note: BuzzFlash fully supports the "New Way Forward" movement to fundamentally change the finance/banking system in the United States and to punish those who made our taxpayers pick up a $2 trillion tab for fraud, abuse and greed. Citizen protest is a vital part of a vibrant and progressive democracy. Join the "New Way Forward" demonstrations on April 11th.

Another day, another sign that the people in charge of our economy are looking out for the banks, not the public. The Financial Accounting Standards Board's decision on Thursday to let banks report the value of their toxic assets however they choose, regardless of what anyone is actually willing to pay for them, only serves to increase secrecy and manipulation in the financial sector. It's a politically motivated decision that gives banks a quick way to inflate their balance sheets without doing anything to address the underlying problems with their holdings.

The AIG bonuses, the Geithner subsidy plan, the mark to market changes -- Americans are seeing the pattern of protection for Wall Street, and we're angry. But unlike the media's fantasy of an irrational working-class mob seeking revenge on the first Wall St. executive they can find, our anger is targeted at the systematic injustices in America right now that continually provide for the financial elite and neglect the millions unemployed and foreclosed. If we are going to fight back, we are going to go straight at the root of the problem -- the collusion between Wall Street and Washington that leaves the rest of us behind.

As the banks grew bigger and bigger until they were "too big to fail," they also became so politically powerful that they are now immune to ordinary actions from our government. Decades of unprecedented campaign funding and political access have led to a gray area between Washington and Wall St. where it's uncertain who is on which side and people move back and forth fluidly between the two realms. Bankers have ingratiated themselves in our politics and sold to both major parties the belief that what is good for them is also good for the public at large. Now we have let this free-market fundamentalism run its course and it has led America to a complete economic meltdown. But the people in charge of our government and our economy have built their power on this intertwining of interests and they remained determined not to shake up the system.

They only way to end the bonus loopholes for executives, the blind-eye regulatory system and the trickle-up profit machine is for the bankers in power to be removed and the banks that caused this mess to be broken up. They need to be taken out of the equation so our policy-makers can operate with political independence to make decisions that protect the public. Can this be done? In a word, yes. It will be an epic struggle, but if we the people can find the courage to trust our guts and take on the economic injustices that have become so painfully obvious, this is precisely the kind of thing that America can overcome.

On April 11th, people across the country will take to the streets to show President Obama and Congress that there is political support for a progressive approach to fixing the economy. Fourteen days ago, a new grassroots initiative to demand structural change in the banking sector -- A New Way Forward -- was launched. In just two weeks, the group has grown from four people to over six thousand. Individuals have stepped up in 58 cities to organize protests to break up the banks; thousands have pledged to attend. Here is the plan:

NATIONALIZE: Insolvent banks that are too big to fail must incur a temporary FDIC intervention. No more blank check taxpayer handouts.

REORGANIZE: Current CEOs and board members must be removed and bonuses wiped out. The financial elite must share in the cost of what they have caused.

DECENTRALIZE: Banks must be broken up and sold back to the private market with new antitrust rules in place -- new banks, managed by new people. Any bank that's "too big to fail" means that it's too big for a free market to function.

Breaking up the banks is not a contrarian call to protest, it is a practical step our country must take right now if we are to have the independence to rebuild our economy so that it is sustainable, free, and in the interest of all people. The people in charge of our country consider these issues of decentralization secondary. They are determined to reset the status quo of the banking sector as soon as possible, and then take a stab at regulation. But if we re-inflate the banks without addressing the fundamental issues plaguing our economic and political systems, our chance as a country to tackle the power that the financial industry holds over our democracy will pass us by. The collusion between policy makers and bankers will be further cemented and we will have to wait until the next crisis (which will be much worse, and soon) takes its toll on working Americans.

A BUZZFLASH GUEST COMMENTARY 

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

What Nobody's Saying: The Bailout Will Kill the Dollar

Many Americans will find that they can no longer live here, but the dollar will be so weak, we won't be able to move and live out our lives away from the war-mongering, fear-mongering, deceptive U.S. government and their sociopathic pals on Wall street.


Dave Lindorff

What nobody in the corporate media is mentioning amid all the blather about the $700-billion Paulson bailout proposal is the impact it will have on the U.S. dollar.

We are told that this huge gift to the financial sector -- the assumption, at top dollar, of all the bad debt they've piled up -- will be at taxpayer expense, but that's only the half of it. (Really only the quarter of it because since the U.S. government is technically bankrupt already, spending more than it takes in each year, all that money will be borrowed, and will be added to the national debt, meaning that just as the real cost of the $500-billion Iraq War is closer to $2 trillion, the real cost of the $700 billion bailout will be more such as $1.5-2.5 trillion.)

But besides the direct bill handed to taxpayers for this gigantic con, there is the fact that adding that much to the national debt is also going to drive the dollar down precipitously against foreign currencies. We're already seeing that happen, even while they're just talking about the bailout. The dollar is falling against all major currencies -- the euro, the yen, the renminbi and the British pound. And it will continue to fall as the details of the bailout come out.

This will add to already powerful pressures in countries such as Saudi Arabia and China, which hold huge quantities of U.S. dollars and U.S. dollar-denominated debt, to shift out of dollars and into other currencies -- particularly the euro and the yen. Last week, an article in China's People's Daily, which like Pravda in the old Soviet Union, is the official voice of the leadership in China, called for just such a move. Russia is also calling for an end to the dollar as the underpinning of the global economy.

For some years now, many economists have been predicting an end to the dollar as the world's reserve currency, but this latest plan by the U.S. Treasury will push such a shift forward from "some day" to "now."

As long as the dollar has been the reserve currency -- the currency in which key commodities such as gold or oil were priced, and the currency that exporting nations stocked in their treasuries as a store of value -- it was protected against collapse. But once it loses that status, there will be nothing to prop it up any longer, and it will quickly slide to a value that it deserves.

We got an inkling of what is going to happen today, as crude oil prices leapt in the short time it took me to research and write this essay (less than an hour!) by 25%, the biggest jump in the history of the oil market. This timely vindication of my point was purely a move caused by loss of confidence in the dollar. There was no oil supply disruption. In fact, demand for oil has been sinking as the economic crisis grows. Oil producers and traders simply realized that the dollar is going poof, so they
radically jacked up the cost of oil in dollars.

If you want to see what that proper value is, look to the currencies of the debtor nations -- countries such as Mexico or perhaps Mozambique. A nation that makes almost nothing, and that imports most of its needs, cannot have a strong currency.

This might not matter much if we had a functioning domestic economy, where people could find the goods and services they needed without turning to sources from abroad. A big country such as the U.S. could simply turn inward and function on by its own domestic economic standards.

I remember back when the former Soviet Union was in a state of economic and political free fall in the early and mid 1990s, the currencies of the constituent countries, such as Russia, Ukraine and Belarus, had collapsed to virtual worthlessness on the international market. A Byelorussian friend, an engineering professor from Minsk, living and working near me in China at the time, explained that although when he traveled the world, he felt such as a pauper, things weren't so bad back home in Belarus, where he and his family would go in the summer. "My apartment only costs a few dollars a month to rent," he explained, "and our food is bought on the local market using rubles, so it is very affordable." The same was true for other needs, such as clothing and books for school, he explained. The only problem was buying gas for his Russian Volga. "Gas," he explained, "is priced as an international commodity, so it takes me one month's wages in Belarus to buy the gas to drive once to and from our country dacha."

