By Robert Reich
October 19, 2010 "Robert Reich's Blog" -- It’s a perfect storm. And I’m not talking about the impending dangers facing Democrats. I’m talking about the dangers facing our democracy.
First, income in America is now more concentrated in fewer hands than it’s been in 80 years. Almost a quarter of total income generated in the United States is going to the top 1 percent of Americans.
The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us.
Who are these people? With the exception of a few entrepreneurs like Bill Gates, they’re top executives of big corporations and Wall Street, hedge-fund managers, and private equity managers. They include the Koch brothers, whose wealth increased by billions last year, and who are now funding tea party candidates across the nation.
Which gets us to the second part of the perfect storm. A relatively few Americans are buying our democracy as never before. And they’re doing it completely in secret.
Hundreds of millions of dollars are pouring into advertisements for and against candidates — without a trace of where the dollars are coming from. They’re laundered through a handful of groups. Fred Maleck, whom you may remember as deputy director of Richard Nixon’s notorious Committee to Reelect the President (dubbed Creep in the Watergate scandal), is running one of them. Republican operative Karl Rove runs another. The U.S. Chamber of Commerce, a third.
The Supreme Court’s Citizens United vs. the Federal Election Commission made it possible. The Federal Election Commission says only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.
We’re back to the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. The public never knew who was bribing whom.
Just before it recessed the House passed a bill that would require that the names of all such donors be publicly disclosed. But it couldn’t get through the Senate. Every Republican voted against it. (To see how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)
Here’s the third part of the perfect storm. Most Americans are in trouble. Their jobs, incomes, savings, and even homes are on the line. They need a government that’s working for them, not for the privileged and the powerful.
Yet their state and local taxes are rising. And their services are being cut. Teachers and firefighters are being laid off. The roads and bridges they count on are crumbling, pipelines are leaking, schools are dilapidated, and public libraries are being shut.
There’s no jobs bill to speak of. No WPA to hire those who can’t find jobs in the private sector. Unemployment insurance doesn’t reach half of the unemployed.
Washington says nothing can be done. There’s no money left.
No money? The marginal income tax rate on the very rich is the lowest it’s been in more than 80 years. Under President Dwight Eisenhower (who no one would have accused of being a radical) it was 91 percent. Now it’s 36 percent. Congress is even fighting over whether to end the temporary Bush tax cut for the rich and return them to the Clinton top tax of 39 percent.
Much of the income of the highest earners is treated as capital gains, anyway — subject to a 15 percent tax. The typical hedge-fund and private-equity manager paid only 17 percent last year. Their earnings were not exactly modest. The top 15 hedge-fund managers earned an average of $1 billion.
Congress won’t even return to the estate tax in place during the Clinton administration – which applied only to those in the top 2 percent of incomes.
It won’t limit the tax deductions of the very rich, which include interest payments on multi-million dollar mortgages. (Yet Wall Street refuses to allow homeowners who can’t meet mortgage payments to include their primary residence in personal bankruptcy.)
There’s plenty of money to help stranded Americans, just not the political will to raise it. And at the rate secret money is flooding our political system, even less political will in the future.
The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work.
We’re losing our democracy to a different system. It’s called plutocracy.
Showing posts with label Oligarchy. Show all posts
Showing posts with label Oligarchy. Show all posts
Wednesday, October 20, 2010
Sunday, July 18, 2010
More on the US Oligarchy
Banks Break Law, Pay Small Fines, Go Back to Breaking Law
By: David Dayen Saturday July 17, 2010 7:11 am
Firedoglake.com
I’m a bit surprised that Ted Kaufman, whose eloquent speech on FinReg said exactly what needed to be said about that legislation, was so pleased with the SEC settlement with Goldman Sachs for $550 million dollars. He says that the case proves that the SEC is back on the beat, that Goldman only made $15 million on the deal so the return was not worth the risk for them and that this could signal the beginning and not the end of civil and criminal prosecutions for financial fraud, a new era of accountability and justice.
"As I said on the Senate floor on March 15, it is high time that we return the rule of law to Wall Street, which has been seriously eroded by the deregulatory mindset that captured our regulatory agencies over the past 30 years. We became enamored of the view that self-regulation was adequate, that rational self-interest would motivate counterparties to undertake stronger and better forms of due diligence than any regulator could perform, and that market fundamentalism would lead to the best outcomes for the most people.
Transparency and vigorous oversight by outside accountants were supposed to keep our financial system credible and sound. Instead, an era with no effective regulation or law enforcement led to the biggest financial crisis since 1929 and an economic disaster for the American people. And we know that fraud and lawlessness were at the heart of it.
Congress must continue to concentrate law enforcement and regulatory resources on restoring the rule of law to Wall Street. I am proud that the S.E.C. has begun this task. We must treat financial crimes with the same gravity as other crimes, because the price of inaction and a failure to deter future misconduct is simply a price America can never again afford to pay." (Senator Ted Kaufman on US Senate floor)
Wall Street doesn’t really see it that way, as evidenced by the persistent rise in Goldman’s stock price since the settlement. And the continued use of exotic financial instruments and high-frequency trading and all of the other casino games that have virtually nothing to do with the purpose of finance.
Consider just one mind-blowing example: Wachovia’s financing of Mexican drug money, an extremely lucrative enterprise that netted them billions over the years. The story, worth reading in full, details how drug money gets laundered through US banks, allowing the multi-billion dollar drug cartels to operate freely. Nobody knows how much Wachovia, since bought by Wells Fargo, made on the handling of $378.4 billion dollars in Mexican currency swaps, but the fine the parent company wound up paying under the Bank Secrecy Act was a mere $160 million. And there’s more:
"The 1970 Bank Secrecy Act requires banks to report all cash transactions above $10,000 to regulators and to tell the government about other suspected money-laundering activity. Big banks employ hundreds of investigators and spend millions of dollars on software programs to scour accounts.
No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again."
Matt Taibbi made this point recently (I forget which radio show it was). If petty thieves steal $10,000 and get caught, they go to jail. If banks steal or fraudulently acquire billions upon billions of dollars, they pay a fine and promise to never do it again, and that’s it. And this was the exact nature of the settlement in the Goldman case.
Rule of law means that people responsible for crimes lose their liberty. That’s what it means for most people, anyway. Not so on Wall Street. Kaufman name-checks Galbraith, but Galbraith would like to see people who break the law go to prison. That would be an effective deterrent, not a slap on the wrist.
UPDATE: It should also be noted that the SEC is “back on the beat” only by the skin of its teeth. The two Republican commissioners on the SEC didn’t want to bring the Goldman case at all, and then split on the settlement as well, trying to get the fine lowered.
By: David Dayen Saturday July 17, 2010 7:11 am
Firedoglake.com
I’m a bit surprised that Ted Kaufman, whose eloquent speech on FinReg said exactly what needed to be said about that legislation, was so pleased with the SEC settlement with Goldman Sachs for $550 million dollars. He says that the case proves that the SEC is back on the beat, that Goldman only made $15 million on the deal so the return was not worth the risk for them and that this could signal the beginning and not the end of civil and criminal prosecutions for financial fraud, a new era of accountability and justice.
"As I said on the Senate floor on March 15, it is high time that we return the rule of law to Wall Street, which has been seriously eroded by the deregulatory mindset that captured our regulatory agencies over the past 30 years. We became enamored of the view that self-regulation was adequate, that rational self-interest would motivate counterparties to undertake stronger and better forms of due diligence than any regulator could perform, and that market fundamentalism would lead to the best outcomes for the most people.
Transparency and vigorous oversight by outside accountants were supposed to keep our financial system credible and sound. Instead, an era with no effective regulation or law enforcement led to the biggest financial crisis since 1929 and an economic disaster for the American people. And we know that fraud and lawlessness were at the heart of it.
Congress must continue to concentrate law enforcement and regulatory resources on restoring the rule of law to Wall Street. I am proud that the S.E.C. has begun this task. We must treat financial crimes with the same gravity as other crimes, because the price of inaction and a failure to deter future misconduct is simply a price America can never again afford to pay." (Senator Ted Kaufman on US Senate floor)
Wall Street doesn’t really see it that way, as evidenced by the persistent rise in Goldman’s stock price since the settlement. And the continued use of exotic financial instruments and high-frequency trading and all of the other casino games that have virtually nothing to do with the purpose of finance.
