Almost Daily Rant

Never, Never, Never, Ever

Let a crisis go to waste, in the words of Rahm Emanuel. As a follow up to yesterday's article about the void of leadership how fitting it is that Obama is proclaiming it is time to thrust forth the climate legislation. For the five people out there that still believe this self-serving nonsense is about the environment, please for the love of your highest good follow the money.

 

Whether it is through FAT, VAT or Carbon Taxes, rest assure the bankrupted governments of the world, acting as agents of the financiers and multinationals that back them and certainly not your representatives, will do absolutely anything they can to ensure their existence by extorting whatever wealth still remains from the other 95% of the population. You could see this coming a mile away knowing that it was only a matter of time before O would take advantage of the highly emotional situation enfolding in the Gulf to railroad the agenda.

 

Our Chernobyl of Leadership

In the article below, Dmitry Orlov explains how the response to the catastrophe in the Gulf of Mexico is a nail in the coffin of government leadership legitimacy. I've long thought that Obama is our Gorbachev, and now Orlov makes the case that politically the oil volcano is our Chernobyl. Although I’ve never seen it as a strictly linear process, you can see Orlov’s 5 stages of collapse (Financial (2008), Commercial (2009), Political (2010), Social, Cultural) play out with each passing day.

 

It is embarrassing to be lost. It is even more embarrassing for a leader to be lost. And what's really really embarrassing to all concerned is when national and transnational corporate leaders attempt to tackle a major disaster and are found out to have been issuing marching orders based on the wrong map. Everyone then executes a routine of turning toward each other in shock, frowning while shaking their heads slowly from side to side and looking away in disgust. After that, these leaders might as well limit their public pronouncements to the traditional "Milk, milk, lemonade, round the corner fudge is made." Whatever they say, the universal reaction becomes: "What leaders? We don't have any."

Getting lost can be traumatic for the rest of us too. When we suddenly realize that we don't know where we are, urgent neural messages are exchanged between our prefrontal cortex, which struggles to form a coherent picture of what's happening, our amygdala, whose job is to hold on to a sense of where we are, and our hippocampus, which motivates us to get back to a place we know as quickly as we possibly can. This strange bit of internal wiring explains why humans who are only slightly lost tend to trot off in a random direction and promptly become profoundly lost. After these immediate biochemical reactions have run their course, we go through the usual stages of:

1. denial—"We are not lost! The ski lodge is just over the next ridge, or the next, or the next..."
2. anger—"We are wasting time! Shut up and keep trotting!"
3. bargaining—"The map must be wrong; either that or someone has dynamited the giant boulder that should be right there..."
4. depression—"We'll never get there! We're all going to die out here!" and 
5. acceptance—"We are not lost; we are right here, wherever it is. We better find some shelter and start a campfire before it gets dark and cold." (Read Full Article)

Ministry of (Mis)Information

"First they ignore you, then they ridicule you, then they fight you, then you win." --  Mahatma Gandhi

As if a 24/7 blitz of corporate news propaganda was not enough for the masses, the State Department has launched a site condemning "conspiracy theories". Perhaps Bagdad Bob has been tasked with running the site?

The US State Department’s America.gov web site, which purports to engage international audiences on issues of foreign policy, society and values, has dedicated a special section to conspiracy theories and misinformation, claiming:

“Conspiracy theories exist in the realm of myth, where imaginations run wild, fears trump facts, and evidence is ignored. As a superpower, the United States is often cast as a villain in these dramas.” (Read full article)

Illegal Immigration

It seems the war of the states is beginning with CA and AZ, with Arizona threatening to cut off power to California in response to Los Angeles’ economic boycott of Arizona’s illegal immigration laws.
 
As with any controversy, we seldom reach beyond the crisis at hand to the root cause of the system that produces the crisis. To start with, I believe a free human being should be able to go wherever she wants without papers of any sort, in a world of sovereign, representative states. Please don’t confuse this ideal with the globalist wet dream of a “borderless world” or an “open society”, George Soros style, which is a nice platitude for global, unrepresentative totalitarianism.  

Illegal immigration is only an issue because we've created a culture of handouts to rich and poor alike, with a sham democratic system that amounts to votes for other people's money, all carefully managed by the elite through various think tanks which write the laws to be carried out by paid-in-full henchman and the usual cast of useful idiots. As a result, cracking down on illegal immigration becomes the inevitable result of protecting wages and a zero-sum game of direct and indirect handouts and subsidies. Most Americans understand that to not enforce immigration laws is to economically self-destruct quicker because we're a nation that doesn't live by what we produce. We're a nation that lives by the debt we print.

Imagine though if we had a direct capitalist system based on a limited Constitutional government, not a corporatist, monopoly capitalist, welfare system...yes, I know it is actually very hard to do. And by "welfare" I'm not referencing welfare in the traditional sense of care for the poor ranted about by the Rushbos, but instead the wide swath of government subsidies of all sorts from Medicare and Social Security entitlement program that is insolvent, to the constant drain of what’s left of the productive economy by the parasitic international G20 financial class, to a global war “on terror” that is actually a global war for private profit (e.g. oil, opium and pipelines), to a profitable police state mechanism here on the “homeland”, to a self-perpetuated war on drugs that benefits the private interests that do the “enforcing” and imprisoning and so forth and so on.
 

In that world, you would attract people purely because they wanted to better their lot in life by working hard to provide a good or service based on inherently improving the quality of life of someone else.

On the other hand, those who wanted to game the system for "free" sickcare, state-sponsored "education" and other bread and cirucuses in exchange for votes that further enrich the elite would be disappointed because there is little to game. People from Mexico, Pakistan, Canada, Russia, Zimbabwe or wherever who are attracted to a Republican form of government and a true free market system would be motivated to settle here, and they’d find that less folks with angry banners would be there to greet them. 

And of course, there would be less of an impetus to escape their countries to begin with if you take away the destabilizing interventionist policies, due to the global warfare-welfare corporatist system, that result in poverty and tyranny. For instance, instead of a positive feedback loop of higher drug prices funding more corruption and oppression resulting from the "war on drugs", imagine the impact of simply legalizing drugs and collapsing the prices that fund the  corrupt narco-political system in both the US and Mexico. If you really wanted to really hit the drug cartels, wouldn’t you just collapse the market and the price by legalizing the product? But that of course doesn't benefit the few that matter in this game, since drug-funded regimes are friendliest to multinational exploiters and the cat and mouse game benefits those with budgets.

But I'll get off my soapbox because I know this is silly idealist thinking that doesn't jive in our world of an empire in its death convulsions and a larger population desperate to sustain a status quo that is unsustainable. For that we need scapegoats and pretend enemies, vote-for-handout politicians need new voters and the elite are only too happy to stoke those self-destructive flames. A Balkanized American population at war with one another is one that can be more easily manipulated for a broader agenda.

Don’t be a sucker for it.

Dealing with Denial and Authoritarians

Washington’s Blog covered the idea of an authoritarian personality disorder at the heart of a widely-held denial that the interests of leaders often conflict with those they lead. Ironically, those who are often quick to criticize “the government” for being corrupt get defensive over specific cases of how deeply the corruption runs.

Yet, it seems so naïve to me that anyone would blindly accept that there aren’t figures within legitimate governmental bodies, with the personality type that would seek power to begin with, who have complex individual motives that overlap with others in the private and public sector to form factions that are at diametrically opposed to those they represent over the long term. Only in some far-away utopia would one not be required to keep diligent watch over shadowy governmental associations between power brokers and policy makers with overlapping interests.

Deniers, sometimes of the "conservative" talk radio variety, often exclaim that the “government” is incapable of conspiracies because they are “too stupid” or incompetent as if all members of government from chief executive to low-level bureaucrat, 16 spy agencies and every private contractor within sign a secret, nefarious agreement. Only "left-wing loons" would believe in such a thing. The reality is that while some leaders are in play, many in legitimate power, including at times the President, play their role as useful idiots, unaware of the bigger picture, ignorant of the economic and geopolitical chessboard and often sincerely believing they are carrying out a plan that is for the greater good. As the expression goes, the right hand seldom knows what the left hand is doing.

So when you speak in terms of “secret societies” you give the propagandists ammunition as a tin-foil’er and mow a path to Stalin’s asylums.

Instead, box the propagandist into a position that forces him to deny think tanks, policy institutes and loose associations with common interests of the world’s most influential industrial and financial stakeholders in spite of insurmountable historical context and documentable money trails.

Another Loss for Due Process of Law

Due process of law was delt a major blow by the courts this week in the War on Liberty. Do you think you're still free like they did?

Reader Walter passed along this distressing sighting from Chris Floyd’s blog. American civil liberties were gutted last week, and the media failed to take note of it.

The development? If the president or one of his subordinates declares someone to be an “enemy combatant” (the 21st century version of “enemy of the state”) he is denied any protection of the law. So any trouble-maker (which means anyone) can be whisked away, incarcerated, tortured, “disappeared,” you name it. Floyd’s commentary:

After hearing passionate arguments from the Obama Administration, the Supreme Court acquiesced to the president’s fervent request and, in a one-line ruling, let stand a lower court decision that declared torture an ordinary, expected consequence of military detention, while introducing a shocking new precedent for all future courts to follow: anyone who is arbitrarily declared a “suspected enemy combatant” by the president or his designated minions is no longer a “person.” They will simply cease to exist as a legal entity. They will have no inherent rights, no human rights, no legal standing whatsoever — save whatever modicum of process the government arbitrarily deigns to grant them from time to time, with its ever-shifting tribunals and show trials (Read Full Article).

Cap and Trade - Cui Bono?

Our War President

I've linked an article below explaining why no one should be surprised by President “Juan Peron” Obama's military Keynesianism. It turns out our Nobel Peace Prize loving President outdoes Bush in the war department when you look at the numbers.

Slowly, the anti-war Progressives who voted for him realize they've been had by a cruel hoax: A much better pitchman for war's financiers. Remember, everyone's favorite Progressive, Woodrow Wilson plunged the US into WWI to ensure J.P. Morgan's bond repayments, after Wilson was elected as "the guy who kept us out of war".

Got change?

All the crying from the left about how Obama "the peace candidate" has now become "a war president" ... Whatever are they talking about? Here's what I wrote in this report in August 2008, during the election campaign:

We find Obama threatening, several times, to attack Iran if they don't do what the United States wants them to do nuclear-wise; threatening more than once to attack Pakistan if their anti-terrorist policies are not tough enough or if there would be a regime change in the nuclear-armed country not to his liking; calling for a large increase in US troops and tougher policies for Afghanistan; wholly and unequivocally embracing Israel as if it were the 51st state.

Why should anyone be surprised at Obama's foreign policy in the White House? He has not even banned torture, contrary to what his supporters would fervently have us believe. If further evidence were needed, we have the November 28 report in the Washington Post: "Two Afghan teenagers held in U.S. detention north of Kabul this year said they were beaten by American guards, photographed naked, deprived of sleep and held in solitary confinement in concrete cells for at least two weeks while undergoing daily interrogation about their alleged links to the Taliban." This is but the latest example of the continuance of torture under the new administration.