You can start to see the problem. Since agriculture has been killed off in most of the U.S., in favor of giant agribusiness enterprises situated in the Western part of the country and some parts of the Midwest, most people elsewhere will not have local produce available, and the cost of transporting food from California to places such as New York or Pennsylvania will be prohibitive once the dollar collapses, since oil is priced internationally. Meanwhile, goods such as TV sets, computers, phones, cars (or at least the key components of cars), clothing, etc., are no longer even made in the U.S., and will thus be completely unaffordable. As for the service jobs that are supposed to have replaced our old manufacturing sector, no one will be interested in buying what they're offering, because they'll be scrimping just to buy the key staples they need to survive, so of course joblessness will soar.

Eventually, of course, entrepreneurial minded people will begin establishing local farms again where they once flourished generations ago, and small factories will be built to provide key essentials, but all this will take time, and will have to cater to a market of people operating at a much lower standard of living.

The banking sector, meanwhile, which is the proximate cause of this monumental disaster, won't mind any of this, for it will continue operating on the international stage, shifting its focus to lending money (no longer dollars, though), to growing economies in Asia, Latin America, and Eastern Europe. And this is what, in truth, the "rescue" of Wall Street is all about.

It's not about saving Main Street, as Paulson claims. Main Street, under the bailout, is toast. It's about helping the banks and investment banks and insurance companies that brought on this crisis to ride it out in style, their astronomical losses bankrolled or absorbed by the American public, so that they can shift their operations overseas and continue with their rape and pillage of the global economy.

The U.S. will be left behind, a smoking ruin, with Americans, such as Weimar Germans before them, going shopping with wheelbarrows full of worthless green paper to exchange for a few days' groceries.

DAVE LINDORFF is a Philadelphia-based journalist and columnist. His latest book is "The Case for Impeachment" (St. Martin's Press, 2006 and now available in paperback edition). His work is available at www.thiscantbehappening.net.


(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

A Time For Transformation

The type of people who make it to the corporate big-leagues are, more often than not, Narcissistic, sociopathic or functional psychotics. Expecting these people to self-regulate is like expecting Ted Bundy to self-regulate.

The more wealth and power they have the more dangerous they are to the nation and her people.

If the jerks who went batshit crazy on Wall street with their various schemes for personal enrichment are allowed to simply walk away with all the loot they have garnered from their irresponsible if not criminal behavior, nothing good can come of this BushCo scheme/bailout for one company after another, because they are too big to fail.

"Voodoo economics" has been a disaster for this nation and her people, with the exception of maybe 1% of the most wealthy.

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You hear that implosion reverberating through financial markets? It's the sound of decades of conservative ideology collapsing.

This raises many pressing questions, both short- and long-term. What's the deal with the Paulson deal? There's a lot of well-aimed skepticism about this plan, and myself and my EPI colleagues will be commenting on it all week (I'm not liking what I'm seeing--not enough safeguards to protect taxpayers from banks perfectly happy to dump toxic debt on the government; not enough quid pro quos for Main Street). But for now, I'd like to focus on an even more important question: what next?

The week that just ended revealed the myth of market fundamentalism: the notion associated with mainstream, Milton Freidman'esque economics, and amplified by anti-government conservatives that unfettered markets will provide society with the best outcomes. Such simplicity, such elegance...such nonsense.

For many of us, it didn't take a market failure of the magnitude we've witnessed in recent weeks to belie this myth. We've been documenting the slow bleed of much subtler market failures for decades. Most recently, we've stressed that despite years of growth before the recent downturn, the real income of middle-class working-age families fell $2,000. Poverty rose. The share of the population without health coverage went up. For the first time in years, the rate of home ownership declined.

If that's Bush's ownership society, please don't sign me up (in truth, it's too late to refuse membership: as taxpayers, we're now proud owners of a growing pile of toxic debt--thanks, George).

But slow bleed or sudden shock, the idea that I've described as YOYO (you're on your own) economics is seriously on the ropes. I still encounter some old school ideologues on the CNBC airwaves, but they're fewer and more contrite, and, interestingly, they generally support the bailouts. Apparently, their mantra is actually "you're on your own; we're lookin' for a bailout." It's privatize the profits, socialize the losses; patriotism for the masses, socialism for the rich.

Such chatter will always be heard, but progressives have a rare opportunity to change the economic debate in this country by injecting some glaringly obvious truths into the fray, such as:

--Deregulated markets cannot police themselves; they tend toward speculation, vastly under-priced risk, and deeply damaging bubbles;

--An economy that generates growth while leaving most families behind is a broken economy;

--We can neither achieve broad prosperity nor compete globally without robust growth in key sectors which we have ignored or underfunded, including manufacturing, green production, and cradle-to-retirement public education; crafting evermore clever financial instruments will not pave the way to dependable, broadly shared growth;

--No private sector firm should be too big to fail; any firm of that magnitude must be nationalized;

--Capital markets are dysfunctional; borrowing and lending standards are ignored; lax capital requirements lead to constant over-leveraging; shadow accounts thwart transparency;

--We apparently can quickly find (or borrow) the money to do the stuff the authorities deem necessary, be it war or bailout; thus, we can also find the money we need for investment in people, from health care to education to infrastructure, etc.

--Supply-side, trickle-down economics does not work; it exacerbates already excessive levels of market-driven inequalities and defunds government, which leads to:

--Clearly, we need government to be amply funded; as is the case today, we will always turn to federal government to meet the toughest challenges, and if the money isn't there, we'll borrow from the future. This means taxes cannot only be lowered; they must sometimes be raised.

--For decades, under the spell of mainstream theories like "rational expectations" (bubbles can't form because prices can't diverge from reality for long), economists and policy makers have missed almost every big market failure, including the last two bubbles (in IT and housing). Government intervention is only "distortionary" in these models, adding the anti-gov't bias since Reagan. We desperately need policy makers and their economists to be much better analysts of markets and how they fail. It is not an exaggeration to state that much of what's gone wrong in the current case could have been avoided by better oversight, common-sense regulation, and clear-eyed analysis of economic indicators that should not have been missed.

If I were Martin Luther, I'd hammer such a list--and this is just a rough draft--feel free to edit and comment--to the doors of the Federal Reserve, but I'd probably get arrested or worse the minute I took out my hammer.

The point is that these are potentially transformational times.

Transformations evolve out of crises. As the great Robert Kuttner stresses in his new book, the big social movements that have transformed our politics have often resulted from the collision of brave, visionary leaders and major upheavals: Lincoln and the Civil War, FDR and the Depression, Johnson and the Civil Rights movement. Kuttner believes the stage is set for the next transformation, this time from a broken economy that threatens American prosperity to one that works for everyone.

After reading Bob's book, I sent him a note pointing out that it might well be a lot harder to motivate major change given the slow bleed we've experienced versus civil war, economic depression, or mass protests and burning cities.

But that was before the bust of the last few weeks, before the onset of a crisis of capitalism that is widely described as the worst market meltdown since the Depression, before the most aggressive government intervention into the economy I've seen in my lifetime. Maybe these recent events fail to rank with those motivating Kuttner's insights, but they're getting awfully close.

What has to happen to realize the transformational potential of the moment? It's quite amazing that this is occurring during the very moment in a pivotal election when a) the electorate is starting to pay attention, and b) the economy is the dominant issue.

