The Dark Power Behind the Frauds and Financial Asset Bubbles - Whose Fool Are You?

"While everyone enjoys an economic party the long-term costs of a bubble to the economy and society are potentially great. They include a reduction in the long-term saving rate, a seemingly random distribution of wealth, and the diversion of financial human capital into the acquisition of wealth.

As in the United States in the late 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst that bubble becomes overwhelming. I think it is far better that we do so while the bubble still resembles surface froth and before the bubble carries the economy to stratospheric heights. Whenever we do it, it is going to be painful, however.”

Larry Lindsey, Federal Reserve Governor, September 24, 1996 FOMC Minutes


“I recognise that there is a stock market bubble problem at this point, and I agree with Governor Lindsey that this is a problem that we should keep an eye on....We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it.”

Alan Greenspan, September 24, 1996 FOMC Minutes


"Where a bubble becomes so large as to pose a threat the entire economic system, the central bank may appropriately decide to use monetary policy to counteract a bubble, notwithstanding the effects that monetary tightening might have elsewhere in the economy.

But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability."

Alan Greenspan, December 5, 1996, Speech to the American Enterprise Institute


"It was incredible. It was distressing to me how simple and outrageous it was. It wasn't so complicated that you said, "Wow, at least they're smart in the way they're doing it." It was simple. It was brazen. The evidence of it was overwhelming. It's just that it hadn't been revealed to the public, and that's why could get away with it...

Over the past decade we've wanted to deregulate, and we've said, "Let's get government out of the business of looking at these issues, and permit industry to control itself, because we can trust them." Maybe that's been a very good thing in some ways.

One of the things that is eminently clear from our investigation is that all the compliance departments, all the self-regulation is nothing. They watched it, but they did nothing. So we've got to think this through, and it's not only the financial community. There are a lot of sectors where we have said self-regulation is the answer. We've got to think about it."

Eliot Spitzer, The Wall Street Fix, March 16, 2003

This is the same Larry Lindsey who was fired by G. W. Bush as his economic advisor for stating that the Iraq War could cost as much as 200 Billion dollars when Rumsfeld estimated less than 50 billion.

And of course this is the same Alan Greenspan who, after a personal visit from Treasury Secretary Robert Rubin, decided that maybe the stock market was not so exuberant after all, and let les bon temps rouler into the dot com bubble and bust.

Who can know why these bubbles happen?  Who can see them coming?  As Upton Sinclair noted, It is difficult to get a man to understand something, when his salary depends on his not understanding it.

And as for Spitzer, he was the target of a Federal investigation into the activities of a single high priced call girl, and was exposed for having sex with her.   And so he was publicly disgraced and taken out of play, as a professional courtesy to the Banks.  And a fine example to other would be reformers he was.

Neil Barofsky puts our current dilemma quite succinctly in this 2012 interview below.

"I was trained to be a government employee and to take my oath of office very seriously. But I wasn't really interested in their reindeer games. And I felt a real obligation and sense of duty to fulfill the oath that I took in Secretary Paulson's office on December 15th, 2008 to do the job that I was sent down there to do. But I wasn't really tempted with a big job on Wall Street. And frankly, if it meant getting a judgeship, compromising the job that I needed to do and was supposed to do, it just wasn't interesting to me.

When I had my incident with the assistant secretary that my deputy, who had come down from-- who's another former federal prosecutor, who did narcotics work, said to me, Kevin Puvalowski. And he said to me, 'Neil, you were just offered the bullet or the bribe, the gold or the lead.'

And what he was referring to was a society just like that, which was Colombia, back in the day when Pablo Escobar and the drug kingpins really controlled society. And what he was referring to is that basically to corrupt society Escobar would go to a magistrate or a police officer, police chief, a politician, and say, "You have two choices. You can either take this giant pile of money and do my bidding. Or you can get the lead, a bullet in your head."

And Kevin was joking that I just received the Washington white collar equivalent of the gold or the lead. And it was funny, at the time, but that's kind of what happens in a society where the rewards and incentives are, again, nobody's getting shot in the head thank goodness. But it's a breakdown of the system.

And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the checks and balances that are built into the system are operational, when in fact they're not. And what you're going to see and what we are seeing is it'll be a breakdown of those governmental institutions. And you'll see governments that continue to have policies that feed the interests of -- and I don't want to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone else.