Consider just one mind-blowing example: Wachovia’s financing of Mexican drug money, an extremely lucrative enterprise that netted them billions over the years. The story, worth reading in full, details how drug money gets laundered through US banks, allowing the multi-billion dollar drug cartels to operate freely. Nobody knows how much Wachovia, since bought by Wells Fargo, made on the handling of $378.4 billion dollars in Mexican currency swaps, but the fine the parent company wound up paying under the Bank Secrecy Act was a mere $160 million. And there’s more:
"The 1970 Bank Secrecy Act requires banks to report all cash transactions above $10,000 to regulators and to tell the government about other suspected money-laundering activity. Big banks employ hundreds of investigators and spend millions of dollars on software programs to scour accounts.
No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again."
Matt Taibbi made this point recently (I forget which radio show it was). If petty thieves steal $10,000 and get caught, they go to jail. If banks steal or fraudulently acquire billions upon billions of dollars, they pay a fine and promise to never do it again, and that’s it. And this was the exact nature of the settlement in the Goldman case.
Rule of law means that people responsible for crimes lose their liberty. That’s what it means for most people, anyway. Not so on Wall Street. Kaufman name-checks Galbraith, but Galbraith would like to see people who break the law go to prison. That would be an effective deterrent, not a slap on the wrist.
UPDATE: It should also be noted that the SEC is “back on the beat” only by the skin of its teeth. The two Republican commissioners on the SEC didn’t want to bring the Goldman case at all, and then split on the settlement as well, trying to get the fine lowered.
Friday, February 12, 2010
It Is Now Official: The U.S. Is A Police State
By Paul Craig Roberts
February 09, 2010 "Information Clearing House" -- Americans have been losing the protection of law for years. In the 21st century the loss of legal protections accelerated with the Bush administration’s “war on terror,” which continues under the Obama administration and is essentially a war on the Constitution and U.S. civil liberties.
The Bush regime was determined to vitiate habeas corpus in order to hold people indefinitely without bringing charges. The regime had acquired hundreds of prisoners by paying a bounty for “terrorists.” Afghan warlords and thugs responded to the financial incentive by grabbing unprotected people and selling them to the Americans.
The Bush regime needed to hold the prisoners without charges because it had no evidence against the people and did not want to admit that the U.S. government had stupidly paid warlords and thugs to kidnap innocent people. In addition, the Bush regime needed “terrorists” prisoners in order to prove that there was a terrorist threat.
As there was no evidence against the “detainees” (most have been released without charges after years of detention and abuse), the U.S. government needed a way around U.S. and international laws against torture in order that the government could produce evidence via self-incrimination. The Bush regime found inhumane and totalitarian-minded lawyers and put them to work at the U.S. Department of Justice (sic) to invent arguments that the Bush regime did not need to obey the law.
The Bush regime created a new classification for its detainees that it used to justify denying legal protection and due process to the detainees. As the detainees were not U.S. citizens and were demonized by the regime as “the 760 most dangerous men on earth,” there was little public outcry over the regime’s unconstitutional and inhumane actions.
As our Founding Fathers and a long list of scholars warned, once civil liberties are breached, they are breached for all. Soon U.S. citizens were being held indefinitely in violation of their habeas corpus rights. Dr. Aafia Siddiqui an American citizen of Pakistani origin might have been the first.
Dr. Siddiqui, a scientist educated at MIT and Brandeis University, was seized in Pakistan for no known reason, sent to Afghanistan, and was held secretly for five years in the U.S. military’s notorious Bagram prison in Afghanistan. Her three young children were with her at the time she was abducted, one an eight-month old baby. She has no idea what has become of her two youngest children. Her oldest child, 7 years old, was also incarcerated in Bagram and subjected to similar abuse and horrors.
Siddiqui has never been charged with any terrorism-related offense. A British journalist, hearing her piercing screams as she was being tortured, disclosed her presence. HERE... An embarrassed U.S. government responded to the disclosure by sending Siddiqui to the U.S. for trial on the trumped-up charge that while a captive, she grabbed a U.S. soldier’s rifle and fired two shots attempting to shoot him. The charge apparently originated as a U.S. soldier’s excuse for shooting Dr. Siddiqui twice in the stomach resulting in her near death.
On February 4, Dr. Siddiqui was convicted by a New York jury for attempted murder. The only evidence presented against her was the charge itself and an unsubstantiated claim that she had once taken a pistol-firing course at an American firing range. No evidence was presented of her fingerprints on the rifle that this frail and broken 100-pound woman had allegedly seized from an American soldier. No evidence was presented that a weapon was fired, no bullets, no shell casings, no bullet holes. Just an accusation.
Wikipedia has this to say about the trial: “The trial took an unusual turn when an FBI official asserted that the fingerprints taken from the rifle, which was purportedly used by Aafia to shoot at the U.S. interrogators, did not match hers.”
An ignorant and bigoted American jury convicted her for being a Muslim. This is the kind of “justice” that always results when the state hypes fear and demonizes a group.
The people who should have been on trial are the people who abducted her, disappeared her young children, shipped her across international borders, violated her civil liberties, tortured her apparently for the fun of it, raped her, and attempted to murder her with two gunshots to her stomach. Instead, the victim was put on trial and convicted.
This is the unmistakable hallmark of a police state. And this victim is an American citizen.
Anyone can be next. Indeed, on February 3 Dennis Blair, director of National Intelligence told the House Intelligence Committee that it was now “defined policy” that the U.S. government can murder its own citizens on the sole basis of someone in the government’s judgment that an American is a threat. No arrest, no trial, no conviction, just execution on suspicion of being a threat.
This shows how far the police state has advanced. A presidential appointee in the Obama administration tells an important committee of Congress that the executive branch has decided that it can murder American citizens abroad if it thinks they are a threat.
I can hear readers saying the government might as well kill Americans abroad as it kills them at home--Waco, Ruby Ridge, the Black Panthers.
Yes, the U.S. government has murdered its citizens, but Dennis Blair’s “defined policy” is a bold new development. The government, of course, denies that it intended to kill the Branch Davidians, Randy Weaver’s wife and child, or the Black Panthers. The government says that Waco was a terrible tragedy, an unintended result brought on by the Branch Davidians themselves. The government says that Ruby Ridge was Randy Weaver’s fault for not appearing in court on a day that had been miscommunicated to him, The Black Panthers, the government says, were dangerous criminals who insisted on a shoot-out.
In no previous death of a U.S. citizen by the hands of the U.S. government has the government claimed the right to kill Americans without arrest, trial, and conviction of a capital crime.
In contrast, Dennis Blair has told the U.S. Congress that the executive branch has assumed the right to murder Americans who it deems a “threat.”
What defines “threat”? Who will make the decision? What it means is that the government will murder whomever it chooses.
There is no more complete or compelling evidence of a police state than the government announcing that it will murder its own citizens if it views them as a “threat.”
Ironic, isn’t it, that “the war on terror” to make us safe ends in a police state with the government declaring the right to murder American citizens who it regards as a threat.
February 09, 2010 "Information Clearing House" -- Americans have been losing the protection of law for years. In the 21st century the loss of legal protections accelerated with the Bush administration’s “war on terror,” which continues under the Obama administration and is essentially a war on the Constitution and U.S. civil liberties.
The Bush regime was determined to vitiate habeas corpus in order to hold people indefinitely without bringing charges. The regime had acquired hundreds of prisoners by paying a bounty for “terrorists.” Afghan warlords and thugs responded to the financial incentive by grabbing unprotected people and selling them to the Americans.
The Bush regime needed to hold the prisoners without charges because it had no evidence against the people and did not want to admit that the U.S. government had stupidly paid warlords and thugs to kidnap innocent people. In addition, the Bush regime needed “terrorists” prisoners in order to prove that there was a terrorist threat.