The candidates are already grappling with these issues, both stressing some versions of the lessons I noted above, which is a nice way of saying McCain is adopting the mantel of reformer and regulator in order to convince pissed-off voters of his midnight conversion from a legislator who accommodated a lot of this damage to one who will fix it. But he's so changeable these days, even uninformed voters are seeing there's not much to to his populist railing. It's all starting to sound like a pretty unhinged "I'll say anything to get your vote!"

Obama's got a head start. He's much less ideological about all this stuff, with a strong pragmatic bent and a willingness to listen to diverse views. He's also been talking for a while about the need to regulate financial markets, and his ideas are sound. Had they been in place, a lot of this mess would not have occurred.

But, as Kuttner stresses, that doesn't mean he will be transformational, or recognize the importance of injecting views like those above into the heart of the national debate. He certainly has that capacity--the vision, the intellect, and the ability to present the big picture in an extremely compelling way. This may be one of those times when the collision of a great leader and cataclysmic events can turn the tides.

Or not. It all hinges on the next few days, weeks, and months.

Jeez...watching history unfold in front of you like this is sure worth the price of admission, ain't it?


(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

Popular Scams of the Rich and Famous

By Richard Backus


21/09/08 "ICH" --- There are an ever-increasing number of linkages between politicians, big businesses, and rich individuals designed to promote their joint prosperity at the expense of the general public. Money flows in both directions between these “players” under various “pay for play” schemes. Because they unfairly absorb federal tax revenue or deprive the general public of legitimately earned benefits, I refer to these schemes as “scams'. Most are technically “legal' being based upon law or statute, or founded upon government policy and practice, but have been set up in ways designed to benefit favored individuals. In most cases, these practices are promoted by Republican politicians serving their primary clients, rich individuals and “big business”. Hopefully, in the coming elections, legislators will be chosen which will have the courage to rectify these abuses. The following are just a few of the more popular scams.


Social laws, uncertain as to constitutionality, have been passed to control the general populace, and are generally ignored by those creating them, as evident in many recent court cases. Prostitutes do quite a brisk business during political party conventions, and a “madam” recently interviewed claimed that the "family values" group, the Republicans, are the the best customers. But all this has been pretty well hidden from public awareness by the establishment media, and grudgingly and belatedly disclosed, if at all, after previously promulgated on blogger sites. This situation was not reported during the 2004 conventions by a single major U.S. media, and I read about it only in foreign news sources, the Guardian and Reuters. So much for the fearless American press! But news media in the U.S . practice self-censorship because they are fully aware of what they can and cannot report. Anything critical of the rich and famous is forbidden.


There has been no effort to contain medical expenses that have caused a great many of the financial problems currently plaguing the U.S. The AMA and ADA have so well financed the campaigns of our legislators that we are now facing multiple financial crises substantially directly cause by health care costs. The 2007 federal government deficit of approximately $180 billion would have become a $300 billion surplus simply with a reform of this sector. Americans pay, on average, nearly $7,000 per person for medical costs, whereas citizens in the next-highest-cost developed pay around $3,200 per person. Bringing the U.S. health costs in line with those of the rest of the western world would save U.S. citizens directly $720 billion and the federal government $480 billion more. The U.S. physician's claim is that costs are so high because we get the best health care in the world. This is a real con job. The World Health Organization ranks the U.S. 26th in quality of health care of the advanced countries. The major problem is that a monopoly has been created by limiting the number of teaching hospitals as well as the number of students who are entitled to enroll. The selection process for medical school positions involves the usual custom of picking predominantly children of those politically connected. The "special" qualifier for positions in the few medical schools places offered, that determines appointment more often than demonstrated academic excellence, is participation in extra-curricular activities indicating "leadership" abilities. This is a standard trick for all appointments in this vast conspiracy, made to benefit unqualified candidates supported by political elites. It avoids the serious business of determining the truly deserving (who are frequently passed over because they are considered “nerds” (because they study so much)) and for admission committees to give preference to candidates whose academic performance is not quite up to par. George W. qualified as a possible “leader” because he was a cheerleader at Andover, and others are selected because of their participation in college political activities. When training people for highly technical and critical jobs (e.g., physicians), the last thing the candidate should be doing is playing political tricks or scheming for political office. They should be studying.


The whole system of "globalization" is simply a way to exploit workers worldwide thereby maximizing the profits of essentially western-owned multinationals. The results are now coming in, as demonstrated by the current disinflation in the western countries. By allowing multinationals special tax breaks and accounting practices the U.S. government has encouraged the transfer of almost all high wage U.S. jobs overseas to low wage (exploited) workers. By simply calling these lost jobs "low skilled" they have convinced U.S. workers that they really deserve less for their labor, which in many cases were the most stressful and demanding in the country, Soon middle level professional jobs will be moved overseas as well, and similarly described, no doubt, as "low skilled". This includes engineering and product design, paralegal and brokerage back office jobs, and accounting and auditing jobs as well. Even radiologists will miraculously end up as "low tech" workers.


Still extant farm subsidies unfortunately not only violate those “economically sacrosanct” principles of globalization but result in higher prices for the American consumer as well as increased cost to the American taxpayer. As a bonus, they frequently produce serious economic consequences for other "global" players, especially for our South American "partners" (and incur their resentment).


The U.S. government has made no effort whatsoever to assist in providing support for displaced U.S. workers by demanding reciprocity of employment opportunity with those countries whose citizens are flooding the U.S. labor market. While surveying foreign papers in Europe and Australia/New Zealand for jobs in the IT business, I found loads of ads promising unlimited amount of IT opportunities in the U.S. But ads for IT jobs in these same countries all ended with statements that these local jobs are reserved for their own citizens. Recently the U.S. government passed an amendment to its visa rules allowing other country's workers to enter the U.S. for 6 months without a prior job offer. Most other western countries did the same I believe, offering job opportunities for U.S. workers. But there was a limit to the ages of these workers, 27 years I believe, suspiciously approximating the average age of the children of our current members of Congress. These job opportunities can not possibly benefit those most damaged by U.S. outsourcing policies, those who had irreplaceable (at their ages) experience, without finances to retrain, and facing huge and continuing family bills in the U.S. They still have no realistic possibilities to work overseas even though the great god “globalization” based its legitimacy on the free movement of capital and labor. What a joke!


The entire USAID program has become an excellent way to feed money to political supporters. This scam involves granting taxpayers money as USAID “aid money” to friendly foreign governments with "tied" aid (agreements to purchase in most cases U.S.-made products and services). The so-called "aid" money never reaches the country supposedly receiving it. The "receiving" country gets products and "advice" from U.S. corporations and individuals selected from the U.S. governments "preferred list" of suppliers. The organizations providing these services and products are basically weapons suppliers and "international" accounting and law firms providing "advice" to the recipient country's government. These “select” suppliers and “advisers” are, of course, those companies and individuals who are the major suppliers of campaign finance funds. The recipient country gets weapons systems and armaments used by the local military to control discontented locals (and also expected to support U.S. regional political goals). The result is a lot of money is transferred to American multinationals and private companies located in the U.S. with the bill payed out of taxpayers funds. This is an excellent way to create campaign finance funds with the bill paid by U.S. taxpayers.