Neil Barofsky in a 2012 interview with Bill Moyers

And once again the public institutions of justice are under assault because they are inconvenient to the oligarchs and their courtiers. And the pundit class and the media go along for the ride, because as so many professionals they are inclined to follow the money flowing into their pockets.

And the corruption slowly infects all. But those who stand firm to the end, who hold true to their oaths, will be saved.

Sounds corny, doesn't it?   Not us, we are exceptional— different.  What a fool believes. As Brother Andrew asked, "I am a fool for Christ. Whose fool are you?"

Know whom you serve, for you will be theirs in God's economy.

Plutocracy, Then and Now - The Lesser of Two Evils

The world being what it is, we sometimes have to choose between two less than desirable options. The problem with choosing the lesser of two evils that are distasteful enough is that one has to numb their conscience to do it. This is what is known as a 'Faustian bargain.' We may lie to others and especially ourselves about it, but there it is.

But the individual will find that if they choose to make this kind of rotten deal with their own conscience enough times, and put their inner voice aside to make an expedient, practical choice rather than a moral one, and pile lie upon lie to ease the pain of their betrayal, eventually their conscience will fail them when it matters the most.  Or they may simply find themselves too compromised to do anything but overtly choose what is objectively wrong or suffer serious personal consequences.  They have intertwined their fingers with the power of darkness so deeply that now they are his.

And this is how the banal, time serving functionaries familiarize themselves into eventually doing otherwise unthinkable, and sometimes monstrous things.

The road to hell is paved, not with one climactic choice, but a long series of increasingly bad choices and lies, that eventually grow into a complete betrayal of duty, and our honour, and our sacred oaths of service.

We Americans are not usually thought to be a submissive people, but of course we are. Why else would we allow our country to be destroyed?  Why else would we be rewarding its destroyers?  Why else would we all— by proxies we have given to greedy corporations and corrupt politicians— be participating in its destruction?

Most of us are still too sane to piss in our own cistern, but we allow others to do so and we reward them for it. We reward them so well, in fact, that those who piss in our cistern are wealthier than the rest of us. How do we submit?  By not being radical enough.  Or by not being thorough enough, which is the same thing.

Wendell Berry


Under pretence of governing they have divided their nations into two classes, wolves and sheep. I do not exaggerate. This is a true picture of Europe. Cherish therefore the spirit of our people, and keep alive their attention. Do not be too severe upon their errors, but reclaim them by enlightening them.

If once they become inattentive to the public affairs, you and I, and Congress, and Assemblies, judges and governors shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions; and experience declares that man is the only animal which devours his own kind, for I can apply no milder term to the governments of Europe, and to the general prey of the rich on the poor.

Thomas Jefferson, 16 January 1787


Special privileges and the use of the taxing power for private gain, these are the twin pillars upon which plutocracy rests. To take away these supports and to elevate the beneficiaries of special legislation to the path of honest effort is the purpose of our party.

And who can suffer injury by just taxation, impartial laws and the application of the Jeffersonian doctrine of equal rights to all and special privileges to none? Only those whose accumulations are stained with dishonesty and whose immoral methods have given them a distorted view of business, society and government.

Accumulating by conscious frauds more money than they can use upon themselves, wisely distribute or safely leave to their children, these denounce as public enemies all who question their methods or throw a light upon their crimes.

Plutocracy is abhorrent to a republic; it is more despotic than monarchy, more heartless than aristocracy, more selfish than bureaucracy. It preys upon the nation in time of peace and conspires against it in the hour of its calamity. Conscienceless, compassionless and devoid of wisdom, it enervates its votaries while it impoverishes its victims.

It is already sapping the strength of the nation, vulgarizing social life and making a mockery of morals. The time is ripe for the overthrow of this giant wrong. In the name of the counting-rooms which it has defiled; in the name of business honor which it has polluted; in the name of the homes which it has despoiled; and in the name of religion, upon which it has placed the stigma of hypocrisy, let us make our appeal to the awakened conscience of the nation.

William Jennings Bryan, 30 August 1906


The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Franklin D. Roosevelt, Inaugural Address, March 4, 1933


Still another danger is represented by those who, paying lip service to democracy and the common welfare, in their insatiable greed for money and the power which money gives, do not hesitate surreptitiously to evade the laws designed to safeguard the public from monopolistic extortion. American fascists of this stamp were clandestinely aligned with their German counterparts before the war, and are even now preparing to resume where they left off, after 'the present unpleasantness' ceases.