As there was no evidence against the “detainees” (most have been released without charges after years of detention and abuse), the U.S. government needed a way around U.S. and international laws against torture in order that the government could produce evidence via self-incrimination. The Bush regime found inhumane and totalitarian-minded lawyers and put them to work at the U.S. Department of Justice (sic) to invent arguments that the Bush regime did not need to obey the law.
The Bush regime created a new classification for its detainees that it used to justify denying legal protection and due process to the detainees. As the detainees were not U.S. citizens and were demonized by the regime as “the 760 most dangerous men on earth,” there was little public outcry over the regime’s unconstitutional and inhumane actions.
As our Founding Fathers and a long list of scholars warned, once civil liberties are breached, they are breached for all. Soon U.S. citizens were being held indefinitely in violation of their habeas corpus rights. Dr. Aafia Siddiqui an American citizen of Pakistani origin might have been the first.
Dr. Siddiqui, a scientist educated at MIT and Brandeis University, was seized in Pakistan for no known reason, sent to Afghanistan, and was held secretly for five years in the U.S. military’s notorious Bagram prison in Afghanistan. Her three young children were with her at the time she was abducted, one an eight-month old baby. She has no idea what has become of her two youngest children. Her oldest child, 7 years old, was also incarcerated in Bagram and subjected to similar abuse and horrors.
Siddiqui has never been charged with any terrorism-related offense. A British journalist, hearing her piercing screams as she was being tortured, disclosed her presence. HERE... An embarrassed U.S. government responded to the disclosure by sending Siddiqui to the U.S. for trial on the trumped-up charge that while a captive, she grabbed a U.S. soldier’s rifle and fired two shots attempting to shoot him. The charge apparently originated as a U.S. soldier’s excuse for shooting Dr. Siddiqui twice in the stomach resulting in her near death.
On February 4, Dr. Siddiqui was convicted by a New York jury for attempted murder. The only evidence presented against her was the charge itself and an unsubstantiated claim that she had once taken a pistol-firing course at an American firing range. No evidence was presented of her fingerprints on the rifle that this frail and broken 100-pound woman had allegedly seized from an American soldier. No evidence was presented that a weapon was fired, no bullets, no shell casings, no bullet holes. Just an accusation.
Wikipedia has this to say about the trial: “The trial took an unusual turn when an FBI official asserted that the fingerprints taken from the rifle, which was purportedly used by Aafia to shoot at the U.S. interrogators, did not match hers.”
An ignorant and bigoted American jury convicted her for being a Muslim. This is the kind of “justice” that always results when the state hypes fear and demonizes a group.
The people who should have been on trial are the people who abducted her, disappeared her young children, shipped her across international borders, violated her civil liberties, tortured her apparently for the fun of it, raped her, and attempted to murder her with two gunshots to her stomach. Instead, the victim was put on trial and convicted.
This is the unmistakable hallmark of a police state. And this victim is an American citizen.
Anyone can be next. Indeed, on February 3 Dennis Blair, director of National Intelligence told the House Intelligence Committee that it was now “defined policy” that the U.S. government can murder its own citizens on the sole basis of someone in the government’s judgment that an American is a threat. No arrest, no trial, no conviction, just execution on suspicion of being a threat.
This shows how far the police state has advanced. A presidential appointee in the Obama administration tells an important committee of Congress that the executive branch has decided that it can murder American citizens abroad if it thinks they are a threat.
I can hear readers saying the government might as well kill Americans abroad as it kills them at home--Waco, Ruby Ridge, the Black Panthers.
Yes, the U.S. government has murdered its citizens, but Dennis Blair’s “defined policy” is a bold new development. The government, of course, denies that it intended to kill the Branch Davidians, Randy Weaver’s wife and child, or the Black Panthers. The government says that Waco was a terrible tragedy, an unintended result brought on by the Branch Davidians themselves. The government says that Ruby Ridge was Randy Weaver’s fault for not appearing in court on a day that had been miscommunicated to him, The Black Panthers, the government says, were dangerous criminals who insisted on a shoot-out.
In no previous death of a U.S. citizen by the hands of the U.S. government has the government claimed the right to kill Americans without arrest, trial, and conviction of a capital crime.
In contrast, Dennis Blair has told the U.S. Congress that the executive branch has assumed the right to murder Americans who it deems a “threat.”
What defines “threat”? Who will make the decision? What it means is that the government will murder whomever it chooses.
There is no more complete or compelling evidence of a police state than the government announcing that it will murder its own citizens if it views them as a “threat.”
Ironic, isn’t it, that “the war on terror” to make us safe ends in a police state with the government declaring the right to murder American citizens who it regards as a threat.
Tuesday, September 15, 2009
The United States of Plutocracy
By William Pfaff
September 11, 2009 "Information Clearing House" -- Paris, September 7, 2009. The United States has for practical purposes been a plutocracy for some years now. American national elections usually function more or less correctly, except that they have become all but completely dominated by money.
The contributors of money to Senate and Congressional campaigns are dominated by the source of that money, and the source of the money is the United States government, which directs it to them as a result of the contracts awarded to them by the congressmen and the senators whose election they support. The process is circular.
It would be cheaper for all concerned if business were directly to pay senators and congressmen and eliminate the middlemen, the parasites that live on the surplus money in this system, paid for their ability to persuade both sellers and buyers (so to speak) that they are providing a service by facilitating the bargain. Elections now cannot take place without them.
There would seem to be two steps by which this rot has taken hold. The first is change in the legislation originally concerned with the use by broadcasters of the airwaves, a public resource. In 1934 the Federal Communications Commission was established with authority over broadcasts. Being a politically balanced body, it decreed that the public service obligation of the broadcaster included the responsibility to provide balanced information. (The Fox News claim to be “fair and balanced” is a sneering reference to this, no doubt unintentional.)
This rule applied to commentary on the news and to coverage of elections and acceptance of political advertising. There had to be substantial balance.
This arrangement was destroyed by the Reagan administration, which removed the FCC’s responsibility to enforce political “fairness” in radio and television network commentary and election coverage. The Republican-controlled Congress defeated efforts to reinstate it.
The change was challenged in 1976 by a congressional candidate who contended that he had been defeated by a candidate who spent on his campaign a sum enormously more than the plaintiff could spend. He contended that the Congress had imposed an unconstitutional money qualification upon election to federal office.
In one of the more notorious and deplorable decisions in the history of the Supreme Court, it ruled that all money spent on advertising in a political campaign is constitutionally protected free speech (Buckley v. Valeo, 1976).
Since then, the United States has been in a dizzying downward spin in the effective purchase of public office by candidates with the most wealthy supporters, usually business corporations. A perverse effect of the ruling, possibly unrecognized by the court, is that this indirectly required all candidates to adopt pro-business positions, or at least positions sufficiently inoffensive to business that they did not become the object of targeted campaigns to silence them.
On Wednesday September 9, the Supreme Court began hearing arguments on the legitimacy of any restriction on direct electoral spending by business corporations.
Since 1908, business corporations have been prohibited from spending on federal elections. Unions have been banned from doing so since 1947. States have banned corporate campaign spending since the late 19th century. Today corporations and unions contribute indirectly through political action committees, limited in what can be contributed.
If corporations now were licensed to make direct payment from corporate funds to influence elections, the country would become a wholly-owned subsidiary of American business. (Editor's emphasis throughout) The government would no longer be able to act disinterestedly. In the circumstances, there would appear to be no possibility that legislation to reverse the effects of such a ruling could succeed.
I do not know whether this is something the majority of citizens wish to see happen. Probably, in these difficult times, the majority do not even know that it is happening. They will discover it later.
September 11, 2009 "Information Clearing House" -- Paris, September 7, 2009. The United States has for practical purposes been a plutocracy for some years now. American national elections usually function more or less correctly, except that they have become all but completely dominated by money.
The contributors of money to Senate and Congressional campaigns are dominated by the source of that money, and the source of the money is the United States government, which directs it to them as a result of the contracts awarded to them by the congressmen and the senators whose election they support. The process is circular.
It would be cheaper for all concerned if business were directly to pay senators and congressmen and eliminate the middlemen, the parasites that live on the surplus money in this system, paid for their ability to persuade both sellers and buyers (so to speak) that they are providing a service by facilitating the bargain. Elections now cannot take place without them.