Flight of capital from the U.S., (unrestrained by laws regularly established by other more prudent governments) is increasing the risk of a banking default in the U.S. and a drastic drop in the dollar. It is accelerating at the same time that foreigners dollar holders (private and public) are thinking twice about keeping their funds here because the U.S. government has shown no interest or willingness to restrain this process.


The much ballyhooed one-man, one-vote election under a democracy simply does not exist. With the caucus system still being practiced in many states, the candidates the public finally gets to vote for (essentially one of 2 choices) have been chosen by the powers-that-be within each state, and under these conditions, the private citizen's vote is practically meaningless.


Most of the efforts of the U.S. government to contain Communism have involved the setting up of American-friendly foreign governments who were willing to turn a blind eye to exploitation of their country's resources and populace by U.S. corporations. To make matters worse, the U.S. Government, which has established these regimes, insist on calling the resulting U.S.-friendly governments (oligarchies of the rich at best) as "democracies" when,in reality, the government which it replaced was far more democratic than the one established by the U.S. government. This was all done under the pretext of constraining Communism, but was also a handy scheme for U.S. businesses to gain possession or control of the few assets these poor countries possessed and a new supply of exploitable local workers. Now that Communism is no longer a realistic treat there is no longer any pretext for doing this. No governments should be overthrown by actions of the U.S. government regardless of its having a political or economic system inimical to presumed western interests, and certainly no one should be going around bragging about setting up a "democracy" when the opposite occurred.


Bidding on all levels of government contracts is also riddled with ways to allow the contract manager to give the contract to a friend. If the manager's friend is not the low bidder, the manager can simply reopen the bidding on any number of pretexts and advise his friend what he needs to bid to get the contract. Bids can be thrown out as "non-serious" bids without notice, on the basis that the bidder is incapable of performing at that price. This device is used when the winning bid is so low that even the manager's friend can't compete even knowing the prospective winning bid price. This is because he is really a 'prime contractor', won't be doing the work, and needs extra funds to cover his “cut” and to cover possible gratuities for the contract manager. The government has even set up a separate agency, at taxpayer expense, to "prove" this type of fraud can not occur. All the public exposure over the years of these practices puts the lie to the honesty of this organization.


The FED's constant claim of incipient inflation over the last 18 years (when none has ever materialized) has finally resulted in our current economic crises. The latest FD-sponsored recession might well be the final straw that breaks the back of U.S. consumers. There is a serious "moral hazard" involved in improper disclosures of these continuing, unpredictable, and totally uncalled- for adjustments in interest rates as well.


The federal government has been playing footsie with fascism for quite a long time, supported only by the inability of the general public to recognize it. Ecclesiastic appointments, corporate management, charity, "brain trust" ,foundations, university appointments, and even scholarship awards are controlled by political elites, with the consequent assurances that these appointees will play ball with the politicians and their “sponsors”. The Pols now essentially control everything under the direction of the rich and famous.


The “justness” of the U.S. legal system can be compromised by anyone with unlimited funds. The Constitution certainly would not have countenanced the use of multiple lawyer (with political connections) for any one case, for jury selection advisors, and the abusive use (and misuse) of expert witnesses.


Foundations, “brain trusts”, charities, and other non-profits are the most dangerous potential source of political influence-buying of all these “scamers”. Foundations, formed by individuals to avoid inheritance taxes, can provide jobs, grant contracts, and purchase goods and services from a large number of politically-sponsored individuals and companies. They pay no taxes even when they accumulate funds, which they call “surplus”. These surpluses can be invested with the proceeds not subject to taxes. Their employees are well compensated and live quite luxuriously while on 'company business'. Contract awards and grants tend be generous, and the foundations can purchase supplies and services without oversight. Most recipients of this largess are politically-connected and are expected to promote political goals and to funnel funds to political campaigns.


There are literally hundreds of thousands of other varieties of non-profits, categorized as NGOs, which conduct their businesses in essentially the same way. They are set up to perform certain socially-beneficial services, but after all the above-mentioned expenses, only a small percentage of their income are used in this way. Typically, 30 percent of their income (tax deductible write offs from corporations and individuals, and government giveaways) are spent on salary and payroll taxes to top employees and their generous “business expenses” (5-star hotel accommodations, chic restaurant and 1st class air travel costs). The remaining 70 percent can be used for “public relation fees” (to supporters) and some is even spent on legitimate promotion programs. What is left, perhaps 50 percent, can, by the “50 percent rule” be passed on to another tax-exempt having similar expenses, with the result that the claimed public-service, used to obtain tax-exempt status, can end up with practically nothing. Certain charities are particularly offensive perpetrators of this same scheme, disbursing for political purposes the monies donated for the most-needy individuals of all, the poor and defenseless, mostly children. Principles of those organizations practicing this blatant “welfare to the rich” scheme should be, but seldom are, prosecuted.


All in all, most of the American populace's problems derive from a lack of understanding of how their job opportunities and financial success are being jeopardized by these practices. A great deal of the blame for these scam's success can be attributed to the establishment media's self-censorship on these important issues, with a consequent inability of the public to correctly determine what is going on. Thankfully, there is now a self-appointed group who are now providing the news so instrumental in allowing the public to make necessary political decisions. They are called "blog sites" and are America's version of the old soviet "samizdat". Hopefully the government can be prevented from meddling with them.


(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

The yield on 3-month U.S. Treasuries....Way Down

Wed Sep 17, 2008 1:00pm EDT

NEW YORK, Sept 17 (Reuters) - The yield on 3-month U.S. Treasury bills sell to 0.02 percent early afternoon New York trade on Wednesday amid investors' panicked scramble into the safe haven of ultra short-dated government securities, traders said.

The 3-month U.S. Treasury bill yield "last traded at 0.02 percent as an actual trade and may have traded negative earlier today," said Sean Murphy, Treasuries trader at RBC Capital Markets in New York, shortly after 12:30 p.m. EDT (1630 GMT).

The last time the 3-month U.S. T-bill yield was at or below zero was in January 1940, said Bryan Taylor, chief economist with Global Financial Data in Los Angeles.

Murphy cited "a flight to quality into the Treasury bill market." "People are just panicking and they just want their principal," he said.

Andrew Brenner, analyst at MF Global Inc, said the 3-month bill traded at 0.02 percent.

"Probably there's disappointment in the Fed's decision (to hold interest rates unchanged) yesterday and what's transpiring is that banks are just pulling back and not lending and not being able to get the funding they need," Murphy said.

(Reporting by John Parry; Editing by Chizu Nomiyama)

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The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

Cool Gadgets For The New Depression

Submitted by BuzzFlash on Wed, 09/17/2008 - 2:20pm. Tony Peyser

Stuffing cash in mattresses is old school
Here's a new idea that's swell; so
What about specially made mattresses
Equipped with zippers or Velcro?

VERSE CASE SCENARIO

Tony Peyser provides daily poems and weekly cartoons for BuzzFlash and also writes the BuzzFlash column, "Blue State Jukebox." He was a daily cartoonist for the L.A. Times from 1994 to 1997. You can e-mail Tony at tonypeyser@yahoo.com.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

American Capitalism In Free-fall

AIG at Risk; $700 Billion In Shareholder Value Vanishes

By Glenn Kessler and David S. Hilzenrath
Washington Post Staff Writers
Tuesday, September 16, 2008; A01

The Federal Reserve and Treasury Department struggled yesterday to contain the fallout from an upheaval among the country's largest investment banks as they moved on to their next challenge -- engineering a $75 billion private rescue of the nation's largest insurance company.