They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.

Henry Wallace, 9 April 1944


It was of the utmost importance to me that people in western Europe should see the Soviet regime for what it really was. Since 1930 I had seen little evidence that the USSR was progressing towards anything that one could truly call Socialism. On the contrary, I was struck by clear signs of its transformation into a hierarchical society, in which the rulers have no more reason to give up their power than any other ruling class.

George Orwell, Animal Farm preface, 1945


Now we remember that it was Bill Clinton's administration that deregulated derivatives, deregulated telecom, and put our country's only strong banking laws in the grave. He's the one who rammed the North America Free Trade Agreement (NAFTA) through congress. Mass incarceration and the repeal of welfare, two of Clinton's other major achievements, are the pillars of the disciplinary state that has made life so miserable for Americans in the lower reaches of society. He would have put a huge dent in Social Security too, had the Monica Lewinsky sex scandal not stopped him. If we take inequality as our measure, the Clinton administration looks not heroic but odious.

Mounting a campaign against plutocracy makes as much sense to the typical Washington liberal as would circulating a petition against gravity. What our modernized liberal leaders offer is not confrontation but a kind of therapy for those flattened by the free-market hurricane: they counsel us to accept the inevitability of the situation.

Thomas Frank, Rendezvous With Oblivion, 1 September 2006


Our plutocracy, whether the hedge fund managers in Greenwich, Connecticut, or the Internet moguls in Palo Alto, now lives like the British did in colonial India: ruling the place but not of it.

Mike Lofgren, The Deep State: The Fall of the Constitution and the Rise of a Shadow Government, 5 January 2016


We are not left to conjecture how the moneyed power, thus organized and with such a weapon in its hands, would be likely to use it. The distress and alarm which pervaded and agitated the whole country when the Bank of the United States waged war upon the people in order to compel them to submit to its demands can not yet be forgotten.

The ruthless and unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, and a scene of cheerful prosperity suddenly changed into one of gloom and despondency ought to be indelibly impressed on the memory of the people of the United States. If such was its power in a time of peace, what would it not have been in a season of war, with an enemy at your doors?

No nation but the freemen of the United States could have come out victorious from such a contest; yet, if you had not conquered, the Government would have passed from the hands of the many to the hands of the few, and this organized money power from its secret conclave would have dictated the choice of your highest officers and compelled you to make peace or war, as best suited their own wishes. The forms of your Government might for a time have remained, but its living spirit would have departed from it.

Andrew Jackson, Farewell Address, 4 March 1837


A multibillion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble.

Chrystia Freeland, The Rise of the New Global Elite, January 2011


That first [gilded] 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.

Major commercial and investment banks—and the hedge funds that ran alongside them—were the big beneficiaries of the twin housing and equity-market bubbles of this decade, their profits fed by an ever-increasing volume of transactions founded on a relatively small base of actual physical assets.

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.

Recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."

Simon Johnson, The Quiet Coup, May 2009


The American economy increasingly serves only a narrow part of society, and America's national politics has failed to put the country back on track through honest, open, and transparent problem solving. Too many of America's elites-among the super-rich, the CEOs, and many of my colleagues in academia-have abandoned a commitment to social responsibility. They chase wealth and power, the rest of society be damned.

Jeffrey Sachs, The Price of Civilization, January 2012


The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy.

Dean Baker, Vicissitudes of the Marketplace Would Be a Big Improvement, 29 September 2014


Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism.

Charles Ferguson, Predator Nation, June 2012


This elite-generated social control maintains the status quo because the status quo benefits and validates those who created and sit atop it. People rise to prominence when they parrot the orthodoxy rather than critically analyze it. Intellectual regurgitation is prized over independent thought. Voices of the dispossessed, different, and un(formally)educated are neglected regardless of their morality, import, and validity.

Real change in politics or society cannot occur under the orthodoxy because if it did, it would threaten the legitimacy of the professional class and all of the systems that helped them achieve their status.

Kristine Mattis, The Cult of the Professional Class, 4 April 2016


Plutocracy is not an American word but it's become an American phenomenon. Back in the fall of 2005, the Wall Street giant Citigroup even coined a variation on it, plutonomy, an economic system where the privileged few make sure the rich get richer with government on their side.

