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Friday, February 27, 2009
Thursday, February 26, 2009
Monetize This!: Resolving a Spiraling Public Debt Crisis. CRG E-Newsletter
Monetize This!: Resolving a Spiraling Public Debt Crisis
How Obama could take a Page from the Fed's Playbook
By Ellen Brown
URL of this article: www.globalresearch.ca/index.php?context=va&aid=12394
Global Research, February 21, 2009
webofdebt.com
"Diseases desperate grown are by desperate appliances relieved, or not at all." – Shakespeare, "Hamlet"
Moody's credit rating agency is warning that the US. government's AAA credit rating is at risk, because it has taken on so much debt that there are few creditors left to underwrite it. Foreigners have bought as much as two-thirds of U.S. debt in recent years, but they could be doing much less purchasing of U.S. Treasury securities in the future, not so much out of a desire to chastise America as simply because they won't have the funds to do it. Oil prices have fallen off a cliff and the U.S. purchase of foreign exports has dried up, slashing the surpluses that those countries previously recycled back into U.S. Treasuries. And domestic buyers of securities, to the extent that they can be found, will no doubt demand substantially higher returns than the rock-bottom interest rates at which Treasuries are available now.1
Who, then, is left to buy the government's debt and fund President Obama's $900 billion stimulus package? The taxpayers are obviously tapped out, so the money will have to be borrowed; but borrowed from whom? The pool of available lenders is shrinking fast. Morever, servicing the federal debt through private lenders imposes a crippling interest burden on the U.S. Treasury. The interest tab was $412 billion in fiscal year 2008, or about one-third of the federal government's total income from personal income taxes ($1,220 billion in 2008). The taxpayers not only cannot afford the $900 billion; they cannot afford to increase their interest payments. But what is the alternative?
How about turning to the lender of last resort, the Federal Reserve itself? The advantage for the government of borrowing from its own central bank is that this money is virtually free. This is because the Federal Reserve rebates any interest it receives to the Treasury after deducting its costs, and the federal debt is never actually paid off but is just rolled over from year to year. Interest-free loans that are never paid off are basically free money. In 2008, 85% of the interest collected by the Federal Reserve (or "Fed") was returned to the Treasury. The average interest rate on Treasury securities today is only about 3%; 15% of 3% is less than ½% – such a negligible interest as to make the money nearly free.
The key is that the Fed does not actually have to acquire the money before lending it. The Fed originates the money it lends, either on a printing press or with accounting entries. It can purchase Treasury debt simply by writing credits into the "reserve account" of the seller's bank, which then credits the seller's account. The Fed's ability to write numbers into an account is obviously unlimited; but it has normally restricted its purchase of government securities to only so much as is necessary to provide the liquidity needed for banks to cash and clear checks. Funding the government's budget shortfall has usually been left to private lenders; but those loans are drying up, and servicing them is proving expensive. Both this interest burden and the need to continually attract new lenders could be avoided by tapping into the government's credit line at its own central bank.
But wouldn't that be dangerously inflationary? Not in today's economic climate, as will be shown. And if the notion of funding the government through its own central bank seems too radical and unprecedented to be entertained, consider the radical moves the Fed has already been taking in the last year. Without so much as a by-your-leave from Congress, the Fed just "monetized" $1.2 trillion in private debt, turning commercial loans into money. If private banks and private corporations now have multi-billion dollar credit lines with the Federal Reserve, then Congress should have one too. In fact Congress, which gave the Fed its charter to create the national money supply, should have been the first in line.
If the Fed Can "Monetize" Private Debt, It Can Monetize Public Debt.
The Fed has been a hotbed of radical, experimental activity in the past year. Ben Gisin is a former banker who has long been tracking the Fed's statistical releases. He says he has never seen anything like it. Assets have been magically appearing on the Fed's balance sheet, and they are not coming from any traditional source.2
In May 2007, the Fed reported assets of about $850 billion, and 92% of them were the usual federal securities (government I.O.U.s). A year later, the Fed's stash of federal securities had dropped to $500 billion, but its total assets remained substantially unchanged. The federal securities had just been swapped for other forms of debt. In January of 2009, however, the Fed reported assets of $2.1 trillion, an increase of $1.2 trillion from a year earlier.3 Where did this new money come from? The Fed's liabilities also went up by $1.2 trillion, indicating that it was creating "credit" simply by double-entry bookkeeping. Loans were being created by entering them as assets on one side of the Fed's books and as corresponding liabilities on the other
Creating money by double-entry bookkeeping is not actually unique to the central bank. It is how all commercial banks come up with the money they lend, as many authorities have attested. In a revealing booklet called Modern Money Mechanics, the Chicago Federal Reserve explained how banks expand the money supply (or create money) using double-entry bookkeeping. The booklet stated:
"Of course, [banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise [by the same amount]."4
Congressman Jerry Voorhis, writing in 1973, explained how monetary expansion is built on the 10% reserve requirement imposed by the Fed:
"[F]or every $1 or $1.50 which people – or the government – deposit in a bank, the banking system can create out of thin air and by the stroke of a pen some $10 of checkbook money or demand deposits. It can lend all that $10 into circulation at interest just so long as it has the $1 or a little more in reserve to back it up."5
That means that if the Federal Reserve were operating like a commercial bank, it could take its $500 billion in U.S. securities and fan them into $5 trillion in loans; and that appears to be exactly what it has been doing. What is extraordinary is that the money is being used to make commercial loans. If the Fed can come up with $1.2 trillion to "monetize" private promissory notes, argues Ben Gisin, there is no reason it could not come up with $900 billion to monetize Obama's stimulus package. In fact, Congress could mandate the central bank that it chartered to buy the bonds needed to fund the stimulus package.
The Advantage of Borrowing from the Federal Reserve
For the government, the difference between borrowing credit created with accounting entries by a private bank and the same sort of credit created by the Federal Reserve is that borrowing from the Fed is nearly interest-free. That is true today, but it has not always been true. Congressman Wright Patman, Chairman of the House Banking and Currency Committee, wrote in a 1964 treatise called A Primer on Money:
"The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury . . . [creating] out of nothing a . . . debt which the American people are obliged to pay with interest."
Patman was outraged at the inequity of this practice and boldly agitated for Congress to nationalize the privately-owned Federal Reserve, a move that would have allowed the government to issue the national money supply directly. Needless to say, however, this proposal met with strong opposition. Nationalization did not happen, but the Fed did have to compromise. According to Jerry Voorhis:
"As a direct result of logical and relentless agitation by members of Congress, led by Congressman Wright Patman as well as by other competent monetary experts, the Federal Reserve began to pay to the U.S. Treasury a considerable part of its earnings from interest on government securities. This was done without public notice and few people, even today, know that it is being done. It was done, quite obviously, as acknowledgment that the Federal Reserve Banks were acting on the one hand as a national bank of issue, creating the nation's money, but on the other hand charging the nation interest on its own credit – which no true national bank of issue could conceivably, or with any show of justice, dare to do."
Voorhis went on, "But this is only part of the story. And the less discouraging part, at that. For where the commercial banks are concerned, there is no such repayment of the people's money." Commercial banks, he explained, do not rebate the interest, although they also "‘buy' the bonds with newly created demand deposit entries on their books – nothing more."6
Voorhis noted that the Constitution provides, "Congress shall have the power to coin money [and] regulate the value thereof." Whether "to coin money" means "to issue money" has been debated; but as President Andrew Jackson observed, if anyone was given the power to issue money, it was Congress, not a private banking elite. For a full century before the American Revolution, the colonists funded a period of unprecedented prosperity and productive enterprise with paper money issued directly by their own local governments or government-owned banks. According to Benjamin Franklin, it was chiefly to get that power back after King George halted the practice that the colonists fought the Revolution.7 They won the war but lost the money-creating power to a private banking cartel. We the people now have an opportunity to get that innovative funding system back, and we can do it without having to convince a faction-ridden Congress that they need to do anything so controversial as nationalizing the Federal Reserve or even passing new legislation. All that is required is a shift in emphasis, a shift the Federal Reserve has been making lately itself. The Fed routinely turns government bonds into dollars in order to expand the amount of currency in circulation; it has now begun doing that with corporate debt; and Fed officials are talking about doing it with long-term federal securities. According to a January 28, 2009 Associated Press report:
"With its key lending rate to banks already near zero, the Fed pledged anew to use ‘all available tools' to revive the economy. Specifically, the Fed said it is ‘prepared' to buy longer-term Treasury securities if the circumstances warrant such action."8
Traditionally, government debt has been "monetized" by the Fed only to provide the bank reserves necessary to cover check cashing and clearing. This tool is now being recommended "to revive the economy." Obama's stimulus package is also intended to revive the economy. Combine the two and you have a package that stimulates the economy without adding to the impossible burden of an exponentially-increasing debt.
But Wouldn't That Be Inflationary?
The usual objection to funding the government with credits drawn on its own central bank is that the result would be inflationary. However, the scenario most feared today is actually deflation – a lack of available dollars to fuel the economy. Asset values have collapsed, and savings have collapsed along with them. People with only half as much money in their brokerage accounts have less to spend; people whose houses have plummeted in value cannot take out consumer loans against equity as was done in the boom years. Funding a "stimulus" package with existing money that is merely recycled through the banking system as loans will not stimulate the economy but will only add to the problem, by adding to the collective burden to service debt. Money that should have gone into more productive endeavors will wind up going into interest payments. To bolster demand and stimulate production, recovery requires an infusion of new dollars – dollars that can be used to pay wages and salaries, which can then be used to buy goods and services.
In any case, adding new money to the money supply will not inflate prices if the money is used in the production of new goods and services. Price inflation results only when "demand" (dollars) exceeds "supply" (goods and services). If the new dollars are used to create new goods and services, demand and supply will rise together and prices will remain stable. If the goods being produced are income-generating assets – railroads, bridges, alternative energy sources, low-cost housing, medical services – so much the better. The projects can be "monetized" in the same way that banks monetize mortgages – by entering them as assets on one side of their books and as liabilities on the other. The funds received from the central bank can then be repaid to the central bank from the income the assets produce, extinguishing the debt and avoiding inflation. Ideally, the projects would actually turn a profit, generating income for the government and reducing the tax burden on the public.
The bottom line is that we cannot borrow our way out of debt. Only new money will stimulate a debt-ridden economy – money that is interest-free and does not have to be paid back. The direct road to that result would have been to nationalize the Federal Reserve and return the power to create money to Congress; but as Wright Patman found, that solution is controversial and could be a difficult piece of legislation to get passed. In the meantime, the same result can be achieved by tapping into the government's nearly-interest-free credit line at the Federal Reserve. Nearly-interest-free loans of accounting-entry money that never has to be paid back are a source of debt-free liquidity that can be used to fund projects that put people back to work, without increasing the interest burden on the government or the tax burden on the public.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from "the money trust." Her eleven books include Forbidden Medicine, Nature's Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.
Notes
1. Aaron Task, "Another $3T of U.S. Debt: Don't Count on Foreigners to Pay for Our Bailouts" (citing John Ryding, chief economist of RDQ Economics), Finance.Yahoo.com (February 13, 2009).
2. Benjamin Gisin, Michael Krajovic, "Rescuing the Physical Economy," Conscious Economics (January 2009).
3. Federal Reserve Board, "Annual Report 2007," "Statistical Tables, "No. 9: Statement of Condition of Federal Reserve Banks," & "No. 10: Income and Expenses of the Federal Reserve Banks," www.federalreserve.gov/boarddocs/rptcongress/default.htm; "Current Release," www.federalreserve.gov/releases/h41.
4. Modern Money Mechanics: A Workbook on Bank Reserves and Deposit Expansion (Federal Reserve Bank of Chicago, Public Information Service, 1992, available at http://www.rayservers.com/images/ModernMoneyMechanics.pdf ), page 6.
5. J. Voorhis, The Strange Case of Richard Milhous Nixon (1973), excerpted at http://www.sonic.net/~doretk/ArchiveARCHIVE/ECONOMICSPOLITICS/FEDERAL%20RESERVE/Jerry%20VoorhisFedReserve.html.
6. Jerry Voorhis, op. cit.
7. Quoted by Congressman Charles Binderup in a 1941 speech, "How America Created Its Own Money in 1750: How Benjamin Franklin Made New England Prosperous," reprinted in Unrobing the Ghosts of Wall Street, http://reactor-core.org/america-created-money.html.
8. Jeannine Aversa, "Fed Ready to Provide Fresh Aid to Revive Economy," Associated Press (January 28, 2009).
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How Obama could take a Page from the Fed's Playbook
By Ellen Brown
URL of this article: www.globalresearch.ca/index.php?context=va&aid=12394
Global Research, February 21, 2009
webofdebt.com
"Diseases desperate grown are by desperate appliances relieved, or not at all." – Shakespeare, "Hamlet"
Moody's credit rating agency is warning that the US. government's AAA credit rating is at risk, because it has taken on so much debt that there are few creditors left to underwrite it. Foreigners have bought as much as two-thirds of U.S. debt in recent years, but they could be doing much less purchasing of U.S. Treasury securities in the future, not so much out of a desire to chastise America as simply because they won't have the funds to do it. Oil prices have fallen off a cliff and the U.S. purchase of foreign exports has dried up, slashing the surpluses that those countries previously recycled back into U.S. Treasuries. And domestic buyers of securities, to the extent that they can be found, will no doubt demand substantially higher returns than the rock-bottom interest rates at which Treasuries are available now.1
Who, then, is left to buy the government's debt and fund President Obama's $900 billion stimulus package? The taxpayers are obviously tapped out, so the money will have to be borrowed; but borrowed from whom? The pool of available lenders is shrinking fast. Morever, servicing the federal debt through private lenders imposes a crippling interest burden on the U.S. Treasury. The interest tab was $412 billion in fiscal year 2008, or about one-third of the federal government's total income from personal income taxes ($1,220 billion in 2008). The taxpayers not only cannot afford the $900 billion; they cannot afford to increase their interest payments. But what is the alternative?
How about turning to the lender of last resort, the Federal Reserve itself? The advantage for the government of borrowing from its own central bank is that this money is virtually free. This is because the Federal Reserve rebates any interest it receives to the Treasury after deducting its costs, and the federal debt is never actually paid off but is just rolled over from year to year. Interest-free loans that are never paid off are basically free money. In 2008, 85% of the interest collected by the Federal Reserve (or "Fed") was returned to the Treasury. The average interest rate on Treasury securities today is only about 3%; 15% of 3% is less than ½% – such a negligible interest as to make the money nearly free.
The key is that the Fed does not actually have to acquire the money before lending it. The Fed originates the money it lends, either on a printing press or with accounting entries. It can purchase Treasury debt simply by writing credits into the "reserve account" of the seller's bank, which then credits the seller's account. The Fed's ability to write numbers into an account is obviously unlimited; but it has normally restricted its purchase of government securities to only so much as is necessary to provide the liquidity needed for banks to cash and clear checks. Funding the government's budget shortfall has usually been left to private lenders; but those loans are drying up, and servicing them is proving expensive. Both this interest burden and the need to continually attract new lenders could be avoided by tapping into the government's credit line at its own central bank.
But wouldn't that be dangerously inflationary? Not in today's economic climate, as will be shown. And if the notion of funding the government through its own central bank seems too radical and unprecedented to be entertained, consider the radical moves the Fed has already been taking in the last year. Without so much as a by-your-leave from Congress, the Fed just "monetized" $1.2 trillion in private debt, turning commercial loans into money. If private banks and private corporations now have multi-billion dollar credit lines with the Federal Reserve, then Congress should have one too. In fact Congress, which gave the Fed its charter to create the national money supply, should have been the first in line.
If the Fed Can "Monetize" Private Debt, It Can Monetize Public Debt.
