Exposing The Truth

Three Ways Elites Rig the System

November 15, 2011 By T Kelly Leave a Comment

From low capital gains taxes to stock buy-backs, here are the ways the elites ensure the markets benefit them.

A growing number of Americans suspect that the American economic system is rigged in favor of the rich and merely affluent. That growing number of Americans is right.

Here are three of the many ways that markets for compensation are rigged to benefit not only the top 1 percent but also the top 10 percent, a group that includes many well-paid professionals:

Financial sector compensation. By now the phrase “too big to fail” has become so familiar that it is known by its acronym: TBTF. What needs to be emphasized is that TBTF is the basis for the huge bonuses paid to elite American bankers who benefit from a government that socializes their losses while allowing them to keep their profits.

Here’s their business model: “We place highly leveraged bets, sometimes as much as 35 or 40 to 1. In return, the government implicitly agrees to bail out our banks, and if we’re fired, we’ve negotiated sweetheart deals with golden parachutes. If we bet right, then our banks keep the windfall profits and we get big bonuses. If we bet wrong, not to worry — the taxpayers will bail out our banks and the government will pay for the cost of the bailouts by cutting Social Security and Medicare. Suckers!”

While TBTF rigs pre-tax income for financial elites, American tax law rigs their after-tax income to their benefit. In the 1980s, capital gains tax rates were equal to income tax rates. But then in the 1990s Clinton and the Republican Congress lowered the capital gains rates. So billionaires who derive most of their money from their investments and savings pay taxes at a lower rate than the majority of Americans, who, like Warren Buffett’s proverbial secretary, rely on their labor income.

Andrew Mellon, who dominated American economic policymaking as treasury secretary in the 1920s during the administrations of Harding, Coolidge and Hoover, was denounced by the liberal reformers of his day as the embodiment of plutocracy. But here is what he had to say about taxing capital versus wages in his 1924 book, “Taxation: The People’s Business”:

The fairness of taxing more lightly income from wages, salaries or from investments is beyond question. In the first case, the income is uncertain and limited in duration; sickness or death destroys it and old age diminishes it; in the other, the source of income continues; the income may be disposed of during a man’s life and it descends to his heirs.

Surely we can afford to make a distinction between the people whose only capital is their mental and physical energy and the people whose income is derived from investments. Such a distinction would mean much to millions of American workers and would be an added inspiration to the man who must provide a competence during his few productive years to care for himself and his family when his earnings capacity is at an end.

To which today’s conservatives, no doubt, would reply: “Andrew Mellon was a liberal!”

CEO compensation. In the last generation, American CEOs have been much better paid than their European and Asian counterparts, without having done remarkably better jobs.

American CEO compensation is rigged with perfect legality by two practices. The first is allowing the compensation of CEOs to be determined by boards of directors, whose members are frequently cronies of the CEO. Well-paid cronies, in many cases. You can be paid hundreds of thousands of dollars a year for attending a few board meetings and rubber-stamping whatever your friend the CEO wants. When the Sarbanes-Oxley Act sought to impose more responsibility on board members, this was denounced as an assault on the foundations of free enterprise. Freebie enterprise, is more like it.

CEO compensation is also inflated by the practice of stock buy-backs. Several decades ago, the practice of rewarding CEOs with company stock options was supposed to improve the performance of their companies and of the American economy as a whole. That worked out well, didn’t it?

American companies routinely and legally drive up the prices of their stock by buying back shares in the stock market. This is the equivalent of a celebrity author buying mass quantities of his or her own book, in the hope of driving it up best-seller lists. Stock buy-backs do not strengthen the company or lead to innovation. They merely inflate the wealth of the CEO and other company employees who are paid with stock options.

Long-term shareholders might object, but they are a dying breed. Most shareholders want to maximize the price of stocks before they cash out by selling them to the proverbial “greater fool.” Thanks to buy-backs, stock options have aligned the interests of CEOs and shareholders — but at the expense of prudent, long-term investment in American companies and American industries.

Professional compensation. Bailed-out bankers and crony capitalist CEOs are not the only Americans who benefit from rigged markets for compensation. Let’s not forget the professional class, which makes up roughly 10 percent of the population (the approximate number of Americans with graduate or professional degrees).

The professions are guilds. To put it another way, they are the most powerful unions in America. They are unions for the affluent. They rig labor markets the way that guilds have always done — by preventing anybody who doesn’t belong to the guild from practicing the trade.

In most states of the Union, you can’t practice law or medicine without both passing exams and possessing a medical degree or a law degree. In the early 20th century, law was an undergraduate degree. Then law schools began requiring four-year college education as a prerequisite, in order to keep the lawyer labor market tight by weeding out Americans who can’t afford at least seven years of higher education.

While raking in rents from their credentials, America’s affluent professionals are delegating more and more of their work to poorly paid subordinates — nurses and health aides, paralegals, adjuncts. While gouging students and parents with high tuitions, today’s universities and colleges assign more and more teaching to “freeway fliers” — often graduate students paid near-poverty wages or affluent professionals who teach as a hobby. God forbid that a well-paid, tenured professor should have to teach undergraduates, instead of jetting to conferences in luxury hotels.

Note that none of these methods of rigging the market to artificially inflate incomes — TBTF, stock buy-backs that drive up stock options, the professional credentials cartel — can be blamed on capitalism or markets. There are still genuine entrepreneurs who get rich by founding companies that provide new and useful goods and services, and there are still genuine capitalists who get rich by investing in them. But getting rich the old-fashioned way by getting customers to buy what you sell is hard, compared to paying politicians to rig markets and tax policies in your favor.

Once upon a time, rigged market capitalism in America benefited the many, and not just the few. Between the 1930s, the New Deal raised the wages of working-class Americans by rigging labor markets in their favor. From the 1920s the New Dealers inherited a system of low immigration, which lasted until the 1970s and helped to create tighter labor markets at the bottom. The black Southern poor who moved North in the Great Migration benefited disproportionately when jobs were opened up for them by the cutoff of mass European immigration.

The New Deal’s minimum wage and maximum hours legislation helped millions of the working poor to join the working class or middle class. And liberal New Deal Democrats promoted unions in peace and war, with the result that by the 1950s about a third of the private sector workforce was unionized (today it is less than 7 percent).

Beginning with Ronald Reagan, the U.S. government has systematically derigged labor markets for the many while rigging compensation markets even more for the elite few. Mass immigration, including mass illegal immigration, resumed after the 1960s, lowering wages for the poorest workers and weakening the ability of unions to organize. In the late 20th century, Congress allowed inflation to erode the real value of the minimum wage. Even after several increases, it is still lower, in real terms, than it was in the 1960s. And having effectively destroyed private-sector unions, the right is now trying to eliminate public sector unions, on the theory that schoolteachers and emergency responders are a much greater threat to the American economy than the reckless bankers who created a near-Depression and the CEOs who are rewarded for offshoring one industry after another.

What is rigged can be derigged; that is the lesson of the derigging of the institutions that raised the incomes of the American middle and working classes, between the Great Depression and the 1980s. TBTF can be eliminated, either by allowing giant, interconnected financial institutions to fail, or, more realistically, by turning them into tightly regulated public utilities that don’t make risky bets. CEO compensation practices can be reformed by law. Corporations are creations of the governments that charter them, and charters can contain any rules that lawmakers choose to put into them. And the rents extracted by the academic-professional complex can be reduced, by lowering the barriers to entry to the professions or, more radically, by reorganizing medicine, law and university teaching so that they are no longer structured as trades run by medieval guilds.

Of course, to succeed, this agenda has to be promoted by politicians, many of whom are members of the credentialed professional guilds, dependent on campaign donations from financial and corporate elites whose compensation depends to a large degree on markets that are legally rigged.

Source: https://www.alternet.org/economy/153025/3_ways_elites_rig_the_system/?page=entire

Filed Under: America, Banks, Capitalism, Consumer, Corporations, Corruption, Economy, Income Inequality, Lobbying, Money, New World Order, Occupy, Politicians, Politics, Poverty, Propaganda, Protests, Revolution, Rights, Taxes, The Hidden Empire, Wealthy Elite

Koch Family Empire Building

November 15, 2011 By T Kelly Leave a Comment

Charles and David Koch are the most powerful right-wing billionaires of our time. They have spent hundreds of millions bankrolling a broad attack against Social Security, organized labor, financial regulations, environmental protection and public education. The brothers plan to spend at least $200 million trying to elect right-wing, anti-government Republicans in 2012, according to Politico. They seem hell-bent on dragging America back to the dark days of unregulated capitalism.

The history of their grandfather in Texas may help explain why.

Little has been written about Harry Koch. He’s the least-known member of the Koch family, which has been marching under the same laissez-faire banner for the past three generations. Harry Koch emigrated to America in 1888, settled in a North Texas railroad town and became a newspaper publisher and aggressive corporate booster. He advocated for railroad and banking interests, amassing wealth and helping big business fight organized labor and squelch reforms.

Much of the Koch brothers’ ideology can be found in Harry Koch’s newspaper editorials of nearly a century ago. Take, for instance, the Kochs’ current fight against Social Security. Harry Koch took part in a multi-year right-wing propaganda campaign to shoot down New Deal programs. Grandfather and grandsons employ eerily familiar talking points to bash government pension and welfare programs.

“No political system can possibly guarantee either a national economic security or an individual standard of living. Government can guarantee no man a job or a livelihood,” Harry Koch wrote on February 1, 1935, nine months before Charles Koch was born.

Fast-forward 75 years and you can see Charles Koch using the same lines of attack in his company’s newsletter: “government actions … stifle economic growth and job creation, which in turn will significantly reduce the standard of living of American families.”

This summer I traveled to Quanah, the dusty North Texas railroad town that Harry Koch called home, to find out more about the life of the man who spawned the two most powerful oligarchs of our time. After spending days hunkered over newspaper archives and rifling through a century’s worth of county records in the town’s tiny courthouse, I began to see a picture emerge of a man who spent his life learning how to use newspapers and media for ideological manipulation and as a platform for pro-business agendas. As I strained to read the battered microfilm, I was constantly surprised at the degree to which Harry’s views - on everything from the economy to the role of government in a democratic society - have been passed on nearly unchanged through two generations, and are now being pushed by Charles and David Koch.

Harry Koch was born in Holland in 1867 to a wealthy German-Dutch family of merchants, farmers and doctors. After apprenticing to a newspaper publisher, he decided to seek his fortune in America. At 21, he set off on a steamer and arrived in New York on Dec. 5, 1888. He spent his first few years in America working for various Dutch newspapers in Chicago, New Orleans, Grand Rapids and Austin until, in 1891, he finally settled down in Quanah, a town that the railroad had established just a few years before. Harry always remained curiously vague and evasive about why he decided to stake his claim in a remote North Texas town, but there is no real mystery to it: he came because of the railroads.

In the second half of the 19th century, America was in the grip of a massive railroad boom. Boosted by eager investors, lucrative subsidies and free land, railroads sprung up connecting every corner of the United States without much thought for demand or necessity. America’s rail mileage quadrupled from 1870 to 1900, with enough track laid down by the end of the century to stretch from New York to San Francisco 66 times.

In those wild early days of the railroad age, real estate speculation was a central plank of the business plan. The U.S. government had given vast stretches of public land to railroad companies, and the companies needed to sell that land to settlers to create customers and pay off debts. That meant railroads needed local publishers to trigger real estate booms in the multitude of railroad towns that had been planned and parceled across the country, luring settlers with exaggerated stories of fertile soil and incipient prosperity.

Dutch investors were heavily involved in several railroad lines in the North Texas area, including the Fort Worth and Denver Railway Company, which had spawned Quanah in 1887 and owned just about all the land in town. County records show Harry provided advertising services and worked directly for the Fort Worth and Denver for nearly 20 years, sometimes receiving payment in the form of land transferred directly from the legendary railroad builder Grenville M. Dodge, who helped lay the Union Pacific and more than a dozen other lines across the country.