There would seem to be two steps by which this rot has taken hold. The first is change in the legislation originally concerned with the use by broadcasters of the airwaves, a public resource. In 1934 the Federal Communications Commission was established with authority over broadcasts. Being a politically balanced body, it decreed that the public service obligation of the broadcaster included the responsibility to provide balanced information. (The Fox News claim to be “fair and balanced” is a sneering reference to this, no doubt unintentional.)
This rule applied to commentary on the news and to coverage of elections and acceptance of political advertising. There had to be substantial balance.
This arrangement was destroyed by the Reagan administration, which removed the FCC’s responsibility to enforce political “fairness” in radio and television network commentary and election coverage. The Republican-controlled Congress defeated efforts to reinstate it.
The change was challenged in 1976 by a congressional candidate who contended that he had been defeated by a candidate who spent on his campaign a sum enormously more than the plaintiff could spend. He contended that the Congress had imposed an unconstitutional money qualification upon election to federal office.
In one of the more notorious and deplorable decisions in the history of the Supreme Court, it ruled that all money spent on advertising in a political campaign is constitutionally protected free speech (Buckley v. Valeo, 1976).
Since then, the United States has been in a dizzying downward spin in the effective purchase of public office by candidates with the most wealthy supporters, usually business corporations. A perverse effect of the ruling, possibly unrecognized by the court, is that this indirectly required all candidates to adopt pro-business positions, or at least positions sufficiently inoffensive to business that they did not become the object of targeted campaigns to silence them.
On Wednesday September 9, the Supreme Court began hearing arguments on the legitimacy of any restriction on direct electoral spending by business corporations.
Since 1908, business corporations have been prohibited from spending on federal elections. Unions have been banned from doing so since 1947. States have banned corporate campaign spending since the late 19th century. Today corporations and unions contribute indirectly through political action committees, limited in what can be contributed.
If corporations now were licensed to make direct payment from corporate funds to influence elections, the country would become a wholly-owned subsidiary of American business. (Editor's emphasis throughout) The government would no longer be able to act disinterestedly. In the circumstances, there would appear to be no possibility that legislation to reverse the effects of such a ruling could succeed.
I do not know whether this is something the majority of citizens wish to see happen. Probably, in these difficult times, the majority do not even know that it is happening. They will discover it later.
Saturday, September 5, 2009
Democracy is Dead ... Lobbyists Rule America
by Paul B. Farrell
ARROYO GRANDE, Calif. -- Democracy dead? Lobbyists ruling America? Lobbyists the new "Unseen Hand" of capitalism? Sadly yes.
And here's why: Ask any neuroeconomist, behavioral-finance quant, investment psychologist or other practitioner of the mysterious "science of irrationality" and they'll tell you that Americans have two self-sabotaging mental biases that killed democracy from within: "Denial" and "Magical Thinking" make us easy targets. Our brains are being manipulated by clandestine forces beyond our control. We can't see them or resist.
Yet we refuse to believe in this new Orwellian America. We prefer the world of magic, myth and illusion.
Yes, folks, democracy is dead. Oh, the illusion will be kept alive in our history books, in the rhetoric of politicians, in the manipulated minds of America's 95 million Main Street investors. The propaganda machine works. Like a child's fairy tale, democracy has been deeply imbedded in our brains for decades; we prefer believing old, familiar stories. They comfort us, even when no longer true. The real democracy, what so many fought and died for since 1776, is dead.
Lobbyists now run America, own America, rule America. Forget the 537 politicians you thought we elected to the White House, Senate and Congress to run America for us. No, they're mere puppets, pawns for the "Happy Conspiracy," an oligopoly, plutocracy, cabal, monopoly all-in-one -- a private club of America's richest few on Wall Street, in Washington and in Corporate America.
Voters and elections are irrelevant. Lobbyists decide what's in the best interests of this elite club. The usual suspects? Try the Forbes 400.
Last year Michael Barone wrote a "Defense of Lobbyists" in U.S. News & World Report: "Lobbying is as American as apple pie, going back to the colonies." How naïve, how in denial.
He obviously missed reading Bob Kaiser's brilliant 25-part series in the Washington Post a couple years earlier, on "how lobbying became Washington's biggest business." Turns out that modern lobbying actually began in the mid-1970s with the innovative "earmarked appropriations, federal funds directed by Congress to private institutions when no federal agency had proposed spending the money."
Kaiser expanded the series to: "So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government." In just three decades, Washington has earmarked hundreds of billions thanks to lobbyists peddling influence bribes to buy Washington votes.
After all, the cost of a Senate race has exploded from $437,000 to $7.9 million. So lobbyists shovel millions to friendly senators, like Connecticut Democrat Christopher Dodd and Alabama Republican Richard Shelby.
Lobbyists love spending your tax dollars
In another example of lobbyists stealing taxpayer dollars Kaiser tells how "last fall the House of Representatives set off a sudden collapse of the stock market by voting against the first version of the bailout legislation that had been hurriedly written to try to stabilize American banks and other financial institutions." Lobbyists then "scrambled to change the legislation in ways that would win support for it from a majority of Congressmen."
How? Simple: Within just days they manipulated Congress to throw in more taxpayer cash. "Sweeteners" included excise-tax rebates for Puerto Rican rum. tax breaks for stock-car-track owners, tax breaks for Hollywood movies made in the USA and lots more. So "days after rejecting the $750 billion bailout, the House approved it."
Why so easy? There's a huge, highly paid army of mercenary lobbyists in Washington. Registered lobbyists may be 42,000 versus a mere 537 elected officials. American University political scientist James Thurber says there are actually 261,000 members of the "influence-lobbying complex" running your government. Many are former congressmen, senators and staffers. Others are ad hoc mercenaries, like the 350 hired by the GOP just to kill health-care reforms at a cost over a million bucks a day.
Another example: Former Senate leader Tom Daschle is not registered, yet has emerged as a key go-between for Obama and health-care insurers, a perfect example of how Obama's $9 trillion programs have fueled an explosion of influence peddlers. Daschle told the New York Times he sees no conflicts, although he's highly paid by insurers. He calls himself a neutral "resource."
This anti-democracy trend was recently exposed in a BusinessWeek piece, "Don't Call Them Lobbyists," where we see this industry rebranding itself as cooperators, as "special policy advisors," "crisis managers" and "strategic planners." Reminds us of that fairy tale about a "wolf in sheep's clothing" guarding the hen house.
Unfortunately, the vast majority of Americans will never hear about all the day-to-day shenanigans: The buying, selling and bartering of sweeteners, earmarks, votes and senatorial seats. Most of the behind-the-scenes deals never cross the radar of Middle America.
Most voters are destined to live in denial, trapped in mind-numbing illusions replaying over and over as they sit passively, dazed. Or they angrily feed their macho delusions of power at town-hall meetings, carrying AK-47s, convinced that grandma will be sacrificed by one of Obama's death panels. Either way, they aimlessly drift, unaware of how lobbyists rule America, how lobbyists help the "Happy Conspiracy" rob them blind.
Sinking sensation ... democracy is rigged
Still, we feel it. As Frank Rich put it in the New York Times:
"What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand." This pervasive public "mood isn't just about the banks, Public Enemy No. 1. What the Great Recession has crystallized is a larger syndrome that Obama tapped into during the campaign. It's the sinking sensation that the American game is rigged, that, as the president typically put it a month after his inauguration, the system is in hock to 'the interests of powerful lobbyists or the wealthiest few' who have 'run Washington far too long.' He promised to smite them."
He can't. Why? Because like the rest of us, he's controlled by the new "Lobbyists Nation of America." Obama's now inside this "Happy Conspiracy," working with lobbyists like Daschle, all aggressively competing for their slice of a $9 trillion pie for rich clients ... as taxpayers sail the good ship "American Titanic Deficits" into a huge iceberg, dead ahead.
Stop kidding yourself. Wake up, you're in denial, in fantasy world, dreaming of a new "American Democracy." Wrong, you no longer live in a democracy. Lobbyists run Washington. They even have their own greed-driven operating rules guiding members working inside "Washington's biggest business."