The Fed has been a hotbed of radical, experimental activity in the past year. Ben Gisin is a former banker who has long been tracking the Fed's statistical releases. He says he has never seen anything like it. Assets have been magically appearing on the Fed's balance sheet, and they are not coming from any traditional source.2
In May 2007, the Fed reported assets of about $850 billion, and 92% of them were the usual federal securities (government I.O.U.s). A year later, the Fed's stash of federal securities had dropped to $500 billion, but its total assets remained substantially unchanged. The federal securities had just been swapped for other forms of debt. In January of 2009, however, the Fed reported assets of $2.1 trillion, an increase of $1.2 trillion from a year earlier.3 Where did this new money come from? The Fed's liabilities also went up by $1.2 trillion, indicating that it was creating "credit" simply by double-entry bookkeeping. Loans were being created by entering them as assets on one side of the Fed's books and as corresponding liabilities on the other
Creating money by double-entry bookkeeping is not actually unique to the central bank. It is how all commercial banks come up with the money they lend, as many authorities have attested. In a revealing booklet called Modern Money Mechanics, the Chicago Federal Reserve explained how banks expand the money supply (or create money) using double-entry bookkeeping. The booklet stated:
"Of course, [banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise [by the same amount]."4
Congressman Jerry Voorhis, writing in 1973, explained how monetary expansion is built on the 10% reserve requirement imposed by the Fed:
"[F]or every $1 or $1.50 which people – or the government – deposit in a bank, the banking system can create out of thin air and by the stroke of a pen some $10 of checkbook money or demand deposits. It can lend all that $10 into circulation at interest just so long as it has the $1 or a little more in reserve to back it up."5
That means that if the Federal Reserve were operating like a commercial bank, it could take its $500 billion in U.S. securities and fan them into $5 trillion in loans; and that appears to be exactly what it has been doing. What is extraordinary is that the money is being used to make commercial loans. If the Fed can come up with $1.2 trillion to "monetize" private promissory notes, argues Ben Gisin, there is no reason it could not come up with $900 billion to monetize Obama's stimulus package. In fact, Congress could mandate the central bank that it chartered to buy the bonds needed to fund the stimulus package.
The Advantage of Borrowing from the Federal Reserve
For the government, the difference between borrowing credit created with accounting entries by a private bank and the same sort of credit created by the Federal Reserve is that borrowing from the Fed is nearly interest-free. That is true today, but it has not always been true. Congressman Wright Patman, Chairman of the House Banking and Currency Committee, wrote in a 1964 treatise called A Primer on Money:
"The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury . . . [creating] out of nothing a . . . debt which the American people are obliged to pay with interest."
Patman was outraged at the inequity of this practice and boldly agitated for Congress to nationalize the privately-owned Federal Reserve, a move that would have allowed the government to issue the national money supply directly. Needless to say, however, this proposal met with strong opposition. Nationalization did not happen, but the Fed did have to compromise. According to Jerry Voorhis:
"As a direct result of logical and relentless agitation by members of Congress, led by Congressman Wright Patman as well as by other competent monetary experts, the Federal Reserve began to pay to the U.S. Treasury a considerable part of its earnings from interest on government securities. This was done without public notice and few people, even today, know that it is being done. It was done, quite obviously, as acknowledgment that the Federal Reserve Banks were acting on the one hand as a national bank of issue, creating the nation's money, but on the other hand charging the nation interest on its own credit – which no true national bank of issue could conceivably, or with any show of justice, dare to do."
Voorhis went on, "But this is only part of the story. And the less discouraging part, at that. For where the commercial banks are concerned, there is no such repayment of the people's money." Commercial banks, he explained, do not rebate the interest, although they also "‘buy' the bonds with newly created demand deposit entries on their books – nothing more."6
Voorhis noted that the Constitution provides, "Congress shall have the power to coin money [and] regulate the value thereof." Whether "to coin money" means "to issue money" has been debated; but as President Andrew Jackson observed, if anyone was given the power to issue money, it was Congress, not a private banking elite. For a full century before the American Revolution, the colonists funded a period of unprecedented prosperity and productive enterprise with paper money issued directly by their own local governments or government-owned banks. According to Benjamin Franklin, it was chiefly to get that power back after King George halted the practice that the colonists fought the Revolution.7 They won the war but lost the money-creating power to a private banking cartel. We the people now have an opportunity to get that innovative funding system back, and we can do it without having to convince a faction-ridden Congress that they need to do anything so controversial as nationalizing the Federal Reserve or even passing new legislation. All that is required is a shift in emphasis, a shift the Federal Reserve has been making lately itself. The Fed routinely turns government bonds into dollars in order to expand the amount of currency in circulation; it has now begun doing that with corporate debt; and Fed officials are talking about doing it with long-term federal securities. According to a January 28, 2009 Associated Press report:
"With its key lending rate to banks already near zero, the Fed pledged anew to use ‘all available tools' to revive the economy. Specifically, the Fed said it is ‘prepared' to buy longer-term Treasury securities if the circumstances warrant such action."8
Traditionally, government debt has been "monetized" by the Fed only to provide the bank reserves necessary to cover check cashing and clearing. This tool is now being recommended "to revive the economy." Obama's stimulus package is also intended to revive the economy. Combine the two and you have a package that stimulates the economy without adding to the impossible burden of an exponentially-increasing debt.
But Wouldn't That Be Inflationary?
The usual objection to funding the government with credits drawn on its own central bank is that the result would be inflationary. However, the scenario most feared today is actually deflation – a lack of available dollars to fuel the economy. Asset values have collapsed, and savings have collapsed along with them. People with only half as much money in their brokerage accounts have less to spend; people whose houses have plummeted in value cannot take out consumer loans against equity as was done in the boom years. Funding a "stimulus" package with existing money that is merely recycled through the banking system as loans will not stimulate the economy but will only add to the problem, by adding to the collective burden to service debt. Money that should have gone into more productive endeavors will wind up going into interest payments. To bolster demand and stimulate production, recovery requires an infusion of new dollars – dollars that can be used to pay wages and salaries, which can then be used to buy goods and services.
In any case, adding new money to the money supply will not inflate prices if the money is used in the production of new goods and services. Price inflation results only when "demand" (dollars) exceeds "supply" (goods and services). If the new dollars are used to create new goods and services, demand and supply will rise together and prices will remain stable. If the goods being produced are income-generating assets – railroads, bridges, alternative energy sources, low-cost housing, medical services – so much the better. The projects can be "monetized" in the same way that banks monetize mortgages – by entering them as assets on one side of their books and as liabilities on the other. The funds received from the central bank can then be repaid to the central bank from the income the assets produce, extinguishing the debt and avoiding inflation. Ideally, the projects would actually turn a profit, generating income for the government and reducing the tax burden on the public.
The bottom line is that we cannot borrow our way out of debt. Only new money will stimulate a debt-ridden economy – money that is interest-free and does not have to be paid back. The direct road to that result would have been to nationalize the Federal Reserve and return the power to create money to Congress; but as Wright Patman found, that solution is controversial and could be a difficult piece of legislation to get passed. In the meantime, the same result can be achieved by tapping into the government's nearly-interest-free credit line at the Federal Reserve. Nearly-interest-free loans of accounting-entry money that never has to be paid back are a source of debt-free liquidity that can be used to fund projects that put people back to work, without increasing the interest burden on the government or the tax burden on the public.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from "the money trust." Her eleven books include Forbidden Medicine, Nature's Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.
Notes
1. Aaron Task, "Another $3T of U.S. Debt: Don't Count on Foreigners to Pay for Our Bailouts" (citing John Ryding, chief economist of RDQ Economics), Finance.Yahoo.com (February 13, 2009).
2. Benjamin Gisin, Michael Krajovic, "Rescuing the Physical Economy," Conscious Economics (January 2009).
3. Federal Reserve Board, "Annual Report 2007," "Statistical Tables, "No. 9: Statement of Condition of Federal Reserve Banks," & "No. 10: Income and Expenses of the Federal Reserve Banks," www.federalreserve.gov/boarddocs/rptcongress/default.htm; "Current Release," www.federalreserve.gov/releases/h41.
4. Modern Money Mechanics: A Workbook on Bank Reserves and Deposit Expansion (Federal Reserve Bank of Chicago, Public Information Service, 1992, available at http://www.rayservers.com/images/ModernMoneyMechanics.pdf ), page 6.
5. J. Voorhis, The Strange Case of Richard Milhous Nixon (1973), excerpted at http://www.sonic.net/~doretk/ArchiveARCHIVE/ECONOMICSPOLITICS/FEDERAL%20RESERVE/Jerry%20VoorhisFedReserve.html.
6. Jerry Voorhis, op. cit.
7. Quoted by Congressman Charles Binderup in a 1941 speech, "How America Created Its Own Money in 1750: How Benjamin Franklin Made New England Prosperous," reprinted in Unrobing the Ghosts of Wall Street, http://reactor-core.org/america-created-money.html.
8. Jeannine Aversa, "Fed Ready to Provide Fresh Aid to Revive Economy," Associated Press (January 28, 2009).
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Doomed by the Myths of Free Trade How the Economy was Lost
http://www.counterpunch.org/roberts02242009.html
Doomed by the Myths of Free Trade
How the Economy was Lost
By PAUL CRAIG ROBERTS
The American economy has gone away. It is not coming back until free trade myths are buried six feet under.
America's 20th century economic success was based on two things. Free trade was not one of them. America's economic success was based on protectionism, which was ensured by the union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.
World War II and socialism together ensured that the US economy dominated the world at the mid 20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism [in terms of the priorities of the capitalist growth model. Editors.]
The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for cooperating with America's cold war and foreign policies. For example, Turkey's US textile quotas were increased in exchange for over-flight rights in the Gulf War, making lost US textile jobs an off-budget war expense.
In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the "free market" Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.
Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington DC aided and abetted the erosion of America's economic position. What we didn't give away, the United States let be taken away while preaching a "free trade" doctrine at which the rest of the world scoffed.
Fortunately, the U.S.'s adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to America's diminishing economic prowess.
This furlough from reality ended when Soviet, Chinese, and Indian socialism surrendered around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly, American and other first world corporations discovered that a massive supply of foreign labor was available at practically free wages.
To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.
As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.
"Free market economists" covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasn't long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.
The American corporations quickly learned that by declaring "shortages" of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.
Chasing after shareholder return and "performance bonuses," US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America's ability to finance its trade deficit.
As the American economy eroded away bit by bit, "free market" ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these "old economy" jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the "service economy" of software and communications would provide a leg up for the work force.
Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.
The "free market" economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted, "outsourcing's inner circle has deep roots in GE (General Electric) and McKinsey," a consulting firm. Indeed, one of McKinsey's main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obama's White House National Economic Council.
The pressure of jobs offshoring, together with vast imports, has destroyed the economic prospects for all Americans, except the CEOs who receive "performance" bonuses for moving American jobs offshore or giving them to H-1b work visa holders. Lowly paid offshored employees, together with H-1b visas, have curtailed employment for older and more experienced American workers. Older workers traditionally receive higher pay. However, when the determining factor is minimizing labor costs for the sake of shareholder returns and management bonuses, older workers are unaffordable. Doing a good job, providing a good service, is no longer the corporation's function. Instead, the goal is to minimize labor costs at all cost.
Thus, "free trade" has also destroyed the employment prospects of older workers. Forced out of their careers, they seek employment as shelf stockers for Wal-Mart.
I have read endless tributes to Wal-Mart from "libertarian economists," who sing Wal-Mart's praises for bringing low price goods, 70 per cent of which are made in China, to the American consumer. What these "economists" do not factor into their analysis is the diminution of American family incomes and government tax base from the loss of the goods producing jobs to China. Ladders of upward mobility are being dismantled by offshoring, while California issues IOUs to pay its bills. The shift of production offshore reduces US GDP. When the goods and services are brought back to America to be sold, they increase the trade deficit. As the trade deficit is financed by foreigners acquiring ownership of US assets, this means that profits, dividends, capital gains, interest, rents, and tolls leave American pockets for foreign ones.
The demise of America's productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a "security." The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.
In pursuit of ever more profits, financial institutions began betting on the success and failure of various debt instruments and by implication on firms. They bought and sold collateral debt swaps. A buyer pays a premium to a seller for a swap to guarantee an asset's value. If an asset "insured" by a swap falls in value, the seller of the swap is supposed to make the owner of the swap whole. The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets.*
The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee. As the issuers of swaps were not required to reserve against them, and as there is no limit to the number of swaps, the payouts could easily exceed the net worth of the issuer.
This was the most shameful and most mindless form of speculation. Gamblers were betting hands that they could not cover. The US regulators fled their posts. The American financial institutions abandoned all integrity. As a consequence, American financial institutions and rating agencies are trusted nowhere on earth.
The US government should never have used billions of taxpayers' dollars to pay off swap bets as it did when it bailed out the insurance company AIG. This was a stunning waste of a vast sum of money. The federal government should declare all swap agreements to be fraudulent contracts, except for a single swap held by the owner of the asset. Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of "troubled" assets that threaten financial markets.
The billions of taxpayers' dollars spent buying up subprime derivatives were also wasted. The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time.
Taxpayers, equity owners, and the credit standing of the US government are being ruined by financial shysters who are manipulating to their own advantage the government's commitment to mark-to-market and to the "sanctity of contracts." Multi-trillion dollar "bailouts" and bank nationalization are the result of the government's inability to respond intelligently.
Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule.
The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to rip-off American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day. In other words, speculators could not make money at others' expense by ganging up on a stock and short-selling it day after day.
As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support. No bailout or stimulus plan has any hope until the uptick rule is reinstated.
The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.
The Bush and Obama plans total 1.6 trillion dollars, every one of which will have to be borrowed, and no one knows from where. This huge sum will compromise the value of the US dollar, its role as reserve currency, the ability of the US government to service its debt, and the price level. These staggering costs are pointless and are to no avail, as not one step has been taken that would alleviate the crisis.
If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars.
According to its hopeful but economically ignorant proponents, globalism was supposed to balance risks across national economies and to offset downturns in one part of the world with upturns in other parts. A global portfolio was a protection against loss, claimed globalism's purveyors. In fact, globalism has concentrated the risks, resulting in Wall Street's greed endangering all the economies of the world. The greed of Wall Street and the negligence of the US government have wrecked the prospects of many nations. Street riots are already occurring in parts of the world. On Sunday February 22, the right-wing TV station, Fox "News," presented a program that predicted riots and disarray in the United States by 2014.
How long will Americans permit "their" government to rip them off for the sake of the financial interests that caused the problem? Obama's cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem. The Obama administration is not a government capable of preventing a catastrophe.
If truth be known, the "banking problem" is the least of our worries. Our economy faces two much more serious problems. One is that offshoring and H-1b visas have stopped the growth of family incomes, except, of course, for the super rich. To keep the economy going, consumers have gone deeper into debt, maxing out their credit cards and refinancing their homes and spending the equity. Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point.
The other serious problem is the status of the US dollar as reserve currency. This status has allowed the US, now a country heavily dependent on imports just like a third world or lesser-developed country, to pay its international bills in its own currency. We are able to import $800 billion annually more than we produce, because the foreign countries from whom we import are willing to accept paper for their goods and services.
If the dollar loses its reserve currency role, foreigners will not accept dollars in exchange for real things. This event would be immensely disruptive to an economy dependent on imports for its energy, its clothes, its shoes, its manufactured products, and its advanced technology products.
If incompetence in Washington, the type of incompetence that produced the current economic crisis, destroys the dollar as reserve currency, the "unipower" will overnight become a third world country, unable to pay for its imports or to sustain its standard of living.
How long can the US government protect the dollar's value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world's fiat currencies.
*(An excellent explanation of swaps can be found here.)
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com
Doomed by the Myths of Free Trade
How the Economy was Lost
By PAUL CRAIG ROBERTS
The American economy has gone away. It is not coming back until free trade myths are buried six feet under.
America's 20th century economic success was based on two things. Free trade was not one of them. America's economic success was based on protectionism, which was ensured by the union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.
World War II and socialism together ensured that the US economy dominated the world at the mid 20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism [in terms of the priorities of the capitalist growth model. Editors.]
The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for cooperating with America's cold war and foreign policies. For example, Turkey's US textile quotas were increased in exchange for over-flight rights in the Gulf War, making lost US textile jobs an off-budget war expense.
In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the "free market" Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.
Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington DC aided and abetted the erosion of America's economic position. What we didn't give away, the United States let be taken away while preaching a "free trade" doctrine at which the rest of the world scoffed.
Fortunately, the U.S.'s adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to America's diminishing economic prowess.