But the shortcomings of Barack Obama and the naiveté of his fans is not the important issue. The important issue is the continuation and escalation of the American war in Afghanistan, based on the myth that the individuals we label "Taliban" are indistinguishable from those who attacked the United States on September 11, 2001, whom we usually label "al Qaeda". "I am convinced," the president said in his speech at the United States Military Academy (West Point) on December 1, "that our security is at stake in Afghanistan and Pakistan. This is the epicenter of violent extremism practiced by al Qaeda. It is from here that we were attacked on 9/11, and it is from here that new attacks are being plotted as I speak."

Obama used one form or another of the word "extremist" eleven times in his half-hour talk. Young, impressionable minds must be carefully taught; a future generation of military leaders who will command America's never-ending wars must have no doubts that the bad guys are "extremists", that "extremists" are by definition bad guys, that "extremists" are beyond the pale and do not act from human, rational motivation like we do, that we — quintessential non-extremists, peace-loving moderates — are the good guys, forced into one war after another against our will. Sending robotic death machines flying over Afghanistan and Pakistan to drop powerful bombs on the top of wedding parties, funerals, and homes is of course not extremist behavior for human beings.

And the bad guys attacked the US "from here", Afghanistan. That's why the United States is "there", Afghanistan. But in fact the 9-11 attack was planned in Germany, Spain and the United States as much as in Afghanistan. It could have been planned in a single small room in Panama City, Taiwan, or Bucharest. What is needed to plot to buy airline tickets and take flying lessons in the United States? And the attack was carried out entirely in the United States. But Barack Obama has to maintain the fiction that Afghanistan was, and is, vital and indispensable to any attack on the United States, past or future. That gives him the right to occupy the country and kill the citizens as he sees fit. Robert Baer, former CIA officer with long involvement in that part of the world has noted: "The people that want their country liberated from the West have nothing to do with Al Qaeda. They simply want us gone because we're foreigners, and they're rallying behind the Taliban because the Taliban are experienced, effective fighters." (Full Article)

The Old Guy or Gal I'd Vote For

If I had to pull the level for a politician in this day in age just who would it be?

Give me an OLD guy or gal in office with a very deep understanding of the forces that have played administrations on both sides of the phony right-left paradigm like chess pieces for ages.
 
That old guy or gal would REALLY understand the fraud behind how the economy works and why unsound money was the key reason a republic evolved into the corporatist state we're in,

REALLY understand the forces behind why endless wars are fought,

REALLY understand the forces behind our escalating police state,

REALLY understand that when governments act to give rights to groups, individuals have none,

REALLY understand US relationships with oppressive regimes,

REALLY understand how phony US national patriotism is used as a tool for global consolidation into fewer and fewer private hands of parties who have no allegiance to the US,

REALLY understand the threat of creeping global government in what is nothing less than an evolution towards unrepresentative totalitarianism,

REALLY understand the money-power-control politics behind global environmentalism while at the same time understanding the reality of how environmental limits (esp. oil, fresh water, good soil) are going to crimp our style in any case, BUT still respecting private property over collectivism because the environmental disasters in the old Soviet Union and China show how effective communist arrangements work towards a clean environment,

REALLY understand that the best thing government can do is to remove itself from most aspects of people's lives because people need to learn to self-direct within their local communities their own living arrangements, probably on a much smaller scale than they are used to.
 
That old guy or gal would not be very flashy or even that popular with most people and most would say, "what has he done - nothing."

And that old guy or gal would be the best at doing as little harm as possible.

Audit the Fed Under Attack

Paul Craig Roberts - US Joins Ranks of Failed States

Paul Craig Roberts, former Assistant Secretary of the US Treasury, pulls no punches.

The US has every characteristic of a failed state.

The US government’s current operating budget is dependent on foreign financing and money creation.

Too politically weak to be able to advance its interests through diplomacy, the US relies on terrorismand military aggression.

Costs are out of control, and priorities are skewed in the interest of rich organized interest groups at the expense of the vast majority of citizens. For example, war at all cost, which enriches the armaments industry, the officer corps and the financial firms that handle the war’s financing, takes precedence over the needs of American citizens. There is no money to provide the uninsured with health care, but Pentagon officials have told the Defense Appropriations Subcommittee in the House that every gallon of gasoline delivered to US troops in Afghanistan costs American taxpayers $400. (Read Full Article) 

Continental Congress 2009

Ron Paul's "End the Fed"

CyberTyranny Act Take 2

Shelly Roche dissects the modified Cyber Tyranny Act, another offensive in the War on Internet.

The Fed's Parent-Child Relationship

Just as a parent tells a child that the child cannot be told for the child’s safety, the privately-owned Federal Reserve continues to tell its tired tale that transparency is dangerous to the public good.

The logic follows that the global financial system can only be kept from plunging into a black hole as long as the public maintains its part of the deal: Quiet acceptance of deception and outright lies. 

And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented.

As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.

In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity. (Continued...) 

Bernanke on the Ropes

The Audit the Federal Reserve House bill HR 1207 has 282 cosponsors and Senate counterpart S.604 has 20 cosponsors, but Barney Frank has manged to keep the House bill bottled up in committee.

Meanwhile, Bernanke continues to squirm hoping Americans will continue to ignore the man behind the curtain and not ask the 2 most inconvenient questions: So where does our money come from? And where does it go?

Bernanke video: He stutters; he stammers; he is in visible panic mode over Ron Paul's bill to audit the Federal Reserve. Watch it. You'll love it! Then send it to your friends.

Usually, when Ben Bernanke is interviewed, he has the demeanor of a college professor in the presence of freshman students. Of course, as a full professor, he did not have to teach freshmen. That is for untenured assistant professors to do. Stammering and stuttering are therefore a real departure for him. There is a reason for this.

For the first time since 1914, there is a public debate in Congress over the Federal Reserve's power. Never before has a majority of the House of Representatives called for what should always have existed: Congressional scrutiny over the FED's money. Bernanke says that Ron Paul's bill to audit the Federal Reserve is a bill to audit Federal Reserve policy. Yet the bill says nothing about auditing policy. So, what is he talking about?

Bernanke says that Congress can have access to an audit at any time. Sure it can – an audit vetted and sanitized by the FED, where no one knows which banks got what bailout money. This is an audit in the way a CIA audit is an audit. The main differences are these: (1) the CIA legally operates only outside the borders of the United States; (2) the CIA can assassinate any uncooperative Congressman who insists on a full audit. The FED does not have the second power, but it is not limited by the first restriction.

What has Bernanke panicked is this: the Federal Reserve has bailed out the biggest banks and has let almost 100 little ones die. This is crony capitalism at its most notorious (cont...)

War on Internet

Freedom of thought and expression through an open medium is the biggest threat to any closed society. And there is no bigger threat to the 24x7 bombardment of infotainment, pundit-speak and propaganda of the corporate media than the Internet.

The proposed Cyber Security Act of 2009, according to Section 18 of S.773 gives the President the right to, “declare a cybersecurity emergency and order the limitation or shutdown of Internet traffic to and from any compromised Federal Government or United States critical infrastructure information system or network.”

 

 

So what is a “critical infrastructure information system or network”?

 

 

The term ‘Federal Government and United States critical infrastructure information systems and networks’ includes State, local, and nongovernmental information systems and networks in the United States designated by the President as critical infrastructure information systems and networks.

 

 

In other words, any network, host, server, mobile device, website, blog, community board or forum that the President wants to unplug. Remember, this isn’t necessarily about the current Administration. Legislation or Executive Orders signed can lay dormant for years for more sinister purposes beyond the already undemocratic effects of suppressed speech.

 

 

As more applications are centralized through cloud computing and more security breaches inevitably occur, no doubt each incident will be conveniently publicized to yet again create a sense of the imminent threat or crisis that requires the government to protect us.

 

 

Making matters worse is the current push to completely neuter or spade the alternative media. Obama’s choice to head the Orwellian-sounding White House Office of Information and Regulatory Affairs should worry any advocate of free speech.

 

When it comes to the First Amendment, Team Obama believes in Global Chilling.

Cass Sunstein, a Harvard Law professor who has been appointed to a shadowy post that will grant him powers that are merely mind-boggling, explicitly supports using the courts to impose a "chilling effect" on speech that might hurt someone's feelings. He thinks that the bloggers have been rampaging out of control and that new laws need to be written to corral them.

Advance copies of Sunstein's new book, "On Rumors: How Falsehoods Spread, Why We Believe Them, What Can Be Done," have gone out to reviewers ahead of its September publication date, but considering the prominence with which Sunstein is about to be endowed, his worrying views are fair game now. Sunstein is President Obama's choice to head the White House Office of Information and Regulatory Affairs. It's the bland titles that should scare you the most (cont.).

Why I Bother and Very High Praise for CHS Survival+ EBook

A good friend of mine asked me what really motivated me to start this website in 2006, so I thought I’d take a broad swag and position the ‘why I bother’ in a form of a list of some guiding questions. It’s surely not the one thing, as the expression goes:

-How do we each best emotionally and philosophically approach the next 2-3 decades, assuming a broad transformation due to economic, social, demographic and environmental factors, as well as political reaction to those factors?

-How do you find the right balance between fatalism (we’re doomed so why bother) and complacency (things will work themselves out through politics and technology)?

-How do you avoid the spectacle of "left"-"right" cartoon politics, but guard against the loss of individual rights, death by 1000 cuts road to fascism, fighting unjust wars, theft by financial cartels, agricultural monopolies (tyranny by seed) and so on?

-How do you reconcile your vigilance over the aristocratic class (I'm not talking classic rich vs. poor claptrap, but rather the highest echelons of global power brokers) that usurps democratic process and governments with the inconvenient fact that in many cases your way of life is deeply intertwined and dependent on the structures and systems they impose? How do you take personal responsibility for your part in the deal instead of simple and pure blame?

-How do you guard against quasi government outside the supposed representative government, which brokers sweetheart deals in backrooms and ensures state-subsidized monopolies maintain an illusion of "free markets", that is more responsible to a small group of elite stakeholders than 99.9% of the population?

-How do you avoid buying into the constant stream of propaganda and Orwellian double-speak in the corporate-owned media, which is nothing more than another means of maintaining structural control by a small group of stakeholders? And again, how do you reconcile your role as someone who is probably in some way shape or form beholden to the same useful myths and outright lies?

-Even if you’ve planned for the worst and stockpiled your beans, bullets and Band-aids in preparation for the sudden plunge into a new dark age completely dominated by warlords with AR’s and AK's, how will you approach day-to-day life if the decisive all-hands-on-deck trigger event never quite comes? What if there is no EMP pulse or sudden hyperinflationary chaos due to an overnight bond market collapse, but a steady descent towards something like a 3^rd world neo feudal arrangement over years, in fits and spurts?

There are of course many others, but that’s a very broad pass which explains the diversity in points of view in authors, writers, columnists and bloggers I link.

No link ever implies, “Hey this guy has all the answers and I agree 100%”, but I respect each of their personal truths and the conviction behind their narratives. I value the free thinkers out there, most of whom have have more wisdom and personal experience than I, who dare speak their form of truth to power and have opinions that aren’t bought and paid for.

That brings me to Charles Hugh Smith’s EBook Survival+ which hits on many of the broader themes of this humble site of mine. Of course I don’t agree with absolutely everything he says in the book, but I can’t be more emphatic to take the time to read this – an excellent summary of the reasons we are where we are, and the factors that most likely shape where we’re heading.

In the end, as my friend points out, it is not what we write or say, but what we do in life.