Harry bought up two of the town’s newspapers, apparently with his own money, merged them into the Quanah Tribune-Chief, and began printing beguiling stories of Western prosperity.

When Harry moved to Quanah, it was little more than a dusty settlement with a patchwork of dirt lots, a few rudimentary buildings and a railroad platform - a get-rich-quick scheme laid out on paper. It was his job to create the demand, bring people in and make the town a reality. He ran his paper like a chamber of commerce newsletter, cramming it full of stories about growth, expansion and the limitless possibilities of life on the frontier. He helped inflate a real estate bubble that, along with the presence of the railroad, nearly quadrupled Hardeman County’s population to more than 11,000.

Harry Koch worked hard to bring a number of railroad spurs to Quanah, and he helped make the town a major transportation hub by the early 1900s. As the town grew, so did Harry’s fortune. He amassed substantial real estate holdings in and around Quanah, which allowed him to cash in on the real estate boom he had helped to create.

Harry enjoyed his success. He got married, had two sons, traveled regularly to New York and Europe, and was proud of having crossed the Atlantic nine times. He even described being in Berlin, caught in a huge crowd that had gathered to hear “der Fuhrer” make a speech.

By the time he retired, Harry Koch was not just a respected newspaper publisher in Texas, but a powerful and highly connected regional business player. He was also extremely well liked. “There is no more popular member of the Association than Harry Koch,” read his bio by the Texas Press Association, where he served as president in 1918.

But the bustling city he helped create was mostly made of hype. Today, Quanah’s population has sunk back to 1890 levels and has little industry left. A gypsum plant on the outskirts of town is the only major employer, and it happens to be owned by the Koch family.

Harry Koch’s rise from immigrant small-town newspaper publisher to entrenched business heavyweight might seem like a classic coming-to-America story, confirming that through hard work, perseverance and luck, anything is possible. But that narrative would be misleading. Harry may have lived among settlers who struggled to eke out a living on the frontier, but he was never really one himself. The difference was right there on the surface for everyone to see: While Harry Koch prospered, almost everyone else in North Texas descended into poverty.

On top of the crippling boom-and-bust cycles that gripped the country from the 1890s through the late 1920s, settlers faced crop failures, low agricultural prices and real estate booms that made it impossible for new farmers to afford land. Many sunk into deep debt and poverty.

The misery and hopelessness of frontier life sparked a powerful new grassroots populist movement, which sought to reform and curb the worst of corporate abuses. Harry Koch was not sympathetic to the cause. (In 1897, while the country was still in the grips of one of the worst economic depressions in its history, Harry Koch penned a long, gushing account of a luxurious trip to a convention thrown for boosters and businessmen in Galveston. Between detailed descriptions of all the oysters eaten and champagne bottles emptied at swanky parties, Harry expressed shock and outrage that the street railway union organized a strike during the convention and forced attendees to temporarily move about on foot. But not for long. “Santa Fe officials took pity on the suffering newspaper men and made up a train to Woolman’s lake where the oyster roast was to be held,” Koch wrote approvingly.)

In a series of early editorials, Harry Koch scoffed at the idea that land rents should be regulated, and ridiculed the plight of heavily indebted farmers, writing that while they might find indebtedness unpleasant, a much bigger problem was their laziness and inability to take care of the farm equipment they had purchased on credit. He patronized Quanah farmers with platitudes about honesty and success: “Be honest. Dishonesty seldom makes one rich, and when it does riches are a curse. There is no such thing as dishonest success.” He delighted in the fact that unlike other cities and towns across America - filled with strikes, riots, political agitation and violent unrest - the people of Quanah largely steered clear of politics, concerning themselves with what they understood best: hard, honest labor. “A very commendable trait among western people,” Harry wrote, “is that they have no time to give to politics.”

Throughout the 1890s, Harry never shied from using his newspaper to promote specific business interests and as a platform to express his aristocratic views on society.

But something began to change at the turn of the century. Koch shed his abrasive attitude toward the masses and began reinventing himself as a champion of the common man.

In 1901, Koch published a long editorial that hinted at this transformation. In the piece, he defends popularly embattled trusts and monopolies with the counterintuitive argument that such protectors of wealth were a force for the common good. He based his argument on the false notion that trusts lowered the price of consumer goods:

“Let this thing be borne in mind as significant, that all real trusts, all that are destined to succeed and endure, are established on a basis of permanent lower prices for their products. Everybody knows that sugar and oil have been considerably cheaper since these industries have been under trust control. And the same is true, barring periods of fluctuation, of all industries under effective monopoly, from steel rails to cigarettes.”

Harry Koch’s transformation was remarkable: Not only was he attempting to convince readers of his point of view by appealing to their own best interests, but he was fleshing out economic arguments in language that his grandsons continue to use today. Harry’s defense of trusts reads exactly like the pro-monopoly propaganda regularly cranked out by scholars at The Cato Institute - a libertarian think tank founded by Harry’s grandson Charles Koch in 1977. University of California-Irvine Professor Richard McKenzie recently published an article in Cato’s Regulation magazine titled “In Defense of Monopoly,” in which he echoes Harry’s 110-year-old editorial, including this claim: “The monopolist does not charge higher prices; it lowers them.”

This new rhetorical approach was not Harry Koch’s invention. Rather, Harry was being swept up in a larger national revolution in the way American business elites communicated with the public.

At the turn of the 20th century, growing public outrage at the way financial elites were handling the economy, combined with a rapid expansion of voting enfranchisement that increased participation in the democratic process from 15 percent of the population in 1890 to 50 percent in 1920, began posing a real threat to the entrenched interests of American corporations.

To protect itself, corporate America began experimenting with modern public relations techniques and developing strategies to manipulate and manage public perceptions.

Harry Koch was right in the thick of it.

In 1910, Koch became the founding director, as well as one of the biggest shareholders, of a small North Texas railroad company called the Quanah, Acme & Pacific. After two decades of laboring to promote other people’s railroad interests, he had finally come into his own. The Tribune-Chief became the de facto advertising arm of the QA&P, extolling the region’s bright future and certain prosperity while hawking company shares and promoting land in towns created and owned by the line. He had his own railroad and his own newspaper to promote it.

In the 1930s, corporations were forced to ramp up their pro-business public relations campaigns to deal with the violent backlash in public opinion caused by the Great Depression.

Harry Koch rolled out an aggressive multi-year attack on Roosevelt’s New Deal. Tribune-Chief criticisms of the program echoed the propaganda of corporate boosters like the National Association of Manufacturers. The paper slammed public pensions, regulations, tariffs, unions, muckrakers, labor laws and deficits, and filled its op-ed space with pro-business opinion pieces delivered fresh from New York lobby groups like the American Bankers Association, whose president, R.S. Becht, wrote to assure Quanah readers that there was no need for the government to regulate banks. Industry self-regulation - or “voluntary self reform,” as he called it - would be enough.

Despite, or because of, overwhelming public support for FDR’s pension and welfare programs, they became major targets, with Harry Koch publishing two or three op-eds in a single day attacking them. “Some ten million old folks are wanting to draw $200 a month from the government, and one hundred million stand ready to quit work when they do. Why not pension all of them?” Koch wrote in a February 1935 editorial, while claiming in a different editorial that the “idea of an old age pension is a splendid idea … such a pension is proper. But great care should be taken…in preparing old age pension laws.”

His editorials contained the same familiar right-wing claims that we hear today: that there is not enough money to support “entitlement” programs, that government will tax industry into ruin, that similar programs in other countries have failed, that regulation is unconstitutional and workers, given the opportunity, will quit en masse and live off government charity.

In a 1934 editorial titled “Democracy’s Problem,” Harry rejected “mobocracy,” which had “been discarded as undesirable, even if attainable.” Mobocracy was the right’s popular name for “tyranny of the majority,” and remains a favorite whipping horse of Koch-funded libertarians, who increasingly promote the idea that America is not a democracy and was never intended to be one. Here’s Steve H. Hanke, senior fellow at the Cato Institute, writing in a 2011 editorial: “Contrary to what propaganda has led the public to believe, America’s Founding Fathers were skeptical and anxious about democracy. They were aware of the evils that accompany a tyranny of the majority. The Framers of the Constitution went to great lengths to ensure that the federal government was not based on the will of the majority and was not, therefore, democratic.”

Harry Koch passed away in 1942, not long after business’ epic battle against the New Deal reforms. The Quanah Tribune-Chief was passed on to his eldest son, who took over the paper with his wife and kept it in the family until the 1970s. Meanwhile, Harry’s other son, Fred Koch, used the fortune he made building refineries for Stalin in the 1930s Soviet Union to ramp up his own business in Wichita, Kansas. He would build a successful oil transportation empire that would one day grow into Koch Industries, the largest privately held oil company in the country.

But even after the family’s base of operations moved away from Quanah, Harry Koch’s ghost would never be far removed. His life at the intersection of news media, big business, public relations and ideological warfare would be passed on as a family tradition from father to son to grandson, elevating his offspring to ever higher levels of wealth and influence.

Source: https://readersupportednews.org/opinion2/279-82/8374-koch-family-empire-building

Filed Under: America, Banks, Capitalism, Civil Liberties, Corporations, Corruption, Foundations, Income Inequality, Lobbying, Media, Military Industrial Complex, Money, New World Order, Politicians, Politics, Propaganda, Rights, The Hidden Empire, Wealthy Elite

The war against the poor in America

November 15, 2011 By T Kelly Leave a Comment

Rampant poverty and further welfare cuts have created a need to move towards a moral economy of the many, not few.

We’ve been at war for decades now - not just in Afghanistan or Iraq, but right here at home. Domestically, it’s been a war against the poor, but if you hadn’t noticed, that’s not surprising. You wouldn’t often have found the casualty figures from this particular conflict in your local newspaper or on the nightly TV news. Devastating as it’s been, the war against the poor has gone largely unnoticed - until now.

The Occupy Wall Street (OWS) movement has already made the concentration of wealth at the top of this society a central issue in US politics. Now, it promises to do something similar when it comes to the realities of poverty in this country.

By making Wall Street its symbolic target and branding itself as a movement of the 99 per cent, OWS has redirected public attention to the issue of extreme inequality, which it has recast as, essentially, a moral problem. Only a short time ago, the “morals” issue in politics meant the propriety of sexual preferences, reproductive behaviour or the personal behaviour of presidents. Economic policy, including tax cuts for the rich, subsidies and government protection for insurance and pharmaceutical companies and financial deregulation, was shrouded in clouds of propaganda or simply considered too complex for ordinary Americans to grasp.

Now, in what seems like no time at all, the fog has lifted and the topic on the table everywhere seems to be the morality of contemporary financial capitalism. The protesters have accomplished this mainly through the symbolic power of their actions: by naming Wall Street, the heartland of financial capitalism, as the enemy, and by welcoming the homeless and the down-and-out to their occupation sites. And of course, the slogan “We are the 99 per cent” reiterated the message that almost all of us are suffering from the reckless profiteering of a tiny handful. (In fact, they aren’t far off: the increase in income of the top one per cent over the past three decades about equals the losses of the bottom 80 per cent)

The movement’s moral call is reminiscent of earlier historical moments when popular uprisings invoked ideas of a “moral economy” to justify demands for bread or grain or wages - for, that is, a measure of economic justice. Historians usually attribute popular ideas of a moral economy to custom and tradition, as when the British historian EP Thompson traced the idea of a “just price” for basic foodstuffs invoked by 18th century English food rioters to then already centuries-old Elizabethan statutes. But the rebellious poor have never simply been traditionalists. In the face of violations of what they considered to be their customary rights, they did not wait for the magistrates to act, but often took it upon themselves to enforce what they considered to be the foundation of a just, moral economy.