This furlough from reality ended when Soviet, Chinese, and Indian socialism surrendered around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly, American and other first world corporations discovered that a massive supply of foreign labor was available at practically free wages.
To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.
As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.
"Free market economists" covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasn't long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.
The American corporations quickly learned that by declaring "shortages" of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.
Chasing after shareholder return and "performance bonuses," US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America's ability to finance its trade deficit.
As the American economy eroded away bit by bit, "free market" ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these "old economy" jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the "service economy" of software and communications would provide a leg up for the work force.
Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.
The "free market" economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted, "outsourcing's inner circle has deep roots in GE (General Electric) and McKinsey," a consulting firm. Indeed, one of McKinsey's main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obama's White House National Economic Council.
The pressure of jobs offshoring, together with vast imports, has destroyed the economic prospects for all Americans, except the CEOs who receive "performance" bonuses for moving American jobs offshore or giving them to H-1b work visa holders. Lowly paid offshored employees, together with H-1b visas, have curtailed employment for older and more experienced American workers. Older workers traditionally receive higher pay. However, when the determining factor is minimizing labor costs for the sake of shareholder returns and management bonuses, older workers are unaffordable. Doing a good job, providing a good service, is no longer the corporation's function. Instead, the goal is to minimize labor costs at all cost.
Thus, "free trade" has also destroyed the employment prospects of older workers. Forced out of their careers, they seek employment as shelf stockers for Wal-Mart.
I have read endless tributes to Wal-Mart from "libertarian economists," who sing Wal-Mart's praises for bringing low price goods, 70 per cent of which are made in China, to the American consumer. What these "economists" do not factor into their analysis is the diminution of American family incomes and government tax base from the loss of the goods producing jobs to China. Ladders of upward mobility are being dismantled by offshoring, while California issues IOUs to pay its bills. The shift of production offshore reduces US GDP. When the goods and services are brought back to America to be sold, they increase the trade deficit. As the trade deficit is financed by foreigners acquiring ownership of US assets, this means that profits, dividends, capital gains, interest, rents, and tolls leave American pockets for foreign ones.
The demise of America's productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a "security." The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.
In pursuit of ever more profits, financial institutions began betting on the success and failure of various debt instruments and by implication on firms. They bought and sold collateral debt swaps. A buyer pays a premium to a seller for a swap to guarantee an asset's value. If an asset "insured" by a swap falls in value, the seller of the swap is supposed to make the owner of the swap whole. The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets.*
The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee. As the issuers of swaps were not required to reserve against them, and as there is no limit to the number of swaps, the payouts could easily exceed the net worth of the issuer.
This was the most shameful and most mindless form of speculation. Gamblers were betting hands that they could not cover. The US regulators fled their posts. The American financial institutions abandoned all integrity. As a consequence, American financial institutions and rating agencies are trusted nowhere on earth.
The US government should never have used billions of taxpayers' dollars to pay off swap bets as it did when it bailed out the insurance company AIG. This was a stunning waste of a vast sum of money. The federal government should declare all swap agreements to be fraudulent contracts, except for a single swap held by the owner of the asset. Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of "troubled" assets that threaten financial markets.
The billions of taxpayers' dollars spent buying up subprime derivatives were also wasted. The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time.
Taxpayers, equity owners, and the credit standing of the US government are being ruined by financial shysters who are manipulating to their own advantage the government's commitment to mark-to-market and to the "sanctity of contracts." Multi-trillion dollar "bailouts" and bank nationalization are the result of the government's inability to respond intelligently.
Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule.
The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to rip-off American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day. In other words, speculators could not make money at others' expense by ganging up on a stock and short-selling it day after day.
As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support. No bailout or stimulus plan has any hope until the uptick rule is reinstated.
The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.
The Bush and Obama plans total 1.6 trillion dollars, every one of which will have to be borrowed, and no one knows from where. This huge sum will compromise the value of the US dollar, its role as reserve currency, the ability of the US government to service its debt, and the price level. These staggering costs are pointless and are to no avail, as not one step has been taken that would alleviate the crisis.
If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars.
According to its hopeful but economically ignorant proponents, globalism was supposed to balance risks across national economies and to offset downturns in one part of the world with upturns in other parts. A global portfolio was a protection against loss, claimed globalism's purveyors. In fact, globalism has concentrated the risks, resulting in Wall Street's greed endangering all the economies of the world. The greed of Wall Street and the negligence of the US government have wrecked the prospects of many nations. Street riots are already occurring in parts of the world. On Sunday February 22, the right-wing TV station, Fox "News," presented a program that predicted riots and disarray in the United States by 2014.
How long will Americans permit "their" government to rip them off for the sake of the financial interests that caused the problem? Obama's cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem. The Obama administration is not a government capable of preventing a catastrophe.
If truth be known, the "banking problem" is the least of our worries. Our economy faces two much more serious problems. One is that offshoring and H-1b visas have stopped the growth of family incomes, except, of course, for the super rich. To keep the economy going, consumers have gone deeper into debt, maxing out their credit cards and refinancing their homes and spending the equity. Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point.
The other serious problem is the status of the US dollar as reserve currency. This status has allowed the US, now a country heavily dependent on imports just like a third world or lesser-developed country, to pay its international bills in its own currency. We are able to import $800 billion annually more than we produce, because the foreign countries from whom we import are willing to accept paper for their goods and services.
If the dollar loses its reserve currency role, foreigners will not accept dollars in exchange for real things. This event would be immensely disruptive to an economy dependent on imports for its energy, its clothes, its shoes, its manufactured products, and its advanced technology products.
If incompetence in Washington, the type of incompetence that produced the current economic crisis, destroys the dollar as reserve currency, the "unipower" will overnight become a third world country, unable to pay for its imports or to sustain its standard of living.
How long can the US government protect the dollar's value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world's fiat currencies.
*(An excellent explanation of swaps can be found here.)
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com
Judicial Watch Announces List of Washington's "Ten Most Wanted Corrupt Politicians" for 2008
Judicial Watch Announces List of Washington's "Ten Most Wanted Corrupt Politicians" for 2008
http://www.ibtimes.com/prnews/20081231/judicial-watch-announces-list-of-washingtons-ten-most-wanted-corrupt-politicians-for-2008.htm
WASHINGTON, DC -- (Marketwire) -- 12/31/08 -- Judicial Watch, the public interest groupthat investigates and prosecutes government corruption, today released its2008 list of Washington's "Ten Most Wanted Corrupt Politicians." The list,in alphabetical order, includes:
Senator Hillary Clinton (D-NY): Let's start with the fact that HillaryClinton is constitutionally ineligible to serve as Secretary of State inthe Obama administration. According to the Ineligibility Clause of theUnited States Constitution, no member of Congress can be appointed to anoffice that has benefited from a salary increase during the time thatSenator or Representative served in Congress. A January 2008 ExecutiveOrder signed by President Bush during Hillary Clinton's current Senate termincreased the salary for Secretary of State, thereby rendering SenatorClinton ineligible for the position. (Congressional "fixes" do not addressthe constitutional issue. Her appointment would be in violation of theU.S. Constitution.) And then, of course, there is the long history ofcorrupt behavior that follows Hillary wherever she goes, includingChinagate, Filegate, pardons for terrorists, pardons for cash (for herbrothers), White House fundraising coffees, Whitewater, Travelgate lies,doing business with the State of Arkansas while her husband was governor,Web Hubbell, smear campaigns, false financial disclosure forms, John Huang,Chinese generals, the Lippo Group, paid sleepovers in the Lincoln Bedroom,cattle futures fraud, and stealing White House furniture. (This corruptionis still going strong. In 2008, Hillary also received an illegal foreigncampaign contribution in the form of a fundraising concert by music iconElton John.)
Senator Chris Dodd (D-CT): Question: Which member of the U.S. Senate tookthe most campaign money from corrupt institutions Fannie Mae and FreddieMac? Answer: Chris Dodd, Chairman of the Senate Banking Committee. Giventhis fact there is little reason to wonder why Senator Dodd blocked reformproposals for Fannie and Freddie, calling them "ill advised." Dodd'swillingness to protect Fannie and Freddie would alone merit a spot on the"ten most corrupt list," but there is much more. Dodd was also nabbed foraccepting preferential treatment and loan terms from Countrywide Financial.The Connecticut Senator admitted earlier this year that he was told in 2003when he refinanced two properties that he was being placed in Countrywide's"VIP Program," but said he believed this was simply a courtesy that hadnothing to do with his position in the U.S. Senate. This is either ablatant lie or horribly naïve for a man who has served in the Senate formore than 25 years and currently chairs the Senate Banking Committee thatregulates the mortgage industry. We're not buying it.
Obama Advisor Valerie Jarrett (D-IL): CBS News once called Chicagopolitician Valerie Jarrett "the other side of Barack Obama's brain."Residents of a housing project in Chicago simply know her as "slumlord."Jarrett is the former manager of Grove Parc Plaza, a controversiallow-income housing project located in Obama's former state senate district.According to the Boston Globe, the housing complex was considered"uninhabitable by unfixed problems, such as collapsed roofs and firedamage... In 2006, federal inspectors graded the condition of the complexan 11 on a 100-point scale -- a score so bad the buildings now facedemolition." According to documents uncovered by Judicial Watch, Jarrettis also linked to a series of other shady real estate scandals involvingconvicted felon and former Obama fundraiser Antoin "Tony" Rezko. Jarretthas also been caught up in the Blagojevich scandal as Obama's Candidate #1for his senate seat. Most of Blagojevich's corrupt negotiations with theObama team centered on the possible Jarrett appointment. She remains mumon the scandal.
Rep. Jerry Lewis (R-CA): Rep. Lewis may share a name with a world-renownedcomedian, but there's nothing funny about his addiction to influencepeddling and earmarking. Lewis, the senior Republican on the HouseAppropriations Committee, is under investigation for approving hundreds ofmillions of dollars in federal projects to benefit clients of one of hisbest friends, lobbyist and former Congressman Bill Lowery. According topress reports, Lowery, partners in his company and their clients donatedapproximately 37% of the funds collected by Lewis' campaign PAC over asix-year period (an estimated $480,000) in return. Lowery has benefitedhandsomely from his relationship to Lewis. His company more than tripledits income between 1998 and 2004 with help from Lewis, while increasing itsclient base from 21 clients to 101 over that same time period. Despitethese allegations, Lewis maintains his high-ranking position on the HouseAppropriations Committee.
President-Elect Barack Obama (D-IL): As Barack Obama assumes thepresidency he already brings to the White House a large amount of ethicalbaggage. Obama's presidential campaign had some of the ethical trimmingsof a Chicago ward election. It was marked with enormous corruption issues,ranging from its alliance with the sleazy ACORN operation's "voterregistration" and "get out the vote" efforts to its acceptance ofuntraceable, and in too many cases, illegal online contributions. Thereare also Obama's corrupt dealings with convicted felon Tony Rezko andunrepentant terrorist William Ayers, his below-market rate mortgage loans,his stock dealings and related "earmark" votes in the U.S. Senate, and hismissing or non-existent official papers from his years in the IllinoisState Senate. His ongoing cover up of his and his team's role in theBlagojevich "pay-to-play" scandal is ruining his presidency even before hetakes the oath of office.
House Speaker Nancy Pelosi (D-CA): Last year House Speaker Nancy Pelosimade the "most corrupt" list for sneaking a $25 million earmark for herhusband into a $15 billion Water Resources Development Act passed byCongress. This year, Pelosi ran afoul of federal election law byparticipating in an illegal advertising campaign funded by Al Gore'snon-profit Alliance for Climate protection. The advertisement featuringPelosi ran at least 300 times nationally, including in the House speaker'sdistrict, during campaign season, representing an illegal in-kindcontribution to her campaign. Perhaps more disturbing than this incident,however, is the fact that Speaker Pelosi has allowed corruption to runrampant in Congress and has ignored serious incidents of crooked behaviorwithin her own party. Pelosi promised a new era of ethics enforcementduring the 2006 campaign and she has failed to deliver. Instead, shecontinues to protect the worst of the worst of political corruption in theHouse of Representatives.
Rep. Charles Rangel (D-NY): Rep. Charles Rangel, Chairman of the powerfulWays and Means Committee, took the unusual step of filing an ethicscomplaint against himself in 2008 related to scandals involving unpaidtaxes and rent-controlled apartments. This act was clearly a publicitystunt, but regardless, the House Ethics Committee took the New Yorkcongressman up on his request, and even took things a step further byexpanding the scope of its investigation. The initial transgressions thatled to the ethics panel probe involve: Rangel's failure to pay taxes on$75,000 in rental income he earned from his off-shore rental property; hisefforts to use his influence to keep hold of highly coveted rent-controlledapartments in Harlem; and misusing his congressional office to fundraisefor his private Rangel Center. Now Congress is looking into whether or notRangel preserved a tax loophole for an oil drilling company in exchange forfunding for the Rangel Center as well.
Former Rep. Rick Renzi (R-AZ): Three-term Republican congressman RickRenzi was indicted by a federal grand jury in 2008 for conspiracy,extortion, money laundering and wire fraud. He allegedly used hisinfluence on a House Natural Resources Committee to orchestrate a land swapwith the federal government that financially benefited himself and hisassociates. The 49-year-old lawmaker, who owns an insurance business, isalso charged with embezzling more than $400,000 from insurance clients tofund his congressional campaign. A 26-page federal indictment lays out howthe legislator and his business associates conspired to obtain federalgovernment land by swapping land they owned together because the covetedpublic land sits above underground copper deposits. The indictment saysthat the congressman concealed nearly $1 million that he made for using hisinfluence to seal the land deals. No wonder Renzi decided to retire thisyear.
Former Senator Ted Stevens (R-AK): "Uncle Ted" Stevens, the face of Alaskapolitics for 40 years and formerly the longest serving Republican in theU.S. Senate, was narrowly defeated in his campaign for re-election inNovember. But that's the least of his problems. Just days before theNovember election, Stevens was convicted on seven felony counts foraccepting illegal gifts and then lying about it. The establishment of bothpolitical parties came to Stevens' defense, including former Secretary ofState Colin Powell and Democratic Senator Daniel Inouye, but to no avail.The jury found Stevens guilty on all counts. And now Stevens faces thepossibility of a 35-year prison sentence.
Rep. Don Young (R-AK): Carrying on Alaska's legacy of corruption, Rep. DonYoung is also the subject of an influence peddling investigation. (You mayrecall it was Young who attempted to push through the $200 million "Bridgeto Nowhere" boondoggle.) Well the Justice Department is also investigatingthe 18-term congressman for his corrupt ties to an oil services company,VECO, ironically the same company that furnished illegal gifts to SenatorTed Stevens. VECO allegedly used golf tournaments and pig roasts toillegally funnel cash to Young, which the 18-term congressman then failedto report on his financial disclosure forms. VECO Vice President RickSmith has already pleaded guilty to bribing lawmakers to supportoil-friendly legislation. The Alaska Republican also added a $10 millionearmark for the construction of short stretch of road in Florida thatbenefited a wealthy campaign contributor. Real estate developer, DanielAronoff, had raised $40,000 for Young shortly before the earmark wasinserted.
DISHONORABLE MENTIONS
Former Senator John Edwards (D-NC): By day, former North Carolina Senatorand Democratic presidential candidate John Edwards repeatedly professed hislove for his cancer-stricken wife during media interviews and campaignspeeches. By night, Edwards was carrying on an illicit sexual affair witha former campaign consultant, Rielle Hunter. Of course, Edwards denied theaffair (calling it "tabloid trash") even after he was trapped in thebasement of the Beverly Hilton hotel by reporters from the NationalEnquirer during one of his late-night liaisons with Ms. Hunter. WhileEdwards did finally admit to violating his marriage vows, questions remainas to whether or not he broke any laws. Edwards' former National FinanceChairman (who just passed away) paid large sums of money to Ms. Hunter, asmuch as $15,000 per month, in addition to covering Hunter's movingexpenses. Were these "hush funds" paid out of Edwards' campaign coffers?