 

Survival+:

Structuring Prosperity for Yourself and the Nation

by Charles Hugh Smith


Introduction

Since launching my blog www.oftwominds.com in May 2005, nothing seemed more important than warning readers that the unsustainably leveraged credit-mad global financial system was poised to break down. Once the system finally crashed in late 2008, my goal switched to writing a practical guide for not just surviving the coming Great Transformation but prospering: a concept I called Survival+ (Plus). This requires liberating ourselves from failed models of credit expansion, resource depletion, financial looting and a counterfeit prosperity built entirely on debt.

I immediately ran into several great difficulties. Many others had foreseen the same calamity, and their focus narrowed on individual survival: relocating to a remote/sustainable spot and preparing for societal collapse by stockpiling self-defense and food.

While prudent and practical on a short-term timeline, this response struck me as incomplete on several levels. Most importantly, stockpiling six months' supplies would not sustain anyone through a 20-year Crisis and Transformation; their own Crisis was simply being delayed a relatively short time. In other words: "what happens in month seven"?

Secondly, many "survivalist" proponents focus on individual preparation, as if a single person or household can prosper without a stable, caring community for reciprocal support. This notion ran counter not just to my own experience but to all of human history. While I understood the desire to "opt out" and become an Isolationist--a solution to general turmoil which has roots going back to the dissolution of the Roman Empire and the Warring States era in ancient China--I felt a more practical, longer-term option to Isolationism should also be presented.

The second great difficulty is that individuals, households and communities exist in larger units: city-states, counties, nations and continents. Even if nation-states were to break apart, the world would remain tightly interconnected. Events, weather, shortages and surpluses in distant places would continue to impact us all. States (by which I mean all forms of government) will continue to extend control over resources and wealth.

Trade has been a key component of security and prosperity since the dawn of civilization. Long before fossil fuels dominated the global economy, land and sea trade in both goods and innovations bound Asia, the Mideast and Europe. Thus a retreat to isolated islands of self-sufficiency, while understandable and practical on one level, does not align with what history teaches us about prosperity. Prosperity ultimately depends on stable communities, surplus production and trade. These essentials have been largely ignored in analyses of the coming Great Transformation.

Thus our individual survival and prosperity are inextricably bound up in larger contexts: we cannot just ignore community, State and trade forces as if they will cease to exist. Even as they no longer function as they did in the past, it seems wise to influence the larger Transformation rather than view ourselves in an isolation which is ultimately misleading.

That is why I subtitled this book "Structuring Prosperity for Yourself and the Nation." To believe that we can prosper individually without regard for the actions of our fellow citizens and the State (government) is simply not practical. Yes, a handful of very rugged people have the experience required to live in the deepest remains of wilderness; but the wilderness cannot support more than a handful of people, and most of us do not have the requisite skills or ruggedness to survive that splendid isolation.

This, then, is a practical book for the rest of us.

As I organized the book, another great difficulty quickly arose. I realized that the way a problem is phrased implicitly stakes out the eventual solution. As a result, the greatest challenge in understanding our plight, both as individuals and communities, is essentially conceptual. The forces which benefit most from the status quo are pouring all their prodigious resources into framing the "problems" in such a way that the "obvious solutions" leave their own power, influence and wealth intact.

Lest you wonder how this works, recall that all through the initial phase of the financial crisis in 2008, the mainstream media and standard-issue financial punditry (SIFP) blamed the entire crisis on foolish low-income homebuyers who had chosen to finance their purchases with subprime mortgages.

Framed in this way, the "problem" appeared to be caused by credulous citizens in the lower socio-economic levels. The "solution" was thus to eliminate these people from the pool of potential homebuyers, and auction off their foreclosed homes to worthier buyers.

But subsequent events revealed this framing of the problem to be highly selective: the "problem" extended far beyond feckless subprime borrowers into the top rungs of American Capitalism: the money-center and investment banks, and a politically driven absence of oversight by the very governmental agencies tasked with protecting the public.

The status quo's convenient "framing of the problem" insured that any "solutions" would leave their power, wealth and influence entirely intact; only the impoverished subprimers would suffer, not those who profited so immensely from the housing/credit bubble.

It was thus clear that a practical analysis of the crisis and coming Transformation requires a deep understanding of how "solutions" are set in the framing of the "problem." Indeed, what is "obvious" must be questioned on the deepest levels, for what is "obvious" has two powerful characteristics: it can be managed/manipulated via the mass media, and it directs "solutions" which leave the rentier-financial Power Elite (what I call the Plutocracy) intact.

The nature of propaganda in a so-called free State must then be explored in depth as well.

The last great difficulty is also conceptual. It is relatively straight-forward to present the causes of the coming global crisis: Peak Oil, disintegration of the credit bubble, demographics, etc. Many books do a fine job of outlining the nature of these interlocking crises.

The books attempting to present solutions typically focus on either individuals (along the lines of "get rich as the world falls apart") or idealized policy "fixes" based on academic understandings of large-scale structures (articles on G-20 trade policies, etc). The flaw in both approaches is that neither flows from what I call an integrated understanding of the actual problems. (Key concepts are italicized when introduced.)

Practical solutions must follow from this integrated understanding. Without such a comprehensive conceptual framework, then all proposed solutions will be ungrounded and thus dangerously misleading.

Any "solution" which ignores key elements of the problem is doomed to solve nothing. As in our example of the so-called "subprime crisis," the "solution" of limiting uncreditworthy borrowers did nothing to address the actual problems: highly profitable and highly fraudulent practices riddling every level of the mortgage/rating/securities industries, perverse incentives that created unprecedented opportunities for windfall exploitation, over-reach and looting, etc.

I cannot claim that reaching such an integrated understanding will be easy. Many of the concepts presented here may be unfamiliar and thus difficult to grasp at first. Many are so alien to status quo "explanations" that they may well strike you as the opposite of "obvious." But since I have thought about these concepts and forces for years, they seem "obvious" to me. In the language of our Declaration of Independence: I hold these truths to be self-evident.

So let us begin.

We stand on the threshold of a Great Transformation that will unfold over the next 20 years--a generation. The exact turn and sequence of events is unknown, but a clear-eyed appraisal of the forces, trends and cycles already at work will help us, collectively and as individuals, weather the challenges and turn what could be a catastrophe into a positive transformation.

To the status quo understanding of how our world works, this appraisal will be anything but "obvious." (Sorting out what is "obvious" is a big part of the analysis which follows.)

A number of other writers have addressed preparing for the Depression which has just begun. These books are, within their limited scope, practical and useful. This book aims at a different goal: once we understand the complex forces at work, then we can structure a response on all three levels: household/family, community and nation. For if there is anything we can confidently predict, it's that the nation's crumbling finances will drastically affect every family and every community (continued link)...

 

Shelly Roche on Cap&Trade

More on the Cap and Trade scam by Shelly Roche. If you're outraged, by wave on wave of fly by night legislation, but don't have the time to research each issue, you might want to bookmark her site as she does a great job of pulling together actionable information for each bill.

Ron Paul on IMF Bailouts

Here's the latest from Ron Paul on the war supplemental appropriations bill and IMF bailouts which punishes those it pretends to help through cut throat Keynesian policies.

John Maynard Keynes famously said, "in the long run we're all dead."

Perhaps he didn't realize how quickly his economic legacy would help that cause.   

Last week Congress passed the war supplemental appropriations bill. In an affront to all those who thought they voted for a peace candidate, the current president will be sending another $106 billion we don't have to continue the bloodshed in Afghanistan and Iraq, without a hint of a plan to bring our troops home.

Many of my colleagues who voted with me as I opposed every war supplemental request under the previous administration seem to have changed their tune. I maintain that a vote to fund the war is a vote in favor of the war. Congress exercises its constitutional prerogatives through the power of the purse, and as long as Congress continues to enable these dangerous interventions abroad, there is no end in sight, that is until we face total economic collapse.

From their spending habits, an economic collapse seems to be the goal of Congress and this administration. Washington spends with impunity domestically, bailing out and nationalizing everything they can get their hands on, and the foreign aid and IMF funding in this bill can rightly be called an international bailout!

As Americans struggle through the worst economic downturn since the Great Depression, this emergency supplemental appropriations bill sends $660 million to Gaza, $555 million to Israel, $310 million to Egypt, $300 million to Jordan, and $420 million to Mexico. Some $889 million will be sent to the United Nations for so-called "peacekeeping" missions. Almost one billion dollars will be sent overseas to address the global financial crisis outside our borders. Nearly $8 billion will be spent to address a "potential pandemic flu" which could result in mandatory vaccinations for no discernable reason other than to enrich the pharmaceutical companies that make the vaccine.

Perhaps most outrageous is the $108 billion loan guarantee to the International Monetary Fund. These new loan guarantees will allow that destructive organization to continue spending taxpayer money to prop up corrupt leaders and promote harmful economic policies overseas.

Not only does sending American taxpayer money to the IMF hurt citizens here, evidence shows that it even hurts those it pretends to help. Along with IMF loans comes IMF required policy changes, called Structural Adjustment Programs, which amount to forced Keynesianism. This is the very fantasy-infused economic model that has brought our own country to its knees, and IMF loans act as the Trojan Horse to inflict it on others. Perhaps most troubling is the fact that leaders in recipient nations tend to become more concerned with the wishes of international elites than the wishes and needs of their own people. Argentina and Kenya are just two examples of countries that followed IMF mandates right off a cliff. The IMF frequently recommends currency devaluation to poorer nations, which has wiped out the already impoverished over and over. There is also a long list of brutal dictators the IMF happily supported and propped up with loans that left their oppressed populace in staggering amounts of debt with no economic progress to show for it.

We are buying nothing but evil and global oppression by sending your taxdollars to the IMF. Not to mention there is no Constitutional authority to do so. Our continued presence in Iraq and Afghanistan does not make us safer at home, but in fact undermines our national security. I vehemently opposed this Supplemental Appropriations Bill and was dismayed to see it pass so easily.

Cap and Trade - Another Fraud

The Waxman-Markley American Clean Air and Security Act of 2009 (ACES), cleverly paraded as an earth-saving, energy independence bill that lowers pollution, is a draconian measure of taxation and government control.

 

The sad irony for me is that this bill will make it more difficult for the average person to transition to a lifestyle less dependent on centralized systems in order to deal with the converging crisis of our times – many of which, such as energy, food and fresh water shortages are environmental. In years to come, we face enough scarcity as it is, and the current subsidies that keep prices artificially low are unsustainable.

 

For decades government manipulation, from tax incentives to military interventions to irresponsible monetary policy has destroyed real market signals resulting in years of privatized gains and socialized costs at the expense of the average person and the environment.

 

Now we are believe that the solution is to give the EPA czar-like authority and a pollution permit allocation scheme that will continue to socialize costs through trickle down taxation.

 

Once again, in great haste the House of Representatives has scrambled to pass a bill with huge implications without having the chance to digest, analyze and summarize the 1200-page proposal, which was being revised up until the final minutes before the July 4^th break.

 

It happened with the Patriot Act, then TARP and now ACES.

 

If bills were actually good for the population, then there would be no rush to push them onto the floor. But, since an informed electorate is the worst enemy of proponents of this type of legislation, they had to act fast before Americans had a chance to absorb the huge implications under cover of a constant deluge of Michael Jackson tributes in the media.