Being poor by the numbers

A moral economy for our own time would certainly take on the unbridled accumulation of wealth at the expense of the majority (and the planet). It would also single out for special condemnation the creation of an ever-larger stratum of people we call “the poor” who struggle to survive in the shadow of the overconsumption and waste of that top one per cent.

Some facts: early in 2011, the US Census Bureau reported that 14.3 per cent of the population, or 47m people - one in six Americans - were living below the official poverty threshold, currently set at $22,400 annually for a family of four. Some 19m people are living in what is called extreme poverty, which means that their household income falls in the bottom half of those considered to be below the poverty line. More than a third of those extremely poor people are children. Indeed, more than half of all children younger than six living with a single mother are poor. Extrapolating from this data, Emily Monea and Isabel Sawhill of the Brookings Institution estimate that further sharp increases in both poverty and child poverty rates lie in our American future.

Some experts dispute these numbers on the grounds that they neither take account of the assistance that the poor still receive, mainly through the food stamp programme, nor of regional variations in the cost of living. In fact, bad as they are, the official numbers don’t tell the full story. The situation of the poor is actually considerably worse. The official poverty line is calculated as simply three times the minimal food budget first introduced in 1959 and then adjusted for inflation in food costs. In other words, the US poverty threshold takes no account of the cost of housing or fuel or transportation or healthcare costs, all of which are rising more rapidly than the cost of basic foods. So the poverty measure grossly understates the real cost of subsistence.

Moreover, in 2006, interest payments on consumer debt had already put more than four million people, not officially in poverty, below the line, making them ”debt poor”. Similarly, if childcare costs, estimated at $5,750 a year in 2006, were deducted from gross income, many more people would be counted as officially poor.

Nor are these catastrophic levels of poverty merely a temporary response to rising unemployment rates or reductions in take-home pay resulting from the great economic meltdown of 2008. The numbers tell the story and it’s clear enough: poverty was on the rise before the Great Recession hit. Between 2001 and 2007, poverty actually increasedfor the first time on record during an economic recovery. It rose from 11.7 per cent in 2001 to 12.5 per cent in 2007. Poverty rates for single mothers in 2007 were 49 per cent higher in the US than in 15 other high-income countries. Similarly, black employment rates and income were declining before the recession struck.

“Indeed, in US politics, ‘poverty’, along with ‘welfare’, ‘unwed mothers’ and ‘crime’, became code words for blacks.“- Frances Fox Piven

In part, all of this was the inevitable fallout from a decades-long business mobilisation to reduce labour costs by weakening unions and changing public policies that protected workers and those same unions. As a result, National Labour Board decisions became far less favourable to both workers and unions, workplace regulations were not enforced and the minimum wage lagged far behind inflation.

Inevitably, the overall impact of the campaign to reduce labour’s share of national earnings meant that a growing number of Americans couldn’t earn even a poverty-level livelihood - and even that’s not the whole of it. The poor and the programmes that assisted them were the objects of a full-bore campaign directed specifically at them.

Campaigning against the poor

This attack began even while the Black Freedom Movement of the 1960s was in full throttle. It was already evident in the failed 1964 presidential campaign of Republican Barry Goldwater, as well as in the recurrent campaigns of sometime Democrat and segregationist governor of Alabama George Wallace. Richard Nixon’s presidential bid in 1968 picked up on the theme.

As many commentators have pointed out, his triumphant campaign strategy tapped into the rising racial animosities not only of white southerners, but of a white working class in the north that suddenly found itself locked in competition with newly urbanised African-Americans for jobs, public services and housing, as well as in campaigns for school desegregation. The racial theme quickly melded into political propaganda targeting the poor and contemporary poor-relief programs. Indeed, in US politics “poverty”, along with “welfare”, “unwed mothers” and “crime”, became code words for blacks.

In the process, resurgent Republicans tried to defeat Democrats at the polls by associating them with blacks and with liberal policies meant to alleviate poverty. One result was the infamous “war on drugs” that largely ignored major traffickers in favour of the lowest level offenders in inner-city communities. Along with that came a massive programme of prison building and incarceration, as well as the wholesale “reform” of the main means-tested cash assistance programme, Aid to Families of Dependent Children. This politically driven attack on the poor proved just the opening drama in a decades-long campaign launched by business and the organised right against workers.

This was not only war against the poor, but the very “class war” that Republicans now use to brand just about any action they don’t like. In fact, class war was the overarching goal of the campaign, something that would soon enough become apparent in policies that led to a massive redistribution of the burden of taxation, the cannibalisation of government services through privatisation, wage cuts and enfeebled unions, and the deregulation of business, banks and financial institutions.

The poor - and blacks - were an endlessly useful rhetorical foil, a propagandistic distraction used to win elections and make bigger gains. Still, the rhetoric was important. A host of new think tanks, political organisations and lobbyists in Washington DC promoted the message that the country’s problems were caused by the poor whose shiftlessness, criminal inclinations and sexual promiscuity were being indulged by a too-generous welfare system.

Genuine suffering followed quickly enough, along with big cuts in the means-tested programmes that helped the poor. The staging of the cuts was itself enwreathed in clouds of propaganda, but cumulatively they frayed the safety net that protected both the poor and workers, especially low-wage ones, which meant women and minorities. When Ronald Reagan entered the Oval Office in 1980, the path had been smoothed for huge cuts in programs for poor people, and, by the 1990s, the Democrats, looking for electoral strategies that would raise campaign dollars from big business and put them back in power, took up the banner. It was Bill Clinton, after all, who campaigned on the slogan “end welfare as we know it”.

A movement for a moral economy

The war against the poor at the federal level was soon matched in state capitols where organisations such as the American Federation for Children, the American Legislative Exchange Council, the Institute for Liberty and the State Policy Network went to work. Their lobbying agenda was ambitious, including the large-scale privatisation of public services, business tax cuts, the rollback of environmental regulations and consumer protections, crippling public sector unions, and measures (such as requiring photo identification) that would restrict the access students and the poor had to the ballot. But the poor were their main public target and again, there were real life consequences - welfare cutbacks, particularly in the Aid to Families with Dependent Children programme and a law-and-order campaign that resulted in the massive incarceration of black men.

“The willful ignorance and cruelty of it all can leave you gasping - and gasp was all we did for decades.“- Frances Fox Piven

The Great Recession sharply worsened these trends. The Economic Policy Institute reports that the typical working-age household, which had already seen a decline of roughly $2,300 in income between 2000 and 2006, lost another $2,700 between 2007 and 2009. And when “recovery” arrived, however uncertainly, it was mainly in low-wage industries, whichaccounted for nearly half of what growth there was. Manufacturing continued to contract, while the labour market lost 6.1 per cent of payroll employment. New investment, when it occurred at all, was more likely to be in machinery than in new workers, so unemployment levels remain alarmingly high. In other words, the recession accelerated ongoing market trends toward lower-wage and ever more insecure employment.

The recession also prompted further cutbacks in welfare programmes. Because cash assistance has become so hard to get, thanks to so-called welfare reform, and fallback state-assistance programmes have been crippled, the federal food stamp programme has come to carry much of the weight in providing assistance to the poor. Renamed the “Supplemental Nutritional Assistance Program”, it was boosted by funds provided in the Recovery Act, and benefits temporarily rose, as did participation. But Congress has repeatedly attempted to slash the programme’s funds, and even to divert some of them into farm subsidies, while efforts, not yet successful, have been made to deny food stamps to any family that includes a worker on strike.

The organised right justifies its draconian policies toward the poor with moral arguments. Right-wing think tanks and blogs, for instance, ponder the damaging effect on disabled poor children of becoming “dependent” on government assistance, or they scrutinise government nutritional assistance for poor pregnant women and children in an effort to explain away positive outcomes for infants.

The willful ignorance and cruelty of it all can leave you gasping - and gasp was all we did for decades. This is why we so desperately needed a movement for a new kind of moral economy. Occupy Wall Street, which has already changed the national conversation, may well be its beginning.

Source: https://www.aljazeera.com/indepth/opinion/2011/11/2011117132329620899.html

Filed Under: America, Banks, Capitalism, Civil Liberties, Consumer, Corporations, Corruption, Democracy, Economy, Education, Employment, Health, Income Inequality, Law, Media, Military Industrial Complex, Money, New World Order, Occupy, Politicians, Politics, Poverty, Propaganda, Protests, Revolution, Rights, Taxes, The Hidden Empire, War, Wealthy Elite

Globalist Robert Pastor: North American Community, Regional Integration and Global Government

November 15, 2011 By T Kelly Leave a Comment

Robert Pastor is a member of the Council on Foreign Relations and essentially the man in charge of creating the blueprint for the regional integration of North America. Some have dubbed him the “Father of the American Union”.

Once continental or regional integration is achieved to varying degree, it is logical that the integration of the world will follow.

In the brief history of North American regional integration, one early verifiable item that stands out is the leaked 1980 scan or report of the Bilderberg group which details its desire for a North American common bloc, established first by free trade and later built upon sequentially by further institutions. Looking upon recent history, these deal with regional economic integration, continental security structures and eventually, someday, political cohesion.

Indeed, Canada and the U.S. signed a bilateral free trade agreement in 1989, integrating Mexico in 1994. In 2011, Canada and the U.S. signed a bilateral common security agreement. Taking into account agreements such as The Merida Initiative, it is logical that Mexico will eventually be integrated into what will be some type of North American Common Security Perimeter.

A month or two ago, Dr. Stephen Zamora paid a visit to a university campus down in Mexico. The first question he asked the crowd was whether they were “North Americans” versus “Mexicans” or “US citizens”.

Zamora, too, is a proponent of North American integration having proposed a regional development fund to move the process along.

I suppose the goal of speakers like Zamora and Pastor is to plant the seeds of the North American idea in the minds of the North American youth and academic institutions, in order to acclimate the next generation so that they would be more sympathetic to the idea.

I surmise the reason Pastor made a low-key visit to the campus, early in the morning, was either because he was extremely busy or that he did not wish to attract too much nationalist sentiment. I was actually surprised and dismayed at the low level of lecture attendees, for here was the man himself, the “Father of the North American Union”!

He gave a rather dry take on the need for a “North American Idea” and “North American Community”. One interesting point he made was that the percentage of trade between the three countries, something like 50-60% was equal to that of the European Union, demonstrating how far integration has come on certain issues.

Dr. Pastor goes on to state, as always, how the nation state is still “the single most important entity in the world.” How global issues such as the environment require problem solving beginning with a “region like North America, toward greater cooperation and greater governance.” Where “we should talk less about greater global government because that just sets the nationalists more on their heels and gets them to stop any cooperation at all. And it’s also unrealistic.”

He argues for “new mechanisms of cooperating among states to deal with issues that can’t be dealt with solely by each one right now. And, for a new generation of students [to] be more relaxed about integrating and interacting with other states and other people.”

Source: https://www.activistpost.com/2011/11/interview-with-globalist-robert-pastor.html

Filed Under: Campaigning, Capitalism, Consumer, Corporations, Corruption, Democracy, Economy, Law, Military Industrial Complex, Money, Politics, Rights, Wealthy Elite

Throwing Out the Master’s Tools and Building a Better House: Thoughts on the Importance of Nonviolence in the Occupy Revolution

November 15, 2011 By T Kelly Leave a Comment

Violence Is Conventional

Violence is what the police use. It’s what the state uses. If we want a revolution, it’s because we want a better world, because we think we have a bigger imagination, a more beautiful vision. So we’re not violent; we’re not like them in crucial ways. When I see a New York City policeman pepper-spray already captive young women in the face, I am disgusted; I want things to be different. And that pepper-spraying incident, terrible though it was for the individuals, did not succeed in any larger way.