The insurer, American International Group, faces a cash crunch that grew more severe last night when the major credit-rating agencies warned investors that the company could have greater difficulty in meeting its obligations. It was unclear whether the downgrades by the agencies would force AIG to post additional collateral at a time when it is having difficulty raising money.

Investors sent the Dow Jones industrial average plunging more than 500 points, or 4.4 percent, for the biggest point loss since the Sept. 11 terrorist attacks seven years ago. About $700 billion in shareholder value disappeared in a single day of trading.

The wrenching reshaping of Wall Street -- which over the weekend included the demise of one big firm and the sale of another -- also pushed the value of the dollar lower. It sent the price of crude oil below $100 a barrel for the first time since Feb. 15 as traders bet a global downturn would reduce the demand for energy.

Wall Street's biggest shakeout since the Great Depression stems from a collapse in housing prices, which spread losses among firms that bet on securities linked to mortgages. Twice in the past year, regulators intervened to save financial firms and prevent further erosion in the housing markets. But over the weekend, officials drew the line at rescuing the storied investment bank Lehman Brothers, which yesterday filed for bankruptcy protection.

"We had a very, very tough day on the market," said Art Hogan, chief market analyst at Jefferies & Co. "Investors are anxious about the spillover effect of Lehman and what is the next shoe to drop."

As investors digested the news, some economists worried whether Wall Street's troubles were spilling over into other parts of the economy, renewing pressure on the Federal Reserve to cut interest rates when it meets today.

Fed leaders, however, believe it is too early to tell what the impact might be, and they are unlikely to cut rates for now.

In the meantime, Treasury Secretary Henry M. Paulson Jr. signaled yesterday that taxpayer funds could still be used broadly to "maintain the stability and orderliness of our financial system" but that he was pressing healthier Wall Street firms and commercial banks to join together to assist in rescuing individual firms -- much like the purchase of Merrill Lynch on Sunday by Bank of America.

Goldman Sachs, for instance, was asked by the Federal Reserve Bank of New York to help AIG, a $1 trillion-asset insurance company that serves 74 million consumers in 130 countries. AIG had been heavily involved in the business of issuing complex insurance contracts to investors in securities backed by mortgages, and the collapse of subprime and other home loans threatened to hobble the company and trigger a chain reaction in the financial system.

J.P. Morgan Chase, which is serving as AIG's financial adviser, was seeking support for a credit line of $70 billion to $75 billion that would involve multiple lenders, spreading the risk, according to two sources familiar with the discussions. They spoke on condition of anonymity because the talks were private.

New York's governor, meanwhile, said his state would allow AIG to use $20 billion from its own insurance subsidiaries to ease a financial crunch. By posting the assets as collateral, AIG can borrow money to run its day-to-day operations, Gov. David A. Paterson (D) said. The move required special dispensation from state insurance superintendent Eric R. Dinallo, who is responsible for protecting the stability of AIG insurance companies in New York and their policyholders.

"It's no secret that the company has been talking to the Feds and talking to us," Paterson said. "They asked us what assistance we could provide, and this is our idea."

A deal to rescue AIG may have to come quickly now that Standard & Poor's and Moody's Investors Service have lowered their credit ratings for the firm, should the decision force AIG to boost its collateral to meet its obligations.

The Fed has maintained that it will not offer AIG a bridge loan or other direct injection from the government, according to sources familiar with the conversations. AIG executives huddled at their Manhattan headquarters over the weekend with potential private investors including J.C. Flowers, Kohlberg Kravis Roberts, and TPG as well as Paterson's representatives, including Dinallo; AIG was also talking to Warren E. Buffett's Berkshire Hathaway.

"I don't think anybody is going to lend that amount of money at terms that are anywhere near economically feasible without a backstop, without some form of guarantee, say by the Fed or another party," said Donn Vickrey of Gradient Analytics, who has been warning of trouble at AIG for months.

Vickrey said it appeared the Fed was playing a game of chicken with Wall Street, trying to pressure firms with a big stake in AIG's continued viability to step up to the plate.

AIG's stock fell 61 percent, to close at $4.76, yesterday.

At the same time, the Fed over the weekend made it easier for investment banking firms to borrow money by agreeing to accept a wider range of assets as collateral, including mortgage-backed securities that banks may not be able to sell. The increased availability of cash could be crucial to the investment banks, the rough equivalent of a home-equity line for a house-rich, cash-poor family.

"The actions of the Federal Reserve, it was the most overlooked but the most important thing that happened this weekend," said Steve Bartlett, president of the Financial Services Roundtable, which represents the largest financial companies.

The Fed's willingness to take those assets off banks' balance sheets could also help the institutions avoid further write-downs if those assets continue to lose value.

The Fed, for its part, is betting that the assets could eventually be sold for more than the market is willing to pay right now. If not, taxpayers could lose money.

Patricia McCoy, who served on the Fed's Consumer Advisory Council from 2002 to 2004, cautioned that "it's a big, big risk . . . Right now it's really hard to value that collateral. And in the meantime, even though the Fed financing is temporary, it sends a huge message to the investment banking industry to continue to arrange your balance sheets to be dependent on short-term financing, because when you get into a liquidity crunch, you can turn to us and we'll help you out."

Stocks' plunge yesterday showed that investors remained nervous. Shares opened lower but generally traded in the same range until the last hour of trading -- when a 300-point drop in the Dow became a 504.48-point rout, bringing it to 10,917.51, moving below the 11,000 mark for the first time since mid-July. The technology-heavy Nasdaq was down more than 3.5 percent, and the Standard & Poor's 500-stock index was down 4.7 percent.

The financial sector was among the hardest hit. Bank of America closed down 21 percent, while Wachovia fell 25 percent. Goldman Sachs and Morgan Stanley, the two remaining survivors of what were once Wall Street's Big Five, report quarterly earnings this week -- and closed down 12 and 14 percent respectively.

Although it was a horrible day for the market, it was no worse than Treasury and Fed officials had expected when they declined to intervene to save Lehman. Indeed, officials said they were pleased that the credit markets seemed to generally to function alright.

Another bit of good news for consumers: Oil prices fell about $5 a barrel, to close at $95.71, the first time prices have closed below $100 in months. Hurricane Ike did not do as much damage as some had feared and overall demand for fuel continues to decline, analysts said.

"One of the reasons that oil is weak is that [there is an acknowledgment that] the slowdown in the economy could affect everything, and that includes demand for oil," said Phil Flynn, oil analyst at Alaron Trading in Chicago.

Risk-adverse investors are likely to move away from U.S. assets, dragging down the value of the dollar compared with a range of foreign currencies, said Joseph Brusuelas, chief U.S. economist at California-based Merk Investments. Already, Treasury bond prices surged yesterday, meaning that yields fell. "There is a concern about the basic stability of the market going forward," he said.

Global stocks also plunged on the weekend news, and central bankers tried to calm the situation during deepening uncertainty about the resilience of the global financial system and the strength of the world economy. China's central bank announced it was cutting a key interest rate to uphold growth, and U.S. industrial production fell faster than expected in August.

Meanwhile, the sidewalk outside Lehman's headquarters in midtown Manhattan took on a carnivalesque atmosphere yesterday, as dozens of reporters clamored outside the doors, a half-dozen television trucks parked on the street, tourists grouped on the sidewalk taking photos, a few political partisans preached their platforms -- and occasionally an employee came out dragging a suitcase on wheels.