 

I usually avoid the global warming debate because even if humans do contribute to global warming, a combination of slowing population growth in the developed world and peaking out of easily accessible oil, natural gas and coal will offset the effects. If you do want to debate the science a growing number of scientists and Americans in general dispute the impacts of manmade warming. Even if you are are an advocate of global warming, then you know that the impacts of the bill on climate in the best case are negligible.

 

The real Inconvenient Truth for those of us paying attention is that you can control, tax and subject a person to do just about anything under false hopes that doing do will save the world. 

 

For the political class, cap and trade is a wealth and power accumulation scheme. 80% of the credits go to special interests and 20% go to the Treasury, while an entirely new marketplace for flipping emission allowances, compensatory allowances and offset credits is emerging. Carbon derivatives anyone?

 

The blatant example is that Al Gore, champion of the global warming agenda, runs a carbon trading firm. He is the Chairman of Generation Investment Management, LLP and one of the principle investment areas for the firm is Carbon Markets and Climate-Related Financial Services. The political connections to other stakeholders in the Chicago Climate Exchange such as Maurice Strong are well-documented.

 

There is a wide gap between the realities of legitimate environmental concerns and a Global Warming money making and social control agenda.  

 

The $14 Trillion and Counting Swindle

The US government and Federal Reserve have spent, lent or committed just under $14 Trillion in banker bailouts as shown in the figure below from the recent FDIC report. The sucking sound you hear right now is trillions of dollars tossed into a vortex of fraud, swindle and deceit under cover of secrecy.

 

Given the momemtum of motions to audit the Federal Reserve in HR 1207 and S604, the Fed hired a lobbyist, Linda Robertson, formerly with - appropriately enough - Enron.

A lobbyist. Can you imagine a government agency - say the Department of Energy or Department of Interior - hiring a lobbyist? Isn't that what private interests do?

Yes, exactly.

And at the time when the Fed is on the defensive now that the public has the audacity to ask for some transparency into where trillions are going, the proposed financial reform act would greatly expand the Fed's powers making them, "the nation's most powerful financial overseer."

The proposal, if passed into law, would represent one of the biggest changes ever in the Fed's role. The central bank would win power to monitor risks across the financial system, and sweeping authority to examine any firm that could threaten financial stability, even if the Fed wouldn't normally supervise the institution. The nation's biggest and most interconnected firms would be subject to heightened oversight by the central bank.

President Obama said the plan would ensure "that lines of responsibility and accountability are clear" by placing authority in the Fed's hands.

I'm hard pressed to think of a more flagrant example of punishing the fox by letting it guard the henhouse, than a case where the Fed, owned by the banks, will supervise the banks...and "any firm that could threaten financial stability".

 

How Governments Manipulate Markets

Blatant government manipulation is another reason that securities markets often appear to be disconnected from the realities of the economy. Catherine Fitts explains how the game is rigged.

Wall Street's mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government's visible hand and insiders control markets and manipulate them up or down for profit - all of them, including stocks, bonds, commodities and currencies.

It's financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls "pump and dump," defined as "artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price," then profit more on the downside by short-selling. "This practice is illegal under securities law, yet it is particularly common," and in today's volatile markets likely ongoing daily.

Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it's more than just "a process designed to wipe out the middle class. This is genocide (by other means) - a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."

Fitts explains that much more than market manipulation goes on. She describes a "financial coup d'etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank" along with insiders. It's a government-business partnership for enormous profits through "legislation, contracts, regulation (or lack of it), financing, (and) subsidies." More still overall by rigging the game for the powerful, while at the same time harming the public so cleverly that few understand what's happening.

Market Rigging Mechanisms - The Plunge Protection Team

On March 18, 1989, Ronald Reagan's Executive Order 12631 created the Working Group on Financial Markets (WGFM) commonly known as the Plunge Protection Team (PPT). It consisted of the following officials or their designees:

• the President;
• the Treasury Secretary as chairman;
• the Fed chairman;
• the SEC chairman; and
• the Commodity Futures Trading Commission chairman.

Under Sec. 2, its "Purposes and Functions" were stated as follows:

(2) "Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

1. the major issues raised by the numerous studies on the events (pertaining to the) October 19, 1987 (market crash and consider) recommendations that have the potential to achieve the goals noted above; and

2. ....governmental (and other) actions under existing laws and regulations....that are appropriate to carry out these recommendations."

In August 2005, Canada-based Sprott Asset Management (SAM) principals John Embry and Andrew Hepburn headlined their report on the US government's "surreptitious" market interventions: "Move Over, Adam Smith - The Visible Hand of Uncle Sam" to prevent "destabilizing stock market declines. Comprising key government agencies, stock exchanges and large Wall Street firms," this group "is significant because the government has never admitted to private-sector membership in the Working Group," nor is it hinting that manipulation works both ways - to stop or create panic.

"Current mythology holds that (equity) prices rise and fall on the basis of market forces alone. Such sentiments appear to be seriously mistaken....And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent....with the active participation of selected investment banks and brokerage houses" - the Wall Street giants.

In 2004, Texas Hedge Report principals Steven McIntyre and Todd Stein said "Almost every floor trader on the NYSE, NYMEX, CBOT and CME will admit to having seen the PPT in action in one form or another over the years" - violating the traditional notion that markets move randomly and reflect popular sentiment.

Worse still, according to SAM principals Embry and Hepburn, "the government's unwillingness to disclose its activities has rendered it very difficult to have a debate on the merits of such a policy," if there are any.

Further, "virtually no one ever mentions government intervention publicly....Our primary concern is that what apparently started as a stopgap measure may have morphed into a serious moral hazard situation."

Worst of all, if government and Wall Street collude to pump and dump markets, individuals and small investment firms can get trampled, and that's exactly what happened in late 2008 and early 2009, with much more to come as the greatest economic crisis since the Great Depression plays out over many more months.

That said, the PPT might more aptly be called the PPDT - The Plunge Protection/Destruction Team, depending on which way it moves markets at any time. Investors beware.

Manipulating markets is commonplace and as old as investing. Only the tools are more sophisticated and amounts involved greater. In her book, "Morgan: American Financier," Jean Strouse explained his role in the Panic of 1907, the result of stock market and real estate speculation that caused a market crash, bank runs, and hysteria. To restore confidence, JP Morgan and the Treasury Secretary organized a group of financiers to transfer funds to troubled banks and buy stocks. At the time, rumors were rampant that they orchestrated the panic for speculative profits and their main goals:

• the 1908 National Monetary Commission to stabilize financial markets as a precursor to the Federal Reserve; and
• the 1910 Jekyll Island meeting where powerful financial figures met in secret for nine days and created the private banking cartel Federal Reserve System, later congressionally established on December 23, 1913 and signed into law by Woodrow Wilson.

Morgan died early that year but profited hugely from the 1907 Panic. It let him expand his steel empire by buying the Tennessee Coal and Iron Company for about $45 million, an asset thought to be worth around $700 million. Today, similar schemes are more than ever common in the wake of the global economic crisis creating opportunities to buy assets cheap by bankers flush with bailout cash. Aided by PPT market rigging, it's simpler than ever.

Wharton Professor Itay Goldstein and Said Business School and Lincoln College, Oxford University Professor Alexander Guembel discussed price manipulation in their paper titled "Manipulation and the Allocational Role of Prices." They showed how traders effect prices on the downside through "bear raids," and concluded:

"We basically describe a theory of how bear raid manipulation works....What we show here is that by selling (a stock or more effectively short-selling it), you have a real effect on the firm. The connection with real value is the new thing....This is the crucial element," but they claim the process only works on the downside, not driving shares up.

In fact, high-volume program trading, analyst recommendations, positive or negative media reports, and other devices do it both ways.

Also key is that a company's stock price and true worth can be highly divergent. In other words, healthy or sick firms may be way-over or under-valued depending on market and economic conditions and how manipulative traders wish to price them, short or longer term.

The idea that equity prices reflect true value or that markets move randomly (up or down) is rubbish. They never have and more than ever don't now.

The Exchange Stabilization Fund (ESF)

The 1934 Gold Reserve Act created the US Treasury's ESF. Section 7 of the 1944 Bretton Woods Agreements made its operations permanent. As originally established, the Treasury ran the Fund outside of congressional oversight "to keep sharp swings in the dollar's exchange rate from (disrupting) financial markets" through manipulation. Its operations now include stabilizing foreign currencies, extending credit lines to foreign governments, and last September to guaranteeing money market funds against losses for up to $50 billion.

In 1995, the Clinton administration used the fund to provide Mexico a $20 billion credit line to stabilize the peso at a time of economic crisis, and earlier administrations extended loans or credit lines to China, Brazil, Ecuador, Iceland and Liberia. The Treasury's web site also states that:

"By law, the Secretary has considerable discretion in the use of ESF resources. The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s....the Secretary (per) approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."

In other words, ESF is a slush fund for whatever purposes the Treasury wishes, including ones it may not wish to disclose, such as manipulating markets, directing funds to the IMF and providing them with strings to borrowers as the Treasury's site explains:

"....Treasury has often linked the availability of ESF financing to a borrower's use of the credit facilities of the IMF, both to support the IMF's role and to strengthen assurances that there will be timely repayment of ESF financing."

The Counterparty Risk Management Policy Group (CRMPG)

Established in 1999 in the wake of the Long Term Capital Management (LTCM) crisis, it manipulates markets to benefit giant Wall Street firms and high-level insiders. According to one account, it was to curb future crises by:

• letting giant financial institutions collude through large-scale program trading to move markets up or down as they wish;
• bailing out its members in financial trouble; and
• manipulating markets short or longer-term with government approval at the expense of small investors none the wiser and often getting trampled.

In August 2008, CRMPG III issued a report titled "Containing Systemic Risk: The Road to Reform." It was deceptive on its face in stating that CRMPG "was designed to focus its primary attention on the steps that must be taken by the private sector to reduce the frequency and/or severity of future financial shocks while recognizing that such future shocks are inevitable, in part because it is literally impossible to anticipate the specific timing and triggers of such events."

In fact, the "private sector" creates "financial shocks" to open markets, remove competition, and consolidate for greater power by buying damaged assets cheap. Financial history has numerous examples of preying on the weak, crushing competition, socializing risks, privatizing profits, redistributing wealth upward to a financial oligarchy, creating "tollbooth economies" in debt bondage according to Michael Hudson, and overall getting a "free lunch" at the public's expense.

CRMPG explains financial excesses and crises this way:

"At the end of the day, (their) root cause....on both the upside and the downside of the cycle is collective human behavior: unbridled optimism on the upside and fear on the downside, all in a setting in which it is literally impossible to anticipate when optimism gives rise to fear or fear gives rise to optimism...."

"What is needed, therefore, is a form of private initiative that will complement official oversight in encouraging industry-wide practices that will help mitigate systemic risk. The recommendations of the Report have been framed with that objective in mind."

In other words, let foxes guard the henhouse to keep inventing new ways to extract gains (a "free lunch") in increasingly larger amounts - "in the interest of helping to contain systemic risk factors and promote greater stability."

Or as Orwell might have said: instability is stability, creating systemic risk is containing it, sloping playing fields are level ones, extracting the greatest profit is sharing it, and what benefits the few helps everyone.