Here are some of the principles in the Manifesto of this new "Lobbyist Nation of America." This is real behavioral economics in action:
Manifesto: 'Lobbyists Nation of America' 16 Principles
1. Lobbyists destined to fill a void left by democracy's failings. Voters are irrational, cannot be trusted to act without guidance from lobbyists.
2. Lobbyists are the new behavioral nudgers guiding America. Forget behavioral scientists, special interest lobbyists will do the real nudging.
3. Lobbyists must nudge voters to elect "friendly" politicians. Lobbyists must invest millions to elect officials favorable to special interests.
4. Lobbyists are the new "unseen hand" of American Capitalism. Capitalism's new "unseen hand" is the enlightened deals of 261,000 lobbyists
5. Lobbyists will guide economic recovery for special interests. Congress, the president and regulators all have a price, find it and pay it.
6. Lobbyists protect special interests using taxpayer money. The wealthy will have ready access to the assets and credits of the Treasury.
7. Lobbyists amass extra capital anticipating a new meltdown. Plan ahead for the next recession by stockpiling benefits for your clients.
8. Lobbyists hire new blood directly from inside government. The contacts of senators and congressmen are worth millions to clients.
9. Lobbyists reward politicians, treat them like co-lobbyists. Everyone in Washington wants to get rich off big government, help them
10. Lobbyists must defeat programs unfavorable to clients. Programs that weaken the power of the rich must be aggressively defeated.
11. Lobbyist clients' interests come before public interest. Principles of fiduciary duty mean clients take precedence over public needs.
12. Lobbyists must defeat or gut financial literacy programs. Intelligent, informed investors undercut special interests; Kill the CFPA.
13. Lobbyists give traders access to commercial bank assets. Investment banks switched to get access to deposits for high-risk trading.
14. Lobbyists never help mortgagees and credit-card holders. Helping failing homeowners and card holders means less for bank insiders.
15. Lobbyists want cap-and-trade derivatives for a new bull market. America needs a new bubble, new bull -- global warming trades will do trick.
16. Lobbyists must reward the rich, eliminate the "death tax." Eliminating inheritance taxes assures continuity of wealthy gene po
ARROYO GRANDE, Calif. -- Democracy dead? Lobbyists ruling America? Lobbyists the new "Unseen Hand" of capitalism? Sadly yes.
And here's why: Ask any neuroeconomist, behavioral-finance quant, investment psychologist or other practitioner of the mysterious "science of irrationality" and they'll tell you that Americans have two self-sabotaging mental biases that killed democracy from within: "Denial" and "Magical Thinking" make us easy targets. Our brains are being manipulated by clandestine forces beyond our control. We can't see them or resist.
Yet we refuse to believe in this new Orwellian America. We prefer the world of magic, myth and illusion.
Yes, folks, democracy is dead. Oh, the illusion will be kept alive in our history books, in the rhetoric of politicians, in the manipulated minds of America's 95 million Main Street investors. The propaganda machine works. Like a child's fairy tale, democracy has been deeply imbedded in our brains for decades; we prefer believing old, familiar stories. They comfort us, even when no longer true. The real democracy, what so many fought and died for since 1776, is dead.
Lobbyists now run America, own America, rule America. Forget the 537 politicians you thought we elected to the White House, Senate and Congress to run America for us. No, they're mere puppets, pawns for the "Happy Conspiracy," an oligopoly, plutocracy, cabal, monopoly all-in-one -- a private club of America's richest few on Wall Street, in Washington and in Corporate America.
Voters and elections are irrelevant. Lobbyists decide what's in the best interests of this elite club. The usual suspects? Try the Forbes 400.
Last year Michael Barone wrote a "Defense of Lobbyists" in U.S. News & World Report: "Lobbying is as American as apple pie, going back to the colonies." How naïve, how in denial.
He obviously missed reading Bob Kaiser's brilliant 25-part series in the Washington Post a couple years earlier, on "how lobbying became Washington's biggest business." Turns out that modern lobbying actually began in the mid-1970s with the innovative "earmarked appropriations, federal funds directed by Congress to private institutions when no federal agency had proposed spending the money."
Kaiser expanded the series to: "So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government." In just three decades, Washington has earmarked hundreds of billions thanks to lobbyists peddling influence bribes to buy Washington votes.
After all, the cost of a Senate race has exploded from $437,000 to $7.9 million. So lobbyists shovel millions to friendly senators, like Connecticut Democrat Christopher Dodd and Alabama Republican Richard Shelby.
Lobbyists love spending your tax dollars
In another example of lobbyists stealing taxpayer dollars Kaiser tells how "last fall the House of Representatives set off a sudden collapse of the stock market by voting against the first version of the bailout legislation that had been hurriedly written to try to stabilize American banks and other financial institutions." Lobbyists then "scrambled to change the legislation in ways that would win support for it from a majority of Congressmen."
How? Simple: Within just days they manipulated Congress to throw in more taxpayer cash. "Sweeteners" included excise-tax rebates for Puerto Rican rum. tax breaks for stock-car-track owners, tax breaks for Hollywood movies made in the USA and lots more. So "days after rejecting the $750 billion bailout, the House approved it."
Why so easy? There's a huge, highly paid army of mercenary lobbyists in Washington. Registered lobbyists may be 42,000 versus a mere 537 elected officials. American University political scientist James Thurber says there are actually 261,000 members of the "influence-lobbying complex" running your government. Many are former congressmen, senators and staffers. Others are ad hoc mercenaries, like the 350 hired by the GOP just to kill health-care reforms at a cost over a million bucks a day.
Another example: Former Senate leader Tom Daschle is not registered, yet has emerged as a key go-between for Obama and health-care insurers, a perfect example of how Obama's $9 trillion programs have fueled an explosion of influence peddlers. Daschle told the New York Times he sees no conflicts, although he's highly paid by insurers. He calls himself a neutral "resource."
This anti-democracy trend was recently exposed in a BusinessWeek piece, "Don't Call Them Lobbyists," where we see this industry rebranding itself as cooperators, as "special policy advisors," "crisis managers" and "strategic planners." Reminds us of that fairy tale about a "wolf in sheep's clothing" guarding the hen house.
Unfortunately, the vast majority of Americans will never hear about all the day-to-day shenanigans: The buying, selling and bartering of sweeteners, earmarks, votes and senatorial seats. Most of the behind-the-scenes deals never cross the radar of Middle America.
Most voters are destined to live in denial, trapped in mind-numbing illusions replaying over and over as they sit passively, dazed. Or they angrily feed their macho delusions of power at town-hall meetings, carrying AK-47s, convinced that grandma will be sacrificed by one of Obama's death panels. Either way, they aimlessly drift, unaware of how lobbyists rule America, how lobbyists help the "Happy Conspiracy" rob them blind.
Sinking sensation ... democracy is rigged
Still, we feel it. As Frank Rich put it in the New York Times:
"What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand." This pervasive public "mood isn't just about the banks, Public Enemy No. 1. What the Great Recession has crystallized is a larger syndrome that Obama tapped into during the campaign. It's the sinking sensation that the American game is rigged, that, as the president typically put it a month after his inauguration, the system is in hock to 'the interests of powerful lobbyists or the wealthiest few' who have 'run Washington far too long.' He promised to smite them."
He can't. Why? Because like the rest of us, he's controlled by the new "Lobbyists Nation of America." Obama's now inside this "Happy Conspiracy," working with lobbyists like Daschle, all aggressively competing for their slice of a $9 trillion pie for rich clients ... as taxpayers sail the good ship "American Titanic Deficits" into a huge iceberg, dead ahead.
Stop kidding yourself. Wake up, you're in denial, in fantasy world, dreaming of a new "American Democracy." Wrong, you no longer live in a democracy. Lobbyists run Washington. They even have their own greed-driven operating rules guiding members working inside "Washington's biggest business."
Here are some of the principles in the Manifesto of this new "Lobbyist Nation of America." This is real behavioral economics in action:
Manifesto: 'Lobbyists Nation of America' 16 Principles
1. Lobbyists destined to fill a void left by democracy's failings. Voters are irrational, cannot be trusted to act without guidance from lobbyists.