One man waved a red flag, calling for a workers' revolution and yelling, "The capitalist order is in free-fall collapse!"

Staff writers Binyamin Appelbaum, David Cho, Zachary A. Goldfarb, Neil Irwin, Heather Landy, Renae Merle, and Robin Shulman contributed to this report.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

Record Corporate Bailout Reveals the Bankruptcy of American Capitalism

So much for the Bush Ownership Society.


More like enslaving money. The enslavement of human beings went out with Lincoln (ironic). Nevertheless, no one has said that the enslavement of money is a crime.


Look For it....the horrid results.....October or so..


by Barry Grey


13/09/08 "WSWS" -- - The US government takeover of the mortgage finance giants Fannie Mae and Freddie Mac has dealt a shattering blow to the ideology of market capitalism, which has been used for decades to justify a relentless assault on the working class and a vast transfer of wealth to the American ruling elite.


The endless invocations of the virtues of private enterprise, individual entrepreneurship and self-reliance, used to demonize socialism and defend a system that exploits the vast majority for the benefit of a financial elite, have been exposed as frauds. When it comes to big capital, losses are socialized. Only profits remain private.


The same forces who year after year have inveighed against “big government” in order to justify the removal of all legal impediments to the accumulation of corporate profits and private fortunes, and carry out the destruction of social safeguards for the working class, have engineered a massive expansion of government power to safeguard the interests of the financial elite.


The bailout has as well exposed the real relations of political power and influence behind the façade of American democracy. The largest government bailout of private companies in world history—whose ultimate cost to taxpayers is likely to reach hundreds of billions—was sanctioned in advance by the Democratic Congress and given instant approval by the leadership of both parties and both of their presidential candidates.


There have been no investigations into the greatest financial scandal in world history. Neither party has any interest in bringing to light the swindling and skullduggery of the Wall Street moguls, because they are both bound hand and foot to those responsible for the financial debacle.


What has been revealed is the existence in the United States, behind the increasingly tattered veneer of democratic institutions, of a plutocracy—the political rule of the rich. When it comes to the basic interests of the financial aristocracy, both parties and all of the official institutions of society snap to attention and do the bidding of their Wall Street masters.


The bailout of the two mortgage giants—which account for 80 percent of new home mortgages in the US—is a demonstration of the historic failure of American capitalism and the profit system on a global scale. It was precipitated by the deepest economic crisis since the Depression of the 1930s, whose epicenter is the United States. The Bush administration moved to take over Fannie Mae and Freddie Mac under conditions of a rapid erosion of international confidence in the solvency of not only these two companies, but of the United States government itself.


Over the past several months, global investors, including central banks and government investment funds, primarily in Asia and Russia, have been dumping their vast holdings in mortgage-backed securities issued by the US government-sponsored firms. Fannie Mae and Freddie Mac have a combined liability of $5.3 trillion in mortgage-backed securities which they own or guarantee. The run on their assets has not only intensified the crisis of the two companies, which are massively leveraged and have suffered billions of dollars in losses as a result of the collapse of the US housing market, it has thrown into question the status of all US government debt, including US Treasury bonds.


The US, by far the world’s largest debtor nation, with a current account deficit of nearly $800 billion, is sustained by the inflow of hundreds of billions of dollars from abroad. It currently imports $1 trillion in foreign capital every year, or over $4 billion every working day.


But the assumption by the US government of the debts of the two mortgage companies, while averting an immediate financial meltdown, only compounds the crisis of American capitalism. As Martin Wolf, the financial correspondent of the Financial Times, wrote on Tuesday, “As a result, US housing finance has been brought under direct government control and, in the process, the gross liabilities of the US government, properly measured, have increased by $5,400 billion, a sum equal to the entire publicly held debt and 40 percent of gross domestic product.”


At a stroke, US sovereign debt has doubled and is now roughly equal to America’s gross domestic product. On July 14, one day after US Treasury Secretary Henry Paulson called for legislation to give him unilateral and unlimited powers to use public funds to rescue Fannie Mae and Freddie Mac, the Wall Street Journal editorialized on the implications of a government bailout of the two companies. It wrote: “But with financial woes mounting, some investors are betting they may profit from weighing the unthinkable question: Could the US government default?”


This immense increase in US government indebtedness can only further undermine international confidence in the credit-worthiness of US Treasury bonds, resulting in a further decline in the dollar and a sharp increase in the interest paid by the US to borrow from its international creditors.


The claims made by the Bush administration, echoed by the US media, that the bailout of the two mortgage finance companies will consume at most $200 billion in public funds—itself a massive amount that eclipses previous corporate bailouts, including the $160 billion bailout of the savings and loans industry less than two decades ago—are not credible. An indication of the sums envisioned by US policy makers is the fact that the legislation passed last July giving Paulson the power to bail out Fannie Mae and Freddie Mac raised the US debt limit by $800 billion, increasing the cushion between the debt limit and current government indebtedness to $1.1 trillion.


Some sense of the social priorities of the US ruling elite and its two parties can be gleaned from a comparison between the sums being extended to bail out just these two companies and those allocated by the federal government in 2008 for education ($67.5 billion), unemployment benefits ($37.3 billion), highways and mass transit ($53.1 billion) and housing ($7.4 billion).


Moreover, the bailout of Fannie Mae and Freddie Mac is only the prelude to a far broader use of public funds to bolster the balance sheets of major corporations. Democratic presidential candidate Barack Obama and his Republican opponent John McCain are both supporting a $50 billion bailout of the US auto companies, which will inevitably entail further cuts in jobs and wages. And the plunge of the Wall Street investment bank Lehman Brothers toward bankruptcy—the firm’s stock fell by 45 percent on Tuesday—poses another rescue operation similar to the $29 billion bailout of Bear Stearns last March.


It is already being widely broached that the government establish a permanent mechanism for using taxpayer funds to buy billions of dollars in failing assets from major banks and financial companies. The Wall Street Journal wrote on Tuesday, “Creating a government-backed entity to buy up these assets could jump-start the market for home loans and relieve banks and other financial institutions, which are taking big hits to their balance sheets as they fall in value.”


The Financial Times sounded the same theme, declaring, “The US government might end up having to support the recapitalization of a much wider range of financial institutions in order to curb the credit crunch.”


These statements give the lie to the attempt to portray Fannie Mae and Freddie Mac as aberrations, which in their reckless speculation and pursuit of super profits departed from the norm. On the contrary, they typify the financial parasitism and outright criminality that have become pervasive characteristics of the workings of American capitalism and the social physiognomy of the US corporate elite.


The operations of the two government-sponsored firms are entirely in line with the unbridled speculation, based on an immense expansion of debt, that has become the hallmark of American capitalism. Their role in the housing and credit boom that has now come crashing down was of a piece with the creation of the vast edifice of paper values, engineered through the so-called “securitization” of debt, which sustained the super profits and immense salaries raked in by Wall Street.


In the wake of the bailout, press reports have noted the bloated salaries of the companies’ CEOs. Before they were sacked as part of the government takeover, Fannie Mae CEO Daniel Mudd and Freddie Mac chief Richard Syron took in between them $29.5 million over the several years they headed their respective corporations. And they stand to receive another $29 million as part of their exit packages.