Michel Chossudovsky explains that: "triggering market collapse(s) can be a very profitable undertaking. (Evidence suggests) that the Security and Exchange Commission (SEC) regulators have created an environment which supports speculative transactions (through) futures, options, index funds, derivative securities (and short-selling), etc. (that) make money when the stock market crumbles....foreknowledge and inside information (create golden profit opportunities for) powerful speculators" able to move markets up or down with the public none the wiser.

As a result, concentrated wealth and "financial power resulting from market manipulation is unprecedented" with small investors' savings, IRAs, pensions, 401ks, and futures being decimated from it.

Deconstructing So-Called "Green Shoots"

Daily the corporate media trumpet them to lull the unwary into believing the global economic crisis is ebbing and recovery is on the way. Not according to longtime market analyst Bob Chapman who calls green shoots "Poison Ivy" and economist Nouriel Roubini saying they're "yellow weeds" at a time there's lots more pain ahead.

For many months and in a recent commentary he refers to "the worst financial crisis, economic crisis and recession since the Great Depression....the consensus is now becoming optimistic again and says that we are going to go from minus 6 percent growth to positive growth in the second half of the year....my views are much more bearish....The problems of the financial system are severe. Many banks are still insolvent."

We're "piling public debt on top of private debt to socialize the losses; and at some point the back of (the) government('s) balance sheet is going to break, and if that happens, it's going to be a disaster." Short of that, he, Chapman, and others see the risks going forward as daunting. As for the recent stock market rise, they both call it a "sucker's rally" that will reverse as the US economy keeps contracting and the financial system suffers unexpected or manipulated shocks.

Highly respected market analyst Louise Yamada agrees. As Randall Forsyth reported in the May 25 issue of Barron's Up and Down Wall Street column:

"It is almost uncanny the degree to which 2002-08 has tracked 1932-38, 'Yamada writes in her latest note to clients.' " Her "Alternate Hypothesis" compares this structural bear market to 1929-42:

· "the dot-com collapse parallels the Great Crash and its aftermath," followed by the 2003-07 recovery, similar to 1933-37;

· then the late 2008 - early March 2009 collapse tracks a similar 1937-38 trajectory, after which a strong rally followed much like today;

· then in November 1938, the market dropped 22% followed by a 26% rise and a series of further ups and downs - down 28%, up 23%, down 16%, up 13%, and a final 29% decline ending in 1942;

· from the 1938 high ("analogous to where we are now," she says), stock prices fell 41% to a final bottom.

Are we at one today as market touts claim? No according to Yamada - top-ranked among her peers in 2001, 2002, 2003 and 2004 when she worked at Citigroup's Smith Barney division. Since 2005, she's headed her own independent research company.

She says structural bear markets typically last 13 - 16 years so this one has a long way to go before "complet(ing) the repair process." She calls the current rebound "a bungee jump," very typical of bear markets. Numerous ones occurred during the Great Depression, 8 alone from 1929 - 1932, some deceptively strong.

Expect market manipulators today to produce similar price action going forward - to enrich themselves while trampling on the unwary, well-advised to protect their dollars from becoming quarters or dimes.

Audit and Abolish the Fed

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

 

“All the perplexities, confusions, and distress in America, arise, not from defects in their Constitution or Confederation, not from a want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”

 

-Thomas Jefferson

 

I am happy to see that HR 1207, Federal Reserve Transparency Act of 2009 now has 165 co-sponsors. Is your Representative on the list?  

 

There’s nothing like a massive loss of faith in the financial system to motivate more people to stop and ask the question, “So where does our money come from”? The history of the Federal Reserve is a web of obfuscation and double speak which on the surface, without closer inspection, resembles legitimacy.

 

The party line is that the Federal Reserve is "within" the Federal government, but its essence is a private organization that, to borrow a line, "is no more Federal than Federal Express."

 

I can't be clearer here: The Federal Reserve is not a national central bank under direct control of the U.S. government and its people. Yes, central banks are needed to implement a country's fiscal policies, ensure the national banking system maintains sufficient assets to remain solvent and stable and performs currency transactions with other central banks. But the Federal Reserve is not a national central bank. The Federal Reserve is privately owned and can therefore only be expected to operate in the best interest of the banks that hold ownership positions and who benefit through reckless monetary policies which are harmful to the public.

 

Alan Greenspan, ex-Federal Reserve Chairman, made it clear in this video that the Fed is an independent agency and no agency of government which can overrule actions that it takes. Bill Bonner and Addison Wiggin describe the origins of the Reserve System in their book, "Empire of Debt,"

 

“They met at Jekyll Island off the coast of Georgia, in seclusion and secrecy, to discuss formation of a centralized monetary agency. Senator Nelson Aldrich met with executives of what is today known as Citibank; Morgan Bank; and Kuhn, Loeb Investment House. The so-called Aldrich Plan recommended the formation of 15 regional banks controlled by a national board. The banks would be allowed to make emergency loans to members and create a flexible currency, serving as the monetary arm of the federal government. Although the original plan was defeated in the House, the formula modeled what is now known as the Federal Reserve System. The legislation, variously called the Currency Bill and the Owens- Glass Act, emerged as the Federal Reserve Act of 1913. It created a dozen regional Reserve Banks to be coordinated by a chairman who would be appointed by the president. While the Constitution grants Congress the right to print money, under the Federal Reserve Act of 1913, Congress approved a plan to delegate this right to the Fed, which is not part of Congress. The U.S. dollar is not issued by the U.S. Treasury but by a privately owned organization, which also influences bank interest rates, the amount of money in currency in circulation, and even the levels of inflation in the United States.

 

 

When leaving office, Woodrow Wilson apologized to the American public for being seduced by bankers understanding the tragic course he set his country on.

 

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men."

 

 

Back to Greenspan’s comments. Didn’t he garble something at the end that seemed to imply some sort of oversight? According to Section 714 of title 31, United States Code, the Comptroller General can audit the agency, but only if the Fed consents in writing. Imagine if the IRS used those terms with taxpayers – we can audit you, but not unless you write a letter granting us permission. How many letters of acceptance do you suppose the IRS would get?

 

Even with this full proof restriction, the Comptroller General cannot  audit:

 

Transactions for or with a foreign central bank, government or a foreign country, or nonprivate international financing organization;

 

Deliberations, decisions or actions on monetary policy matters, including discounty window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;

 

Transactions made under the direction of the Federal Open Market Committee, or

 

A part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses 1-3 of this subsection.

 

So no, there is no auditing and no oversight of the Federal Reserve by the people’s representatives regardless of what you are being told.

 

HR 1207 would simply require an audit and strike these ridiculous and far-reaching exclusions of an already unconstitutional and illegitimate banking cartel.

HR 1207 IH

111th CONGRESS

1st Session

H. R. 1207

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

February 26, 2009

Mr. PAUL (for himself, Mr. KAGEN, Mrs. BACHMANN, Mr. BARTLETT, Mr. JONES, Mr. REHBERG, Mr. POSEY, Mr. BROUN of Georgia, Mr. POE of Texas, Mr. BURTON of Indiana, Mr. ABERCROMBIE, and Ms. WOOLSEY) introduced the following bill; which was referred to the Committee on Financial Services

---

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Federal Reserve Transparency Act of 2009’.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after ‘shall audit an agency’ and inserting a period.

(b) Audit- Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

‘(e) Audit and Report of the Federal Reserve System-

‘(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

‘(2) REPORT-

‘(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

‘(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.’.

 

 

So who owns the Fed?

 

The Federal Reserve Banks of each region are owned by the member banks of the Federal Reserve Region and create ownership by issuing stock to the member banks, which are private banks.

 

The charts and text below from Staff Report, Committee on Banking, Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976 illustrate the stockholders list of the 12 regional Federal Reserve Banks. The ownership list is a who's who of financial corporate stakeholders.

 

This is a matter of Congressional record, not conspiracy theories.

 

Until we change the monetary system, nothing changes.

 

Federal Reserve Directors: A Study of Corporate and Banking Influence

Published 1976

Chart 1 reveals the linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn,Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control.

							    N.M. Rothschild , London - Bank of England

								 ______________________________________

							    |									 |

							    |						   J. Henry Schroder	 

	    						|							 Banking | Corp.

							    |									 |

						  Brown, Shipley - Morgan Grenfell - Lazard - |

						   & Company	    & Company	   Brothers  |

							    |			   |			  |	  |

		    --------------------|	    -------|			  |	  |

		    |				   |	    |	  |			  |	  |

 Alex Brown - Brown Bros. - Lord Mantagu - Morgan et Cie -- Lazard ---| 

 & Son	  |  Harriman	   Norman	 |    Paris		  Bros	 |

		    |				   |	    /	  |		    N.Y.	 |

		    |				   |	   |	   |			  |	  |

		    |		    Governor, Bank | J.P. Morgan Co -- Lazard ---| 

			|		    of England    /  N.Y. Morgan	   Freres    |   

			|		    1924-1938    /   Guaranty Co.	  Paris	 |

		    |					    /    Morgan Stanley Co.  |	  / 

			|					   /		   |			  \Schroder Bank   

			|					  /		    |			  Hamburg/Berlin

		    |					 /      Drexel & Company		 /  

			|				    /	   Philadelphia		    / 

			|				   /							   /

		    |				  /						   Lord Airlie

		    |	  		   /							   /

		    |			    /	 M. M. Warburg	   Chmn J. Henry Schroder

		    |			    |	  Hamburg ---------  marr. Virginia F. Ryan

		    |			    |		 |			   grand-daughter of Otto

		    |			    |		 |			    Kahn of Kuhn Loeb Co.

		    |			    |		 |					    

			|			    |		 |					    

Lehman Brothers N.Y -------------- Kuhn Loeb Co. N. Y.						 

			|			    |	 --------------------------					 

   µ

		    |			    |	   |					  |					 

		   8

		    |    			|	   |					  |

Lehman Brothers - Mont. Alabama   Solomon Loeb		   Abraham Kuhn

		    |			    |	 __|______________________|_________

Lehman-Stern, New Orleans   Jacob Schiff/Theresa Loeb  Nina Loeb/Paul Warburg

-------------------------    |	   |					  |

			 |			   | Mortimer Schiff	    James Paul Warburg

_____________|_______________/	   |

|		    |		  |   |	    |

Mayer Lehman |	 Emmanuel Lehman    \

|		    |		  |			  \

Herbert Lehman	 Irving Lehman	    \

|		    |		  |			    \

Arthur Lehman \    Phillip Lehman	 John Schiff/Edith Brevoort Baker

			  /		 |			 Present Chairman Lehman Bros

			 /  Robert Owen Lehman    Kuhn Loeb - Granddaughter of

		    /		   |			 George F. Baker

		   |		   /			   |

		   |		  /			    |

		   |		 /		   Lehman Bros Kuhn Loeb (1980)

		   |	    /				  |

		   |	   /			 Thomas Fortune Ryan

		   |	  |				    |

		   |	  |				    |

	  Federal Reserve Bank Of New York |

		   ||||||||				    |

  ______National City Bank N. Y.	   |

  |	    |						   |

  |   National Bank of Commerce N.Y ---|

  |	    |						    \

  |   Hanover National Bank N.Y.		 \

  |	    |		    				  \

  |   Chase National Bank N.Y.			 \

  |									    |

  |									    |

Shareholders - National City Bank - N.Y.   | 

-----------------------------------------  |  

  |	 								   /

James Stillman						    /

Elsie m. William Rockefeller			 /

Isabel m.  Percy Rockefeller		    / 

William Rockefeller		  Shareholders - National Bank of Commerce N. Y.   