2. Lobbyists are the new behavioral nudgers guiding America. Forget behavioral scientists, special interest lobbyists will do the real nudging.
3. Lobbyists must nudge voters to elect "friendly" politicians. Lobbyists must invest millions to elect officials favorable to special interests.
4. Lobbyists are the new "unseen hand" of American Capitalism. Capitalism's new "unseen hand" is the enlightened deals of 261,000 lobbyists
5. Lobbyists will guide economic recovery for special interests. Congress, the president and regulators all have a price, find it and pay it.
6. Lobbyists protect special interests using taxpayer money. The wealthy will have ready access to the assets and credits of the Treasury.
7. Lobbyists amass extra capital anticipating a new meltdown. Plan ahead for the next recession by stockpiling benefits for your clients.
8. Lobbyists hire new blood directly from inside government. The contacts of senators and congressmen are worth millions to clients.
9. Lobbyists reward politicians, treat them like co-lobbyists. Everyone in Washington wants to get rich off big government, help them
10. Lobbyists must defeat programs unfavorable to clients. Programs that weaken the power of the rich must be aggressively defeated.
11. Lobbyist clients' interests come before public interest. Principles of fiduciary duty mean clients take precedence over public needs.
12. Lobbyists must defeat or gut financial literacy programs. Intelligent, informed investors undercut special interests; Kill the CFPA.
13. Lobbyists give traders access to commercial bank assets. Investment banks switched to get access to deposits for high-risk trading.
14. Lobbyists never help mortgagees and credit-card holders. Helping failing homeowners and card holders means less for bank insiders.
15. Lobbyists want cap-and-trade derivatives for a new bull market. America needs a new bubble, new bull -- global warming trades will do trick.
16. Lobbyists must reward the rich, eliminate the "death tax." Eliminating inheritance taxes assures continuity of wealthy gene po
Monday, July 13, 2009
The More Things "Change"...
By Tim Gatto
July 12, 2009 -- -Information Clearing House--Every one of us has their own “take” on what is happening in this brave new world. I am no different than most, I also have an opinion on what’s going on. When I write an article I usually have no problem giving my opinion as to what is really happening. This time however, I’m going to try not to give my opinion. I only want to present the facts as I understand them. The truth is much more damning than any opinion I could offer, as Sgt Joe Friday once said in Dragnet, an old TV police show; “Just the facts Ma’am, just the facts”.
Let’s start with the two political parties that supposedly “run” this country. The truth is that political parties don’t run this country, money does. Our entire political system is based on wealth. This has been true in some degree since the day we gained our independence, but it has never been as apparent as it is now. Money drives political campaigns. All the politicos know this and so do most people. Senators Russ Feingold and John McCain tried to reform the way that political campaigns were financed, but by the time the reforms were passed by Congress, the politicians and lobbyists had gutted the bill, making it so weak that it was too little, too late.
We, the people, are supposedly equal under the law, and we are, except that some are more equal than others depending on their net worth and how their money is used. During the last presidential election, money coming from “ordinary folks” in a “populist surge of donations” put Barack Obama over the top and they supposedly carried the day.
It never happened.
What really happened is that the people who controlled the financial sector of the economy saw a massive train wreck about to happen and they needed someone malleable and ambitious enough to work with them to clean up the mess that would follow. At that time, A junior Senator from Illinois with his golden tongue a good understanding of quid pro quid, stepped into the batter’s box. The financial sector then showered him with campaign funds in order to minimize the catastrophe that was, beyond a shadow of doubt, going to happen. The truth was that everyone in government, and those working in the financial sector, knew that the only recourse available to prevent a financial meltdown, was for the Federal Government to bail out the bankers, the stock exchange, the real estate market and the hedge fund people, mortgage lenders and the manufacturing base (Automobile manufacturers and the defense industry).
Let’s take a look at campaign financing. Obama raised $745 million, McCain raised $368 million.
Finance, Insurance & Real Estate: $130,634,154 Total. Democrats $69,987,307 GOP: $60,525,764
Total Individuals PAC’S To Democrats To Republicans
2008 $468,809,924 $396,331,007 $72,478,917 $238,597, 503 $229,267,201
Securities and Investments
Total Individuals PAC’S To Dems To Republicans
2008 $154,918,793 $143,495,995 $11,422,798 $87,965,961 $66,736,485
When it comes to influence, the average American has very little. It’s amazing when you consider how the political parties package their candidates. They use the oldest trick in the book to win elections. Divide and conquer. Left, right, rich poor, black, white, legal, illegal, it’s all a ruse.
The hot-button issues still resonate; abortion, gay and lesbian, health care, education and taxes and the all-important “national security” as if Venezuela were to suddenly invade the Gulf of Mexico with help from Bolivia.
Our lawmakers have broken the backs of the Unions. They pass agricultural laws that drive independent farmers out of business because the costs of doing business have become astronomical. Meanwhile fear-mongers and ideologues such as Rush Limbaugh claim that Obama is practicing some new variation of “socialism” that has allowed corporations to return to the era of monopolies. Standard Oil, AT&T and big Pharmaceutical companies merged with their competitors and drove smaller operations out of business.
Our nation is continuously at war. The War on Drugs, the War on Crime, the War on Terrorism and the War on Climate Change challenge our resources so that we now fight wars for these resources. We celebrate our freedom while our phones are being tapped, our e-mails read and collected, our computer keystrokes are recorded and plans for an RFID chip in a National ID card are being planned.
These are not right or left issues or liberal/conservative issues. Until 2008 the Republicans spent money like drunken sailors on liberty, now the Democrats find themselves buying American auto manufacturers and controlling interests in banks and insurance companies. We buy American dollars from the Rothschild’s and the Mellon’s and the Rockefellers at interest through private banker that have the audacity to call themselves “The Federal Reserve” We cannot print our own national currency; this was a primary reason we fought to free ourselves from Great Britain. Our money comes pre-packaged with debt attached.
Congress denies legislation for Americans so that they may stay in their homes while authorizing 80 million in additional funds so that we can continue to send unmanned drones into Pakistan to bring death from the sky blasting suspected Taliban forces that turn out to be wedding parties and picnics.
Our “Shining City on a Hill” has caused more than one million dead Iraqi’s and over four million refugees. Our thousand points of light are actually depleted uranium projectiles that emit alpha radiation that bring death in the form of fission and birth defects to Iraqi children Along ken strands of DNA in our soldiers that bring deformities to American children. A thousand points of light in the form of white phosphorus that when burning, doesn’t stop until it has burned through flesh and bone until it lands on dirt.
We watch as American and NATO troops take the Helmand Provence in Southern Afghanistan that will be used for the all important oil pipeline that was planned by UnoCal years ago when President Karzai, the Afghan leader worked for the American oil company. Now we have permission the fly over Russia to resupply Afghanistan with soldiers and instruments of war while the Russians sit back and watch our people die.
The American people are slowly realizing that we have traded one war-monger for another. Once we were in Afghanistan to fight al Qaeda, now we are trying to kill the Taliban. In reality we are killing anyone that stops us from building that oil pipeline.
Almost a decade ago we saw a candidate tout “compassionate conservatism”. Nothing was further from the truth. Now we have a President that speaks of “change”. The only change I see is a different battlefield for people to die.
July 12, 2009 -- -Information Clearing House--Every one of us has their own “take” on what is happening in this brave new world. I am no different than most, I also have an opinion on what’s going on. When I write an article I usually have no problem giving my opinion as to what is really happening. This time however, I’m going to try not to give my opinion. I only want to present the facts as I understand them. The truth is much more damning than any opinion I could offer, as Sgt Joe Friday once said in Dragnet, an old TV police show; “Just the facts Ma’am, just the facts”.
Let’s start with the two political parties that supposedly “run” this country. The truth is that political parties don’t run this country, money does. Our entire political system is based on wealth. This has been true in some degree since the day we gained our independence, but it has never been as apparent as it is now. Money drives political campaigns. All the politicos know this and so do most people. Senators Russ Feingold and John McCain tried to reform the way that political campaigns were financed, but by the time the reforms were passed by Congress, the politicians and lobbyists had gutted the bill, making it so weak that it was too little, too late.