But these sums are by no means exceptional. The Financial Times reported last week that compensation for major executives of the seven biggest US banks totaled $95 billion between 2005 and 2007.


The collapse of Fannie Mae and Freddie Mac is a paradigm of the US economy as a whole. Over the past three decades, the decay of American capitalism has taken the form of a vast growth of financial parasitism. At its heart, this involves the separation of wealth creation from the creation of real value in the production process. The American ruling elite has largely dismantled the productive base of the US economy, ruthlessly downsizing manufacturing at the cost of millions of jobs and the destruction of working class living standards, in order to reap higher profits from increasingly reckless forms of financial speculation.


The indices of the growth of financial speculation in the US economy are staggering: In 1982, the profits of US financial companies accounted for 5 percent of total after-tax corporate profits. In 2007, they made up 41 percent of corporate profits.


This process has generated ever greater levels of social inequality, the most telling symptom of the degenerate state of the US profit system. A report by the Congressional Research Service, updated July 31, provides a measure of the ever growing chasm between the ruling elite and the broad mass of the American people. It states that the share of national income accounted for by the top 1 percent of earners (as reported on tax returns) reached 21.8 percent in 2005—a level not seen since 1928. The report further noted that in 2006, corporate profits totaled 12.4 percent of national income, a level not reached in 50 years.


The cost of the ever-expanding bailout of American big business will be borne squarely by the working class. Even in the midst of growing unemployment and poverty and a flood of home foreclosures, there is much talk in the media about the American people “living beyond their means.”


That the next administration, whether headed by McCain or Obama, will sharply intensify the assault on working class living standards was spelled out by the New York Times, which editorialized Tuesday: “Senators John McCain and Barack Obama have both voiced support for the bailout, which shows good judgment. But what the next president will need to worry about, and both candidates need to talk about, is the depth of the country’s economic problems. It will take discipline and sacrifice to address them.”


The only alternative to a rapid lowering of working class living standards and the only rational and progressive solution to the financial crisis is a socialist program of nationalization of the entire financial system under the democratic control of the working people, with provisions to secure the investments of small depositors and share-holders. The wealth and resources of the country must be developed and allocated to meet the social needs of the population, not the money-mad strivings of financial speculators.


This policy can be carried out only through the independent political mobilization of the working class in opposition to the two-party system and the financial aristocracy which it serves. The Socialist Equality Party is dedicated to the building of such a mass socialist movement of the working class.

Copyright 1998-2008 - World Socialist Web Site - All rights reserved

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

The Crash of Western Capitalist Civilization?

By Richard_C_Cook

15/09/08 "ICH" -- - “Train-wreck” doesn't even begin to describe what is starting to happen to the U.S. today with the financial crisis, an onrushing depression, and the failure of George W. Bush's war policy as he is faced down by Iran and the Russian bear.

But in an even broader sense, the West, as a civilization, after a century of world war and the utter failure of global finance capitalism, may have reached its limits.

Those with a vested interest in the status quo dismiss any suggestion that something is wrong. This includes Donald Luskin, author of an article in the Washington Post on Sunday, September 14, titled: “A Nation of Exaggerators: Quit Doling Out That Bad Economy Line.”

Luskin writes, “The relentless drumbeat of pessimism in the media and on the campaign trail” is “a virus.”

He continues: “Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.”

Continue reading, and you find out who Luskin is: a campaign adviser to John McCain.

We know that “where you stand depends on where you sit”—and who pays you for advice. So is a catastrophic meltdown coming?

If so, probably a majority of the people in the world are thinking: “Serves them right.” For the last 500 years, the West has been striding across the globe, armed to the teeth with firearms, warships, bombers, and—more recently—depleted uranium, enforcing the “white man's burden” by enslaving nations and peoples and confiscating everything of value—ranging from art objects to gold to oil—that can be carried away.

The financiers behind it all have also used the diabolically clever practice of creating money “out of thin air” to put the natives everywhere into debt, and, when that has proven insufficient, of doing the same to their own populations.

All this is rationalized by various brands of racism, cultural superiority, social Darwinism, historical determinism, “dominion of the Elect,” “God's chosen people,” etc. Or, simply, “might makes right.”

Some call it “The New World Order.”

So today, we Americans, denizens of the “land of the free and the home of the brave,” victors in two world wars, bearers of “democracy” to Afghanistan and Iraq, allies of the brave Israelis who hold high the banner of Judeo-Christian values among the ungrateful Palestinians—well, we Americans owe our own bankers almost $70 trillion at most recent count. With the government takeover of Fannie Mae and Freddie Mac, we owe holders of bad housing loans, including the governments of China, Korea, and Japan, another few trillion.

The bluster of Kissinger, Brzezinski, the Kristols, the Christian fundamentalists, and their paid-off politicians and media millionaires notwithstanding, America—indeed, the entire West—has been found out, perhaps even checkmated on the world stage.

The Bush/Cheney wars in Afghanistan and Iraq have blackened America's name forever. Iran has called our bluff. In Israel the gap between rich and poor is increasing as much as in the U.S. According to an article by Ian S. Lustick, the Palestinians have stood up to the Israelis to the point where more Jews are emigrating from that country than are moving in, and where those who remain are increasingly huddling around Tel Aviv as a safe haven. (Ian S. Lustick, “Abandoning the Iron Wall: ‘Israel and the Middle Eastern Muck',” Middle East Policy , Vo. XV, No. 3, Fall 2008.)

In the 1990s, the European bankers used U.S. and NATO forces to dismember Yugoslavia so George Soros and the Rothschilds could gobble up Balkan resources. But that strategy is failing in the Caucasus, where the Russians fought back against the genocidal attack by Dick Cheney's poodle, Mikheil Saakashvili, the New York-trained attorney the CIA got elected as the president of Georgia.

And now the people of Ukraine, the “Little Russians,” realizing what the West has in store for them, are rushing back into the Slavic fold and may be only a year or so away from reuniting with their “Great Russian” cousins across the border.

What is telling is to watch the Western financier press, chiefly the Washington Post and the New York Times , fume about Russian prime minister Vladimir Putin and his “authoritarian” manner. An example is the article by Times correspondent Ellen Barry on Putin's September 11 press conference in Moscow. She wrote, “In three-and-a-half hours, in tones that were alternatively pugilistic and needy, Vladimir V. Putin tried to explain himself.”

I'm sorry, Ms. Barry. You and your editors may think your writing is cute, but Vladimir Putin is the foremost figure on the world stage today. He will remain so after George W. Bush leaves the White House disgraced.

Putin is heir to an epochal movement of patriots who began in the 1970s to take back Russia from within. It started with a base of operations within the KGB and the Orthodox Church, led to Gorbachev's glasnost in the 1980s, and culminated in the Second Russian Revolution of 1991. At that point, the Western financiers gleefully rushed in to support an assault from the Russian “oligarchs” who were looting Russia of everything it owned.

The oligarchs were the shock troops of a financier assault that had already begun to overlap in the West with the Russian Mafia. Cheered on by the Washington Post and aided by academic advisors from places like Harvard, this international syndicate nearly destroyed Russia during the 1990s. But when Putin was appointed interim president by Boris Yelstin in 1999, and after winning the presidential election of 2000 in his own right, he began to fight back.