J. P. Morgan				 -----------------------------------------------

M.T. Pyne				    Equitable Life - J.P. Morgan

Percy Pyne				   Mutual Life - J.P. Morgan

J.W. Sterling			    H.P. Davison - J. P. Morgan

NY Trust/NY Edison 		  Mary W. Harriman

Shearman & Sterling		  A.D. Jiullard - North British Merc. Insurance

|						    Jacob Schiff

|						    Thomas F. Ryan

|						    Paul Warburg

|						    Levi P. Morton - Guaranty Trust - J. P. Morgan

|

|

Shareholders - First National Bank of N.Y.

-------------------------------------------

J.P. Morgan

George F. Baker

George F. Baker Jr.

Edith Brevoort Baker

US Congress - 1946-64

|

|

|

|

|

Shareholders - Hanover National Bank N.Y.

------------------------------------------

James Stillman

William Rockefeller

|

|

|

|

|

Shareholders - Chase National Bank N.Y.

---------------------------------------

George F. Baker

Chart 2

Federal Reserve Directors: A Study of Corporate and Banking Influence

- Published 1983

The J. Henry Schroder Banking Company chart encompasses the entire history of the twentieth century, embracing as it does the program (Belgium Relief Commission) which provisioned Germany from 1915-1918 and dissuaded Germany from seeking peace in 1916; financing Hitler in 1933 so as to make a Second World War possible; backing the Presidential campaign of Herbert Hoover ; and even at the present time, having two of its major executives of its subsidiary firm, Bechtel Corporation serving as Secretary of Defense and Secretary of State in the Reagan Administration.

The head of the Bank of England since 1973, Sir Gordon Richardson, Governor of the Bank of England (controlled by the House of Rothschild) was chairman of J. Henry Schroder Wagg and Company of London from 1963-72, and director of J. Henry Schroder,New York and Schroder Banking Corporation,New York,as well as Lloyd's Bank of London, and Rolls Royce. He maintains a residence on Sutton Place in New York City, and as head of "The London Connection," can be said to be the single most influential banker in the world.

J. Henry Schroder

							   -----------------

									  |

									  |

									  |

						  Baron Rudolph Von Schroder

						   Hamburg - 1858 - 1934

									  |

									  |

									  |

						    Baron Bruno Von Schroder

						    Hamburg - 1867 - 1940

 F. C. Tiarks	 					|

 1874-1952						    |

	 |							    |

 marr. Emma Franziska				 |

 (Hamburg)				    Helmut B. Schroder

 J. Henry Schroder 1902			   |

 Dir. Bank of England    			 |

 Dir. Anglo-Iranian				   |

 Oil Company		 J. Henry Schroder Banking Company N.Y.

									  |

									  |

					   J. Henry Schroder Trust Company N.Y.

 									 |

									  |

									  |

				   ___________________|____________________

				  |									    |

		    Allen Dulles							  John Foster Dulles

		  Sullivan & Cromwell					    Sullivan & Cromwell

		  Director - CIA							 U. S. Secretary of State

										    		 Rockefeller Foundation

 Prentiss Gray

 ------------

Belgian Relief Comm.					 Lord Airlie

Chief Marine Transportation			  -----------

US Food Administration WW I		  Chairman; Virgina Fortune

Manati Sugar Co. American &		  Ryan daughter of Otto Kahn

British Continental Corp.		    of Kuhn,Loeb Co.

	   |								    |

	   |								    |

 M. E. Rionda							   |

 ------------		    				   |

Pres. Cuba Cane Sugar Co.				   |

Manati Sugar Co. many other				 |

sugar companies.					 _______|	   

	   |						    |

	   |						    |

 G. A. Zabriskie				    |

 ---------------				    |			    Emile Francoui

Chmn U.S. Sugar Equalization	    |			    --------------

Board 1917-18; Pres Empire		  |		    Belgian Relief Comm. Kai

Biscuit Co., Columbia Baking	    |		    Ping Coal Mines, Tientsin

Co. , Southern Baking Co.		   |		    Railroad,Congo Copper, La

								    |		    Banque Nationale de Belgique

			 Suite 2000 42 Broadway | N. Y	    			  |

		  __________________________|___________________________|_

		 |						  |						   |

		 |						  |						   |

    Edgar Richard		    Julius H. Barnes			 Herbert Hoover

    -------------		    ----------------			 --------------   

Belgium Relief Comm		 Belgium Relief Comm	   Chmn Belgium Relief Com

Amer Relief Comm		    Pres Grain Corp.		   U.S. Food Admin

U.S. Food Admin			 U.S. Food Admin		   Sec of Commerce 1924-28

1918-24, Hazeltine Corp.    1917-18, C.B Pitney	   Kaiping Coal Mines

   |					    Bowes Corp, Manati	    Congo Copper, President

   |		  			  Sugar Corp.				  U.S. 1928-32

   |

   |

   |

John Lowery Simpson

-------------------					  

Sacramento,Calif Belgium Relief					   |

Comm. U. S. Food Administration			 Baron Kurt Von Schroder

Prentiss Gray Co. J. Henry Schroder		 -----------------------

Trust, Schroder-Rockefeller, Chmn		 Schroder Banking Corp. J.H. Stein

Fin Comm, Bechtel International		   Bankhaus (Hitler's personal bank

Co. Bechtel Co. (Casper Weinberger  	  account) served on board of all

Sec of Defense, George P. Schultz		 German subsidiaries of ITT . Bank

Sec of State (Reagan Admin).			  for International Settlements,

		    |							 SS Senior Group Leader,Himmler's

		    |							 Circle of Friends (Nazi Fund),

		    |							 Deutsche Reichsbank,president

		    |

		    |

Schroder-Rockefeller & Co. , N.Y.

---------------------------------

Avery Rockefeller, J. Henry Schroder

Banking Corp., Bechtel Co., Bechtel

International Co. , Canadian Bechtel

Company.		  |

				  |

				  |

				  |

		 Gordon Richardson

		 -----------------

Governor, Bank of England

1973-PRESENT C.B. of J. Henry Schroder N.Y.

Schroder Banking Co., New York, Lloyds Bank

Rolls Royce

Chart 3

Federal Reserve Directors: A Study of Corporate and Banking Influence

- Published 1976

The David Rockefeller chart shows the link between the Federal Reserve Bank of New York,Standard Oil of Indiana,General Motors and Allied Chemical Corportion (Eugene Meyer family) and Equitable Life (J. P. Morgan).

DAVID ROCKEFELLER

----------------------------

Chairman of the Board

Chase Manhattan Corp

	  |

	  |

______|_______________________

Chase Manhattan Corp.	    |    

Officer & Director Interlocks|---------------------

------|-----------------------			  	  |

	  |										   |

Private Investment Co. for America	   Allied Chemicals Corp.

	  |										   |

Firestone Tire & Rubber Company		  General Motors			  

	  |   										|

Orion Multinational Services Ltd.	    Rockefeller Family & Associates

	  |										   |

ASARCO. Inc							  Chrysler Corp.

	  |						  				 |

Southern Peru Copper Corp.			   Intl' Basic Economy Corp.

	  |										   |

Industrial Minerva Mexico S.A.		   R.H. Macy & Co.

	  |										   |

Continental Corp.					    Selected Risk Investments S.A.

	  |										   |

Honeywell Inc.						   Omega Fund, Inc.

	  |										   |

Northwest Airlines, Inc.	   		  Squibb Corporation

	  |										   |

Northwestern Bell Telephone Co.		  Olin Foundation  

	  |										   |

Minnesota Mining & Mfg Co (3M)		   Mutual Benefit Life Ins. Co. of NJ

	  |										   |

American Express Co.						    AT & T   

	  |										   |

Hewlett Packard						  Pacific Northwestern Bell Co.

	  |    									   |

FMC Corporation						  BeachviLime Ltd.

	  |										   |

Utah Intl' Inc.						  Eveleth Expansion Company

	  |							   			|

Exxon Corporation					    Fidelity Union Bancorporation

	  |										   |

International Nickel/Canada			  Cypress Woods Corporation

	  |										   |

Federated Capital Corporation		    Intl' Minerals & Chemical Corp.

	  |										   |

Equitable Life Assurance Soc U.S.	    Burlington Industries

	  |										   |

Federated Dept Stores				    Wachovia Corporation

	  |										   |

General Electric						 Jefferson Pilot Corporation

	  |										   |

Scott Paper Co.					  	R. J. Reynolds Industries Inc.

	  |										   |

American Petroleum Institute			 United States Steel Corp.

	  |										   |

Richardson Merril Inc.				   Metropolitan Life Insurance Co.

	  |										   |

May Department Stores Co.			    Norton-Simon Inc.

	  |										   |

Sperry Rand Corporation				  Stone-Webster Inc.

	  |   										|

San Salvador Development Company		 Standard Oil of Indiana

Chart 4
Federal Reserve Directors: A Study of Corporate and Banking Influence
- Published 1976 
This chart shows the interlocks between the Federal Reserve Bank of New York J. Henry Schroder Banking Corp., J. Henry Schroder Trust Co., Rockefeller Center, Inc., Equitable Life Assurance Society ( J.P. Morgan), and the Federal Reserve Bank of Boston. 

 Alan Pifer, President

Carnegie Corporation

of New York

----------------------

		 |

		 |

----------------------

Carnegie Corporation

Trustee Interlocks	   --------------------------

----------------------						    |

		 |									    |

Rockefeller Center, Inc				 J. Henry Schroder Trust Company

		 |									    |

The Cabot Corporation				   Paul Revere Investors, Inc.

		 |									    |

Federal Reserve Bank of Boston		  Qualpeco, Inc.

		 |

Owens Corning Fiberglas

		 |

New England Telephone Co.

		 |

Fisher Scientific Company

		 |

Mellon National Corporation

		 |

Equitable Life Assurance Society

		 |

Twentieth Century Fox Corporation

		 |

J. Henry Schroder Banking Corporation

Chart 5

Federal Reserve Directors: A Study of Corporate and Banking Influence

- Published 1976 

This chart shows the link between the Federal Reserve Bank of New York, Brown Brothers Harriman,Sun Life Assurance Co. (N.M. Rothschild and Sons), and the Rockefeller Foundation.

Maurice F. Granville

Chairman of The Board

Texaco Incorporated

----------------------

	    |

	    |

Texaco Officer & Director Interlocks  ---------------- Liggett & Myers, Inc.

------------------------------------		   |

	    |		   						   |

	    |									  |

 L  Arabian American Oil Company		    St John d'el Ray Mining Co. Ltd.

 O	  |									  |

 N  Brown Brothers Harriman & Co.		   National Steel Corporation

 D	  |									  |

 O  Brown Harriman & Intl' Banks Ltd.	   Massey-Ferguson Ltd.

 N	  |									  |

    American Express					    Mutual Life Insurance Co.

    	|									  |

 N. American Express Intl' Banking Corp.    Mass Mutual Income Investors Inc.

 M.	 |									  |

    Anaconda							    United Services Life Ins. Co.

 R	  | 									 |

 O  Rockefeller Foundation				  Fairchild Industries

 T	  |									  |

 H  Owens-Corning Fiberglas				 Blount, Inc.