Former Rep. William "Dollar Bill" Jefferson (D-LA): William "Dollar Bill"Jefferson was nabbed in a sting operation accepting a $100,000 bribe froman FBI informant to broker business deals in Africa. During hisconversation with the informant, who was wired, Jefferson famouslyremarked, "All these notes we're writing to each other, as if the FBI iswatching." Well, the FBI was watching (and listening) and during asubsequent search of Jefferson's home, investigators found $90,000 in cashstuffed in the congressman's freezer. (The marked bills were laterrecovered by federal authorities.) Jefferson allegedly intended to use themoney to bribe a Nigerian official over a business deal that would haveenriched himself and his family. Jefferson was widely expected to returnto Congress despite these serious allegations. However, in a December 2008special election surprise, voters decided instead to send "Dollar Bill"into retirement.
Judicial Watch is a 501(c)(3) non-profit organization. Judicial Watchneither supports nor opposes candidates for public office. For moreinformation, visit www.judicialwatch.org.
Contact:Jill Farrell202-646-5188
http://www.ibtimes.com/prnews/20081231/judicial-watch-announces-list-of-washingtons-ten-most-wanted-corrupt-politicians-for-2008.htm
WASHINGTON, DC -- (Marketwire) -- 12/31/08 -- Judicial Watch, the public interest groupthat investigates and prosecutes government corruption, today released its2008 list of Washington's "Ten Most Wanted Corrupt Politicians." The list,in alphabetical order, includes:
Senator Hillary Clinton (D-NY): Let's start with the fact that HillaryClinton is constitutionally ineligible to serve as Secretary of State inthe Obama administration. According to the Ineligibility Clause of theUnited States Constitution, no member of Congress can be appointed to anoffice that has benefited from a salary increase during the time thatSenator or Representative served in Congress. A January 2008 ExecutiveOrder signed by President Bush during Hillary Clinton's current Senate termincreased the salary for Secretary of State, thereby rendering SenatorClinton ineligible for the position. (Congressional "fixes" do not addressthe constitutional issue. Her appointment would be in violation of theU.S. Constitution.) And then, of course, there is the long history ofcorrupt behavior that follows Hillary wherever she goes, includingChinagate, Filegate, pardons for terrorists, pardons for cash (for herbrothers), White House fundraising coffees, Whitewater, Travelgate lies,doing business with the State of Arkansas while her husband was governor,Web Hubbell, smear campaigns, false financial disclosure forms, John Huang,Chinese generals, the Lippo Group, paid sleepovers in the Lincoln Bedroom,cattle futures fraud, and stealing White House furniture. (This corruptionis still going strong. In 2008, Hillary also received an illegal foreigncampaign contribution in the form of a fundraising concert by music iconElton John.)
Senator Chris Dodd (D-CT): Question: Which member of the U.S. Senate tookthe most campaign money from corrupt institutions Fannie Mae and FreddieMac? Answer: Chris Dodd, Chairman of the Senate Banking Committee. Giventhis fact there is little reason to wonder why Senator Dodd blocked reformproposals for Fannie and Freddie, calling them "ill advised." Dodd'swillingness to protect Fannie and Freddie would alone merit a spot on the"ten most corrupt list," but there is much more. Dodd was also nabbed foraccepting preferential treatment and loan terms from Countrywide Financial.The Connecticut Senator admitted earlier this year that he was told in 2003when he refinanced two properties that he was being placed in Countrywide's"VIP Program," but said he believed this was simply a courtesy that hadnothing to do with his position in the U.S. Senate. This is either ablatant lie or horribly naïve for a man who has served in the Senate formore than 25 years and currently chairs the Senate Banking Committee thatregulates the mortgage industry. We're not buying it.
Obama Advisor Valerie Jarrett (D-IL): CBS News once called Chicagopolitician Valerie Jarrett "the other side of Barack Obama's brain."Residents of a housing project in Chicago simply know her as "slumlord."Jarrett is the former manager of Grove Parc Plaza, a controversiallow-income housing project located in Obama's former state senate district.According to the Boston Globe, the housing complex was considered"uninhabitable by unfixed problems, such as collapsed roofs and firedamage... In 2006, federal inspectors graded the condition of the complexan 11 on a 100-point scale -- a score so bad the buildings now facedemolition." According to documents uncovered by Judicial Watch, Jarrettis also linked to a series of other shady real estate scandals involvingconvicted felon and former Obama fundraiser Antoin "Tony" Rezko. Jarretthas also been caught up in the Blagojevich scandal as Obama's Candidate #1for his senate seat. Most of Blagojevich's corrupt negotiations with theObama team centered on the possible Jarrett appointment. She remains mumon the scandal.
Rep. Jerry Lewis (R-CA): Rep. Lewis may share a name with a world-renownedcomedian, but there's nothing funny about his addiction to influencepeddling and earmarking. Lewis, the senior Republican on the HouseAppropriations Committee, is under investigation for approving hundreds ofmillions of dollars in federal projects to benefit clients of one of hisbest friends, lobbyist and former Congressman Bill Lowery. According topress reports, Lowery, partners in his company and their clients donatedapproximately 37% of the funds collected by Lewis' campaign PAC over asix-year period (an estimated $480,000) in return. Lowery has benefitedhandsomely from his relationship to Lewis. His company more than tripledits income between 1998 and 2004 with help from Lewis, while increasing itsclient base from 21 clients to 101 over that same time period. Despitethese allegations, Lewis maintains his high-ranking position on the HouseAppropriations Committee.
President-Elect Barack Obama (D-IL): As Barack Obama assumes thepresidency he already brings to the White House a large amount of ethicalbaggage. Obama's presidential campaign had some of the ethical trimmingsof a Chicago ward election. It was marked with enormous corruption issues,ranging from its alliance with the sleazy ACORN operation's "voterregistration" and "get out the vote" efforts to its acceptance ofuntraceable, and in too many cases, illegal online contributions. Thereare also Obama's corrupt dealings with convicted felon Tony Rezko andunrepentant terrorist William Ayers, his below-market rate mortgage loans,his stock dealings and related "earmark" votes in the U.S. Senate, and hismissing or non-existent official papers from his years in the IllinoisState Senate. His ongoing cover up of his and his team's role in theBlagojevich "pay-to-play" scandal is ruining his presidency even before hetakes the oath of office.
House Speaker Nancy Pelosi (D-CA): Last year House Speaker Nancy Pelosimade the "most corrupt" list for sneaking a $25 million earmark for herhusband into a $15 billion Water Resources Development Act passed byCongress. This year, Pelosi ran afoul of federal election law byparticipating in an illegal advertising campaign funded by Al Gore'snon-profit Alliance for Climate protection. The advertisement featuringPelosi ran at least 300 times nationally, including in the House speaker'sdistrict, during campaign season, representing an illegal in-kindcontribution to her campaign. Perhaps more disturbing than this incident,however, is the fact that Speaker Pelosi has allowed corruption to runrampant in Congress and has ignored serious incidents of crooked behaviorwithin her own party. Pelosi promised a new era of ethics enforcementduring the 2006 campaign and she has failed to deliver. Instead, shecontinues to protect the worst of the worst of political corruption in theHouse of Representatives.
Rep. Charles Rangel (D-NY): Rep. Charles Rangel, Chairman of the powerfulWays and Means Committee, took the unusual step of filing an ethicscomplaint against himself in 2008 related to scandals involving unpaidtaxes and rent-controlled apartments. This act was clearly a publicitystunt, but regardless, the House Ethics Committee took the New Yorkcongressman up on his request, and even took things a step further byexpanding the scope of its investigation. The initial transgressions thatled to the ethics panel probe involve: Rangel's failure to pay taxes on$75,000 in rental income he earned from his off-shore rental property; hisefforts to use his influence to keep hold of highly coveted rent-controlledapartments in Harlem; and misusing his congressional office to fundraisefor his private Rangel Center. Now Congress is looking into whether or notRangel preserved a tax loophole for an oil drilling company in exchange forfunding for the Rangel Center as well.
Former Rep. Rick Renzi (R-AZ): Three-term Republican congressman RickRenzi was indicted by a federal grand jury in 2008 for conspiracy,extortion, money laundering and wire fraud. He allegedly used hisinfluence on a House Natural Resources Committee to orchestrate a land swapwith the federal government that financially benefited himself and hisassociates. The 49-year-old lawmaker, who owns an insurance business, isalso charged with embezzling more than $400,000 from insurance clients tofund his congressional campaign. A 26-page federal indictment lays out howthe legislator and his business associates conspired to obtain federalgovernment land by swapping land they owned together because the covetedpublic land sits above underground copper deposits. The indictment saysthat the congressman concealed nearly $1 million that he made for using hisinfluence to seal the land deals. No wonder Renzi decided to retire thisyear.
Former Senator Ted Stevens (R-AK): "Uncle Ted" Stevens, the face of Alaskapolitics for 40 years and formerly the longest serving Republican in theU.S. Senate, was narrowly defeated in his campaign for re-election inNovember. But that's the least of his problems. Just days before theNovember election, Stevens was convicted on seven felony counts foraccepting illegal gifts and then lying about it. The establishment of bothpolitical parties came to Stevens' defense, including former Secretary ofState Colin Powell and Democratic Senator Daniel Inouye, but to no avail.The jury found Stevens guilty on all counts. And now Stevens faces thepossibility of a 35-year prison sentence.
Rep. Don Young (R-AK): Carrying on Alaska's legacy of corruption, Rep. DonYoung is also the subject of an influence peddling investigation. (You mayrecall it was Young who attempted to push through the $200 million "Bridgeto Nowhere" boondoggle.) Well the Justice Department is also investigatingthe 18-term congressman for his corrupt ties to an oil services company,VECO, ironically the same company that furnished illegal gifts to SenatorTed Stevens. VECO allegedly used golf tournaments and pig roasts toillegally funnel cash to Young, which the 18-term congressman then failedto report on his financial disclosure forms. VECO Vice President RickSmith has already pleaded guilty to bribing lawmakers to supportoil-friendly legislation. The Alaska Republican also added a $10 millionearmark for the construction of short stretch of road in Florida thatbenefited a wealthy campaign contributor. Real estate developer, DanielAronoff, had raised $40,000 for Young shortly before the earmark wasinserted.
DISHONORABLE MENTIONS
Former Senator John Edwards (D-NC): By day, former North Carolina Senatorand Democratic presidential candidate John Edwards repeatedly professed hislove for his cancer-stricken wife during media interviews and campaignspeeches. By night, Edwards was carrying on an illicit sexual affair witha former campaign consultant, Rielle Hunter. Of course, Edwards denied theaffair (calling it "tabloid trash") even after he was trapped in thebasement of the Beverly Hilton hotel by reporters from the NationalEnquirer during one of his late-night liaisons with Ms. Hunter. WhileEdwards did finally admit to violating his marriage vows, questions remainas to whether or not he broke any laws. Edwards' former National FinanceChairman (who just passed away) paid large sums of money to Ms. Hunter, asmuch as $15,000 per month, in addition to covering Hunter's movingexpenses. Were these "hush funds" paid out of Edwards' campaign coffers?
Former Rep. William "Dollar Bill" Jefferson (D-LA): William "Dollar Bill"Jefferson was nabbed in a sting operation accepting a $100,000 bribe froman FBI informant to broker business deals in Africa. During hisconversation with the informant, who was wired, Jefferson famouslyremarked, "All these notes we're writing to each other, as if the FBI iswatching." Well, the FBI was watching (and listening) and during asubsequent search of Jefferson's home, investigators found $90,000 in cashstuffed in the congressman's freezer. (The marked bills were laterrecovered by federal authorities.) Jefferson allegedly intended to use themoney to bribe a Nigerian official over a business deal that would haveenriched himself and his family. Jefferson was widely expected to returnto Congress despite these serious allegations. However, in a December 2008special election surprise, voters decided instead to send "Dollar Bill"into retirement.
Judicial Watch is a 501(c)(3) non-profit organization. Judicial Watchneither supports nor opposes candidates for public office. For moreinformation, visit www.judicialwatch.org.
Contact:Jill Farrell202-646-5188
545 vs 300,000,000
EVERY CITIZEN NEEDS TO READ THIS AND THINK ABOUT WHAT THIS JOURNALIST HAS SCRIPTED IN THIS MESSAGE. READ IT AND THEN REALLY THINK ABOUT OUR CURRENT POLITICAL DEBACLE.
Charley Reese has been a journalist for 49 years.
[]
545 vs 300,000,000
http://www.rense.com/general83/reese.htm
By Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The president does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one president, and nine Supreme Court justices 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash.
The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? Nancy Pelosi. She is the leader of the majority party.
She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in IRAQ, it's because they want them in IRAQ.
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy," "inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees.
We should vote all of them out of office and clean up their mess!
Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.
What you do with this article now that you have read it........ Is up to you.
Charley Reese has been a journalist for 49 years.
[]
545 vs 300,000,000
http://www.rense.com/general83/reese.htm
By Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The president does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one president, and nine Supreme Court justices 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash.
The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? Nancy Pelosi. She is the leader of the majority party.
She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in IRAQ, it's because they want them in IRAQ.
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy," "inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees.
We should vote all of them out of office and clean up their mess!
Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.
What you do with this article now that you have read it........ Is up to you.
Top 10: Financial Crises
Top 10: Financial Crises
These 10 disasters all gave rise to widespread pandemonium and all starred that most slippery of tricksters: money.
By Ross Bonander, Entertainment Correspondent
Page 1: Financial crises
Stock market crash - Credit: Fotolia
Whether or not Karl Marx, the archenemy of wealth, ever compared money to evil, I do not know. He did, however, write about what he felt was money’s most intriguing quality: its ability to turn everything into its contrary. For example, if you’re ugly but rich, you can buy the most beautiful women; thus, money negates or flip-flops the very quality that should repel those women. On whom or what precisely this point reflects most poorly -- cash or chicks -- is for someone else to figure out. In the meantime, what follows is a century’s worth of financial crises, starring that most slippery of trickster characters, money.
Number 10
The Panic of 1907
The fourth so-called ”panic” in 34 years, the Panic of 1907 was brought about by the usual suspects: overexpansion and poor speculation. The stock market crashed in March, and a second crash in October led to a run on banks and every trust in New York, notably causing the massive National Bank of North America to fail. The U.S. Treasury department -- with exceptional help from J.P. Morgan and some select executives -- raced in with federal money and some creative financial ”redirection.” Confidence in the market had been restored by February 1908, and in May, Congress passed the Aldrich-Vreeland Act, which created the National Monetary Commission that later recommended the Federal Reserve Act in an effort to squash any future panics before they were able to do such tremendous damage to the economy.
Number 9
El Error de Diciembre - 1994
Also known as the Mexican Peso Crisis, this title is not a reference to the ”girl” you hooked up with during some poorly recalled winter vacation in Mazatlan. Rather, “The December Mistake” stems from the incoming Mexican government’s pressing need to correct some monumental mistakes left behind by its outgoing administration.
The year leading up to the “Mistake” featured enough turmoil to make any investor more than a little shy: A rebel uprising in Chiapas, rumors of corruption at the highest levels of government and a pair of political assassinations a few months apart, to name a few. Incoming President Ernesto Zedillo’s administration saw no choice but to devalue the peso; a move that caused cash to flee the country so quickly and so dramatically that the government itself nearly defaulted.
Number 8
Argentine economic crisis - 1999
The 1980s were a difficult time for Argentina: military dictatorship, the Falklands debacle, economic collapse, and massive inflation. Their debt grew throughout the 1990s and, coupled with corruption, the country landed in a full-blown recession by 1999 -- one it couldn’t seem to counter with economic policy. True to form, investors lost confidence, and a drastic run on banks forced the government to freeze bank accounts for a full year, permitting only meager withdrawals. Demonstrations were followed by violent riots and the eventual fall of Fernando de la Rúa’s government. The next two administrations failed to right the ship, as countless public and private companies filed for or came close to filing for bankruptcy. A third administration, led by Nestor Kirchner, finally succeeded in stabilizing the economy.
If you have no money, is it a good idea to print more?
Page 2: Financial collapse
New York Stock Exchange - Credit: UPI
Number 7
German hyperinflation - 1918-24
In 1914, the exchange rate between the U.S. dollar and the German Mark was about 1 to 4. By 1923, the rate had mushroomed to $1 to 1 trillion Marks. Ordinarily, the idea of having so much cash that you have to cart it around in a wheelbarrow sounds good, but not when it hardly buys a loaf of bread.
