They finance the military, too.
Rule by the Rich - by Paul Craig Roberts
Global Research, January 27, 2010 - Creators Syndicate - 2010-01-25
The election of Republican Scott Brown to the U.S. Senate by Democratic voters in Massachusetts sends President Obama a message. Voters perceive that Obama.s administration has morphed into a Bush-Cheney government. Obama has reneged on every promise he made, from ending wars, to closing Gitmo, to providing health care for Americans, to curtailing the domestic police state, to putting the interests of dispossessed Americans ahead of the interests of the rich banksters who robbed Americans of their homes and pensions.
But what can Obama do other then spout more rhetoric?
The Democrats were destroyed as an independent party by jobs offshoring and so-called free trade agreements such as NAFTA. The effect of"globalism" has been to destroy the industrial and manufacturing unions, thus leaving the Democrats without a power base and source of funding.
Obama and the Democrats cannot be an opposition party, because Democrats are as dependent as Republicans on corporate interest groups for campaign funding.
The Democrats have to support war and the police state if they want funding from the military/security complex. They have to make the health care bill into a subsidy for private insurance if they want funding from the insurance companies. They have to abandon the American people for the rich banksters if they want funding from the financial lobby.
Now that the five Republicans on the Supreme Court have overturned decades of U.S. law and given corporations the ability to buy every American election, Democrats and Republicans can be nothing but pawns for a plutocracy.
Most Americans are hard pressed, but the corporations have only begun to milk them.
Wars are too profitable for the armaments industry to ever end. High unemployment is now a permanent state in the U.S., thus coercing job seekers into military service.
The security industry profits from the police state and regards civil liberties as a hindrance to profits. By announcing that he intends to continue the Bush policy of indefinite detention, a violation of the Constitution and U.S. legal procedures, Obama has granted the Democratic Party.s consent to the Republicans. destruction of habeas corpus, the main bastion of individual liberty.
Jobs offshoring is too profitable for U.S. corporations for Obama to be able to save American jobs and restart the broken economy.
Americans are being squeezed out of health care not only by the loss of job benefits, but also by corporate takeover of medical practice from physicians. Today medical doctors are wage slaves of corporate health providers that leverage doctors by turning them into supervisors of physician assistants, lower-paid people without medical degrees who perform the services that doctors once provided. As neither doctor nor physician assistant has any independence, there is no one to represent the patient.s care against the profits of the corporation.
Even environmental concerns are being used to create "cap and trade" rights to buy and sell the ability to pollute. Wall Street is licking its lips over a new source of leveraged derivative instruments.
The American public cannot even get reliable information about their plight as the "MainStream Media" has been concentrated into a few corporate hands that do not permit independent reporting. The media is as dependent on corporate money as are politicians.
How can President Obama restart an economy that has been moved offshore? Millions of manufacturing jobs are gone, as are millions of jobs for college graduates, such as software engineering, Information Technology--indeed, any intellectual skill the product of which can be conveyed via the Internet. Even those intellectual skill jobs that do remain in the U.S. are filled increasingly by foreigners brought in on work visas. The wipeout of blue collar and middle class job growth has stopped the growth of American incomes except, of course, those of the super rich. For a decade American consumers substituted increased personal indebtedness for income growth.
In order to maintain and to increase their consumption, Americans consumed their assets, such as their home equity. Americans reached their maximum debt load just as the real estate bubble burst and just as the banksters highly-leveraged, toxic financial instruments brought down the stock market and the values of Americans. pensions.
The enormous damage done to the U.S. economy by jobs offshoring, work visas, and financial deregulation cannot be offset by government stimulus plans, which expand the debt burdens that are crushing Americans. The federal government.s massive budget deficits and the Federal Reserve.s easy monetary policy are setting the stage for an inflationary depression to follow a deflationary depression.
The Federal Reserve chairman says not to worry about inflation, because the Fed can take the money back out of the economy. But can the Fed take the money out without contracting the economy?
The Federal Reserve says not to worry about financing the federal budget deficit. Banksters are buying the Treasury bonds with the proceeds from their sales of their toxic derivatives to the Fed.
So what is happening to the Federal Reserve.s balance sheet? And when will the Fed have no recourse but to print new money in order to finance the federal deficit?
How long can the dollar retain its reserve currency role in such circumstances, and how does the U.S. pay for its imports when this role is lost?
Don.t look to Washington for answers to these questions.
Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan.s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand.
He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economyand Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Clickhere for Peter Brimelow.s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.==========
Secret Banking Cabal Emerges From AIG Shadows
by David Reilly, January 29, 2010
The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week.s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.
Wednesday.s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We.re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG.s bailout -- deserves further congressional scrutiny.
The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.
That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc..s own mid-September bankruptcy filing.
Saving the System
Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. He maintained during Wednesday.s hearing that the New York bank had to buy the insurance contracts, known as credit default swaps, to keep AIG from failing, which would have threatened the financial system.