 S	  |									  |

 C  National City Bank (Cleveland)		  William Wrigley Jr. Co

 H	  |									  |

 I  Sun Life Assurance Co.				  National Blvd. Bank of Chicago

 L	  |									  |

 D  General Reinsurance					 Lykes Youngstown Corporation

	    |									  |

    General Electric (NBC)				  Inmount Corporation

Hostile Takeover

Simon Johnson, Ex-chief Economist of the IMF details how the US government has been silently hijacked by Wall Street oligarchs in an article titled “The Quiet Coup” published in The Atlantic.

Image credit: Jim Bourg/Reuters/Corbis

Through the lens of IMF standards, the financial condition of the US has reached banana republic status. Similar to other banana republics, political arrangements made in backroom deals see to it that 1.) Debt incurred by the oligarchs is privatized by the people and 2.) Profits are privatized and losses socialized. The same basic method has been used time and again to loot and plunder the 3^rd world, consolidate wealth into a handful of elites after the Soviet Union collapsed and is now being put to bad use in the U.S.

For the record, I’m not necessarily endorsing the “reform” suggested in the article. I get nervous at grand plans beyond simply letting the banks go into bankruptcy. If you take any reform suggested by the IMF at face value, then I encourage you to research the history of how IMF loans - in particular restructured IMF loans - have worked in the past for the man on the street in the indebted nation.

We have a situation where the would be reformers – both in government and quasi-government positions - are the ones in need of reform. All too often, reform in economic chaos is a shell game that simply redirects the wealth to the same set of hands in different ways, and uses socialism to dole out the remaining crumbs in bread and circus fashion.

I’ve posted some excerpts from the article, but it’s worth a full read.

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.”

***

From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

***

“Of course, the U.S. is unique. And just as we have the world’s most advanced economy, military, and technology, we also have its most advanced oligarchy.

In a primitive political system, power is transmitted through violence, or the threat of violence: military coups, private militias, and so on. In a less primitive system more typical of emerging markets, power is transmitted via money: bribes, kickbacks, and offshore bank accounts. Although lobbying and campaign contributions certainly play major roles in the American political system, old-fashioned corruption—envelopes stuffed with $100 bills—is probably a sideshow today, Jack Abramoff notwithstanding.

Instead, the American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

These personal connections were multiplied many times over at the lower levels of the past three presidential administrations, strengthening the ties between Washington and Wall Street. It has become something of a tradition for Goldman Sachs employees to go into public service after they leave the firm. The flow of Goldman alumni—including Jon Corzine, now the governor of New Jersey, along with Rubin and Paulson—not only placed people with Wall Street’s worldview in the halls of power; it also helped create an image of Goldman (inside the Beltway, at least) as an institution that was itself almost a form of public service.

Wall Street is a very seductive place, imbued with an air of power. Its executives truly believe that they control the levers that make the world go round. A civil servant from Washington invited into their conference rooms, even if just for a meeting, could be forgiven for falling under their sway. Throughout my time at the IMF, I was struck by the easy access of leading financiers to the highest U.S. government officials, and the interweaving of the two career tracks. I vividly remember a meeting in early 2008—attended by top policy makers from a handful of rich countries—at which the chair casually proclaimed, to the room’s general approval, that the best preparation for becoming a central-bank governor was to work first as an investment banker.

A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true. Alan Greenspan’s pronouncements in favor of unregulated financial markets are well known. Yet Greenspan was hardly alone. This is what Ben Bernanke, the man who succeeded him, said in 2006: “The management of market risk and credit risk has become increasingly sophisticated. … Banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks.”

***

From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

• insistence on free movement of capital across borders;

• the repeal of Depression-era regulations separating commercial and investment banking;

• a congressional ban on the regulation of credit-default swaps;

• major increases in the amount of leverage allowed to investment banks;

• a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;

• an international agreement to allow banks to measure their own riskiness;

• and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation. “

***

“The response so far is perhaps best described as “policy by deal”: when a major financial institution gets into trouble, the Treasury Department and the Federal Reserve engineer a bailout over the weekend and announce on Monday that everything is fine. In March 2008, Bear Stearns was sold to JP Morgan Chase in what looked to many like a gift to JP Morgan. (Jamie Dimon, JP Morgan’s CEO, sits on the board of directors of the Federal Reserve Bank of New York, which, along with the Treasury Department, brokered the deal.) In September, we saw the sale of Merrill Lynch to Bank of America, the first bailout of AIG, and the takeover and immediate sale of Washington Mutual to JP Morgan—all of which were brokered by the government. In October, nine large banks were recapitalized on the same day behind closed doors in Washington. This, in turn, was followed by additional bailouts for Citigroup, AIG, Bank of America, Citigroup (again), and AIG (again).

Some of these deals may have been reasonable responses to the immediate situation. But it was never clear (and still isn’t) what combination of interests was being served, and how. Treasury and the Fed did not act according to any publicly articulated principles, but just worked out a transaction and claimed it was the best that could be done under the circumstances. This was late-night, backroom dealing, pure and simple.”

***

“In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. “

Return of European Fascism

One of the worst outcomes of an economic collapse is that it leads to civil unrest and eventually extraordinary politics.

History shows us time and time again the types of governments installed by or imposed on a desperate and angry group of people searching for someone to blame and a return to former glory. The most cited example of the 20^th century is a humiliated Germany reeling from war time reparations in WWI due to the Treaty of Versailles and a miserable bout with hyperinflation. Mussolini’s rise to power came on the coattails an economic crisis coupled with strong feelings of resentment towards the Allies having been slighted at the Paris Peace Conference in 1919.

In 2009, the early warning signs of fascist regimes are already flashing in the UK.

"Ed Balls, the Children's and Schools Secretary, said the downturn was likely to be the most serious for 100 years, and his comments appeared to raise the prospect of a return to the Far Right politics of the 1930s and the rise of Facism.

His warning, in a speech to activists at the weekend, came after a trade union baron warned that far right parties were trying to hijack the campaign for "British jobs for British workers".

The row over foreign workers has gathered momentum in recent weeks and Mr Balls seemed to suggest the recession could trigger a return to the Far Right politics that prospered in the Great Depression of the 1930s.

He told Labour's Yorkshire conference: "The economy is going to define our politics in this region and in Britain in the next year, the next five years, the next 10 and even the next 15 years.

"I think that this is a financial crisis more extreme and more serious than that of the 1930s and we all remember how the politics of that era were shaped by the economy."

The remarks are significant because Mr Balls was a key adviser to Mr Brown during his decade at the Treasury as Chancellor of the Exchequer.

Mr Balls said that he believed this to be "the most serious global recession for over 100 years".

He said: "We now are seeing the realities of globalisation, though at a speed, pace and ferocity which none of us have seen before. The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years as it will turn out."

Last week Derek Simpson, the general secretary of Unite, gave warning that far right elements were hijacking a campaign against foreign firms bringing in non-British workers.

He said: "We are deeply concerned that other organisations like the BNP are latching onto the movement for their own racist agenda."

Last night, George Osborne, the shadow Chancellor, said Mr Balls' comments were at odds with Treasury forecasts suggesting a recovery in the third quarter this year.

He said: "This is a staggering and very worrying admission from a Cabinet Minister and Gordon Brown's closest ally in the Treasury over the past ten years.

"We are being told that not only we are facing the worst recession in 100 years, but that it will last for over a decade – far longer than Treasury forecasts predict.

"In this time of recession, a Cabinet rift over the economy could be deeply damaging.

"We need immediate clarification of whether Ed Balls is speaking for his colleagues in the Government."

The Liberal Democrats compared the comments with those made by Treasury minister Baroness Vadera, when she claimed she was seeing "green shoots" of economic recovery, echoing remarks by former Tory Chancellor Norman Lamont in 1991.

She was criticised for saying last month: "I am seeing a few green shoots, but it's a little bit too early to say exactly how they'd grow."

Vincent Cable, the LibDems' Treasury spokesman, said: "Instead of giving clear and consistent leadership, government ministers are oscillating between complacent optimism and this doom laden picture of Armageddon.

"Surely the truth lies between the two? This is a serious crisis but not hopeless."

The news came as the Financial Services Authority, the City watchdog, warned that the UK was at risk of a deeper-than-expected recession.

The authority said that the worst financial meltdown "in more than 70 years" has far from run its course and the British economy was predicted to shrink by 2.2 per cent this year.

It also said that Britain's 'vulnerable' banks need to make huge culture changes to survive the recession.

A spokesman for Ed Balls denied he had been trying to draw parallels with the Far Right.

He said: “The speech was about the difference between Labour and the Tories on the economy. It was not about trying to draw parallels with the Far Right.

“The Tories are completely isolated in their opposition to a fiscal stimulus that is essential to combating what most economists agree is an unprecedented financial sector recession. “He said that this difference between the parties will define this country’s politics for many years to come.”

Hamilton vs. Jefferson Redux

Representatives from the states of New Hampshire, Washington and Arizona have introduced resolutions affirming their sovereignty under the 10^th Amendment.

Meanwhile, legislatures in Indiana and Colorado introduced hard money bills for consideration.

The 10^th Amendment affirms that the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

The language of the New Hampshire bill is very revealing. It is an understatement to say that we are living in interesting times.

That any Act by the Congress of the United States, Executive Order of the President of the United States of America or Judicial Order by the Judicatories of the United States of America which assumes a power not delegated to the government of United States of America by the Constitution for the United States of America and which serves to diminish the liberty of the any of the several States or their citizens shall constitute a nullification of the Constitution for the United States of America by the government of the United States of America. Acts which would cause such a nullification include, but are not limited to:

I. Establishing martial law or a state of emergency within one of the States comprising the United States of America without the consent of the legislature of that State.

II. Requiring involuntary servitude, or governmental service other than a draft during a declared war, or pursuant to, or as an alternative to, incarceration after due process of law.

III. Requiring involuntary servitude or governmental service of persons under the age of 18 other than pursuant to, or as an alternative to, incarceration after due process of law.

IV. Surrendering any power delegated or not delegated to any corporation or foreign government.

V. Any act regarding religion; further limitations on freedom of political speech; or further limitations on freedom of the press.

VI. Further infringements on the right to keep and bear arms including prohibitions of type or quantity of arms or ammunition; and

That should any such act of Congress become law or Executive Order or Judicial Order be put into force, all powers previously delegated to the United States of America by the Constitution for the United States shall revert to the several States individually. Any future government of the United States of America shall require ratification of three quarters of the States seeking to form a government of the United States of America and shall not be binding upon any State not seeking to form such a government; and

That copies of this resolution be transmitted by the house clerk to the President of the United States, each member of the United States Congress, and the presiding officers of each State’s legislature.

 

The Not So Exceptional Case of Madoff

Bernard Madoff is the public spectacle du jour, but in the broader rob Peter to pay Paul financial order, is this particular case of fraud really that exceptional?

Shortly after the news broke, a very witty lady near and dear to my heart took it all in stride and said, “So explain the difference between this ponzi model and most investment banker models or social security for that matter.”

Naturally, I was stumped.

Only the powerful elixir of getting something for nothing could overcome suspicions of a ridiculous and clearly unsustainable hedge fund model with predictable (cough) returns, huge fees and takes by the house. Or the sirens call of politicians with their hands in the public treasury for that matter. I suppose once we conquer greed, we can join Sancho Panza, mount our horse Rosinate and put an end to lust, gluttony, sloth, wrath, envy and pride while we’re at it.