We, the people, are supposedly equal under the law, and we are, except that some are more equal than others depending on their net worth and how their money is used. During the last presidential election, money coming from “ordinary folks” in a “populist surge of donations” put Barack Obama over the top and they supposedly carried the day.
It never happened.
What really happened is that the people who controlled the financial sector of the economy saw a massive train wreck about to happen and they needed someone malleable and ambitious enough to work with them to clean up the mess that would follow. At that time, A junior Senator from Illinois with his golden tongue a good understanding of quid pro quid, stepped into the batter’s box. The financial sector then showered him with campaign funds in order to minimize the catastrophe that was, beyond a shadow of doubt, going to happen. The truth was that everyone in government, and those working in the financial sector, knew that the only recourse available to prevent a financial meltdown, was for the Federal Government to bail out the bankers, the stock exchange, the real estate market and the hedge fund people, mortgage lenders and the manufacturing base (Automobile manufacturers and the defense industry).
Let’s take a look at campaign financing. Obama raised $745 million, McCain raised $368 million.
Finance, Insurance & Real Estate: $130,634,154 Total. Democrats $69,987,307 GOP: $60,525,764
Total Individuals PAC’S To Democrats To Republicans
2008 $468,809,924 $396,331,007 $72,478,917 $238,597, 503 $229,267,201
Securities and Investments
Total Individuals PAC’S To Dems To Republicans
2008 $154,918,793 $143,495,995 $11,422,798 $87,965,961 $66,736,485
When it comes to influence, the average American has very little. It’s amazing when you consider how the political parties package their candidates. They use the oldest trick in the book to win elections. Divide and conquer. Left, right, rich poor, black, white, legal, illegal, it’s all a ruse.
The hot-button issues still resonate; abortion, gay and lesbian, health care, education and taxes and the all-important “national security” as if Venezuela were to suddenly invade the Gulf of Mexico with help from Bolivia.
Our lawmakers have broken the backs of the Unions. They pass agricultural laws that drive independent farmers out of business because the costs of doing business have become astronomical. Meanwhile fear-mongers and ideologues such as Rush Limbaugh claim that Obama is practicing some new variation of “socialism” that has allowed corporations to return to the era of monopolies. Standard Oil, AT&T and big Pharmaceutical companies merged with their competitors and drove smaller operations out of business.
Our nation is continuously at war. The War on Drugs, the War on Crime, the War on Terrorism and the War on Climate Change challenge our resources so that we now fight wars for these resources. We celebrate our freedom while our phones are being tapped, our e-mails read and collected, our computer keystrokes are recorded and plans for an RFID chip in a National ID card are being planned.
These are not right or left issues or liberal/conservative issues. Until 2008 the Republicans spent money like drunken sailors on liberty, now the Democrats find themselves buying American auto manufacturers and controlling interests in banks and insurance companies. We buy American dollars from the Rothschild’s and the Mellon’s and the Rockefellers at interest through private banker that have the audacity to call themselves “The Federal Reserve” We cannot print our own national currency; this was a primary reason we fought to free ourselves from Great Britain. Our money comes pre-packaged with debt attached.
Congress denies legislation for Americans so that they may stay in their homes while authorizing 80 million in additional funds so that we can continue to send unmanned drones into Pakistan to bring death from the sky blasting suspected Taliban forces that turn out to be wedding parties and picnics.
Our “Shining City on a Hill” has caused more than one million dead Iraqi’s and over four million refugees. Our thousand points of light are actually depleted uranium projectiles that emit alpha radiation that bring death in the form of fission and birth defects to Iraqi children Along ken strands of DNA in our soldiers that bring deformities to American children. A thousand points of light in the form of white phosphorus that when burning, doesn’t stop until it has burned through flesh and bone until it lands on dirt.
We watch as American and NATO troops take the Helmand Provence in Southern Afghanistan that will be used for the all important oil pipeline that was planned by UnoCal years ago when President Karzai, the Afghan leader worked for the American oil company. Now we have permission the fly over Russia to resupply Afghanistan with soldiers and instruments of war while the Russians sit back and watch our people die.
The American people are slowly realizing that we have traded one war-monger for another. Once we were in Afghanistan to fight al Qaeda, now we are trying to kill the Taliban. In reality we are killing anyone that stops us from building that oil pipeline.
Almost a decade ago we saw a candidate tout “compassionate conservatism”. Nothing was further from the truth. Now we have a President that speaks of “change”. The only change I see is a different battlefield for people to die.
Wednesday, June 24, 2009
Why America is a Bank-owned State
By Samah El-Shahat
June 23, 2009 "Al Jazeera" -- June 12, 2009 - In my last column I introduced the idea that America's handling of the financial crisis, and in particular the way it has refused to deal with the banks, is more in keeping with how an "emerging" economy might behave and act.
So this week, I will say that America has become a bank-owned state, allowing its banking oligarchs to suffocate the economy so they can survive at any price.
As a development economist, what always made developing and poorer countries stand out was the level of inequality between individuals.
That is, the difference between how a small percentage, usually the country's capitalists, oligarchs and those close to people in power, were overdosing on wealth as the rest struggled to make ends meet, or even survive.
Everyone in the country knew it, from the poorest farmer on the street to the richest oligarch. It was in your face, unashamed, unabated and highly discomforting.
Discomforting because it made all of us who witnessed it feel crippled at the power of the status quo, ruing the unfairness of life when merit always comes last, relative to who you know and who you are.
We took some relief from believing that this only happens because these countries were authoritarian, and not so accountable to their electorate.
Yet, if we look closer at the leading capitalist economies such as those of America and the UK, we will find that inequity raises its ugly head equally, and as starkly, when you look at the numbers.
Kept in the dark
Here too, a small percentage have the lion's share of national income in their hands, while the rest of the population experience stagnant incomes, all within a democratic, rather than an authoritarian, political regime.
Yet the real difference here is that, away from the numbers, the wider population and the electorate were mostly kept in the dark about this.
In 2006, the top one per cent of American households' share of all disposable income amounted to almost a quarter of all households' disposable income, according to Robert Hunter Wade, professor of political economy at the London School of Economics.
In crude terms, one per cent of the population have a quarter of all the wealth.
Moreover, Wade found the average income of the bottom 90 per cent of the population remained almost stagnant after 1980, although consumption kept rising thanks to the build-up of private debt.
This means that 90 per cent of the American economy were financing their American dream on debt.
In the UK, Wade found the pay gap between the highest and average earners had widened alarmingly.
Back in 1989, chief executives pocketed 17 times more than average earners.
By 2007, those same "captains of industry" were earning 75 times more than the average worker.
That is one enormous leap and I wouldn't mind that happening to my salary!
What's good for Wall Street ...
Warning signs that the financial crisis would become the great recession were there for all to see for a long time.
But where were the alarms in the system itself to say that these countries and the individuals in them were pursuing an unsustainable way of life?
Where were the signs that things were going to end disastrously and, worse still, that the most vulnerable might end up paying the heftiest and most disproportionate price than anyone else?
I believe the status quo was allowed to go unquestioned because banks were benefiting obscenely from the interest on our debt, and governments were in cahoots with these banks. Let's not forget that governments conveniently moved away from the provision of affordable healthcare, free university education and affordable housing while the banks entered our lives, aggressively, to fill that void.
In addition, I think that this warped and unjust way of operating was not questioned because the electorate was kept in the dark in the most subtle way possible.
The whole issue was made invisible. It was kept off the radar screens of electoral politics.
The American electorate were made accomplice to this because they were convinced that what was good for Wall Street, was good for America as a whole.
It was a political sleight of hand of the highest order. And this explains the bipartisan agreement to the ill-designed deregulation of the finance sector that we have seen over the years.
America has become a bank-owned state.
Ann Pettifor, a fellow development economist who works for the New Economics Foundation, says the US administration has been hijacked, and democracy has been pushed aside in favour of what is good for the bankers, by what Abraham Lincoln called "the money power".
And how right she is. The way the banks are being bailed out is a clear example of this political edifice.