In the aftermath of the First World War, the ”winners,” who blamed Germany for starting the war, set out to punish Germany and demanded financial retribution for the cost of the war. Unfortunately, Germany had little in the way of land, goods or precious metals to back it up, and its currency lost value by the day. What was the solution? Germany started the presses until the 1,000-billion Mark was produced. They issued the Rentenmark currency in 1923 in an effort to put the brakes on the inflation. The Rentenmark was replaced by the Reichmark in 1924. The hyperinflation came to an end, but not before embittering a generation of Germans and one especially surly über racist from Austria.
Number 6
Souk Al-Manakh - 1982
Could something as simple as postdated checks crush an economy? It’s never that simple, but it’s close enough for our purposes.
Kuwait’s Souk Al-Manakh stock market was an alternative market and not quite legal, especially next to the country’s official market. However, many new investors had little access to the legal market, which was largely controlled by old money, and began investing in the Souk Al-Manakh. Shares were being dealt heavily by postdated checks; an act that created a castle in the clouds that was quick to collapse. Thousands of investors held unregulated credit in the form of postdated or outstanding checks that amounted to about $94 billion. In truth, the money was never there and only two banks (one commercial) survived the crash. The Kuwaiti government stepped in and had barely begun to turn things around when Iraq invaded the country in 1990. On a brighter note, in today’s currency market, the Kuwaiti Dinar holds a higher value than any other national currency.
Number 5
Black Monday - 1987
Why Monday October 19, 1987? Why a massive stock market crash? How did $500 billion from the NYSE disappear into thin air? Many years later, no clear answers exist, largely because there were so few indicators that it was even coming. Whatever the cause, world markets took it in the gut: By the end of October 1987, the Australian market fell 41.8%, Canada’s plunged 22.5%, the United Kingdom’s fell 26.4%, and Hong Kong’s dropped a ridiculous 45.8%. One popular theory ascribes the crash to instant program trading and the growing influence of computers on Wall Street, but that debate rages. What is certain is that lots of people went broke very, very quickly.
Number 4
Russian financial crisis - 1998
Stricken by corruption, lacking an effective economic reform policy, devaluation of the ruble, and political instability sent Russia into a massive financial crisis as the millennium came to a close. Additionally, as the exporter of one-third of the world’s oil and natural gas reserves, Russia was hit even harder when those prices dropped. When foreign investors pulled their money out of the country, the banks were crippled to such an extent that even an IMF loan was largely ineffective. The crisis stung countries like Ukraine and the Czech Republic and directly hit the Dow, which suffered one of its biggest point drops in history.
Black Tuesday and an embargo on black gold top this list…
Page 3: Stock market crashes
Oil crisis - Credit: UPI
Number 3
East Asian financial crisis - 1997
The so-called “Asian economic miracle” turned disastrous in July 1997 when investors did what they do so well: lost confidence, particularly in currencies. High yield rates made Asian markets appealing, but when the U.S. tried to stem their own recession by lowering interest rates, they made themselves more attractive and, as a consequence, the Asian markets looked too risky. A domino effect followed, beginning in Thailand and spreading through the Philippines, Hong Kong, Indonesia, Malaysia and beyond, triggering an unprecedented global crisis. Asian markets that had enjoyed some rare prosperity were slammed: Thailand dipped 75%; Hong Kong’s HSI, 23%; and Singapore, 60%. Not a single global market went untouched.
Number 2
Black Tuesday - 1929
On October 29, 1929, $10 billion (around $95 billion today) turned to dust. Sounds more like a Tuesday in the red, but history has stamped it black.
In the years leading up to Black Tuesday, the Dow was turning countless men into millionaires. The market became a hobby for many ignorant investors who knew nothing about how the market worked, but they still readily poured all their money into the stocks of companies (many of which were fraudulent) that they knew nothing about.
When the government stepped in to try and cool things down by raising interest rates, panic ensued. Investors were desperate to liquidate their stocks, but the money was an illusion that created instant and unimaginable poverty. Unfortunately, banks also invested in stocks and the panic led to a run on those banks that reduced many to insolvency and failure. The country was thrust into the Great Depression, and much of the world followed. Unsurprisingly, a war was needed to return many of these countries to some semblance of economic prosperity.
As an aside, one wealthy investor who pulled out of the market before it collapsed was Joseph Kennedy, father to JFK, RFK and Teddy. We can only imagine how different the American political landscape may have been if Joseph didn’t get out early; perhaps the family compound would have been located in a dusty Hooverville, and not swanky Hyannisport.
Number 1
1973 Oil Crisis
After years of getting reamed by the West for its oil, the modest members of OPEC got wise: In the midst of the Yom Kippur war between Syria and Egypt against Israel, OPEC employed oil as a weapon with the Arab Oil Embargo against those who supported Israel. Crude oil costs rose while production was cut, specifically to the U.S. and the Netherlands. The embargo lasted only five months, but the affects continue today: OPEC member states realized a level of wealth unfathomable only years before; in six weeks shares on the NYSE lost $97 billion in value; Japanese car makers began to counter the American-made gas guzzlers with smaller cars, giving them a tremendous market share; the U.S. enacted a 55-mph speed limit in an effort to conserve oil; and, in 1977, President Carter created the Department of Energy, which promptly developed the U.S.’s strategic petroleum reserve (tapped George W. Bush when the price of oil skyrocketed).
rockin’ the stocks
Returning to Marx, the contrary quality of money he described in The Economic and Philosophic Manuscripts was not so much on display in the previous crises as money’s more frightening capacity to disappear in the blink of an eye. When there’s no money, the old barter system becomes more appealing by the second.
Resources:
http://en.wikipedia.org - Panic of 1907
http://en.wikipedia.org - Mexican peso crisis
http://en.wikipedia.org - Argentine economic crisis
http://en.wikipedia.org - Souk Al-Manakh
http://en.wikipedia.org - Black Monday
http://en.wikipedia.org - Russian financial crisis
http://en.wikipedia.org - Asian financial crisis
http://en.wikipedia.org - Black Tuesday
http://en.wikipedia.org - 1973 Oil Crisis
www.pbs.org
www.futurecasts.com
These 10 disasters all gave rise to widespread pandemonium and all starred that most slippery of tricksters: money.
By Ross Bonander, Entertainment Correspondent
Page 1: Financial crises
Stock market crash - Credit: Fotolia
Whether or not Karl Marx, the archenemy of wealth, ever compared money to evil, I do not know. He did, however, write about what he felt was money’s most intriguing quality: its ability to turn everything into its contrary. For example, if you’re ugly but rich, you can buy the most beautiful women; thus, money negates or flip-flops the very quality that should repel those women. On whom or what precisely this point reflects most poorly -- cash or chicks -- is for someone else to figure out. In the meantime, what follows is a century’s worth of financial crises, starring that most slippery of trickster characters, money.
Number 10
The Panic of 1907
The fourth so-called ”panic” in 34 years, the Panic of 1907 was brought about by the usual suspects: overexpansion and poor speculation. The stock market crashed in March, and a second crash in October led to a run on banks and every trust in New York, notably causing the massive National Bank of North America to fail. The U.S. Treasury department -- with exceptional help from J.P. Morgan and some select executives -- raced in with federal money and some creative financial ”redirection.” Confidence in the market had been restored by February 1908, and in May, Congress passed the Aldrich-Vreeland Act, which created the National Monetary Commission that later recommended the Federal Reserve Act in an effort to squash any future panics before they were able to do such tremendous damage to the economy.
Number 9
El Error de Diciembre - 1994
Also known as the Mexican Peso Crisis, this title is not a reference to the ”girl” you hooked up with during some poorly recalled winter vacation in Mazatlan. Rather, “The December Mistake” stems from the incoming Mexican government’s pressing need to correct some monumental mistakes left behind by its outgoing administration.
The year leading up to the “Mistake” featured enough turmoil to make any investor more than a little shy: A rebel uprising in Chiapas, rumors of corruption at the highest levels of government and a pair of political assassinations a few months apart, to name a few. Incoming President Ernesto Zedillo’s administration saw no choice but to devalue the peso; a move that caused cash to flee the country so quickly and so dramatically that the government itself nearly defaulted.
Number 8
Argentine economic crisis - 1999
The 1980s were a difficult time for Argentina: military dictatorship, the Falklands debacle, economic collapse, and massive inflation. Their debt grew throughout the 1990s and, coupled with corruption, the country landed in a full-blown recession by 1999 -- one it couldn’t seem to counter with economic policy. True to form, investors lost confidence, and a drastic run on banks forced the government to freeze bank accounts for a full year, permitting only meager withdrawals. Demonstrations were followed by violent riots and the eventual fall of Fernando de la Rúa’s government. The next two administrations failed to right the ship, as countless public and private companies filed for or came close to filing for bankruptcy. A third administration, led by Nestor Kirchner, finally succeeded in stabilizing the economy.
If you have no money, is it a good idea to print more?
Page 2: Financial collapse
New York Stock Exchange - Credit: UPI
Number 7
German hyperinflation - 1918-24
In 1914, the exchange rate between the U.S. dollar and the German Mark was about 1 to 4. By 1923, the rate had mushroomed to $1 to 1 trillion Marks. Ordinarily, the idea of having so much cash that you have to cart it around in a wheelbarrow sounds good, but not when it hardly buys a loaf of bread.
In the aftermath of the First World War, the ”winners,” who blamed Germany for starting the war, set out to punish Germany and demanded financial retribution for the cost of the war. Unfortunately, Germany had little in the way of land, goods or precious metals to back it up, and its currency lost value by the day. What was the solution? Germany started the presses until the 1,000-billion Mark was produced. They issued the Rentenmark currency in 1923 in an effort to put the brakes on the inflation. The Rentenmark was replaced by the Reichmark in 1924. The hyperinflation came to an end, but not before embittering a generation of Germans and one especially surly über racist from Austria.
Number 6
Souk Al-Manakh - 1982
Could something as simple as postdated checks crush an economy? It’s never that simple, but it’s close enough for our purposes.
Kuwait’s Souk Al-Manakh stock market was an alternative market and not quite legal, especially next to the country’s official market. However, many new investors had little access to the legal market, which was largely controlled by old money, and began investing in the Souk Al-Manakh. Shares were being dealt heavily by postdated checks; an act that created a castle in the clouds that was quick to collapse. Thousands of investors held unregulated credit in the form of postdated or outstanding checks that amounted to about $94 billion. In truth, the money was never there and only two banks (one commercial) survived the crash. The Kuwaiti government stepped in and had barely begun to turn things around when Iraq invaded the country in 1990. On a brighter note, in today’s currency market, the Kuwaiti Dinar holds a higher value than any other national currency.
Number 5
Black Monday - 1987
Why Monday October 19, 1987? Why a massive stock market crash? How did $500 billion from the NYSE disappear into thin air? Many years later, no clear answers exist, largely because there were so few indicators that it was even coming. Whatever the cause, world markets took it in the gut: By the end of October 1987, the Australian market fell 41.8%, Canada’s plunged 22.5%, the United Kingdom’s fell 26.4%, and Hong Kong’s dropped a ridiculous 45.8%. One popular theory ascribes the crash to instant program trading and the growing influence of computers on Wall Street, but that debate rages. What is certain is that lots of people went broke very, very quickly.
Number 4
Russian financial crisis - 1998
Stricken by corruption, lacking an effective economic reform policy, devaluation of the ruble, and political instability sent Russia into a massive financial crisis as the millennium came to a close. Additionally, as the exporter of one-third of the world’s oil and natural gas reserves, Russia was hit even harder when those prices dropped. When foreign investors pulled their money out of the country, the banks were crippled to such an extent that even an IMF loan was largely ineffective. The crisis stung countries like Ukraine and the Czech Republic and directly hit the Dow, which suffered one of its biggest point drops in history.
Black Tuesday and an embargo on black gold top this list…
Page 3: Stock market crashes
Oil crisis - Credit: UPI
Number 3
East Asian financial crisis - 1997
The so-called “Asian economic miracle” turned disastrous in July 1997 when investors did what they do so well: lost confidence, particularly in currencies. High yield rates made Asian markets appealing, but when the U.S. tried to stem their own recession by lowering interest rates, they made themselves more attractive and, as a consequence, the Asian markets looked too risky. A domino effect followed, beginning in Thailand and spreading through the Philippines, Hong Kong, Indonesia, Malaysia and beyond, triggering an unprecedented global crisis. Asian markets that had enjoyed some rare prosperity were slammed: Thailand dipped 75%; Hong Kong’s HSI, 23%; and Singapore, 60%. Not a single global market went untouched.
Number 2
Black Tuesday - 1929
On October 29, 1929, $10 billion (around $95 billion today) turned to dust. Sounds more like a Tuesday in the red, but history has stamped it black.
In the years leading up to Black Tuesday, the Dow was turning countless men into millionaires. The market became a hobby for many ignorant investors who knew nothing about how the market worked, but they still readily poured all their money into the stocks of companies (many of which were fraudulent) that they knew nothing about.
When the government stepped in to try and cool things down by raising interest rates, panic ensued. Investors were desperate to liquidate their stocks, but the money was an illusion that created instant and unimaginable poverty. Unfortunately, banks also invested in stocks and the panic led to a run on those banks that reduced many to insolvency and failure. The country was thrust into the Great Depression, and much of the world followed. Unsurprisingly, a war was needed to return many of these countries to some semblance of economic prosperity.
As an aside, one wealthy investor who pulled out of the market before it collapsed was Joseph Kennedy, father to JFK, RFK and Teddy. We can only imagine how different the American political landscape may have been if Joseph didn’t get out early; perhaps the family compound would have been located in a dusty Hooverville, and not swanky Hyannisport.
Number 1
1973 Oil Crisis
After years of getting reamed by the West for its oil, the modest members of OPEC got wise: In the midst of the Yom Kippur war between Syria and Egypt against Israel, OPEC employed oil as a weapon with the Arab Oil Embargo against those who supported Israel. Crude oil costs rose while production was cut, specifically to the U.S. and the Netherlands. The embargo lasted only five months, but the affects continue today: OPEC member states realized a level of wealth unfathomable only years before; in six weeks shares on the NYSE lost $97 billion in value; Japanese car makers began to counter the American-made gas guzzlers with smaller cars, giving them a tremendous market share; the U.S. enacted a 55-mph speed limit in an effort to conserve oil; and, in 1977, President Carter created the Department of Energy, which promptly developed the U.S.’s strategic petroleum reserve (tapped George W. Bush when the price of oil skyrocketed).
rockin’ the stocks
Returning to Marx, the contrary quality of money he described in The Economic and Philosophic Manuscripts was not so much on display in the previous crises as money’s more frightening capacity to disappear in the blink of an eye. When there’s no money, the old barter system becomes more appealing by the second.
Resources:
http://en.wikipedia.org - Panic of 1907
http://en.wikipedia.org - Mexican peso crisis
http://en.wikipedia.org - Argentine economic crisis
http://en.wikipedia.org - Souk Al-Manakh
http://en.wikipedia.org - Black Monday
http://en.wikipedia.org - Russian financial crisis
http://en.wikipedia.org - Asian financial crisis
http://en.wikipedia.org - Black Tuesday
http://en.wikipedia.org - 1973 Oil Crisis
www.pbs.org
www.futurecasts.com
U.S. Intel Chief's Shocking Warning: Wall Street's Disaster Has Spawned Our Greatest Terrorist Threat
U.S. Intel Chief's Shocking Warning:
Wall Street's Disaster Has Spawned Our Greatest Terrorist Threat
By Chris Hedges, Truthdig. Posted February 17, 2009.
The Director of National Intelligence argued that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorists.
We have a remarkable ability to create our own monsters. A few decades of meddling in the Middle East with our Israeli doppelgnger and we get Hezbollah, Hamas, al-Qaida, the Iraqi resistance movement and a resurgent Taliban. Now we trash the world economy and destroy the ecosystem and sit back to watch our handiwork. Hints of our brave new world seeped out Thursday when Washington's new director of national intelligence, retired Adm. Dennis Blair, testified before the Senate Intelligence Committee. He warned that the deepening economic crisis posed perhaps our gravest threat to stability and national security. It could trigger, he said, a return to the "violent extremism" of the 1920s and 1930s.