As images of Wall Street and Hedgestan smolder in the backdrop, most folks in the real world are too busy rolling up their sleeves and bracing for a worsening depression, to glance back in the rearview. Still let's not forget the injustice along the way and the spirit of Newer Deal make work programs, let’s let the lawyers feed on this one a while. So far our idea of oversight is to let the rabbits watch over the cabbage.

Best Laid Plans

Few things have shaped the modern world more than the clash of the 2 opposing economic belief systems of John Maynard Keynes and Milton Friedman.

Disciples of the first believe the free market is a wild animal that must be caged, while to a Friedmanite, there is no greater sin than caging such a beautiful beast.  One says government should spend, intervene and monitor as required like a French chef twiddling the knobs of his gas range, while the other says that if anything ever goes wrong it is because that damn French chef was twiddling the knobs again.

Keynes had his heyday during FDR’s New Deal period and Friedman’s neoliberals have had one hell of a run for the past 30 years. The tide goes out on one and in on the other; Neoliberalism ends in Keynesism and so the story goes anyway. But the trouble, as with most theories, is that pesky reality has managed to give us the worst of both worlds.

Backing up a few decades, like any good missionary, the Friedmanites knew that the key to unlock new converts in global markets was to plant lots of seeds in new fertile grounds. The Chicago School would be the incubator, to spread the gospel into native populations, the people would take to free market ideas like moths to flame and great trees of productive capitalist enterprise would grow.

Things didn’t work out that way of course, and years of unpopular attempts to remove those obstacles to the “free market” – people and systems and otherwise - resulted in the rise of populist leaders like Chavez in Venezuela and a huge geopolitical backlash against the US.

On the other hand, FDR learned a thing or two about Keynesian deficit spending - it earned votes from the various interest groups who benefited at someone else’s expense - a tough habit for any politician to break. And since deficits and trade imbalances needed to rise faster than the value of a metal could be mined from the earth, Nixon knew he had to break away from the Bretton Woods arrangement which inconveniently burdened the US with a fixed US dollar to ounce-of-gold valuation.

Not only would the dollar be the world’s reserve currency, but the US would allow the value to float against other currencies on the open market – a free market delight to be certain! Now the US put itself in the unique position to print away its debt in the same denomination in which it was created. But yet, the money created would be left to central bank mechanisms which are very Keynesian at the core. There is of course nothing free market about a central banking cartel that fixes short term interest rates and governs the amount of currency in an economy.

In any case, Nixon may have proved to have been a crook, but he was no dummy.  So after reaching an agreement with the House of Saud to sell Saudi oil in US dollars and recycle the petrodollars by purchasing US Treasuries, the US benefited from two things: The inflation tax from other countries who would be reimbursed in dollars worth less than when they made the original transaction, and an artificially stronger dollar since every country would have to exchange their currencies to dollars in order to buy oil from the Saudis. In a sense, after the delink with gold, the dollar has been backed by oil.

So now fast forward to current times and we have Keynesian policy adicts to thank for the terrible hangover from runaway deficit spending, interest rates much lower than inflation and years of increasing the money and money substitute supply resulting in the largest across the board asset bubble in human existence.

But what about the free market?

The term free market when associated with neoliberalism is a complete misnomer in all of this don’t you think? What is free market about central banking cartels setting interest rates or the types of harsh IMF policies and disaster profiteering that the Friedmanites and the multinationals they represent have thrived on in places like South America and Indonesia?

It is a cruel, strange twist that the West has had to nationalize the financial establishment to “save the free market”. After years of rewarding non-productive financial shell games which created a shadow banking market tens of times larger than the global GDP, and skimmed what amounted to trillions of dollars transaction fees, we are forced by gunpoint to redeem an unredeemable system. Suddenly the people in the West realize they have much more in common with their brethren to the south as victims of crony capitalism or to cut to the chase: Oligarchy.

Speaking of Chavez, I caught where he remarked last week that Bush was “to the left of me” in an obvious reference to bailout mania.

At this point, the smoke in the latest battle of idealogies is clearing and we now have a Southern Hemisphere that nationalizes valuable minerals, natural gas and oil, and a Northern Hemisphere that nationalizes completely worthless paper assets.

Makes sense to me.

Reality-based Optimism

There was a memorable line in a movie, which itself wasn’t really memorable which went, “If you can’t give a man something to love, give him something to hope for and if you can’t give him hope just give him something to do.”

I can’t help but put that line squarely into the context of where we are in 2008.

Here we are in the midst of an election year, another on-going pageant which rewards those who make you feel, well the most loved or the most hope and if nothing else at least assure each of us we’ll have a meaningful role to play in the future.

National morale is low with the sinking economy, housing bust and war in the Middle East. Political pundits ramble on about who will carry the torch into America’s future while the average guy just shrugs and wonders how we’ll continue to finance guns or butter for that matter.

Daytime radio hosts, Times editorialists and business tycoons of glory days espouse their personal solutions and “we ought to’s” and “we need to just’s” in order to rebuild, regain, re-entrench our way into the future.

But underneath the public spectacle of Hillary’s tears and sound bites edited for mass consumption, I do sense a growing number of people with a keen awareness of the interconnectedness of the converging economic, social, energy and environmental crises in an age of increasing scarcity.

Trouble is it’s socially deadly to have frank discussions about these matters among a population that grew up with Disney World, happy movie endings and believe in ever advancing progress, abundance and prosperity.

So few do.

No presidential candidate has said, “No, we’re not having a housing slowdown; really the suburban expansion which has had a nice run for 60 years, and through which we’ve squandered much of our post WWII wealth, has topped out. It’s pretty much downhill from here and when you think about the relationship between Suburbia, the American economy and way of life, that’s going to hurt.”

No financial guru interviewed by cable news would say, “No, we’re really not about to have a recession, what you’re seeing is just one of the first waves of the collapse of the financial system. But really what else would you expect after 30 years of divergence between the paper, debt-based economy and the world’s ability to back it with hard assets and resources? Now we're faced with the fallout of a combination of consumer and national debt, years of growing trade deficits, underfunded government obligations, retirement system collapse and a massive derivative implosion. If you think subprime and collateralized debt obligations was fun, just wait until the $50 trillion credit default swap mess gets going.”

Or, “Yes, Asia is growing and is the story of the 21^st century, but do you really think 700 million Chinese can live like Americans running errands to Wal-Mart and Home Depot in their knock-off Excursions?”

No Federal Reserve Chairman would admit, “The average person is going to get waylaid by the combined freight trains of deflation from the credit and housing bust and inflation from skyrocketing commodity prices. But don’t worry as you won’t feel the pinch of inflation if you don’t plan on eating, driving, keeping your home warm or watching ‘American Idol’. But we’ll do our best to inject so much funny money into the system that if you did manage to save a buck, I’d advise you go ahead and spend it today, since it will be worth much less tomorrow."

No talk radio host who claims environmental restrictions are the reason we're not energy independent would actually say, "Even if we opened up the entire continental shelf, quickly invented the seismic equipment, had a growing fleet of newer offshore rigs to drill these deep offshore wells, discovered two new North Seas, then maybe we could spend $500 billion and maybe end up 10 years from now with 6 million barrels per day of fresh supply. Trouble is we have none of those things. And 10-15 years from now, our 73 million barrels per day of current crude production could easily be down to 50 or 45 based on depletion rates of existing fields. Even if you had another 6 million barrels per day, you'll have much less than you have today."

Nor would he say, "Sure we’re going to be more and more energy independent and we’re almost certain to meet our goals of importing less oil and refined fuel. What would you expect since there is less and less available on the world market?”

You get the gist.

But none of this is to say there is no hope.

It is to say that hope is personal responsibility as is dealing with reality.

And in a culture consumed with pop positivism, I found Kathy McMahon’s article on why blind, unfounded optimism in the face of what confronts us is well…downright neurotic.

Panglossian Disorders and Their Subtypes

Panglossian Disorder: “The neurotic tendency toward extreme optimism in the face of likely cultural and planetary collapse.”

Temporal Subtypes:
Scarlet O’Hara-ism- “I’ll just have to think about that tomorrow.” A strategy of denial that allows the person to temporally compartmentalize the feared event(s).
Futurism: “Sure, that will happen, but it will occur after all of us are long dead.” A belief that something that might happen in the distant future is no concern in the present.
Y2K features : “They said everything would collapse with 2000, and it didn’t.” A belief that any prior concern about societal problems that didn’t occur demonstrates the impossibility of any others happening in the future.

Angry Subtypes:
Rhett-Butlerist Features - “Peak Oil? Planetary Collapse? Frankly, my dear, I don’t give a damn.” Aggressive denial of information not in keeping with one’s world view.
Kill the Messenger Redirection : “Why are you telling me this? What kind of sicko focuses on these kinds of facts? You need help!” The belief that those who bring bad news are doing it for malevolent reasons.

Narcissistic Subtypes:
Rigid Cheney-ism: “The American Way of Life is non-negotiable.” The belief that any undesirable change can be avoided by a sheer act of will.
Survivalistic features : “Hey, if the rest of the world is doomed, I don’t worry about it, because I’ve got mine.” A belief that personal preparation is adequate.

Religious Subtypes:
Religiousity : “God/The Planet/Mother Nature loves humans. He/She/It would never permit massive die-off.” Or “If that happens, I just put my faith in my Savior.”
Neoliberal Econo-manic Tendencies : “The market will sort it out.” A belief that market forces control all--- including geological realities.
Nascarian Features : “People love their automobiles. A solution will have to be found to keep us driving.”

Subtypes with Denial or Minimization as the Central Feature:
Pure Denial: “That can’t be right. It’s just impossible.”
Minimalization as a primary defense : “There may be some shortages, but I doubt it will be as bad as you say.”

Subtypes with Histrionic, Helplessness, Acquiescence or Submissive Features:
Submissive Features : You're probably right. [Shrug]" Too hard/scary to think about... A response that acknowledges the reality of the threat, but is emotionally frozen or unwilling to devote emotional time and energy to the matter.
Histrionic Features : “I just don’t know anything about that. Oh, Golly, I hope you’re wrong. That’s all I can say. Oh Golly, I just can’t think about it.”

Subtypes with Delusional or Magical Thinking:
Meglomatic Features :“This simply won’t happen to me.” A belief in one’s specialness, which will save them from the consequences affecting those around them.
Paternalistic Features : "The government/corporations will sort it out." A belief in the infallibility of organizational structures to resolve problems they aren’t willing to even acknowledge.
Doubting Thomas Features : “Peak Oil is a scam by the Oil Companies to raise prices!” Minimizing the possibility of the crisis by the belief that some one or some group has ultimate control over its happening.
Pure Cornucopian Features : “The more we need, the more they’ll be.” A belief that continued progress and provision of material items for mankind can be met by advances in technology.
The Flinestonian : “The stone-age didn’t end because they ran out of stones.” A belief that modern innovation is eternal.
Frank Zappa-ism : “As soon as things get really bad, they’ll come up with something.” A belief that necessity is the mother of invention.
Magical Thinking : “Don’t worry, we can build a car that can run on air!” Proposes solutions that are clearly outside the realm of physics.
McGiveristic Features - A belief that massive planetary problems can be solved with ordinary/common items found readily at hand. Eg.: “Pig dung will be the next fossil fuel.” Or “Coke Cans can be turned into solar panels.”