The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed.s subsequent attempt to cover up buyout details and who benefited.
By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn.t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.
This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed.s bailout programs. It.s as though the New York Fed was a black-ops outfit for the nation.s central bank.
The New York Fed is one of 12 Federal Reserve Banks that operate under the supervision of the Federal Reserve.s board of governors, chaired by Ben Bernanke. Member-bank presidents are appointed by nine-member boards, who themselves are appointed largely by other bankers.
As Representative Marcy Kaptur told Geithner at the hearing: "A lot of people think that the president of the New York Fed works for the xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />U.S. government. But in fact you work for the private banks that elected you."
And yet the New York Fed played an integral role in the government.s bailout of banks, often receiving surprisingly free rein to act as it saw fit.
Consider AIG. Let.s take Geithner at his word that a failure to resolve the insurer.s default swaps would have led to financial Armageddon. Given the stakes, you might think Geithner would have coordinated actions with then-Treasury Secretary Henry Paulson. Yet Paulson testified that he wasn.t in the loop.
"I had no involvement at all, in the payment to the counterparties, no involvement whatsoever," Paulson said.
Fed Chairman Bernanke also wasn.t involved. In a written response to questions from Representative Darrell Issa, Bernanke said he "was not directly involved in the negotiations" with AIG.s counterparty banks.
You have to wonder then who really was in charge of our nation.s financial future if AIG posed as grave a threat as Geithner claimed.
Questions about the New York Fed.s accountability grew after Geithner on Nov. 24, 2008, was named by then-President- elect Barack Obama to be Treasury Secretary. Geither said he recused himself from the bank.s day-to-day activities, even though he never actually signed a formal letter of recusal.
That left issues related to disclosures about the deal in the hands of the bank.s lawyers and staff, rather than a top executive. Those staffers didn.t want details of the swaps purchase to become public.
New York Fed staff and outside lawyers from Davis Polk & Wardell edited AIG communications to investors and intervened with the Securities and Exchange Commission to shield details about the buyout transactions, according to a report by Issa.
That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself.
Later, when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: "I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals -- too many counterparties, too many lawyers and advisors, too many people from AIG -- to keep a determined Congress from the information."
Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark.
This belies the culture of secrecy obviously pervasive within the New York Fed. Committee Chairman Edolphus Towns noted during the hearing that the bank initially refused to disclose even the names of other banks that benefited from its actions, arguing this information would somehow harm AIG.
.Penchant for Secrecy.
"In fact, when the information was finally released, under pressure from Congress, nothing happened," Towns said. "It had absolutely no effect on AIG.s business or financial condition. But it did have an effect on the credibility of the Federal Reserve, and it called into question the Fed.s penchant for secrecy."
Now, I.m not saying Congress should be meddling in interest-rate decisions, or micro-managing bank regulation. Nor do I think we should all don tin-foil hats and start ranting about the Trilateral Commission.
Yet when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.
David Reilly is a Bloomberg News columnist. The opinions expressed are his own.
When "Conspiracy Theory" becomes Mainstream: Maybe A Secret Banking Cabal Does Run The World After All
Bloomberg reports on the New York Fed's backdoor bailoutby Paul Joseph Watson -- Global Research, January 31, 2010 Prison Planet - 2010-01-29
In another measure of how what the establishment labels "conspiracy theory" is quickly becoming mainstream, Bloomberg News carries a story today acknowledging that those derided as "crazy" for warning that the world is run by a secret banking cabal have largely been proven right in light of the AIG cover-up.
"The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week.s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all," writes Bloomberg.s David Reilly [January 29, 2010].
"Wednesday.s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials." Reilly goes on to describe how the New York Fed conducted a backdoor bailout (or in plainer terms a wholesale looting of the taxpayer) of banks like Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, and then sought to keep it secret from the public. Reilly also highlights another telling quote by Representative Marcy Kaptur during the hearing on Wednesday, when she told Geithner, "A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you."
Reilly savages Tim Geithner.s denial of any involvement in the scandal and concludes with stating, "When unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil."
As we have constantly emphasized, as the global government and the financial takeover accelerates, it.s becoming harder and harder for the elite to hide the true intention of what they are doing, which is centralizing power into fewer hands, destroying sovereignty and creating a one world order run by an unelected, undemocratic authoritarian system.
So whereas "conspiracy theorists" were once sidelined as paranoid kooks, as more and more of what they warned about comes to fruition, they gain more credibility and the establishment finds it more difficult to neutralize what they are saying by means of character assassination.
The Bloomberg writer.s admission that the "conspiracy theorists" were probably right reminds us of former Clinton advisor Dick Morris. appearance on Fox News last year, when he pointed out that people who have been sounding the alarm bells over a global government takeover for decades have also been vindicated.