Police violence at Occupy Wall Street. In fact, seen on Youtube (704,737 times for one posted version) and widely spread, it helped make Occupy Wall Street visible and sympathetic to mainstream viewers. The movement grew tremendously after that. The incident demonstrated the moral failure of the police and demonstrated that violence is also weak. It can injure, damage, destroy, kill, but it can’t coerce the will of the people, whether it’s a policeman assaulting unarmed young women or the US Army in Vietnam or Iraq.

Imagine that some Occupy activists had then beaten up the cop. That would have seemed to justify him in the eyes of many; it would’ve undermined the moral standing of our side. And then what? Moral authority was also that young Marine veteran, Shamar Thomas, chewing out thirty or so New York cops in what became a Youtube clip viewed 2,652,037 times so far. He didn’t fight them; he told them that what they were doing is wrong and dishonorable. And brought the nation along with him. Which violence wouldn’t do.

Violence Is Weak

As Jonathan Schell points out in his magnificent book The Unconquerable World: Power, Nonviolence, and the Will of the People, violence is what the state uses when its other powers have failed, when it is already losing. In using violence the state often loses its moral authority and its popular support. That’s why sometimes their visible violence feeds our victory, tragic though the impact may be. It’s also telling that when the FBI or other government agencies infiltrate a movement or an activist group, they seek to undermine it by egging it on to more violence.

The state would like us to be violent. Violence as cooptation tries to make us more like them, and if we’re like them they win twice—once because being unlike them is our goal and again because then we’re then easier to imprison, brutalize, marginalize, etc. We have another kind of power, though the term nonviolence only defines what it is not; some call our power people power. It works. It’s powerful. It’s changed and it’s changing the world.

The government and mainstream-to-right media often create fictions of our violence, from the myth that protesters were violent (beyond property damage) in Seattle in 1999 to the myth of spitting in returning soldiers’ faces in the Vietnam era to generally smearing us as terrorists. If we were violent, we’d be conventionally dangerous and the authorities could justify repressing us. In fact, we’re unconventionally dangerous, because we’re not threatening physical violence but the transformation of the system (and its violence). That is so much more dangerous to them, which is why they have to lie about (or just cannot comprehend) the nature of our danger.

So when episodes of violence break out as part of our side in a demonstration, an uprising, a movement, I think of it as a sabotage, a corruption, a coercion, a misunderstanding, or a mistake, whether it’s a paid infiltrator or a clueless dude. Here I want to be clear that property damage is not necessarily violence. The firefighter breaks the door to get the people out of the building. But the husband breaks the dishes to demonstrate to his wife that he can and may also break her. It’s violence displaced onto the inanimate as a threat to the animate.

Quietly eradicating experimental GMO crops or pulling up mining claim stakes is generally like the firefighter. Breaking windows during a big demonstration is more like the husband. I saw the windows of a Starbucks and a Niketown broken in downtown Seattle after nonviolent direct action had shut the central city and the World Trade Organization ministerial down. I saw scared-looking workers and knew that the CEOs and shareholders were not going to face that turbulence and they sure were not going to be the ones to clean it up. Economically it meant nothing to them.

We Are Already Winning

The powers that be are already scared of the Occupy movement and not because of tiny acts of violence. They are scared because right now we speak pretty well for the 99%. And because we set out to change the world and it’s working. The president of Russia warmed at the G20 Summit a week or so ago, “The reward system of shareholders and managers of financial institution should be changed step by step. Otherwise the ‘Occupy Wall street’ slogan will become fashionable in all developed countries.” That’s fear. And capitulation. And New York Times columnist Paul Krugman opened a recent column thus: “Inequality is back in the news, largely thanks to Occupy Wall Street….” We have set the agenda and framed the terms, and that’s already a huge victory.

This movement is winning. It’s winning by being broad and inclusive, by emphasizing what we have in common and bridging differences between the homeless, the poor, those in freefall, the fiscally thriving but outraged, between generations, races and nationalities and between longtime activists and never-demonstrated-before newcomers. It’s winning by keeping its eyes on the prize, which is economic justice and direct democracy, and by living out that direct democracy through assemblies and other means right now.

It’s winning through people power direct-action tactics, from global marches to blockades to many hundreds of Occupations. It’s winning through the creativity of the young, from the 22-year-old who launched Move Your Money Day to the 26-year-old who started the We Are the 99% website. And by tactics learned from Argentina’s 2001 revolution of general assemblies and politica afectiva, the politics of affection. It’s winning by becoming the space in which we are civil society: of human beings in the aggegate, living in public and with trust and love for one another. Violence is not going to be one of the tools that works in this movement.

Violence Is Authoritarian

Bodily violence is a means of coercing others against their will by causing pain, injury, or death. It steals another’s bodily integrity or very life as property to dispose of as the violator wishes. Since the majority in our movement would never consent to violent actions, such actions are also imposed on our body politic against our will. This is the very antithesis of anarchy as an ideal in which no one is coerced. If you wish to do something the great majority of us oppose, do it on your own. But these small violent bands attach themselves to large nonviolent movements, perhaps because there aren’t any large violent movements around.

As Peter Marshall writes in his history of anarchism, Demanding the Impossible, “Indeed the word violence comes from the Latin violare and etymologically means violation. Strictly speaking, to act violently means to treat others without respect…. A violent revolution is therefore unlikely to bring about any fundamental change in human relations. Given the anarchists’ respect for the sovereignty of the individual, in the long run it is non-violence and not violence which is implied by anarchist values.” Many of us anarchists are not ideological pacifists; I’m more than fine with the ways the Zapatistas rebels in southern Mexico have defended themselves and notice how sadly necessary it sometimes is, and I sure wouldn’t dictate what Syrians or Tibetans may or may not do. But petty violence in public in this country doesn’t achieve anything useful.

Snatching Defeat from the Jaws of Victory

In downtown Oakland, late on the evening of November 2 after a triumphant and mostly nonviolent day of mass actions, a building near Occupy Oakland’s encampment was seized, debris was piled up as if to make barricades that were only show barricades to set afire, not defend, trash cans were set on fire, windows broken, rocks thrown, and then there were altercations with the police. If the goal was to seize a building, one witness pointed out, then seize it secretly, not flamboyantly. The activity around the seizure seemed intended to bait the police into action. Which worked; police are not hard to bait. Activists and police were injured. What was achieved?

Many other activists yelled at the brawlers because they felt that the violence-tinged actions did not represent them or the Occupy movement and put them in danger. It was appalling that the city of Oakland began, a week earlier, by sending in stormtrooper police before dawn rather than negotiating about the fate of the Occupy Oakland encampment. But it was ridiculous that some people tried to get the police to be violent all over again. And it was tragic that others bore the brunt of that foray, including the grievously injured veteran Kayvan Sabeghi—another veteran, a week after Scott Olson.

Earlier this fall, the publishing group Crimethinc issued a screed in justification of violence that’s circulated widely in the Occupy movement. It’s titled “Dear Occupiers: A Letter from Anarchists,” though most anarchists I know would disagree with almost everything that follows. Midway through it declares, “Not everyone is resigned to legalistic pacifism; some people still remember how to stand up for themselves. Assuming that those at the front of clashes with the authorities are somehow in league with the authorities is not only illogical…. It is typical of privileged people who have been taught to trust the authorities and fear everyone who disobeys them.”

If nonviolence/people power is privilege, explain this eyewitness account from Oakland last Wednesday, posted on the Occupy Oakland site by Kallista Patridge: “By the time we got to the University building, a brave man was blocking the door screaming “Peaceful Protest! This is my city, and I don’t want to destroy it!” He cracked his knuckles, ready to take on an attack, his face splattered in paint from the Whole Foods fiasco [in which downtown Oakland’s branch of the chain store was spraypainted and smashed up based on a rumor that workers were told they’d be fired if they took the day off for the General Strike]. Behind the doors were men in badges. I was now watching a black man shield cops from a protest. The black flag group began pointing out those attempting to stop them, chanting ‘The peace police must be stopped,’ and I was, personally, rather disgusted by the strategy of comparing peacefully pissed people to police….”

This account is by a protestor who also noted in downtown Oakland that day a couple of men with military-style haircuts and brand new clothes put bandannas over their faces and began to smash stuff. She thinks that infiltrators were part of the property destruction and maybe instigated it, and Copwatch’s posted video seems to document police infiltrators at Occupy Oakland. One way to be impossible to sabotage is to be clearly committed to tactics that the state can’t coopt. If an infiltrator wants to nonviolently blockade or march or take out the garbage, well, that’s one more of us. If an infiltrator sabotages us by recruiting for mayhem, that’s a comment on what those tactics are good for.

What Actually Works

The language of Crimethinc is empty machismo peppered with insults. And just in this tiny snippet, incoherent. People who don’t like violence are not necessarily fearful or obedient; people power and nonviolence are strategies that are not the same as the ideology pacifism. To shut down the whole central city of Seattle and the World Trade Organization ministerial meeting on November 30, 1999, or the business district of San Francisco for three days in March of 2003, or the Port of Oakland on November 2, 2011—through people power—is one hell of a great way to stand up. It works. And it brings great joy and sense of power to those who do it. It’s how the world gets changed these days.

Crimethinc, whose logo is its name inside a bullet, doesn’t actually cite examples of violence achieving anything in our recent history. Can you name any? The anonymous writers don’t seem prepared to act, just tell others to (as do the two most high-profile advocates of violence on the left). And despite the smear quoted above that privileged people oppose them, theirs is the language of privilege. White kids can do crazy shit and get slapped on the wrist or maybe slapped around for it; I have for a quarter century walked through police lines like they were tall grass; people of color face far more dire consequences. When white youth try to bring the police down on a racially diverse movement—well, it’s not exactly what the word solidarity means to most of us.

Another Occupy Oakland witness, a female street medic, wrote of the ill-conceived November 2 late-night antics, “watching black bloc-ers run from the cops and not protect the camp their actions had endangered, an action which ultimately left behind many mentally ill people, sick people, street kids, and homeless folks to defend themselves against the police onslaught was disturbing and disgusting in ways I can’t even articulate because I am still so angry at the empty bravado and cowardice that I saw.” She adds, “I want those kids to be held accountable to the damage that they did, damage made possible by their class and race privilege.” And physical fitness; Occupy Oakland’s camp includes children, older people, wheelchair users and a lot of other people less ready to run.

As Oakland Occupier Sunaura Taylor put it, “A few people making decisions that affect everyone else is not what revolution looks like; it’s what capitalism looks like.”

How We Defeated the Police

The euphemism for violence is “diversity of tactics,” perhaps because diversity has been a liberal-progressive buzzword these past decades. But diversity does not mean that anything goes and that democratic decisionmaking doesn’t apply. If you want to be part of a movement, treat the others with respect; don’t spring unwanted surprises on them, particularly surprises that sabotage their own tactics—and chase away the real diversity of the movement. Most of us don’t want to be part of an action that includes those tactics. If you want to fight the police, look at who’s succeeded in changing their behavior: lawyers, lawmakers, police watchdog groups like Copwatch, investigative journalists (including a friend of mine whose work just put several New Orleans policemen in prison for decades), neighborhood patrols, community organizers, grassroots movements, often two or more players working together. You have to build.

The night after the raid on Oakland, the police were massed to raid Occupy San Francisco. About two thousand of us stood in and around the Occupy encampment as helicoptors hovered. Nonviolence trainers helped people prepare to blockade. Because we had a little political revolt against the Democratic money machine ten years ago and began to elect progressives who actually represent us pretty well, five of our city supervisors, the public defender, and a state senator—all people of color, incidentally- stood with us all night, vowing they would not let this happen.