It turns out that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorists. We will see accelerated plant and retail closures, inflation, an epidemic of bankruptcies, new rounds of foreclosures, bread lines, unemployment surpassing the levels of the Great Depression and, as Blair fears, social upheaval.
The United Nations' International Labor Organization estimates that some 50 million workers will lose their jobs worldwide this year. The collapse has already seen 3.6 million lost jobs in the United States. The International Monetary Fund's prediction for global economic growth in 2009 is 0.5 percent--the worst since World War II. There are 2.3 million properties in the United States that received a default notice or were repossessed last year. And this number is set to rise in 2009, especially as vacant commercial real estate begins to be foreclosed. About 20,000 major global banks collapsed, were sold or were nationalized in 2008. There are an estimated 62,000 U.S. companies expected to shut down this year. Unemployment, when you add people no longer looking for jobs and part-time workers who cannot find full-time employment, is close to 14 percent.
And we have few tools left to dig our way out. The manufacturing sector in the United States has been destroyed by globalization. Consumers, thanks to credit card companies and easy lines of credit, are $14 trillion in debt. The government has pledged trillions toward the crisis, most of it borrowed or printed in the form of new money. It is borrowing trillions more to fund our wars in Afghanistan and Iraq. And no one states the obvious: We will never be able to pay these loans back. We are supposed to somehow spend our way out of the crisis and maintain our imperial project on credit. Let our kids worry about it. There is no coherent and realistic plan, one built around our severe limitations, to stanch the bleeding or ameliorate the mounting deprivations we will suffer as citizens. Contrast this with the national security state's strategies to crush potential civil unrest and you get a glimpse of the future. It doesn't look good.
"The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications," Blair told the Senate. "The crisis has been ongoing for over a year, and economists are divided over whether and when we could hit bottom. Some even fear that the recession could further deepen and reach the level of the Great Depression. Of course, all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism."
The specter of social unrest was raised at the U.S. Army War College in November in a monograph [click on Policypointers' pdf link to see the report] titled "Known Unknowns: Unconventional 'Strategic Shocks' in Defense Strategy Development." The military must be prepared, the document warned, for a "violent, strategic dislocation inside the United States," which could be provoked by "unforeseen economic collapse," "purposeful domestic resistance," "pervasive public health emergencies" or "loss of functioning political and legal order." The "widespread civil violence," the document said, "would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security."
"An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home," it went on.
"Under the most extreme circumstances, this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance," the document read.
In plain English, something bureaucrats and the military seem incapable of employing, this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.
Adm. Blair warned the Senate that "roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown." He noted that the "bulk of anti-state demonstrations" internationally have been seen in Europe and the former Soviet Union, but this did not mean they could not spread to the United States. He told the senators that the collapse of the global financial system is "likely to produce a wave of economic crises in emerging market nations over the next year." He added that "much of Latin America, former Soviet Union states and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit, or other coping mechanism."
"When those growth rates go down, my gut tells me that there are going to be problems coming out of that, and we're looking for that," he said. He referred to "statistical modeling" showing that "economic crises increase the risk of regime-threatening instability if they persist over a one to two year period."
Blair articulated the newest narrative of fear. As the economic unraveling accelerates we will be told it is not the bearded Islamic extremists, although those in power will drag them out of the Halloween closet when they need to give us an exotic shock, but instead the domestic riffraff, environmentalists, anarchists, unions and enr aged members of our dispossessed working class who threaten us. Crime, as it always does in times of turmoil, will grow. Those who oppose the iron fist of the state security apparatus will be lumped together in slick, corporate news reports with the growing criminal underclass.
The committee's Republican vice chairman, Sen. Christopher Bond of Missouri, not quite knowing what to make of Blair's testimony, said he was concerned that Blair was making the "conditions in the country" and the global economic crisis "the primary focus of the intelligence community."
The economic collapse has exposed the stupidity of our collective faith in a free market and the absurdity of an economy based on the goals of endless growth, consumption, borrowing and expansion. The ideology of unlimited growth failed to take into account the massive depletion of the world's resources, from fossil fuels to clean water to fish stocks to erosion, as well as overpopulation, global warming and climate change. The huge international flows of unregulated capital have wrecked the global financial system. An overvalued dollar (which will soon deflate), wild tech, stock and housing financial bubbles, unchecked greed, the decimation of our manufacturing sector, the empowerment of an oligarchic class, the corruption of our political elite, the impoverishment of workers, a bloated military and defense budget and unrestrained credit binges have conspired to bring us down. The financial crisis will soon become a currency crisis. This second shock will threaten our financial viability. We let the market rule. Now we are paying for it.
The corporate thieves, those who insisted they be paid tens of millions of dollars because they were the best and the brightest, have been exposed as con artists. Our elected officials, along with the press, have been exposed as corrupt and spineless corporate lackeys. Our business schools and intellectual elite have been exposed as frauds. The age of the West has ended. Look to China. Laissez-faire capitalism has destroyed itself. It is time to dust off your copies of Marx.
Chris Hedges, a Pulitzer prize-winning reporter, is a Senior Fellow at the Nation Institute. His latest book is Collateral Damage: America's War Against Iraqi Civilians.
Wall Street's Disaster Has Spawned Our Greatest Terrorist Threat
By Chris Hedges, Truthdig. Posted February 17, 2009.
The Director of National Intelligence argued that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorists.
We have a remarkable ability to create our own monsters. A few decades of meddling in the Middle East with our Israeli doppelgnger and we get Hezbollah, Hamas, al-Qaida, the Iraqi resistance movement and a resurgent Taliban. Now we trash the world economy and destroy the ecosystem and sit back to watch our handiwork. Hints of our brave new world seeped out Thursday when Washington's new director of national intelligence, retired Adm. Dennis Blair, testified before the Senate Intelligence Committee. He warned that the deepening economic crisis posed perhaps our gravest threat to stability and national security. It could trigger, he said, a return to the "violent extremism" of the 1920s and 1930s.
It turns out that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorists. We will see accelerated plant and retail closures, inflation, an epidemic of bankruptcies, new rounds of foreclosures, bread lines, unemployment surpassing the levels of the Great Depression and, as Blair fears, social upheaval.
The United Nations' International Labor Organization estimates that some 50 million workers will lose their jobs worldwide this year. The collapse has already seen 3.6 million lost jobs in the United States. The International Monetary Fund's prediction for global economic growth in 2009 is 0.5 percent--the worst since World War II. There are 2.3 million properties in the United States that received a default notice or were repossessed last year. And this number is set to rise in 2009, especially as vacant commercial real estate begins to be foreclosed. About 20,000 major global banks collapsed, were sold or were nationalized in 2008. There are an estimated 62,000 U.S. companies expected to shut down this year. Unemployment, when you add people no longer looking for jobs and part-time workers who cannot find full-time employment, is close to 14 percent.
And we have few tools left to dig our way out. The manufacturing sector in the United States has been destroyed by globalization. Consumers, thanks to credit card companies and easy lines of credit, are $14 trillion in debt. The government has pledged trillions toward the crisis, most of it borrowed or printed in the form of new money. It is borrowing trillions more to fund our wars in Afghanistan and Iraq. And no one states the obvious: We will never be able to pay these loans back. We are supposed to somehow spend our way out of the crisis and maintain our imperial project on credit. Let our kids worry about it. There is no coherent and realistic plan, one built around our severe limitations, to stanch the bleeding or ameliorate the mounting deprivations we will suffer as citizens. Contrast this with the national security state's strategies to crush potential civil unrest and you get a glimpse of the future. It doesn't look good.
"The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications," Blair told the Senate. "The crisis has been ongoing for over a year, and economists are divided over whether and when we could hit bottom. Some even fear that the recession could further deepen and reach the level of the Great Depression. Of course, all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism."
The specter of social unrest was raised at the U.S. Army War College in November in a monograph [click on Policypointers' pdf link to see the report] titled "Known Unknowns: Unconventional 'Strategic Shocks' in Defense Strategy Development." The military must be prepared, the document warned, for a "violent, strategic dislocation inside the United States," which could be provoked by "unforeseen economic collapse," "purposeful domestic resistance," "pervasive public health emergencies" or "loss of functioning political and legal order." The "widespread civil violence," the document said, "would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security."
"An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home," it went on.
"Under the most extreme circumstances, this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance," the document read.
In plain English, something bureaucrats and the military seem incapable of employing, this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.
Adm. Blair warned the Senate that "roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown." He noted that the "bulk of anti-state demonstrations" internationally have been seen in Europe and the former Soviet Union, but this did not mean they could not spread to the United States. He told the senators that the collapse of the global financial system is "likely to produce a wave of economic crises in emerging market nations over the next year." He added that "much of Latin America, former Soviet Union states and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit, or other coping mechanism."
"When those growth rates go down, my gut tells me that there are going to be problems coming out of that, and we're looking for that," he said. He referred to "statistical modeling" showing that "economic crises increase the risk of regime-threatening instability if they persist over a one to two year period."
Blair articulated the newest narrative of fear. As the economic unraveling accelerates we will be told it is not the bearded Islamic extremists, although those in power will drag them out of the Halloween closet when they need to give us an exotic shock, but instead the domestic riffraff, environmentalists, anarchists, unions and enr aged members of our dispossessed working class who threaten us. Crime, as it always does in times of turmoil, will grow. Those who oppose the iron fist of the state security apparatus will be lumped together in slick, corporate news reports with the growing criminal underclass.
The committee's Republican vice chairman, Sen. Christopher Bond of Missouri, not quite knowing what to make of Blair's testimony, said he was concerned that Blair was making the "conditions in the country" and the global economic crisis "the primary focus of the intelligence community."
The economic collapse has exposed the stupidity of our collective faith in a free market and the absurdity of an economy based on the goals of endless growth, consumption, borrowing and expansion. The ideology of unlimited growth failed to take into account the massive depletion of the world's resources, from fossil fuels to clean water to fish stocks to erosion, as well as overpopulation, global warming and climate change. The huge international flows of unregulated capital have wrecked the global financial system. An overvalued dollar (which will soon deflate), wild tech, stock and housing financial bubbles, unchecked greed, the decimation of our manufacturing sector, the empowerment of an oligarchic class, the corruption of our political elite, the impoverishment of workers, a bloated military and defense budget and unrestrained credit binges have conspired to bring us down. The financial crisis will soon become a currency crisis. This second shock will threaten our financial viability. We let the market rule. Now we are paying for it.
The corporate thieves, those who insisted they be paid tens of millions of dollars because they were the best and the brightest, have been exposed as con artists. Our elected officials, along with the press, have been exposed as corrupt and spineless corporate lackeys. Our business schools and intellectual elite have been exposed as frauds. The age of the West has ended. Look to China. Laissez-faire capitalism has destroyed itself. It is time to dust off your copies of Marx.
Chris Hedges, a Pulitzer prize-winning reporter, is a Senior Fellow at the Nation Institute. His latest book is Collateral Damage: America's War Against Iraqi Civilians.
Shut the International Criminal Court
The Soros-controlled International Criminal Court (ICC) is preparing to unleash bloody hell in Sudan, if it is not stopped now. This release is being circulated internationally, demanding that the will of the African Union nations that this racist, British-colonial Court be stopped immediately, must be honored. Lyndon Larouche has gone further, demanding that this illegal Court be abolished altogether, as an imperial assault on the sovereignty of nations. Mike Billington
- THE ICC'S RACIST GENOCIDE AGAINST AFRICA MUST BE STOPPED! -
Feb. 24 (LPAC)--The International Criminal Court (ICC), a
wholly-owned tool of the British Empire's Lord Mark Malloch-Brown
and his drug-pushing lackey George Soros, is currently on a
full-scale mobilization to set off a new racist genocide against
Africa, with a totally unwarranted indictment against the
president of Sudan, the largest country in Africa. Indeed, even
George Soros's own mouthpiece, Human Right Watch, has provided
the evidence to show that the ICC is an instrument of
anti-African genocide.
According to a Human Rights Watch report, the ICC, which was
founded in July 2002, has received over 1700 complaints from at
least 103 different countries, to investigate charges of ``the
most serious crimes'' of concern to humanity as a whole,
inclusive of crimes against humanity, genocide, war crimes, and
the crimes of aggression. Yet, {the only investigations which the
Court has initiated have been in African countries.}
The African Union has formally called on the United Nations
Security Council to defer an indictment for 12 months, to give a
greater chance to the peace process now ongoing between the
Sudanese government and rebel factions. AU Commission Chief Jean
Ping has also accused the court of concentrating only on
Africans.
``We think there is a problem with ICC targetting only
Africans, as if Africa has been a place to experiment with their
ideas,'' Ping told reporters at the Feb. 2 AU summit, according
to the {Sudan Tribune}. ``A judge should be impartial. ``The law
should apply to everyone and not only the weak.'' Ping went on to
question why the denunciations of African leaders by the
international community, are not also levelled at other
countries, such as those involved in the conflicts in Gaza, Iraq,
or Sri Lanka.
The AU chief's implicit charge of {racist} actions against
African countries and leaders, is more than backed up by the
character and history of the leading sponsors of the ICC,
specifically the megaspeculator, drugpusher, and Nazi
collaborator George Soros, and his virtual controller and
business partner, Britain's Foreign and Commonwealth Office
Secretary, Lord Mark Malloch-Brown. Soros earned his stripes as
an adolescent, working for the Adolf Eichmann apparatus carrying
out the extermination of the Jews of Hungary in 1944. This
``character-forming'' (his words) experience prepared him well
for a career in ruthless speculation--and racist genocide.
As for Malloch-Brown, he has taken the point in British
Imperial operations such as Georgia's blitzkrieg against South
Ossetia, and other targettings of sovereign nation states,
including as an official of the World Bank. At present, he is the
point person for the British Prime Minister's attempt to corral
the Group of 20 behind his plans for a new supranational
financial dictatorship, as a so-called solution for the world
financial breakdown crisis.
It is well-known to all parties in Africa, and to the
British imperial stooges Malloch-Brown and Soros, that any
indictment of Sudanese President Omar Hassan al-Bashir is not
only unjust, but also a means of detonating broad genocidal
warfare throughout the African continent. This point has been
emphasized by human rights activists who have opposed President
Bashir, as well as heads of state in Africa, who have issued
frequent warnings to this effect.
One of the most significant warnings was issued last week by
Pope Benedict XVI, who was reported in {Sudan Vision} to have
told British Prime Minister Gordon Brown, during his meeting in
the Vatican on Feb. 19, ``We should give priority to peace
efforts first, then we look for judicature.'' The Pope singled
out the recent goodwill declaration signed between the Sudanese
government and one of the leading rebel groups in Darfur, as a
sign that peace efforts should be given a chance.
More dire was the warning issued by Egyptian President Hosni
Mubarak, who met with President Bashir Feb. 22 in Cairo. ``The
repercussions will be dangerous on Darfur, in particular, and in
Sudan in general,'' President Mubarak said.
In fact, many Arab and African countries have warned that
indicting Bashir will destroy any hopes of peace in the
war-ravaged region of Darfur, and likely lead to the break-up of
Sudan, destroying a hard-fought agreement of comprehensive peace
which President al-Bashir himself fought hard to achieve, over
much opposition. While a collapse of the fragile peace talks over
Darfur might result in renewed danger for hundreds of thousands,
the biggest danger is the collapse of the Comprehensive Peace
Agreement between North and South, which could lead to the death
of millions. It is reliably reported that both sides are now
arming, in the event that the plug is pulled on the agreement.
Lyndon LaRouche, America's leading statesman and advocate
for kicking the British Empire out of Africa, has repeatedly
called for the abolition of the International Criminal Court.
``Its existence itself is a crime against humanity--because it
disregards the principle of the sovereignty of nation-states.''
It is now clear that the ICC, in the tradition of the
racist, slave-trading British Empire, targets some nation-states
and peoples more than others--specifically, dark-skinned African
people.
- THE ICC'S RACIST GENOCIDE AGAINST AFRICA MUST BE STOPPED! -
Feb. 24 (LPAC)--The International Criminal Court (ICC), a
wholly-owned tool of the British Empire's Lord Mark Malloch-Brown
and his drug-pushing lackey George Soros, is currently on a
full-scale mobilization to set off a new racist genocide against
Africa, with a totally unwarranted indictment against the
president of Sudan, the largest country in Africa. Indeed, even
George Soros's own mouthpiece, Human Right Watch, has provided
the evidence to show that the ICC is an instrument of
anti-African genocide.