By the next spring, Citigroup decided the time had come to publicly 'bang the drum on plutonomy.' 

Over the past 30 years the plutocrats, or plutonomists— choose your poison— have used their vastly increased wealth to capture the flag and assure the government does their bidding.

This marriage of money and politics has produced an America of gross inequality at the top and low social mobility at the bottom, with little but anxiety and dread in between, as middle class Americans feel the ground falling out from under their feet.

Like those populists of that earlier era, millions of Americans have awakened to a sobering reality: they live in a plutocracy, where they are disposable. Then, the remedy was a popular insurgency that ignited the spark of democracy. Now we have come to another parting of the ways, and once again the fate and character of our country are up for grabs.

Democracy only works when we claim it as our own.

Bill Moyers, last episode of Bill Moyers Journal, 30 April 2010


Hubris calls for nemesis, and in one form or another it's going to get it, not as a punishment from outside but as the completion of a pattern already started.

Mary Midgley, The Myths We Live By, 2003

Nomi Prins: Crony Capitalism and Corruption - An Entirely Rigged Political-Financial System

I think you would do well to watch this video below.

Too big to fail is a seven-year phenomenon created by the most powerful central banks to bolster the largest, most politically connected US and European banks. More than that, it’s a global concern predicated on that handful of private banks controlling too much market share and elite central banks infusing them with boatloads of cheap capital and other aid.

Synthetic bank and market subsidization disguised as ‘monetary policy’ has spawned artificial asset and debt bubbles - everywhere. The most rapacious speculative capital and associated risk flows from these power-players to the least protected, or least regulated, locales.

There is no such thing as isolated 'Big Bank' problems. Rather, complex products, risky practices, leverage and co-dependent transactions have contagion ramifications, particularly in emerging markets whose histories are already lined with disproportionate shares of debt, interest rate and currency related travails.

The notion of free markets, mechanisms where buyers and sellers can meet to exchange securities or various kinds of goods, in which each participant has access to the same information, is a fallacy. Transparency in trading across global financial markets is a fallacy. Not only are markets rigged by, and for, the biggest players, so is the entire political-financial system.

The connection between democracy and free markets is interesting though. Democracy is predicated on the idea that every vote counts equally, and in the utopian perspective, the government adopts policies that benefit or adhere to the majority of those votes. In fact, it's the minority of elite families and private individuals that exercise the most control over America's policies and actions.

The myth of a free market is that every trader or participant is equal, when in fact the biggest players with access to the most information and technology are the ones that have a disproportionate advantage over the smaller players. What we have is a plutocracy of government and markets. The privileged few don't care, or need to care, about democracy any more than they would ever want to have truly "free" markets, though what they do want are markets liberated from as many regulations as possible. In practice, that leads to huge inherent risk.

Michael Lewis' latest book on high frequency trading seems to have struck some sort of a national chord. Yet what he writes about is the mere tip of the iceberg covered in my book. He's talking about rigged markets - which have been a problem since small investors began investing with the big boys, believing they had an equal shot.

I'm talking about an entirely rigged political-financial system.

Nomi Prins

'Among Major Economies, Only the Chinese Numbers Are More Suspect'

On the surface this report shows solid economic growth for the US economy during the second quarter of 2015. Unfortunately, all of the usual caveats merit restatement: 

-- A significant portion of the "solid growth" in this headline number could be the result of understated BEA inflation data. Using deflators from the BLS results in a more modest 2.33% growth rate. And using deflators from the Billion Prices Project puts the growth rate even lower, at 1.28%. 

-- Per capita real GDP (the number we generally use to evaluate other economies) comes in at about 1.6% using BLS deflators and about 0.6% using the BPP deflators. Keep in mind that population growth alone (not brilliant central bank maneuvers) contributes a 0.72% positive bias to the headline number. 

-- Once again we wonder how much we should trust numbers that bounce all over the place from revision to revision. One might expect better from a huge (and expensive) bureaucracy operating in the 21st century.

Among major economies, only the Chinese numbers are more suspect. 

All that said, we have -- on the official record -- solid economic growth and 5.3% unemployment.

What more could Ms. Yellen want? 

Consumer Metrics Institute, BEA Revises 2nd Quarter 2015 GDP Growth Upward to 3.70%

Thanks to Wall Street On Parade for pointing the way to this commentary above.

The campaign to smother the true state of the US economy with paper, both in terms of paper money and manufactured statistics, is an outgrowth of the credibility trap.