We stood up. We fought a nonviolent battle against four hundred riot police that was so effective the police didn’t even dare show up. That’s people power. The same day Occupy Oakland took its campsite back, with people power, and the black bloc kids were reportedly part of the whole: they dismantled the cyclone fencing panels and stacked them up neatly. That’s how Occupy San Francisco won. And that’s how Occupy Oakland won.

State troopers and city police police refused to break up the Occupy Albany (New York) encampment, despite the governor’s and mayor’s orders. Sometimes the police can be swayed. Not by violence, though. The master’s tools won’t dismantle the master’s house. And they sure won’t build a better house.

People Power Shapes the World

Left violence failed miserably in the 1970s: the squalid and futile violence in Germany and Italy, the delusional Symbionese Liberation Army murdering Marcus Foster, Oakland’s first black school superintendent, and later gunning down a bystander mother of four in a bank, the bumbling Weather Underground accidentally blowing three of its members up and turning the rest into fugitives for a decade; all of them giving us a bad name we’ve worked hard to escape.

Think of that excruciating footage in Sam Green’s Weather Underground documentary of the “days of rage,” when a handful of delusions-of-grandeur young white radicals thought they’d do literal battle with the Chicago police and thus inspire the working class to rise up. The police clobbered them; the working class was so not impressed. If you want to address a larger issue, getting overly entangled with local police is a great way to lose focus and support.

In fact, the powerful and effective movements of the past sixty years have been almost entirely nonviolent. The Civil Rights Movement included the Deacons for Defense, but the focus of that smaller group was actually defense—the prevention of violence against nonviolent activists and the movement, not offensive forays. Schell points out that even the French and Russian Revolutions were largely nonviolent when it came to overthrowing the old regime; seizing a monopoly of power to form a new regime is when the blood really began to flow.

I think of the Sandinista Revolution of 1979 as the last great armed revolution, and it succeeded because the guerrillas with guns who came down from the mountains had wide popular support. People power. People power overthrew the Shah of Iran that year, in a revolution that was hijacked by authoritarians fond of violence. In 1986 the Marcos regime of the Philippines was overthrown by nonviolent means, means so compelling the army switched sides and refused to support the Marcos regime.

Armies don’t do that if you shoot at them, generally (and if you really defeated the police in battle—all the police, nationwide?-you’d face the army). Since then dozens of regimes, from South Africa to Hungary, Czechoslovakia and Poland to Nepal to Bolivia, Argentina, Uruguay, Brazil and Tunisia have been profoundly changed through largely nonviolent means. There was self-defense in the Deacons for Defense mode in the Egyptian uprising this year, but people power was the grand strategy that brought out the millions and changed the country. Armed struggle was part of the ongoing resistance in South Africa, but in the end people power and international solidarity were the fulcrom of change. The Zapatistas used violence sparingly as a last resort, but “our word is our weapon,” they say, and they used other tools in preference, often and exquisitely.

The powerful and effective movements of the past sixty years have used the strategy of people power.

It works. It changes the world. It’s changing the world now. Join us. Or don’t join us.

But please don’t try to have it both ways.

Source: https://www.commondreams.org/view/2011/11/14-8#.TsG-tDGu2do.facebook

Filed Under: America, Banks, Capitalism, Civil Liberties, Corporations, Corruption, Democracy, Economy, Education, Income Inequality, Law, Lobbying, Media, Military Industrial Complex, Money, New World Order, Occupy, Police, Politicians, Politics, Poverty, Propaganda, Protests, Revolution, Rights, Self-Sustainability, Surveillance, Taxes, Truth, Wealthy Elite

The Wall Street Pentagon Papers: Biggest Scam In World History Exposed: Are The Federal Reserve’s Crimes Too Big To Comprehend?

November 15, 2011 By T Kelly Leave a Comment

What if the greatest scam ever perpetrated was blatantly exposed, and the US media didn’t cover it? Does that mean the scam could keep going? That’s what we are about to find out.

I understand the importance of the new WikiLeaks documents. However, we must not let them distract us from the new information the Federal Reserve was forced to release. Even if WikiLeaks reveals documents from inside a large American bank, as huge as that could be, it will most likely pale in comparison to what we just found out from the one-time peek we got into the inner-workings of the Federal Reserve. This is the Wall Street equivalent of the Pentagon Papers.

I’ve written many reports detailing the crimes of Wall Street during this crisis. The level of fraud, from top to bottom, has been staggering. The lack of accountability and the complete disregard for the rule of law have made me and many of my colleagues extremely cynical and jaded when it comes to new evidence to pile on top of the mountain that we have already gathered. But we must not let our cynicism cloud our vision on the details within this new information.

Just when I thought the banksters couldn’t possibly shock me anymore… they did.

We were finally granted the honor and privilege of finding out the specifics, a limited one-time Federal Reserve view, of a secret taxpayer funded “backdoor bailout” by a small group of unelected bankers. This data release reveals “emergency lending programs” that doled out $12.3 TRILLION in taxpayer money – $3.3 trillion in liquidity, $9 trillion in “other financial arrangements.”

Wait, what? Did you say $12.3 TRILLION tax dollars were thrown around in secrecy by unelected bankers… and Congress didn’t know any of the details?

Yes. The Founding Fathers are rolling over in their graves. The original copy of the Constitution spontaneously burst into flames. The ghost of Tom Paine went running, stark raving mad screaming through the halls of Congress.

The Federal Reserve was secretly throwing around our money in unprecedented fashion, and it wasn’t just to the usual suspects like Goldman Sachs, JP Morgan, Citigroup, Bank of America, etc.; it was to the entire Global Banking Cartel. To central banks throughout the world: Australia, Denmark, Japan, Mexico, Norway, South Korea, Sweden, Switzerland, England… To the Fed’s foreign primary dealers like Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), BNP Paribas (France)… All their Ponzi players were “gifted.” All the Racketeer Influenced and Corrupt Organizations got their cut.

Talk about the ransacking and burning of Rome! Sayonara American middle class…

If you still had any question as to whether or not the United States is now the world’s preeminent banana republic, the final verdict was just delivered and the decision was unanimous. The ayes have it.

Any fairytale notions that we are living in a nation built on the rule of law and of the global economy being based on free market principles has now been exposed as just that, a fairytale. This moment is equivalent to everyone in Vatican City being told, by the Pope, that God is dead.

I’ve been arguing for years that the market is rigged and that the major Wall Street firms are elaborate Ponzi schemes, as have many other people who built their beliefs on rational thought, reasoned logic and evidence. We already came to this conclusion by doing the research and connecting the dots. But now, even our strongest skeptics and the most ardent Wall Street supporters have it all laid out in front of them, on FEDERAL RESERVE SPREADSHEETS.

Even the Financial Times, which named Lloyd Blankfein its 2009 person of the year, reacted by reporting this: “The initial reactions were shock at the breadth of lending, particularly to foreign firms. But the details paint a bleaker and even more disturbing picture.”

Yes, the emperor doesn’t have any clothes. God is, indeed, dead. But, for the moment at least, the illusion continues to hold power. How is this possible?

To start with, as always, the US television “news” media (propaganda) networks just glossed over the whole thing – nothing to see here, just move along, back after a message from our sponsors… Other than that obvious reason, I’ve come to the realization that the Federal Reserve’s crimes are so big, so huge in scale, it is very hard for people to even wrap their head around it and comprehend what has happened here.

Think about it. In just this one peek we got at its operations, we learned that the Fed doled out $12.3 trillion in near-zero interest loans, without Congressional input.

The audacity and absurdity of it all is mind boggling…

Based on many conversations I’ve had with people, it seems that the average person doesn’t comprehend how much a trillion dollars is, let alone 12.3 trillion. You might as well just say 12.3 gazillion, because people don’t grasp a number that large, nor do they understand what would be possible if that money was used in other ways.

Can you imagine what we could do to restructure society with $12.3 trillion? Think about that…

People also can’t grasp the colossal crime committed because they keep hearing the word “loans.” People think of the loans they get. You borrow money, you pay it back with interest, no big deal.

That’s not what happened here. The Fed doled out $12.3 trillion in near-zero interest loans, using the American people as collateral, demanding nothing in return, other than a bunch of toxic assets in some cases. They only gave this money to a select group of insiders, at a time when very few had any money because all these same insiders and speculators crashed the system.

Do you get that? The very people most responsible for crashing the system, were then rewarded with trillions of our dollars. This gave that select group of insiders unlimited power to seize control of assets and have unprecedented leverage over almost everything within their economies – crony capitalism on steroids.

This was a hostile world takeover orchestrated through economic attacks by a very small group of unelected global bankers. They paralyzed the system, then were given the power to recreate it according to their own desires. No free market, no democracy of any kind. All done in secrecy. In the process, they gave themselves all-time record-breaking bonuses and impoverished tens of millions of people – they have put into motion a system that will inevitably collapse again and utterly destroy the very existence of what is left of an economic middle class.

That is not hyperbole. That is what happened.

We are talking about trillions of dollars secretly pumped into global banks, handpicked by a small select group of bankers themselves. All for the benefit of those bankers, and at the expense of everyone else. People can’t even comprehend what that means and the severe consequences that it entails, which we have only just begun to experience.

Let me sum it up for you: The American Dream is O-V-E-R.

Welcome to the neo-feudal-fascist state.

People throughout the world who keep using the dollar are either A) Part of the scam; B) Oblivious to reality; C) Believe that US military power will be able to maintain the value of an otherwise worthless currency; D) All of the above.

No matter which way you look at it, we are all in serious trouble!

If you are an elected official, (I know at least 17 of you subscribe to my newsletter) and you believe in the oath you took upon taking office, you must immediately demand a full audit of the Federal Reserve and have Ben Bernanke and the entire Federal Reserve Board detained. If you are not going to do that, you deserve to have the words “Irrelevant Puppet” tattooed across your forehead.

Yes, those are obviously strong words, but they are the truth.

The Global Banking Cartel has now been so blatantly exposed, you cannot possibly get away with pretending that we live in a nation of law based on the Constitution. The jig is up.

It’s been over two years now; does anyone still seriously not understand why we are in this crisis? Our economy has been looted and burnt to the ground due to the strategic, deliberate decisions made by a small group of unelected global bankers at the Federal Reserve. Do people really not get the connection here? I mean, H.E.L.L.O. Our country is run by an unelected Global Banking Cartel.

I am constantly haunted by a quote from Harry Overstreet, who wrote the following in his 1925 groundbreaking study Influencing Human Behavior: “Giving people the facts as a strategy of influence” has been a failure, “an enterprise fraught with a surprising amount of disappointment.”

This crisis overwhelmingly proves Overstreet’s thesis to be true. Nonetheless, we solider on…

Here’s a roundup of reports on this Bernanke Leaks:

Prepare to enter the theater of the absurd…

I’ll start with Senator Bernie Sanders (I-Vermont). He was the senator who Bernanke blew off when he was asked for information on this heist during a congressional hearing. Sanders fought to get the amendment written into the financial “reform” bill that gave us this one-time peek into the Fed’s secret operations. (Remember, remember the 6th of May, HFT, flash crash and terrorism. “Hey, David, Homeland Security is on the phone! They want to ask you questions about some NYSE SLP program.”)

In an article entitled, “A Real Jaw-Dropper at the Federal Reserve,” Senator Sanders reveals some of the details:

At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later… we have begun to lift the veil of secrecy at the Fed…

After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed’s multi-trillion-dollar bailout of Wall Street and corporate America….

We have learned that the $700 billion Wall Street bailout… turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country.…

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse — which were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities….

Has the Federal Reserve of the United States become the central bank of the world?… [read Global Banking Cartel]

What this disclosure tells us, among many other things, is that despite this huge taxpayer bailout, the Fed did not make the appropriate demands on these institutions necessary to rebuild our economy and protect the needs of ordinary Americans….