From the mid-1970s to today, thousands of Russian gangsters, along with many hard-line Bolsheviks/Stalinists, were allowed to emigrate. Many settled in the U.S. and are here today, and many more settled in Israel. In fact, one reason the price of condos in New York, Miami, Tel Aviv, and elsewhere has inflated so much reportedly is the flood of cash from racketeering.

The crooks have allied themselves with the Colombian drug cartels and have heavily infiltrated the world's financial systems, even setting up their own banks for laundering money and speculating in the commodities markets.

Today, Putin is cleaning out the remaining gangster class. His efforts reached a milestone in January with the arrest in Moscow of Semion Mogilevich, called “the world's most dangerous man.”

Putin has declared that the world will not be governed in a “unipolar” manner; i.e. by the U.S. military as the police force for the global financiers. This does not mean Russia has to be our enemy. In fact the world would be much better off, and much safer, if we joined with Russia as allies in keeping the peace.

But to do that our system would have to change, because finance capitalism is far too unstable to coexist with other nations as equals. It must either grow or die, because it always needs new victims to pay the interest on its usury practices and to finance its speculative balloons. As a last resort, it needs the kind of financial institution bailouts being engineered by Secretary of the Treasury Henry Paulson, where the only remaining stopgap is borrowing from public funds and adding to the national debt.

Once economic growth stops, as has now happened, and all the bubbles to restart it have blown up, as has also happened, the end really is nigh. Especially if the host—the U.S.—is bankrupt.

What is coming at us today isn't just another downturn. If people like McCain adviser Donald Luskin doubt it, maybe, instead of writing campaign propaganda, they should ask the fired CEOs of Fannie Mae and Freddie Mac, the stockholders of Lehman Brothers, whose shares have dropped ninety percent in less than a year, and the millions who are losing their homes.

Presidential candidates Barack Obama and John McCain are calling for “change.” Well, if I were standing on a beach with a 100-foot tsunami roaring in my direction, I would call for change too. Except I would not be standing around arguing about the meaning of the words “lipstick on a pig.”

By Richard C. Cook
http:// www.richardccook.com

Copyright 2008 by Richard C. Cook

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Hope of Monetary Reform will be published soon by Tendril Press. He is also the author of Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age , called by one reviewer, “the most important spaceflight book of the last twenty years . ” His Challenger website is at www.richardccook.com . A new economics website at www.RealSustainableLiving.com is upcoming with partner/author Susan Boskey. To get on his mailing list, for questions and comments, or to pre-purchase copies of his new book, please write EconomicSanity@gmail.com .

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

Major Meltdown!!!!!

ECONOMY MELTDOWN
"Once In A Century Event"

NY Times: Lehman Brothers Will File For Bankruptcy... Would Be Largest Failure Of An Investment Bank In 18 Years... Bank Of America, Merrill Lynch In Acquisition Talks... US, Foreign Banks Prepare For Fallout... Greenspan: America Can't Afford McCain's Tax Plan... "I'm Not In Favor Of Financing Tax Cuts With Borrowed Money"

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)


The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

R.I.P., Trickle Down.

The only thing that trickles down during every Republican administration I have witnessed is meanness, nastiness and hate crimes.

By Jared Bernstein - August 26, 2008, 11:11PM

Look for this obituary in tomorrow's paper:

Trickle-down economics died yesterday morning at 10AM. The cause of death was a data release from the US Census Bureau, but trickle-down had been ailing from lack of empirical support for decades. Also known as "supply-side economics," trickle-down was the love child of Ronald Reagan, Arthur Laffer, and Jude Wanniski. It is survived by Larry Kudlow and Co., and the editorial page of the Wall St. Journal.

That's what you should see, but you probably won't. Let me explain.

The Census Bureau released some new data on Tuesday that strongly contradicts supply-side, trickle-down economics, but the truth is that if this brand of hucksterism could be brought down by evidence, it would have died long ago.

First, the new data. Every year the Census Bureau releases info on middle-class incomes and poverty for the prior year. So today's release refers to last year's data. Median household income, inflation-adjusted, was up slightly in 2007, but poverty rose too.

But the annual data are not of great interest here. Since 2007 was the last year of an economic expansion that began in 2001, that makes it an economic peak: the last year of a cycle. Which means we can now, for the first time, compare the results from this peak to the peak of the prior cycle: 2000.

Economists like such comparisons because they evaluate a given outcome across similar years in the cycle. If you were to compare, say, trough to peak, you'd expect things to improve. But peak-to-peak is considered the legit way to compare like-to-like.

So here are some key peak-to-peak comparisons:

Real (inflation-adjusted) median household income was essentially unchanged between 2000 and 2007 (it was $300 lower last year than in 2000, but the difference is not statistically significant).

This is the first cycle on record where the real median household income failed to surpass its prior peak.

For working-age households, real median income is $2,000 below its 2000 level.

Poverty rates were 1.2% higher in 2007 than in 2000, up from 11.3% to 12.5%, an addition of 5.7 million to the poverty rolls. This is the worst cycle for poverty on record. The second worse was 1979-89, a decade also dominated by trickle-down economics.

What is trickle-down? It's the set of economic policies based on the notion that if you provide economic incentives to the wealthy by cutting their taxes (or, as the supply-siders put it, "letting us keep our money") while deregulating industry, you'll unleash a tsunami of economic activities that will enrich even the least advantaged among us.

The theory doesn't make sense even on its face. Why would people work harder only if you cut their taxes? After all, their after-tax income goes up, so they might decide they can work less and still be as well off. Or, if you raise their taxes, they might decide to work harder to make up the after-tax losses.

No matter...this stuff is not based on logic. It's largely a rationale for upward redistribution that's been kept alive by the vested interests who benefit from it. Reagan put this stuff on the map, but GW Bush brought it back with a vengeance, and McCain goes even further. He extends the supply-side Bush tax cuts, and lards on about $75 billion more in corporate tax cuts on top of that.

The evidence from the 1980s and the 2000s shows that trickle-down works fine, if by "down" they mean "up." But is there any counter-evidence that shows the impact of a different policy regime on middle-class and low-incomes?

Exhibit A is the 1990s. When he came into office, Clinton eschewed supply-side, cutting taxes on lower-income households and raising them at the top end. Obama takes a similar approach.

Now, take a look at Figures 5 and 6, and especially Table 2 in this document, drawing on today's report from the Census. There you will see evidence of the strong real growth in median incomes and sharp declines in poverty that occurred over the 1990s, contrasted with the opposite trends in the 2000s.

Remember those working-age households that lost a couple of grand in the 2000s? Their income was up 10%, or $5,200 in the 1990s (1989-2000). Had this growth rate prevailed in the 2000s, their median income would have gone up $3,600 instead of falling $2,000.

Note that these results are strongest for minorities. The median household income of African-American households grew 22% in the 1990s and fell 5% in the 2000s. Note also the poverty results from black children (Table 2 from the above link). If evidence were bullets, trickle-down would perish in a pool of blood.

Yet, its obit is premature. It lives on in the Republican platform, the right-wing think tanks, and conservative media (really, in the mainstream media...you may recall that during a Democratic primary debate on ABC, Charles Gibson claimed that due to the magic of supply-side, capital gains tax cuts pay for themselves).

Frankly, I'm not sure how to kill it, and am earnestly interested in any ideas you might have for exposing and discrediting this deeply damaging ruse. In the meantime, the best we can hope for is to throw its practitioners out of the White House and Congress.


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