According to a Human Rights Watch report, the ICC, which was
founded in July 2002, has received over 1700 complaints from at
least 103 different countries, to investigate charges of ``the
most serious crimes'' of concern to humanity as a whole,
inclusive of crimes against humanity, genocide, war crimes, and
the crimes of aggression. Yet, {the only investigations which the
Court has initiated have been in African countries.}
The African Union has formally called on the United Nations
Security Council to defer an indictment for 12 months, to give a
greater chance to the peace process now ongoing between the
Sudanese government and rebel factions. AU Commission Chief Jean
Ping has also accused the court of concentrating only on
Africans.
``We think there is a problem with ICC targetting only
Africans, as if Africa has been a place to experiment with their
ideas,'' Ping told reporters at the Feb. 2 AU summit, according
to the {Sudan Tribune}. ``A judge should be impartial. ``The law
should apply to everyone and not only the weak.'' Ping went on to
question why the denunciations of African leaders by the
international community, are not also levelled at other
countries, such as those involved in the conflicts in Gaza, Iraq,
or Sri Lanka.
The AU chief's implicit charge of {racist} actions against
African countries and leaders, is more than backed up by the
character and history of the leading sponsors of the ICC,
specifically the megaspeculator, drugpusher, and Nazi
collaborator George Soros, and his virtual controller and
business partner, Britain's Foreign and Commonwealth Office
Secretary, Lord Mark Malloch-Brown. Soros earned his stripes as
an adolescent, working for the Adolf Eichmann apparatus carrying
out the extermination of the Jews of Hungary in 1944. This
``character-forming'' (his words) experience prepared him well
for a career in ruthless speculation--and racist genocide.
As for Malloch-Brown, he has taken the point in British
Imperial operations such as Georgia's blitzkrieg against South
Ossetia, and other targettings of sovereign nation states,
including as an official of the World Bank. At present, he is the
point person for the British Prime Minister's attempt to corral
the Group of 20 behind his plans for a new supranational
financial dictatorship, as a so-called solution for the world
financial breakdown crisis.
It is well-known to all parties in Africa, and to the
British imperial stooges Malloch-Brown and Soros, that any
indictment of Sudanese President Omar Hassan al-Bashir is not
only unjust, but also a means of detonating broad genocidal
warfare throughout the African continent. This point has been
emphasized by human rights activists who have opposed President
Bashir, as well as heads of state in Africa, who have issued
frequent warnings to this effect.
One of the most significant warnings was issued last week by
Pope Benedict XVI, who was reported in {Sudan Vision} to have
told British Prime Minister Gordon Brown, during his meeting in
the Vatican on Feb. 19, ``We should give priority to peace
efforts first, then we look for judicature.'' The Pope singled
out the recent goodwill declaration signed between the Sudanese
government and one of the leading rebel groups in Darfur, as a
sign that peace efforts should be given a chance.
More dire was the warning issued by Egyptian President Hosni
Mubarak, who met with President Bashir Feb. 22 in Cairo. ``The
repercussions will be dangerous on Darfur, in particular, and in
Sudan in general,'' President Mubarak said.
In fact, many Arab and African countries have warned that
indicting Bashir will destroy any hopes of peace in the
war-ravaged region of Darfur, and likely lead to the break-up of
Sudan, destroying a hard-fought agreement of comprehensive peace
which President al-Bashir himself fought hard to achieve, over
much opposition. While a collapse of the fragile peace talks over
Darfur might result in renewed danger for hundreds of thousands,
the biggest danger is the collapse of the Comprehensive Peace
Agreement between North and South, which could lead to the death
of millions. It is reliably reported that both sides are now
arming, in the event that the plug is pulled on the agreement.
Lyndon LaRouche, America's leading statesman and advocate
for kicking the British Empire out of Africa, has repeatedly
called for the abolition of the International Criminal Court.
``Its existence itself is a crime against humanity--because it
disregards the principle of the sovereignty of nation-states.''
It is now clear that the ICC, in the tradition of the
racist, slave-trading British Empire, targets some nation-states
and peoples more than others--specifically, dark-skinned African
people.
- THE ICC'S RACIST GENOCIDE AGAINST AFRICA MUST BE STOPPED! -
Feb. 24 (LPAC)--The International Criminal Court (ICC), a
wholly-owned tool of the British Empire's Lord Mark Malloch-Brown
and his drug-pushing lackey George Soros, is currently on a
full-scale mobilization to set off a new racist genocide against
Africa, with a totally unwarranted indictment against the
president of Sudan, the largest country in Africa. Indeed, even
George Soros's own mouthpiece, Human Right Watch, has provided
the evidence to show that the ICC is an instrument of
anti-African genocide.
According to a Human Rights Watch report, the ICC, which was
founded in July 2002, has received over 1700 complaints from at
least 103 different countries, to investigate charges of ``the
most serious crimes'' of concern to humanity as a whole,
inclusive of crimes against humanity, genocide, war crimes, and
the crimes of aggression. Yet, {the only investigations which the
Court has initiated have been in African countries.}
The African Union has formally called on the United Nations
Security Council to defer an indictment for 12 months, to give a
greater chance to the peace process now ongoing between the
Sudanese government and rebel factions. AU Commission Chief Jean
Ping has also accused the court of concentrating only on
Africans.
``We think there is a problem with ICC targetting only
Africans, as if Africa has been a place to experiment with their
ideas,'' Ping told reporters at the Feb. 2 AU summit, according
to the {Sudan Tribune}. ``A judge should be impartial. ``The law
should apply to everyone and not only the weak.'' Ping went on to
question why the denunciations of African leaders by the
international community, are not also levelled at other
countries, such as those involved in the conflicts in Gaza, Iraq,
or Sri Lanka.
The AU chief's implicit charge of {racist} actions against
African countries and leaders, is more than backed up by the
character and history of the leading sponsors of the ICC,
specifically the megaspeculator, drugpusher, and Nazi
collaborator George Soros, and his virtual controller and
business partner, Britain's Foreign and Commonwealth Office
Secretary, Lord Mark Malloch-Brown. Soros earned his stripes as
an adolescent, working for the Adolf Eichmann apparatus carrying
out the extermination of the Jews of Hungary in 1944. This
``character-forming'' (his words) experience prepared him well
for a career in ruthless speculation--and racist genocide.
As for Malloch-Brown, he has taken the point in British
Imperial operations such as Georgia's blitzkrieg against South
Ossetia, and other targettings of sovereign nation states,
including as an official of the World Bank. At present, he is the
point person for the British Prime Minister's attempt to corral
the Group of 20 behind his plans for a new supranational
financial dictatorship, as a so-called solution for the world
financial breakdown crisis.
It is well-known to all parties in Africa, and to the
British imperial stooges Malloch-Brown and Soros, that any
indictment of Sudanese President Omar Hassan al-Bashir is not
only unjust, but also a means of detonating broad genocidal
warfare throughout the African continent. This point has been
emphasized by human rights activists who have opposed President
Bashir, as well as heads of state in Africa, who have issued
frequent warnings to this effect.
One of the most significant warnings was issued last week by
Pope Benedict XVI, who was reported in {Sudan Vision} to have
told British Prime Minister Gordon Brown, during his meeting in
the Vatican on Feb. 19, ``We should give priority to peace
efforts first, then we look for judicature.'' The Pope singled
out the recent goodwill declaration signed between the Sudanese
government and one of the leading rebel groups in Darfur, as a
sign that peace efforts should be given a chance.
More dire was the warning issued by Egyptian President Hosni
Mubarak, who met with President Bashir Feb. 22 in Cairo. ``The
repercussions will be dangerous on Darfur, in particular, and in
Sudan in general,'' President Mubarak said.
In fact, many Arab and African countries have warned that
indicting Bashir will destroy any hopes of peace in the
war-ravaged region of Darfur, and likely lead to the break-up of
Sudan, destroying a hard-fought agreement of comprehensive peace
which President al-Bashir himself fought hard to achieve, over
much opposition. While a collapse of the fragile peace talks over
Darfur might result in renewed danger for hundreds of thousands,
the biggest danger is the collapse of the Comprehensive Peace
Agreement between North and South, which could lead to the death
of millions. It is reliably reported that both sides are now
arming, in the event that the plug is pulled on the agreement.
Lyndon LaRouche, America's leading statesman and advocate
for kicking the British Empire out of Africa, has repeatedly
called for the abolition of the International Criminal Court.
``Its existence itself is a crime against humanity--because it
disregards the principle of the sovereignty of nation-states.''
It is now clear that the ICC, in the tradition of the
racist, slave-trading British Empire, targets some nation-states
and peoples more than others--specifically, dark-skinned African
people.
- THE ICC'S RACIST GENOCIDE AGAINST AFRICA MUST BE STOPPED! -
Feb. 24 (LPAC)--The International Criminal Court (ICC), a
wholly-owned tool of the British Empire's Lord Mark Malloch-Brown
and his drug-pushing lackey George Soros, is currently on a
full-scale mobilization to set off a new racist genocide against
Africa, with a totally unwarranted indictment against the
president of Sudan, the largest country in Africa. Indeed, even
George Soros's own mouthpiece, Human Right Watch, has provided
the evidence to show that the ICC is an instrument of
anti-African genocide.
According to a Human Rights Watch report, the ICC, which was
founded in July 2002, has received over 1700 complaints from at
least 103 different countries, to investigate charges of ``the
most serious crimes'' of concern to humanity as a whole,
inclusive of crimes against humanity, genocide, war crimes, and
the crimes of aggression. Yet, {the only investigations which the
Court has initiated have been in African countries.}
The African Union has formally called on the United Nations
Security Council to defer an indictment for 12 months, to give a
greater chance to the peace process now ongoing between the
Sudanese government and rebel factions. AU Commission Chief Jean
Ping has also accused the court of concentrating only on
Africans.
``We think there is a problem with ICC targetting only
Africans, as if Africa has been a place to experiment with their
ideas,'' Ping told reporters at the Feb. 2 AU summit, according
to the {Sudan Tribune}. ``A judge should be impartial. ``The law
should apply to everyone and not only the weak.'' Ping went on to
question why the denunciations of African leaders by the
international community, are not also levelled at other
countries, such as those involved in the conflicts in Gaza, Iraq,
or Sri Lanka.
The AU chief's implicit charge of {racist} actions against
African countries and leaders, is more than backed up by the
character and history of the leading sponsors of the ICC,
specifically the megaspeculator, drugpusher, and Nazi
collaborator George Soros, and his virtual controller and
business partner, Britain's Foreign and Commonwealth Office
Secretary, Lord Mark Malloch-Brown. Soros earned his stripes as
an adolescent, working for the Adolf Eichmann apparatus carrying
out the extermination of the Jews of Hungary in 1944. This
``character-forming'' (his words) experience prepared him well
for a career in ruthless speculation--and racist genocide.
As for Malloch-Brown, he has taken the point in British
Imperial operations such as Georgia's blitzkrieg against South
Ossetia, and other targettings of sovereign nation states,
including as an official of the World Bank. At present, he is the
point person for the British Prime Minister's attempt to corral
the Group of 20 behind his plans for a new supranational
financial dictatorship, as a so-called solution for the world
financial breakdown crisis.
It is well-known to all parties in Africa, and to the
British imperial stooges Malloch-Brown and Soros, that any
indictment of Sudanese President Omar Hassan al-Bashir is not
only unjust, but also a means of detonating broad genocidal
warfare throughout the African continent. This point has been
emphasized by human rights activists who have opposed President
Bashir, as well as heads of state in Africa, who have issued
frequent warnings to this effect.
One of the most significant warnings was issued last week by
Pope Benedict XVI, who was reported in {Sudan Vision} to have
told British Prime Minister Gordon Brown, during his meeting in
the Vatican on Feb. 19, ``We should give priority to peace
efforts first, then we look for judicature.'' The Pope singled
out the recent goodwill declaration signed between the Sudanese
government and one of the leading rebel groups in Darfur, as a
sign that peace efforts should be given a chance.
More dire was the warning issued by Egyptian President Hosni
Mubarak, who met with President Bashir Feb. 22 in Cairo. ``The
repercussions will be dangerous on Darfur, in particular, and in
Sudan in general,'' President Mubarak said.
In fact, many Arab and African countries have warned that
indicting Bashir will destroy any hopes of peace in the
war-ravaged region of Darfur, and likely lead to the break-up of
Sudan, destroying a hard-fought agreement of comprehensive peace
which President al-Bashir himself fought hard to achieve, over
much opposition. While a collapse of the fragile peace talks over
Darfur might result in renewed danger for hundreds of thousands,
the biggest danger is the collapse of the Comprehensive Peace
Agreement between North and South, which could lead to the death
of millions. It is reliably reported that both sides are now
arming, in the event that the plug is pulled on the agreement.
Lyndon LaRouche, America's leading statesman and advocate
for kicking the British Empire out of Africa, has repeatedly
called for the abolition of the International Criminal Court.
``Its existence itself is a crime against humanity--because it
disregards the principle of the sovereignty of nation-states.''
It is now clear that the ICC, in the tradition of the
racist, slave-trading British Empire, targets some nation-states
and peoples more than others--specifically, dark-skinned African
people.
The Long Arm of the Lawless
from STRATFOR
The Long Arm of the Lawless
February 25, 2009
Global Security and Intelligence Report
By Fred Burton and Scott Stewart
Related Special Topic Page
* Tracking Mexico’s Drug Cartels
Last week we discussed the impact that crime, and specifically kidnapping, has been having on Mexican citizens and foreigners visiting or living in Mexico. We pointed out that there is almost no area of Mexico immune from the crime and violence. As if on cue, on the night of Feb. 21 a group of heavily armed men threw two grenades at a police building in Zihuatanejo, Guerrero state, wounding at least five people. Zihuatanejo is a normally quiet beach resort just north of Acapulco; the attack has caused the town’s entire police force to go on strike. (Police strikes, or threats of strikes, are not uncommon in Mexico.)
Mexican police have regularly been targeted by drug cartels, with police officials even having been forced to seek safety in the United States, but such incidents have occurred most frequently in areas of high cartel activity like Veracruz state or Palomas. The Zihuatanejo incident is proof of the pervasiveness of violence in Mexico, and demonstrates the impact that such violence quickly can have on an area generally considered safe.
Significantly, the impact of violent Mexican criminals stretches far beyond Mexico itself. In recent weeks, Mexican criminals have been involved in killings in Argentina, Peru and Guatemala, and Mexican criminals have been arrested as far away as Italy and Spain. Their impact — and the extreme violence they embrace — is therefore not limited to Mexico or even just to Latin America. For some years now, STRATFOR has discussed the threat that Mexican cartel violence could spread to the United States, and we have chronicled the spread of such violence to the U.S.-Mexican border and beyond.
Traditionally, Mexican drug-trafficking organizations had focused largely on the transfer of narcotics through Mexico. Once the South American cartels encountered serious problems bringing narcotics directly into the United States, they began to focus more on transporting the narcotics to Mexico. From that point, the Mexican cartels transported them north and then handed them off to U.S. street gangs and other organizations, which handled much of the narcotics distribution inside the United States. In recent years, however, these Mexican groups have grown in power and have begun to take greater control of the entire narcotics-trafficking supply chain.
With greater control comes greater profitability as the percentages demanded by middlemen are cut out. The Mexican cartels have worked to have a greater presence in Central and South America, and now import from South America into Mexico an increasing percentage of the products they sell. They are also diversifying their routes and have gone global; they now even traffic their wares to Europe. At the same time, Mexican drug-trafficking organizations also have increased their distribution operations inside the United States to expand their profits even further. As these Mexican organizations continue to spread beyond the border areas, their profits and power will extend even further — and they will bring their culture of violence to new areas.