What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people.

In an article entitled, “The Fed Lied About Wall Street,” Zach Carter sums it up this way:

The Federal Reserve audit is full of frightening revelations about U.S. economic policy and those who implement it… By denying the solvency crisis, major bank executives who had run their companies into the ground were allowed to keep their jobs, and shareholders who had placed bad bets on their firms were allowed to collect government largesse, as bloated bonuses began paying out soon after.

But the banks themselves still faced a capital shortage, and were only kept above those critical capital thresholds because federal regulators were willing to look the other way, letting banks account for obvious losses as if they were profitable assets.

So based on the Fed audit data, it’s hard to conclude that Fed Chairman Ben Bernanke was telling the truth when he told Congress on March 3, 2009, that there were no zombie banks in the United States.

“I don’t think that any major U.S. bank is currently a zombie institution,” Bernanke said.

As Bernanke spoke those words banks had been pledging junk bonds as collateral under Fed facilities for several months…

This is the heart of today’s foreclosure fraud crisis. Banks are foreclosing on untold numbers of families who have never missed a payment, because rushing to foreclosure generates lucrative fees for the banks, whatever the costs to families and investors. This is, in fact, far worse than what Paul Krugman predicted. Not only are zombie banks failing to support the economy, they are actively sabotaging it with fraud in order to make up for their capital shortages. Meanwhile, regulators are aggressively looking the other way.

The Fed had to fix liquidity in 2008. That was its job. But as major banks went insolvent, the Fed and Treasury had a responsibility to fix that solvency issue—even though that meant requiring shareholders and executives to live up to losses. Instead, as the Fed audit tells us, policymakers knowingly ignored the real problem, pushing losses onto the American middle class in the process.”

Even the Financial Times is jumping ship:

Sunlight Shows Cracks in Fed’s Rescue Story

It took two years, a hard-fought lawsuit, and an act of Congress, but finally… the Federal Reserve disclosed the details of its financial crisis lending programs. The initial reactions were shock at the breadth of lending, particularly to foreign firms. But the details paint a bleaker, earlier, and even more disturbing picture…. An even more troubling conclusion from the data is that… it is now apparent that the Fed took on far more risk, on less favorable terms, than most people have realized.

In true Fed fashion, they didn’t even fully comply with Congress. In a report entitled, “Fed Withholds Collateral Data for $885 Billion in Financial-Crisis Loans,” Bloomberg puts some icing on the cake:

For three of the Fed’s six emergency facilities, the central bank released information on groups of collateral it accepted by asset type and rating, without specifying individual securities. Among them was the Primary Dealer Credit Facility, created in March 2008 to provide loans to brokers as Bear Stearns Cos. collapsed.

“This is a half-step,” said former Atlanta Fed research director Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. in Sarasota, Florida. “If you were going to audit the facilities, then would this enable you to do an audit? The answer is ‘No,’ you would have to go in and look at the individual amounts of collateral and how it was broken down to do that. And that is the spirit of what the requirements were in Dodd-Frank.”

Here’s the only person on US TV “news” who actually covers and understands any of this, enter Dylan Ratigan, with his guest Chris Whalen from Institutional Risk Analytics. This quote from Whalen sums it up well: “The folks at the Fed have become so corrupt, so captured by the banking industry… the Fed is there to support the speculators and they let the real economy go to hell.”

The Progressive’s Matthew Rothschild has a good quote: “The financial bailout was a giant boondoggle, undemocratic and kleptocratic to its core.”

Matt Stoller on NewDeal 2.0:

End This Fed

The Fed, and specifically the people who run it, are responsible for declining wages, for de-industrialization, for bubbles, and for the systemic corruption of American capital markets. The new financial blogosphere destroyed the Fed’s mythic stature…. With a loss of legitimacy comes a lack of public trust and a vulnerability to any form of critic. The Fed is now less respected than the IRS…. Liberals should stop their love affair with conservative technocratic myths of monetary independence, and cease seeing this Federal Reserve as a legitimate actor. At the very least, we need to begin noticing that these people do in fact run the country, and should not.

The Sunlight Foundation shines a light on Bank of America and the Federal Reserve’s brother money manager BlackRock:

Federal Reserve Loan Program Allowed Bank of America to Benefit Twice

Bank of America was one of several banks that was able to play both sides of a Federal Reserve program launched during the 2008 financial crisis. While Bank of America was selling its assets to firms obtaining loans through the Fed program, the investment firm BlackRock—partially owned by Bank of America—was potentially turning a profit by using those loans to buy assets similar to those sold by Bank of America.

Gretchen Morgenson at the New York Times jumps into the act:

So That’s Where the Money Went

How the truth shines through when you shed a little light on a subject….

All of the emergency lending data released by the Fed are highly revealing, but why weren’t they made public much earlier? That’s a question that Walker F. Todd, a research fellow at the American Institute for Economic Research, is asking.

Mr. Todd, a former assistant general counsel and research officer at the Federal Reserve Bank of Cleveland, said details about the Fed’s vast and various programs should have been available before the Dodd-Frank regulatory reform law was even written.

“The Fed’s current set of powers and the shape of the Dodd-Frank bill over all might have looked quite different if this information had been made public during the debate on the bill,” he said. “Had these tables been out there, I think Congress would have either said no to emergency lending authority or if you get it, it’s going to be a much lower number — half a trillion dollars in the aggregate.” [read more]

Welcome to the “global pawnshop:”

The Fed Operates as a “global pawnshop:” $9 trillion to 18 financial institutions

What the report shows is that the Fed operated as a global pawnshop taking in practically anything the banks had for collateral. What is even more disturbing is that the Federal Reserve did not enact any punitive charges to these borrowers so you had banks like Goldman Sachs utilizing the crisis to siphon off cheap collateral. The Fed is quick to point out that “taxpayers were fully protected” but mention little of the destruction they have caused to the US dollar. This is a hidden cost to Americans and it also didn’t help that they were the fuel that set off the biggest global housing bubble ever witnessed by humanity. [read more]

“No strings attached.” Financial reporter Barry Grey unleashes the truth:

Fed report lifts lid on Great Bank Heist of 2008-2009

The banks and corporations that benefited were not even obliged to provide an account of what they did with the money. The entire purpose of the operation was to use public funds to cover the gambling losses of the American financial aristocracy, and create the conditions for the financiers and speculators to make even more money.

All of the 21,000 transactions cited in the Fed documents―released under a provision included, over the Fed’s objections, in this year’s financial regulatory overhaul bill―were carried out in secret. The unelected central bank operated without any congressional mandate or oversight.

The documents shed light on the greatest plundering of social resources in history. It was carried out under both the Republican Bush and Democratic Obama administrations. Those who organized the looting of the public treasury were long-time Wall Street insiders: men like Bush’s treasury secretary and former Goldman Sachs CEO Henry Paulson and the then-president of the New York Federal Reserve, Timothy Geithner….

The Fed documents show that the US central bank enabled banks and corporations to offload their bad debts onto the Fed’s balance sheet. Now, in order to prevent a collapse of the dollar and a default by the US government, the American people are being told they must sacrifice to reduce the national debt and budget deficit.

But as the vast sums make clear, the “sacrifice” being demanded of working people means their impoverishment―wage-cutting, mass unemployment, cuts in health care, Social Security, Medicare, Medicaid, etc.

The very scale of the Fed bailout points to the scale of the financial crash and the criminality that fostered it…. The entire US capitalist economy rested on a huge Ponzi scheme that was bound to collapse…

The banks were able to take the cheap cash from the Fed and lend it back to the government at double and quadruple the interest rates they were initially charged―pocketing many billions in the process….

The ongoing saga of the looting of the economy by the financial elite puts the lie to the endless claims that “there is no money” for jobs, housing, education or health care. The ruling class is awash in money.

Ben Shalom Bernanke is wanted for violating the United States Constitution, committing acts of financial terrorism and crimes against humanity. As a leading member of the Global Banking Cartel, he is considered a highly dangerous enemy combatant. Citizens of the United States hereby demand that he be properly detained under the laws and customs of war.

Source: https://pubrecord.org/nation/8622/pentagon-papers-wall-street/

Filed Under: America, Banks, Capitalism, Civil Liberties, Consumer, Corporations, Corruption, Democracy, Economy, Education, Federal Reserve, Lobbying, Money, New World Order, Politicians, Politics, Poverty, The Hidden Empire, Truth, Whistleblowers

The Pusher and the Popper

November 15, 2011 By T Kelly Leave a Comment

Drugs have always been an integral part of human recreation, and served as a business opportunity to many others. Pushers in the ’60s and ’70s became famous for turning many people onto new drugs.

There was no charge for a “taste” or sample of their product. These innocent and uninformed people will try the drugs, like the drugs, want more of the drugs, and come back to the pushers hungry for more . . . ultimately, creating addicts that buy their drugs over and over again, without really knowing or caring about what exactly these drugs are doing to their bodies. Why? Because it feels good, it’s an escape, and it helps to ease the “pain”.

Hmmm . . . this cycle sounds familiar to me . . . .

Pushers, and the successful drug trade in general, also got the attention of the government, who noticed their clever marketing ideas. In the early ’70s, as an answer to the growth in popularity and untaxed profits, the U.S. announced the War on Drugs. In other words, they created a conflict and sold a message that street drugs were bad and the cause of crime. With the masses believing this was a “worthy” cause, they willingly paid higher taxes to fund this so called “war”.

In actuality, this action by our government has only increased the public’s access to drugs. This 40-year-old “war” ha a current annual cost to the taxpayer of around $18 billion; this is just to chase and catch the offenders. After spending all those billions our government then spends billions more in the justice and penal system, housing, feeding, and providing medical care to prisoners at an average cost of $40,000 a year. Maybe if we stopped funding this insurmountable war our government could start providing food, shelter, and medical care to needy citizens who obey the law, but have fallen on hard times. When are we going to make a change? It is time to stop supporting the criminals, and let’s start helping those in need!

Instead, we live with a system were little by little people’s rights and privacy have been taken away in the name of patriotism and justice. Whose patriotism and what justice? Innocent lives, our rights, and cash are the collateral damage of this clash. Why, and for what purpose?

If the government creates a “problem” and they convince people to be afraid of that problem, likedrugs for example, they are more willing to give up their rights out of fear. What word conjures fearin the hearts of all humans more than war? War mongering and fear mongering go hand in hand; this was a master stroke by our government to further distract the masses in order to gain more control through F.E.A.R. - False Evidence Appearing Real.

This is exactly what has happened and continues to happen. These controlling forces use the media (which they own and control) to create false evidence; in this case they make it appear that street drugs are bad and addictive. In reality, pharmaceuticals are just as addictive and hazardous to health. Corporations commercialize their lies through crafty salesmen, who are paid very large salaries, to convince the masses to believe their non-sense. Part of the marketing campaign is to create fear toward “those other drugs”. Human nature does the rest; the masses then blame these “bad drug pushers”, who have been conveniently targeted by the media. This helps create further chaos in society, which increases governmental control, essentially granting pharmaceutical corporations a monopoly on drugs.Look, I’m not on the side of the “bad guys” or the cartels; I think getting people hooked on any drug is terrible, but these “good guys” are getting people hooked on drugs too! As if that wasn’t enough, innocent people are used as cannon fodder in the government’s war for power, which is played out on our public streets and in our neighborhoods.

Hiding under the guise of “savior” and “protectors”, the government fools people into giving up even more of their rights to restore “security”. The same controlling forces that caused the chaos in the first place, are now increasing their control and power over the population. Various governmental leaders have convinced the masses, that it is necessary to have your phone calls monitored andnormal to have your car ripped apart and searched with no explanation; it’s just part of the routine, and necessary for your safety.