Having crippled the real economy with incompetent and corrupt policy decisions, the status quo of pampered privilege is going full out to try and save the day– for themselves.

Meanwhile, underneath the public relations campaign to persuade people that all is calm, the pressures of a decade or so of malinvestment and crony capitalism continue to build.   The persuasion of the official numbers is becoming more and more ineffective, as people hear one thing but see another in their daily lives.

Yes, there are more jobs.  And they are of an inferior quality with low pay and often little or no benefits such as basic healthcare, which despite assurances otherwise is becoming increasingly expensive, and as in the clear case of Big Pharma, unnecessarily so but supported by government policies.

And the urge is to spread this malicious monopolistic drug policy globally through secret trade deals such as the TPP and TTIP.

The public is rejecting the 'establishment' in increasing numbers, such that such voices of the privileged are now recognizing them, but dismissing them as a sociological phenomenon,  expressive individualism.

The political and economic establishment has failed, again and again and consciously so, because it was to their short term benefit to do it.   It is the failure of an oath, of personal morality, and of office.

But now that the consequences of their actions are becoming apparent, they cannot possibly admit to them because, after all, it was they who are responsible.  And there is still plenty of money left on the table.

And so they must deny the problems, cover them and distract attention away from them, and continue to press on with what has been working all along, for them and their friends. The oligarchy has indeed become audacious. both in its lust for looting the system, and its bravura in the attempts to cover up the consequences of their decisions.

"Some appear to believe that 'confidence in the banks' can be rebuilt by a new round of good economic news, by rising stock prices, by the reassurances of high officials – and by not looking too closely at the underlying evidence of fraud, abuse, deception and deceit."

James K. Galbraith, Testimony to Congress, May 2010

Related:   LBMA Apparently Restated Its 2013 Gold Refining Number 2,200 Tonnes Lower

Wilkerson: Who Makes US Foreign Policy

Part of what I teach is how since World War II and the acquisition of this enormous power by what in essence is the new Rome in the world, the United States, part of the shift that takes place in manipulating and managing that new power is a centralization of foreign policy away from the old cabinet places where it used to take place, most prominently through the Foreign Service and through the secretary of state, to the White House and to the creation of the 1947 National Security Act, the National Security Council.

So if you ask me pro forma where does it exist today, it exists more in the National Security Council and its staff than it does anywhere else, certainly anywhere else in the cabinet. So what I'm saying is it's centralized in the White House.

But what does that mean in terms of, I think, your real question, who's behind the White House, and who's therefore behind U.S. foreign policy, more or less? I think the answer today is the oligarchs, which would be the same answer, incidentally, ironically, if you will, for Putin in Russia, the people who own the wealth, the people who therefore have the power and who more or less (and I'm not being too facetious here, I don't think) buy the president and thus buy American foreign policy. So that's as succinct an answer as I can give you and touch on a few historical points...

And you could say in some respects this shadow behind the power that makes money off war, period, no matter who's the belligerent, makes money off that volatility now, especially with computers that are able to assist them in doing so, like currency manipulation, for example, or just general speculation. With computers you can do it at lightning speed and you can do it in a nanosecond, and you can make billions in that nanosecond, and you don't care about what you're doing to the real economy, because you're raking in the dough.

Lawrence Wilkerson

You may watch the entire three video interview here.

Letter to Edward M. House
Warm Springs, November 21, 1933

My dear Friend:

...I had a nice talk with Jack Morgan the other day and he and he seemed more worried about Tugwell's speech than about anything else, especially when Tugwell said, "From now on property rights and financial rights will be subordinated to human rights." J.P.M. did not seem much troubled over the gold purchasing, and confessed that he had been completely misled in regard to the Federal expenditures.

The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson— and I am not wholly excepting the Administration of WW [Woodrow Wilson]— The country is going through a repetition of Jackson's fight with the Bank of the United Stated - only on a far bigger and broader basis.

I am having a grand rest and am catching up on much needed sleep. Take care of yourself and do write me soon.

Franklin Roosevelt

War is a racket. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one in which the profits are reckoned in dollars and the losses in lives.

I spent thirty-three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General.

The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag.

I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912.

I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.

There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights.