Burned in Phoenix
The spillover of violence from Mexico began some time ago in border towns like Laredo and El Paso in Texas, where merchants and wealthy families face extortion and kidnapping threats from Mexican gangs, and where drug dealers who refuse to pay “taxes” to Mexican cartel bosses are gunned down. But now, the threat posed by Mexican criminals is beginning to spread north from the U.S.-Mexican border. One location that has felt this expanding threat most acutely is Phoenix, some 185 miles north of the border. Some sensational cases have highlighted the increased threat in Phoenix, such as a June 2008 armed assault in which a group of heavily armed cartel gunmen dressed like a Phoenix Police Department tactical team fired more than 100 rounds into a residence during the targeted killing of a Jamaican drug dealer who had double-crossed a Mexican cartel. We have also observed cartel-related violence in places like Dallas and Austin, Texas. But Phoenix has been the hardest hit.
Narcotics smuggling and drug-related assassinations are not the only thing the Mexican criminals have brought to Phoenix. Other criminal gangs have been heavily involved in human smuggling, arms smuggling, money laundering and other crimes. Due to the confluence of these Mexican criminal gangs, Phoenix has now become the kidnapping-for-ransom capital of the United States. According to a Phoenix Police Department source, the department received 368 kidnapping reports last year. As we discussed last week, kidnapping is a highly underreported crime in places such as Mexico, making it very difficult to measure accurately. Based upon experience with kidnapping statistics in other parts of the world — specifically Latin America — it would not be unreasonable to assume that there were at least as many unreported kidnappings in Phoenix as there are reported kidnappings.
At present, the kidnapping environment in the United States is very different from that of Mexico, Guatemala or Colombia. In those countries, kidnapping runs rampant and has become a well-developed industry with a substantial established infrastructure. Police corruption and incompetence ensures that kidnappers are rarely caught or successfully prosecuted.
A variety of motives can lie behind kidnappings. In the United States, crime statistics demonstrate that motives such as sexual exploitation, custody disputes and short-term kidnapping for robbery have far surpassed the number of reported kidnappings conducted for ransom. In places like Mexico, kidnapping for ransom is much more common.
The FBI handles kidnapping investigations in the United States. It has developed highly sophisticated teams of agents and resources to devote to investigating this type of crime. Local police departments are also far more proficient and professional in the United States than in Mexico. Because of the advanced capabilities of law enforcement in the United States, the overwhelming majority of criminals involved in kidnapping-for-ransom cases reported to police — between 95 percent and 98 percent — are caught and convicted. There are also stiff federal penalties for kidnapping. Because of this, kidnapping for ransom has become a relatively rare crime in the United States.
Most kidnapping for ransom that does happen in the United States occurs within immigrant communities. In these cases, the perpetrators and victims belong to the same immigrant group (e.g., Chinese Triad gangs kidnapping the families of Chinese businesspeople, or Haitian criminals kidnapping Haitian immigrants) — which is what is happening in Phoenix. The vast majority of the 368 known kidnapping victims in Phoenix are Mexican and Central American immigrants who are being victimized by Mexican or Mexican-American criminals.
The problem in Phoenix involves two main types of kidnapping. One is the abduction of drug dealers or their children, the other is the abduction of illegal aliens.
Drug-related kidnappings often are not strict kidnappings for ransom per se. Instead, they are intended to force the drug dealer to repay a debt to the drug trafficking organization that ordered the kidnapping.
Nondrug-related kidnappings are very different from traditional kidnappings in Mexico or the United States, in which a high-value target is abducted and held for a large ransom. Instead, some of the gangs operating in Phoenix are basing their business model on volume, and are willing to hold a large number of victims for a much smaller individual pay out. Reports have emerged of kidnapping gangs in Phoenix carjacking entire vans full of illegal immigrants away from the coyote smuggling them into the United States. The kidnappers then transport the illegal immigrants to a safe house, where they are held captive in squalid conditions — and often tortured or sexually assaulted with a family member listening in on the phone — to coerce the victims’ family members in the United States or Mexico to pay the ransom for their release. There are also reports of the gangs picking up vehicles full of victims at day labor sites and then transporting them to the kidnap ping safe house rather than to the purported work site.
Drug-related kidnappings are less frequent than the nondrug-related abduction of illegal immigrants, but in both types of abductions, the victims are not likely to seek police assistance due to their immigration status or their involvement in illegal activity. This strongly suggests the kidnapping problem greatly exceeds the number of cases reported to police.
Implications for the United States
The kidnapping gangs in Phoenix that target illegal immigrants have found their chosen crime to be lucrative and relatively risk-free. If the flow of illegal immigrants had continued at high levels, there is very little doubt the kidnappers’ operations would have continued as they have for the past few years. The current economic downturn, however, means the flow of illegal immigrants has begun to slow — and by some accounts has even begun to reverse. (Reports suggest many Mexicans are returning home after being unable to find jobs in the United States.)
This reduction in the pool of targets means that we might be fast approaching a point where these groups, which have become accustomed to kidnapping as a source of easy money — and their primary source of income — might be forced to change their method of operating to make a living. While some might pursue other types of criminal activity, some might well decide to diversify their pool of victims. Watching for this shift in targeting is of critical importance. Were some of these gangs to begin targeting U.S. citizens rather than just criminals or illegal immigrants, a tremendous panic would ensue, along with demands to catch the perpetrators.
Such a shift would bring a huge amount of law enforcement pressure onto the kidnapping gangs, to include the FBI. While the FBI is fairly hard-pressed for resources given its heavy counterterrorism, foreign counterintelligence and white-collar crime caseload, it almost certainly would be able to reassign the resources needed to respond to such kidnappings in the face of publicity and a public outcry. Such a law enforcement effort could neutralize these gangs fairly quickly, but probably not quickly enough to prevent any victims from being abducted or harmed.
Since criminal groups are not comprised of fools alone, at least some of these groups will realize that targeting soccer moms will bring an avalanche of law enforcement attention upon them. Therefore, it is very likely that if kidnapping targets become harder to find in Phoenix — or if the law enforcement environment becomes too hostile due to the growing realization of this problem — then the groups may shift geography rather than targeting criteria. In such a scenario, professional kidnapping gangs from Phoenix might migrate to other locations with large communities of Latin American illegal immigrants to victimize. Some of these locations could be relatively close to the Mexican border like Dallas, Houston, San Antonio, San Diego or Los Angeles, though they could also include locations farther inland like Chicago, Atlanta, New York, or even the communities around meat and poultry packing plants in the Midwest and mid-Atlantic states. Such a migration of ethn ic criminals would not be unprecedented: Chinese Triad groups from New York for some time have traveled elsewhere on the East Coast, like Atlanta, to engage in extortion and kidnapping against Chinese businessmen there.
The issue of Mexican drug-traffic organizations kidnapping in the United States merits careful attention, especially since criminal gangs in other areas of the country could start imitating the tactics of the Phoenix gangs.
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The Long Arm of the Lawless
February 25, 2009
Global Security and Intelligence Report
By Fred Burton and Scott Stewart
Related Special Topic Page
* Tracking Mexico’s Drug Cartels
Last week we discussed the impact that crime, and specifically kidnapping, has been having on Mexican citizens and foreigners visiting or living in Mexico. We pointed out that there is almost no area of Mexico immune from the crime and violence. As if on cue, on the night of Feb. 21 a group of heavily armed men threw two grenades at a police building in Zihuatanejo, Guerrero state, wounding at least five people. Zihuatanejo is a normally quiet beach resort just north of Acapulco; the attack has caused the town’s entire police force to go on strike. (Police strikes, or threats of strikes, are not uncommon in Mexico.)
Mexican police have regularly been targeted by drug cartels, with police officials even having been forced to seek safety in the United States, but such incidents have occurred most frequently in areas of high cartel activity like Veracruz state or Palomas. The Zihuatanejo incident is proof of the pervasiveness of violence in Mexico, and demonstrates the impact that such violence quickly can have on an area generally considered safe.
Significantly, the impact of violent Mexican criminals stretches far beyond Mexico itself. In recent weeks, Mexican criminals have been involved in killings in Argentina, Peru and Guatemala, and Mexican criminals have been arrested as far away as Italy and Spain. Their impact — and the extreme violence they embrace — is therefore not limited to Mexico or even just to Latin America. For some years now, STRATFOR has discussed the threat that Mexican cartel violence could spread to the United States, and we have chronicled the spread of such violence to the U.S.-Mexican border and beyond.
Traditionally, Mexican drug-trafficking organizations had focused largely on the transfer of narcotics through Mexico. Once the South American cartels encountered serious problems bringing narcotics directly into the United States, they began to focus more on transporting the narcotics to Mexico. From that point, the Mexican cartels transported them north and then handed them off to U.S. street gangs and other organizations, which handled much of the narcotics distribution inside the United States. In recent years, however, these Mexican groups have grown in power and have begun to take greater control of the entire narcotics-trafficking supply chain.
With greater control comes greater profitability as the percentages demanded by middlemen are cut out. The Mexican cartels have worked to have a greater presence in Central and South America, and now import from South America into Mexico an increasing percentage of the products they sell. They are also diversifying their routes and have gone global; they now even traffic their wares to Europe. At the same time, Mexican drug-trafficking organizations also have increased their distribution operations inside the United States to expand their profits even further. As these Mexican organizations continue to spread beyond the border areas, their profits and power will extend even further — and they will bring their culture of violence to new areas.
Burned in Phoenix
The spillover of violence from Mexico began some time ago in border towns like Laredo and El Paso in Texas, where merchants and wealthy families face extortion and kidnapping threats from Mexican gangs, and where drug dealers who refuse to pay “taxes” to Mexican cartel bosses are gunned down. But now, the threat posed by Mexican criminals is beginning to spread north from the U.S.-Mexican border. One location that has felt this expanding threat most acutely is Phoenix, some 185 miles north of the border. Some sensational cases have highlighted the increased threat in Phoenix, such as a June 2008 armed assault in which a group of heavily armed cartel gunmen dressed like a Phoenix Police Department tactical team fired more than 100 rounds into a residence during the targeted killing of a Jamaican drug dealer who had double-crossed a Mexican cartel. We have also observed cartel-related violence in places like Dallas and Austin, Texas. But Phoenix has been the hardest hit.
Narcotics smuggling and drug-related assassinations are not the only thing the Mexican criminals have brought to Phoenix. Other criminal gangs have been heavily involved in human smuggling, arms smuggling, money laundering and other crimes. Due to the confluence of these Mexican criminal gangs, Phoenix has now become the kidnapping-for-ransom capital of the United States. According to a Phoenix Police Department source, the department received 368 kidnapping reports last year. As we discussed last week, kidnapping is a highly underreported crime in places such as Mexico, making it very difficult to measure accurately. Based upon experience with kidnapping statistics in other parts of the world — specifically Latin America — it would not be unreasonable to assume that there were at least as many unreported kidnappings in Phoenix as there are reported kidnappings.
At present, the kidnapping environment in the United States is very different from that of Mexico, Guatemala or Colombia. In those countries, kidnapping runs rampant and has become a well-developed industry with a substantial established infrastructure. Police corruption and incompetence ensures that kidnappers are rarely caught or successfully prosecuted.
A variety of motives can lie behind kidnappings. In the United States, crime statistics demonstrate that motives such as sexual exploitation, custody disputes and short-term kidnapping for robbery have far surpassed the number of reported kidnappings conducted for ransom. In places like Mexico, kidnapping for ransom is much more common.
The FBI handles kidnapping investigations in the United States. It has developed highly sophisticated teams of agents and resources to devote to investigating this type of crime. Local police departments are also far more proficient and professional in the United States than in Mexico. Because of the advanced capabilities of law enforcement in the United States, the overwhelming majority of criminals involved in kidnapping-for-ransom cases reported to police — between 95 percent and 98 percent — are caught and convicted. There are also stiff federal penalties for kidnapping. Because of this, kidnapping for ransom has become a relatively rare crime in the United States.
Most kidnapping for ransom that does happen in the United States occurs within immigrant communities. In these cases, the perpetrators and victims belong to the same immigrant group (e.g., Chinese Triad gangs kidnapping the families of Chinese businesspeople, or Haitian criminals kidnapping Haitian immigrants) — which is what is happening in Phoenix. The vast majority of the 368 known kidnapping victims in Phoenix are Mexican and Central American immigrants who are being victimized by Mexican or Mexican-American criminals.
The problem in Phoenix involves two main types of kidnapping. One is the abduction of drug dealers or their children, the other is the abduction of illegal aliens.
Drug-related kidnappings often are not strict kidnappings for ransom per se. Instead, they are intended to force the drug dealer to repay a debt to the drug trafficking organization that ordered the kidnapping.
Nondrug-related kidnappings are very different from traditional kidnappings in Mexico or the United States, in which a high-value target is abducted and held for a large ransom. Instead, some of the gangs operating in Phoenix are basing their business model on volume, and are willing to hold a large number of victims for a much smaller individual pay out. Reports have emerged of kidnapping gangs in Phoenix carjacking entire vans full of illegal immigrants away from the coyote smuggling them into the United States. The kidnappers then transport the illegal immigrants to a safe house, where they are held captive in squalid conditions — and often tortured or sexually assaulted with a family member listening in on the phone — to coerce the victims’ family members in the United States or Mexico to pay the ransom for their release. There are also reports of the gangs picking up vehicles full of victims at day labor sites and then transporting them to the kidnap ping safe house rather than to the purported work site.
Drug-related kidnappings are less frequent than the nondrug-related abduction of illegal immigrants, but in both types of abductions, the victims are not likely to seek police assistance due to their immigration status or their involvement in illegal activity. This strongly suggests the kidnapping problem greatly exceeds the number of cases reported to police.
Implications for the United States
The kidnapping gangs in Phoenix that target illegal immigrants have found their chosen crime to be lucrative and relatively risk-free. If the flow of illegal immigrants had continued at high levels, there is very little doubt the kidnappers’ operations would have continued as they have for the past few years. The current economic downturn, however, means the flow of illegal immigrants has begun to slow — and by some accounts has even begun to reverse. (Reports suggest many Mexicans are returning home after being unable to find jobs in the United States.)
This reduction in the pool of targets means that we might be fast approaching a point where these groups, which have become accustomed to kidnapping as a source of easy money — and their primary source of income — might be forced to change their method of operating to make a living. While some might pursue other types of criminal activity, some might well decide to diversify their pool of victims. Watching for this shift in targeting is of critical importance. Were some of these gangs to begin targeting U.S. citizens rather than just criminals or illegal immigrants, a tremendous panic would ensue, along with demands to catch the perpetrators.
Such a shift would bring a huge amount of law enforcement pressure onto the kidnapping gangs, to include the FBI. While the FBI is fairly hard-pressed for resources given its heavy counterterrorism, foreign counterintelligence and white-collar crime caseload, it almost certainly would be able to reassign the resources needed to respond to such kidnappings in the face of publicity and a public outcry. Such a law enforcement effort could neutralize these gangs fairly quickly, but probably not quickly enough to prevent any victims from being abducted or harmed.
Since criminal groups are not comprised of fools alone, at least some of these groups will realize that targeting soccer moms will bring an avalanche of law enforcement attention upon them. Therefore, it is very likely that if kidnapping targets become harder to find in Phoenix — or if the law enforcement environment becomes too hostile due to the growing realization of this problem — then the groups may shift geography rather than targeting criteria. In such a scenario, professional kidnapping gangs from Phoenix might migrate to other locations with large communities of Latin American illegal immigrants to victimize. Some of these locations could be relatively close to the Mexican border like Dallas, Houston, San Antonio, San Diego or Los Angeles, though they could also include locations farther inland like Chicago, Atlanta, New York, or even the communities around meat and poultry packing plants in the Midwest and mid-Atlantic states. Such a migration of ethn ic criminals would not be unprecedented: Chinese Triad groups from New York for some time have traveled elsewhere on the East Coast, like Atlanta, to engage in extortion and kidnapping against Chinese businessmen there.
The issue of Mexican drug-traffic organizations kidnapping in the United States merits careful attention, especially since criminal gangs in other areas of the country could start imitating the tactics of the Phoenix gangs.
Tell Stratfor What You Think
This report may be forwarded or republished on your website with attribution to www.stratfor.com
Please feel free to distribute this Intelligence Report to friends or repost to your Web site linking to www.stratfor.com.
This analysis was just a fraction of what our Members enjoy, to start your Free Membership Trial Today!
If a friend forwarded this email to you, click here to join our mailing list for FREE intelligence and other special offers.
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