Get used to it!

As far as the purpose behind the War on Drugs it’s complicated, because there are many levels, and trillions of dollars involved, but the basic levels of operation can be broken down as follows:

Level One: Create a revenue stream and learn the inner workings of the drug trade in order to take out the competition. Create a false war and raise taxes to gain the venture capital to fund their study and corporate take over of the drug trade.

Level Two: Vilify the street/recreational drugs and drug dealers. Confiscate money and drugs that are “dirty”. Clean up the drugs, synthesize them and give them creative new names with F.D.A. approval!

Level Three: The corporate takeover and legalization of their new “prescription” drugs through clever corporate-packaging and marketing campaigns aimed to “help” the masses.

Level Four: Take all the money, knowledge, and influence; use it to spread the franchise for further profit. Their influence is the media, the knowledge is used to create addicts, and the money comes rolling in….

Level Five: Repeat. They’re still learning and expanding!

So here we are. Our leaders learned something from the competitive drug market, declared war on their “enemies”, and now we pay the bill. Their media helps sell a negative image of street drugs. Then, they turn around and open their own drug operation called “pharmaceuticals”, and create addicts out of the same citizens they claim to be protecting. The best and biggest pay-off of all, the government now profits off both sides of the drug trade!

Now, massive corporations have become the drug lords, and doctors are often used as the pushers. Doctors always know what’s best for their patients after all; they’ve been to medical school and are just trying to help people – right? Innocent people walk into doctors’ appointments, explain a few symptoms, and asample is given to them. They go home, uninformed, but trusting in their highly educated doctor, and decide to give it a “taste”. When their body has a negative side effect, or they feel strange, they call their doctor, who responds with, “oh no, that’s normal just pop by the office tomorrow and I’ll adjust your dose and give you some more free samples.” They trust their doctors, wait for their body to adjust to its new chemical addiction, and now they’re hooked. That sounds criminal to me, creating an addict out of innocent people for profit. I’m not judging the millions of people on prescription drugs either – we should all be free to choose. I’m stressing the hypocrisy in the current system that judges and condemns their definition of “criminals” for conducting business under the very same model, selling in many cases the exact same product.

It’s time to stop trying to govern the drug trade and start educating people about all forms of drugs, including herbal alternatives – and the effects all drugs have on our bodies. When we treat all drugs as a choice of the individual and put education first – we’ll have true freedom!

Whatever options we are told to have by people in positions of authority, we can always choose to say ‘no,’ even though the consequences for doing so may seem frightening.

Being alert to our own interests, and having the simple courage to say ‘no’ in accordance with personal judgment, can mean the difference between wanting freedom and actually being free. Remember that the next time your doctor offers you free samples of an easy cure.

Source: https://www.activistpost.com/2011/07/pusher-and-popper.html

Filed Under: Big Pharma, Capitalism, Corporations, Health, Lobbying, Medical Industry, Money, Politics, Poverty, Rights, Science, Vaccines and Medicine

Federal Appeals Court Upholds Forced Home Entry Over DUI

November 14, 2011 By T Kelly Leave a Comment

The US Supreme Court ruled 27 years ago that police could not forcibly enter someone’s home over suspected drunk driving. The Fourth District US Court of Appeals in an unpublished decision is looking to change the precedent. A three-judge appellate panel considered the case of Alan J. Cilman who had filed a false arrest lawsuit after Officer M.A. Reeves busted down his door, without a warrant, on October 3, 2004.Earlier that day, Cilman had left Neighbors Restaurant where he watched a football game and had dinner and drinks. Reeves claimed Cilman drove out of the Neighbors parking lot at a “high rate of speed.” Reeves followed, noting that Cilman had run a stop sign, failed to signal and accelerated quickly in turns. Accounts differ over whether Reeves turned on his police lights before Cilman made it to the driveway of his home, which was not far away. Reeves got out of his cruiser as Cilman was walking briskly to the door. Reeves told Cilman to stop, but he did not say the man was under arrest. Cilman told the officer to get off his property as he went inside and locked the door.

Reeves waited for backup, then kicked in Cilman’s door and arrested him for being drunk in public and evasion without force — not driving under the influence of alcohol (DUI). Prosecutors later dropped those charges. The US District Court for the Eastern District of Virginia agreed that kicking in Cilman’s door without a warrant was a violation of the Fourth Amendment, but a jury awarded Cilman $0 in damages as compensation. Officer Reeves appealed the judge’s finding that he had violated the Constitution, because under state law he would be forced to resign if found guilty of a second constitutional violation.

In the 1984 US Supreme Court case Welsh v. Wisconsin, the high court ruled that “police may not make a warrantless entry into a home to make an arrest for DUI.” The US Court of Appeals panel ruled this precedent did not apply because Virginia imposes a higher fine and longer jail sentence than Wisconsin for DUI.

“No controlling Supreme Court or Fourth Circuit precedent speaks to a person’s right to be free from a warrantless entry into his home in circumstances like those in the case at hand,” the appellate judges ruled in a per curiam decision.

Cilman charged that Vienna’s police exhibited a pattern of Fourth Amendment violations, but the appellate panel dismissed this by calling the reports “isolated, unprecedented incidents.” The judges reversed every judgment in Cilman’s favor and ordered the case dismissed in its entirety.

A copy of the ruling is available in a 50k PDF file at the source link below.

Link: Cilman v. Reeves (US Court of Appeals, Fourth Circuit, 11/4/2011)

Source: https://www.activistpost.com/2011/11/federal-appeals-court-upholds-forced.html

Filed Under: America, Capitalism, Civil Liberties, Corporations, Corruption, Human Rights, Law, Money, New World Order, Police, Politicians, Politics, Prison, Revolution, Rights, The Hidden Empire, Truth

Iceland’s New Bank Disaster

November 14, 2011 By T Kelly Leave a Comment

Naked Capitalism

The problem of bank loans gone bad, especially those with government-guarantees such as U.S. student loans and Fannie Mae mortgages, has thrown into question just what should be a “fair value” for these debt obligations. Should “fair value” reflect what debtors can pay – that is, pay without going bankrupt?

Or is it fair for banks and even vulture funds to get whatever they can squeeze out of debtors?

The answer will depend largely on the degree to which governments back the claims of creditors. The legal definition of how much can be squeezed out is becoming a political issue pulling national governments, the IMF, ECB and other financial agencies into a conflict pitting banks, vulture funds and debt-strapped populations against each other.

This polarizing issue has now broken out especially in Iceland. The country is now suffering a second round of economic and financial distress stemming from the collapse of its banking system in October 2008. That crisis caused a huge loss of savings not only for domestic citizens but also for international creditors such as Deutsche Bank, Barclay’s and their institutional clients.

Stuck with bad loans and bonds from bankrupt issuers, foreign investors in the old banks sold their bonds and other claims for pennies on the dollar to buyers whose web sites described themselves as “specializing in distressed assets,” commonly known as vulture funds. (Persistent rumors suggest that some of these are working with the previous owners of the failed Icelandic banks, operating out of offshore banking and tax havens and currently under investigation by a Special Prosecutor.)

Foreclosure Time is not sufficient, because much property has fallen into negative equity – about a quarter of U.S. real estate. And for Ireland, market value of real estate covers only about 30% of the face value of mortgages. So Bailout Time becomes necessary. The banks turn over their bad loans to the government in exchange for government debt. The Federal Reserve has arranged over $2 trillion of such bank-friendly swaps. Banks receive government bonds or central bank deposits in exchange for their bad debts, accepted at face value rather than at “mark-to-market” prices.At the time when those bonds were sold in the market, Iceland’s government owned 100% of all three new banks. Representing the national interest, it intended for the banks to pass on to the debtors the write-downs at which they discounted the assets they bought from the old banks. This was supposed to be what “fair value” meant: the low market valuation at that time. It was supposed to take account of the reasonable ability of households and businesses to pay back loans that had become unpayable as the currency had collapsed and import prices had risen accordingly.
The IMF entered the picture in November 2008, advising the government to reconstruct the banking system in a way that “includes measures to ensure fair valuation of assets [and] maximize asset recovery.” The government created three “good” new banks from the ruins of its failed banks, transferring loans from the old to the new banks at a discount of up to 70 percent to reflect their fair value, based on independent third party valuation.

The vultures became owners of two out of three new Icelandic banks. On IMF advice the government negotiated an agreement so loose as to give them a hunting license on Icelandic households and businesses. The new banks acted much as U.S. collection agencies do when they buy bad credit-card debts, bank loans or unpaid bills from retailers at 30% of face value and then hound the debtors to squeeze out as much as they can, by hook or by crook.

These scavengers of the financial system are the bane of many states. But there is now a danger of their rising to the top of the international legal pyramid, to a point where they are in a position to oppress entire national economies.

Iceland’s case has a special twist. By law Icelandic mortgages and many other consumer loans are linked to the country’s soaring consumer price index. Owners of these loans not only can demand 100% of face value, but also can add on the increase in debt principal from the indexing. Thousands of households face poverty and loss of property because of loans that, in some cases, have more than doubled as a result of the currency crash and subsequent price inflation. But the IMF and Iceland’s Government and Supreme Court have affirmed the price-indexation of loan principal and usurious interest rates, lest the restructured banking system come to grief.

This is not what was expected. In 2009 the incoming “leftist” government negotiated an agreement with creditors to relate loan payments to the discounted transfer value. On IMF advice, the government handed over controlling interest in the new banks to creditors of the old banks. The aim was to minimize the cost of refinancing the banking system – but not to destroy the economy. Loans that were transferred from the old banks to the new after the 2008 crash at a discount of up to 70% to reflect their depreciated market value. This discount was to be passed on to borrowers (households and small businesses) faced with ballooning principal and payments due to CPI indexing of loans.

But the economy’s survival is not of paramount interest to the aggressive hedge funds that have replaced the established banks that originally lent to the Icelandic banks. Instead of passing on the debt write-downs to households and other debtors, the new banks are revaluing these loan principals upward. Their demands are keeping the economy in a straight jacket. Instead of debt restructuring taking place as originally hoped for, the scene is being set for a new banking crisis.

Something has to give. But so far it is Iceland’s economy, not the vulture funds. With the IMF insisting that the government abstain from intervention, the government’s approval rating has plunged to just 10% of Icelanders for floundering so badly while the new owners call the shots.

The New Banks have written off claims on major corporate debtors, whose continued operations have ensured their role as cash cows for the banks’ new vulture owners. But household debts acquired at 30 to 50 percent of face value have been re-valued at up to 100 percent. The value of owners’ share equity has soared. The Government has not intervened, accepting the banks’ assertion that they lack the resources to grant meaningful debt relief to households. So unpayably high debts are kept on the books, at transfer prices that afford a windfall to financial predators, dooming debtors to a decade or more of negative equity.

With the preparatory work done, the time has come for the Vultures to cash in through re-sale of New Bank equity shares by yearend. The New Banks have kept their corporate cash cows afloat while window-dressing owners’ equity with unrealistic valuations of consumer debts that cannot be paid, except at the cost of bankrupting the economy.

There is a feeling that Iceland’s government has been disabled from acting as an honest broker, as bank lobbyists have worked with Althing insiders – now backed by the IMF – to provide a windfall for creditors.

The problem becoming a global one. Many European countries and the United States face collapsed banks and derailed banking systems. How are the IMF and ECB to respond? Will they prescribe the Icelandic-type model of collaboration between Government and hedge funds? Or should the government be given power to resist drive by vulture funds to profiteer on an international scale, backed by international sanctions against their prey?

The policy danger now facing Europe

An economic crisis is the financial equivalent of military conquest. It is an opportunity for financial elites to make their property grab as Foreclosure Time arrives. It also becomes a political grab to make real the financial claims that had become uncollectible and hence largely fictitious “mark-to-model” accounting. Populist rhetoric is crafted to mobilize the widespread financial distress and general discontent as an opportunity to turn losers against each other rather than at the creditors.