Major General Smedley Butler, USMC

President Carter: US Is Now 'Just an Oligarchy With Unlimited Political Bribery"

You might not have heard about this interview on the mainstream media.  It occurred several days ago.  Apparently Jimmy is not gleefully participating in the triumphant Clinton-Bush winners road tour and congenial yukfest. 

 

Some, nearing the latter part of their days, tend to feel the weight of their conscience.  But certainly not all, especially not those who believe in nothing greater than themselves.

 

Carter's startling admission is at the root, the very heart of the lack of reform and recovery. 

 

But the pundits, even the so-called liberal media and the disgruntled conservative media, will not discuss it frankly and openly.   They traffic in shallow anger and distraction, and faithfully serve the special interests.

And there is as little serious discussion in the pampered corporatist media, whose mission is to obfuscate and distract the public from the key issues with 'bread, circuses, and sensationalism.'

This is the kind of thing that everyone in power, and almost all those who bask in that power, know but never talk about openly, feigning ignorance with dismissive ridicule.  

 

They are caught in a credibility trap of their own making.  And so they while away the days with private looting, waiting to see which way and when the winds of reaction may blow, while doing everything they can to maintain the status quo which they have created for their own benefit.

It is the dark heart of corruption, the quiet coup d'état that has overthrown the American republic.

 

The people are beginning to ask, 'After six years, why is there tremendous profits for those who caused the problems in the first place, but no recovery for the rest of us?'

And the elite look with bewilderment, fear, and anger at the fruits of their treachery and deceit.  

They think to themselves, 'We know that we are superior people, tasked with the burdens of leadership, so they must simply be ungrateful,  jealous of our success.'

 

A small but highly visible minority may look to the worst of the oligarchs as their leader and savior.  One might call it a kind of Stockholm Syndrome, but really it is just a perverse reaction, the impulse of the camp follower that identifies with their abusers, thinking that this elevates them from the rest.

 

And the media wisely warns them, slurring any candidates out of the mainstream control, the narcissist and the socialist, urging the people to stick with the familiar oligarchic brand names, Bush and Clinton, and in extremis that slickly formed alloy and extruded creation of the money masters, brand Obama.

Hubris begets nemesis.  If they were not so self-absorbed and morally stunted by their pride and selective experience they would understand that people will not stand by and allow themselves to be abused forever.

Transcript:

HARTMANN: Our Supreme Court has now said, “unlimited money in politics.” It seems like a violation of principles of democracy. … Your thoughts on that?

CARTER: It violates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members.

So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favors for themselves after the election’s over. … The incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves.

Hat tip for the above to Sam Sacks and especially to Jon Schwarz at The Intercept.

 

Power: The Essence of Corrupt Banking and Politics Is to Grow and Control the Debt

"Events have satisfied my mind, and I think the minds of the American people, that the mischiefs and dangers which flow from a national [central] bank far over-balance all its advantages. The bold effort the present bank has made to control the Government, the distresses it has wantonly produced, the violence of which it has been the occasion in one of our cities famed for its observance of law and order, are but premonitions of the fate which awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."

Andrew Jackson, Sixth Annual Message, December 1, 1834


"Another cause of today’s instability is that we now have a society in America, Europe and much of the world which is totally dominated by the two elements of sovereignty that are not included in the state structure: control of credit and banking, and the corporation.

These are free of political controls and social responsibility and have largely monopolized power in Western Civilization and in American society. They are ruthlessly going forward to eliminate land, labor, entrepreneurial-managerial skills, and everything else the economists once told us were the chief elements of production.

The only element of production they are concerned with is the one they can control: capital."

Professor Carroll Quigley, Oscar Iden Lecture Series 3, 1976

Money is power.  And those who control the money, if they have the will for it, can use it as a means to incredible power, to create debt, and to control it, thereby controlling the debtors, both as individuals, as communities, as regions, and whole nations.

This is the story of global trade deals, the Dollar, and the foul marriage between politics, money, and central banking.   The more discretion and secrecy that is granted to those who create money and debt, the more vulnerable is the freedom of the people.

This is the story of Cyprus, of Greece, and of the Ukraine.

And there will be more.

This will to power is as old as Babylon, and as evil as hell.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations.

Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Professor Carroll Quigley, Tragedy and Hope, 1966


"He promises you illumination, he offers you knowledge, science, philosophy, enlargement of mind. He scoffs at times gone by; he scoffs at every institution which reveres them.

He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods.

Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

John Henry Newman

Colonel Lawrence Wilkerson on Congress and their 18 Percent Approval Rating

"Journalism is one of the devices whereby industrial autocracy keeps its control over political democracy; it is the day-by-day, between-elections propaganda, whereby the minds of the people are kept in a state of acquiescence, so that when the crisis of an election comes, they go to the polls and cast their ballots for either one of the two candidates of their exploiters."

Upton Sinclair, The Brass Check

Congress has an approval rating hovering around 18% according to the latest Gallup poll.  

Yikes! How can that be in a 'democratic' system?

 

Even President Obama's approval rating is hovering around 48% with about the same disapproval in our polarizing society.

 

Can 18% of the people pick the representative they like, while ignoring the other 82%?

Is it the fault of the people, the voting public?

Yes, but mostly by inaction, and their obvious confusion in the face of well funded onslaughts of command, control, and propaganda across most of the media spectrum. 

 

Gerrymandering.  Disgracefully obvious voter suppression. A insider controlled two party candidate selection process. Distorted primaries.  Rabid framing of the issues based on stereotypes and emotions.  Purposeful deceit.  Secrecy.  Manipulation.  Even the results of polls and headlines are distorted to support the 'messaging.'

 

And powerful private interests would definitely like to convince you that government is necessarily evil by its very nature, and that you should just get rid of it, and trust the monopolies and moneyed interests to be naturally benevolent and virtuous.  

They have been waging this campaign to overthrow democracy and repeal every reform, one by one, for thirty years.  And they seem to be winning, little by little, in overturning most safeguards for fairness and justice. 

 

The massive pollution of the airwaves by corporate funds and the moneyed interests with an almost incessant stream of persuasion and propaganda.  They phrase the questions carefully, and then give us the answers they want the people to hear.

And most people still believe what they see on television, the radio, and the mainstream media.

 

You give the 'wrong answer' on television, and you are never invited back.  You are also cut off from access to power and information.   You would not believe have many times I have heard this.  

 

The key morning message from Bloomberg Television this morning was an old meme from almost exactly this time last year by David Zervos, chief market strategist of Jefferies, with Eric Schatzker and Stephanie Ruhle nodding approvingly:

"Stocks are for lovers, gold is for haters."

"In short, he said that if you're somewhat of a pessimist — a hater — and think the Fed's monetary easing can't go on forever, and the system is destined to crash, then you think we're going back to the 1970s and want to be in hard commodities, such as gold. But if you think the U.S. economy is eventually going to emerge from this period of low growth and eventually recover, much like the 1990s, then you're a lover and should be in equities."

 

Yes, that 'worked' as stocks greatly outperformed metals for quite some time now, about three years.  The trend is your friend.  And so is the Fed and their method of implementing monetary policies.  Not so much for workers and real median wages though.  I think we can stipulate that Wall Street has been a major beneficiary of the Fed and the government.  Why not, they paid well enough for it.

 

And yes, we are just about at that point in the banal insipidness of our economic discussion.  Whatever works for whatever reason, just go with it.   Bear and bull markets make people economic forecasting geniuses.  Until they don't.  And then they blame you for listening.

Speaking of geniuses, next year will you may have the privilege to vote Bush v. Clinton, or Clinton v. Bush.

You get to vote for the candidates that the insiders select for you.

I am not sure about Wilkerson's assessment that 95% of the Congress are just stupid.  Jim McGill's opinion on lawyers in the second video is of course exaggerated, but has some merit.  And it seems applicable to quite a few other professions these days, where people say what their paychecks demand.

Modern Economics: Austerity

"In Greek mythology Sisyphus (Greek: Σίσυφος) was the king of Ephyra. He was punished by the gods for his chronic deceitfulness by being compelled to roll an immense boulder up a steep hill, only to watch it roll back down, over and over again."

In the modern mythology of bizarre economics, austerity can be described as 'the Reverse Sisyphus.'

The victims of systemic bank fraud and widespread cheating and manipulation of markets and laws are forced to pay the price, in an endless cycle of booms and busts, for the deceitfulness and injustice of the powerful financial interests and their privileged friends.

 

Related:  Bubblenomics

 

 

 

The NeoLiberal Colossus

"Keep, ancient lands, your human dignity!" cries she

With curling lips. "Give me your tired, your poor,

Your huddled masses, yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the weak, the homeless, the victims all to me,

And I will grind their bones, forevermore!"