Sucking the life out of tax-payers
The fact some of these failing banks have been thrown a lifeline is a testament to the hold they have over Barack Obama's administration.
Some of the banks should be allowed to die because they are so insolvent and holding so much in toxic assets that they will forever need to be on taxpayer-funded life support.
The problem is, this life support is sucking the life out of the taxpayer in the process, as it weighs them down with ever-increasing debt.
On top of that, the money could be used to restructure the economy in a way that is less reliant on the financial sector.
Underlying this refusal to kill those banks in poor health is a faulty and, dare I say, convenient assumption, that is not backed up by reality or fact, that the banks are facing a liquidity crisis as opposed to them facing a solvency crisis.
A liquidity crisis means the banks are facing a credit shortage, and once that is sorted, all will be well. A solvency crisis means that the assets of many banks, firms and households are worth less than their debt.
And this means that these banks have to be completely nationalised.
Which leads us to Timothy Geithner, the US treasury secretary, and his "stress tests".
The tests were meant to give a clear and final assessment of these banks' balance sheets, telling us which were healthy and which would not be able to survive and would need more cash if the recession deepens.
As in any induced test, like the ones we undergo when we have our hearts tested, the "stress tests" were meant to simulate worse-case scenarios. Well, that was the promise at least.
The hope was that some would be declared so bad, they would have to go under once and for all.
Unfortunately, the tests turned out peculiarly lacking in stress.
Nouriel Roubini, professor at the Stern School of Business at New York University, says: "The government used assumptions for the macro variables in 2009 and 2010 that are so optimistic that the actual data for 2009 are already worse than the adverse scenario."
"As for some crucial variables, such as the unemployment rate – key to proper estimates of default and recovery rates for residential mortages ... and other bank loans – the current trend shows that by the end of 2009 the unemployment rate will be higher than the average unemployment rate assumed in the more adverse scenario for 2010, not for 2009."
The unemployment rate used in the worse-case scenario was assumed to average 8.9 per cent in 2009 and 10.3 per cent in 2010. But unemployment has already reached 9.4 per cent this year, and looks likely to overtake 10.3 per cent by next year.
So, there is nothing really challenging about these worse case scenarios at all.
Next week, I'll write about Timothy Geithner's plan to wipe toxic assets off the banks' balance sheets without getting rid of one single bank ... and how long before we say ENOUGH and really do something about it.
June 23, 2009 "Al Jazeera" -- June 12, 2009 - In my last column I introduced the idea that America's handling of the financial crisis, and in particular the way it has refused to deal with the banks, is more in keeping with how an "emerging" economy might behave and act.
So this week, I will say that America has become a bank-owned state, allowing its banking oligarchs to suffocate the economy so they can survive at any price.
As a development economist, what always made developing and poorer countries stand out was the level of inequality between individuals.
That is, the difference between how a small percentage, usually the country's capitalists, oligarchs and those close to people in power, were overdosing on wealth as the rest struggled to make ends meet, or even survive.
Everyone in the country knew it, from the poorest farmer on the street to the richest oligarch. It was in your face, unashamed, unabated and highly discomforting.
Discomforting because it made all of us who witnessed it feel crippled at the power of the status quo, ruing the unfairness of life when merit always comes last, relative to who you know and who you are.
We took some relief from believing that this only happens because these countries were authoritarian, and not so accountable to their electorate.
Yet, if we look closer at the leading capitalist economies such as those of America and the UK, we will find that inequity raises its ugly head equally, and as starkly, when you look at the numbers.
Kept in the dark
Here too, a small percentage have the lion's share of national income in their hands, while the rest of the population experience stagnant incomes, all within a democratic, rather than an authoritarian, political regime.
Yet the real difference here is that, away from the numbers, the wider population and the electorate were mostly kept in the dark about this.
In 2006, the top one per cent of American households' share of all disposable income amounted to almost a quarter of all households' disposable income, according to Robert Hunter Wade, professor of political economy at the London School of Economics.
In crude terms, one per cent of the population have a quarter of all the wealth.
Moreover, Wade found the average income of the bottom 90 per cent of the population remained almost stagnant after 1980, although consumption kept rising thanks to the build-up of private debt.
This means that 90 per cent of the American economy were financing their American dream on debt.
In the UK, Wade found the pay gap between the highest and average earners had widened alarmingly.
Back in 1989, chief executives pocketed 17 times more than average earners.
By 2007, those same "captains of industry" were earning 75 times more than the average worker.
That is one enormous leap and I wouldn't mind that happening to my salary!
What's good for Wall Street ...
Warning signs that the financial crisis would become the great recession were there for all to see for a long time.
But where were the alarms in the system itself to say that these countries and the individuals in them were pursuing an unsustainable way of life?
Where were the signs that things were going to end disastrously and, worse still, that the most vulnerable might end up paying the heftiest and most disproportionate price than anyone else?
I believe the status quo was allowed to go unquestioned because banks were benefiting obscenely from the interest on our debt, and governments were in cahoots with these banks. Let's not forget that governments conveniently moved away from the provision of affordable healthcare, free university education and affordable housing while the banks entered our lives, aggressively, to fill that void.
In addition, I think that this warped and unjust way of operating was not questioned because the electorate was kept in the dark in the most subtle way possible.
The whole issue was made invisible. It was kept off the radar screens of electoral politics.
The American electorate were made accomplice to this because they were convinced that what was good for Wall Street, was good for America as a whole.
It was a political sleight of hand of the highest order. And this explains the bipartisan agreement to the ill-designed deregulation of the finance sector that we have seen over the years.
America has become a bank-owned state.
Ann Pettifor, a fellow development economist who works for the New Economics Foundation, says the US administration has been hijacked, and democracy has been pushed aside in favour of what is good for the bankers, by what Abraham Lincoln called "the money power".
And how right she is. The way the banks are being bailed out is a clear example of this political edifice.
Sucking the life out of tax-payers
The fact some of these failing banks have been thrown a lifeline is a testament to the hold they have over Barack Obama's administration.
Some of the banks should be allowed to die because they are so insolvent and holding so much in toxic assets that they will forever need to be on taxpayer-funded life support.
The problem is, this life support is sucking the life out of the taxpayer in the process, as it weighs them down with ever-increasing debt.
On top of that, the money could be used to restructure the economy in a way that is less reliant on the financial sector.
Underlying this refusal to kill those banks in poor health is a faulty and, dare I say, convenient assumption, that is not backed up by reality or fact, that the banks are facing a liquidity crisis as opposed to them facing a solvency crisis.
A liquidity crisis means the banks are facing a credit shortage, and once that is sorted, all will be well. A solvency crisis means that the assets of many banks, firms and households are worth less than their debt.
And this means that these banks have to be completely nationalised.
Which leads us to Timothy Geithner, the US treasury secretary, and his "stress tests".
The tests were meant to give a clear and final assessment of these banks' balance sheets, telling us which were healthy and which would not be able to survive and would need more cash if the recession deepens.
As in any induced test, like the ones we undergo when we have our hearts tested, the "stress tests" were meant to simulate worse-case scenarios. Well, that was the promise at least.
The hope was that some would be declared so bad, they would have to go under once and for all.
Unfortunately, the tests turned out peculiarly lacking in stress.
Nouriel Roubini, professor at the Stern School of Business at New York University, says: "The government used assumptions for the macro variables in 2009 and 2010 that are so optimistic that the actual data for 2009 are already worse than the adverse scenario."
"As for some crucial variables, such as the unemployment rate – key to proper estimates of default and recovery rates for residential mortages ... and other bank loans – the current trend shows that by the end of 2009 the unemployment rate will be higher than the average unemployment rate assumed in the more adverse scenario for 2010, not for 2009."
The unemployment rate used in the worse-case scenario was assumed to average 8.9 per cent in 2009 and 10.3 per cent in 2010. But unemployment has already reached 9.4 per cent this year, and looks likely to overtake 10.3 per cent by next year.
So, there is nothing really challenging about these worse case scenarios at all.
Next week, I'll write about Timothy Geithner's plan to wipe toxic assets off the banks' balance sheets without getting rid of one single bank ... and how long before we say ENOUGH and really do something about it.
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