This is the point at which all the years of financial propaganda pay off. Neoliberals have persuaded the public to believe that banks are needed to “oil the wheels of commerce” – that is, provide the credit bloodstream that brings nourishment to the economy’s moving parts. Only under such crisis conditions can banks collect what has become a fictitious buildup of debt claims. The overgrowth of mortgage debt, corporate debt, student loans, credit-card debt and other debts are fictitious because under normal circumstances there is no way for them to be paid.
At least in the United States and Britain, the central bank can print as much domestic currency as is necessary to pay interest and keep these government bonds liquid. Public agencies then take on the position of creditor vis-à-vis debtors that can’t pay.

These public agencies then have a choice. They may seek to collect the full amount (or at least, as much as they can get), as in the case of Fannie Mae and Freddie Mac in the United States. Or, the government may sell the bad debts to vulture funds, for a fraction of their face value.

After the September 2008 crash, Iceland’s government took over the old, collapsed, banks and created new ones in their place. Original bondholders of the old banks off-loaded the Icelandic bank bonds in the market for pennies on the dollar. The buyers were vulture funds. These bondholders became the owners of the old banks, as all shareholders were wiped out. In October, the government’s monetary authority appointed new boards to control the banks. Three new banks were set up, and all the deposits, mortgages and other bank loans were transferred to these new, healthier banks – at a steep discount. These new banks received 80 percent of the assets, the old banks 20 percent.

Then, owners of the old banks were given control over two of the new banks (87% and 95% respectively). The owners of these new banks were called vultures not only because of the steep discount at which the financial assets and claims of the old banks were transferred, but mainly because they already had bought control of the old banks at pennies on the dollar.

The result is that instead of the government keeping the banks and simply wiping them out in bankruptcy, the government kept aside and let vulture investors reap a giant windfall – that now threatens to plunge Iceland’s economy into chronic financial austerity. In retrospect, none of this was necessary. The question is, what can the government do to clean up the mess that it has created by so gullibly taking bad IMF advice?

In the United States, banks receiving TARP bailout money were supposed to negotiate with mortgage debtors to write down the debts to market prices and/or the ability to pay. This was not done. Likewise in Iceland, the vulture funds that bought the bad “old bank” loans were supposed to pass on the debt write-downs to the debtors. This was not done either. In fact, the loan principals continued to be revalued upward in keeping with Iceland’s unique indexing designed to save banks from taking a loss – that is, to make sure that the economy as a whole suffers, even suffering a fatal austerity attack, so that bankers will be “made whole.” This means making a windfall fortune for the vultures who buy bad loans on the cheap.

Is this the future of Europe as well? If so, the present financial crisis will become the great windfall for vulture banks, and for banks in general. Whereas the past few centuries have seen financial crashes wipe out the savings and creditor claims (bonds, bank loans, etc.) that are the counterpart to bad debts, today we are seeing the bad debts kept on the books, but the banks and bondholders that provided the bad loans being made whole at taxpayer expense.

This is not how economic democracy was expected to work during the 19th-century drive for Parliamentary reform. And by the early 20th century, social democratic and labor parties were supposed to take the lead in moving banking and credit along with other basic infrastructure into the public domain. But today, from Greece to Iceland, governments are acting as enforcers or even as collection agents on behalf of the financial sector – as the Occupy Wall Street movement expresses it, the top “1%,” not the bottom 99%.

Iceland stands as a dress rehearsal for this power grab. The IMF and Iceland’s government held a conference in Reykjavik on October 27 to celebrate the ostensible success in their reconstruction of Iceland’s economy and banking system.

In the United States, the crisis that Obama Chief of Staff Rahm Emanuel celebrated as “too good to let go to waste” will be capped by scaling back Social Security and Medicare as soon as the autumn Doomsday Clock runs down and the Congressional Super-Committee of 12 (with President Obama holding the 13th vote in case of a tie) gets to agree to make the working population pay Wall Street for its bad loans. The Greek austerity plan thus serves as a dress rehearsal for the U.S. – with the Democratic Party playing the role as counterparts to Greece’s Socialist Party that is sponsoring austerity, and expelling labor union leaders from its ranks if they object to the grand double-cross.

Source: https://www.activistpost.com/2011/11/icelands-new-bank-disaster.html

Filed Under: Banks, Capitalism, Civil Liberties, Consumer, Corporations, Corruption, Economy, Lobbying, Media, Military Industrial Complex, Money, New World Order, Politicians, Politics, Poverty, Propaganda, Protests, Revolution, Rights, Self-Sustainability, Taxes, The Hidden Empire

How to Survive the Second Depression

November 14, 2011 By T Kelly Leave a Comment

I don’t think that there is any denial from the working class that we are still in the throes of a recession. And many also believe that if we are not in an actual depression now, we will be soon. The rising cost of food and health care, the elimination of the single-family home from the American Dream, the lack of jobs for the unemployed, and the wholesale underemployment of many with jobs . . . well even an economics dunce like me can see the writing of the wall.

Luckily, I am prepared. And even though some of my peers get tired of my continued emphasis on preparing for an uncertain future, the reality is that the door on the old way of life is closing and families of all types need to be ready. But my intent here is not to preach.

Instead, I have a special treat. My longtime friend George Ure has given me permission to repost his muse on the Perfect Modern Depression Family that was previously shared only with his $40 per year subscribers at Peoplenomics.

A Perfect Modern Depression Family

Don’t know as I’ve ever given you a sketch of where I’d be if I could design a perfect family situation for weathering a Great Depression, but it might be a family set up something like this:

• Dad works as a lineman for a utility company. He’s going to have a fairly steady job because people will want their lights on, but with people getting lights turned on and off, as they pay their bills, or not, he’d have lots to do pulling meters and so forth. Since climate change means more violent weather, lots of potential for pick-up hours, too. And at double time in some cases. Or, maybe dad is an x-ray tech, or runs an ultrasound or MRI machine in medicine. Lights and meds will still be around.

• Mom works as a grocery checker, or works as a meat cutter in the local store. Many still have meat cutters and they make good money, get good vacations and, yep, have an inside line on food stocks even when things start to run short.

• Johnny, their boy, has a paper route. He’s going to have a hot business on his hands because as people drop Internet connectivity, the small local newspaper could make a big come back, especially because people will be looking for local deals on everything. He wants to be a doctor when he grows up and since he’s on the honor role, he has a good chance of making it.

• Suzy, the daughter, has been really active in 4-H – so much so that she’s been getting hints from the teacher that she might get a full-ride scholarship to a state Ag school. She seems set for a good career and she’s thinking about becoming a veterinarian.

• The family house was purchased 19 years ago and has been refinanced recently, not to pull out equity, but to reduce the monthly payment to the smallest possible amount since the family knows tough times are coming. Resetting at 20 years, even though they had only 10 years to go, helps. I might not do it, but I don’t have to pay for kids, except for the ongoing school taxes.

• The family has slowly acquired about 100 ounces of silver and 10 ounces of gold.

• Did I mention Suzy has been doing a backyard garden and that Mom has been canning the past couple of years? Nothing fancy; some dill pickles, a few fruits and beans and tomatoes from the garden. These past few weeks, she’s been blanching and freezing other varieties.

• Dad’s gone off the deep end, putting a solar cooking rig in the back yard – sun-driven BBQ and oven while Mom’s order of a year’s worth of grains in nitrogen-packed containers came in a few weeks back.

• Uncle Bob is a dentist, and everything in the mouth is done and paid for with cash. The family’s 3 cars are all in good repair and in the area of 50,000 miles each, including the subcompact the kids share. Fresh tires on them all, too, since overseas sources may dry up in the Depression.

• The family all have library cards and have rediscovered reading. As a result, family dinners are lively and thought provoking conversation gatherings which build the family bond. Neighborhood kids come over, too, since the food is so good and it’s not like their homes at all.

The Worst Family Profile

If you think the first family has it made, you got it right! Contrast how an adverse time is going to work out for this family:

• Dad works for a financial services company selling annuities. He’s on the verge of losing his job because people aren’t buying that kind of financial product anymore.

• Mom was selling real estate, but since she just got into that in the fall of 2008, she hasn’t made hardly any money at it, and though she keeps hoping to get a few sales, like most agents, she’s only able to make $23,000 per year because of the downturn.

• Billy, their son, is totally immersed in video games and Goth. He’s on expensive ADHD medication and has a 2-second attention span on a good day. He’s eating almost exclusively a high-fructose corn syrup laced diet which has made him fat and his attitude is horrible. His grades are failing and he’s talk about dropping out in his junior year of high school. He spends a lot of time on the cell phone running up his phone tab alone north of $100 per month.

• Christy, the daughter, has turned into a drug-smoking slut, popular with gang-types, and lately with mom and dad at work, several items around the home have turned up missing, including Billy’s last cell phone which cost $350 to replace because he threw fits about needing a stylish phone.

• The family home is one payment from foreclosure most of the time. Dad hasn’t been able to bring down credit card debt, and with all seven cards the total is more than $60,000.

• They refinanced the house at the peak in 2008 and pulled out money for a new SUV, but that was wrecked the month after they bought it and the insurance didn’t pay off well, so they drive a four-year-old SUV with high miles. It’s going to need tires soon, but there’s no money for them, since they put custom 24″ wheels on it for appearances and those tires are $350 each now.

• At the end of each month, they are about $300 cash negative, but the bank cards have “helped”. The parents are praying for better jobs and sending resumes everywhere.

• Dad got called into the office next Thursday to meet with HR. He’s one step from fiscal disaster.

• The family doesn’t eat together, no one reads, and meals are expensive as a result with a high ‘fast food’ cost. Neighborhood kids come over to smoke dope, make a run at Christy, and see if Billy’s checked out so they can swipe some of his game cartridges.

Given a choice, I don’t think it’s too hard to figure out which family is going to survive a further 50% reduction of income. One is actually a family team, while the other is a haphazard collection of social ills residing under a common roof that may be ‘called’ any time.

. . . George Ure, August 2011

Now I am sure that many families fall somewhere in between the “perfect” family and the “worst” family. The point, though, is to figure out where you are in this continuum and to begin taking the steps to move closer to a perfect family dynamic.

So what are some of the decision and choices?

One that sure comes to mind has to do with housing. Depending on your financial condition, age, and employment status, where you live may indeed become one of the most significant changes you can make to ensure your security in the second depression. Should you live in a single-family home, or a multi-generation shared residence? Should you move to a “cheap” state where property taxes are low and the cost of living is reasonable? How about moving to the country where you can grow your own food and raise chickens? Or, what about being geographically independent by living in a large motor home (dirt cheap right now) and roaming from one Wal-Mart parking lot to another?

Okay, I admit the latter option is a bit extreme but still, if all of your money is presently going toward housing, you need to rethink your situation and come up with alternatives, even if it means finding housemates or becoming creative in some other manner.

With the goal of becoming the Perfect Modern Family, I heartily endorse learning as much as you can about personal survival skills. Learn to cook, learn to sew, learn to build a fire and learn to fix stuff.

The other thing? Learn to become self-entertaining, and by that I mean learn to be happy with books, walks in the woods or the park, and the company of others who share like-minded and spirited conversations about things that matter.

Gut feelings are a funny thing – sometimes right and sometimes wrong – but as you age, you begin to trust those instincts more and more. There is no doubt in my mind that the old ways of doing things are long gone, and if you are “old as dirt” as I am, you just know that old ways will never return.

Enjoy your next adventure through common sense and thoughtful preparation!

Source: https://www.activistpost.com/2011/11/how-to-survive-second-depression.html

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