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According to the Organization for Economic Cooperation and Development's latest health care rankings of the 34 most developed nations in the world, the United States ranks dead last in male life expectancy.

We also rank near the very bottom in preventing premature death, infant mortality, total health care coverage, number of practicing doctors, and preventing heart disease deaths.

But, here's some good news (at least for those fans of Americanized health care): our world rankings might soon improve.

Not because we're radically changing our privatized system that puts profits ahead of people's lives. But because banksters in Europe are forcing several nations that rank ahead of us to ditch their national public health care systems, and replace them with more privatized (and profitable) American-style health care systems.

And, despite what conservatives say about how the American health care system is the envy of the rest of the world, those Europeans who are watching banksters re-make their public health care systems are outraged.

On Sunday, protests swept across Spain, with thousands of doctors, nurses, and health professionals demonstrating against new conservative austerity measures that will privatize more than 40 public hospitals and care centers.

Spain, like Greece, is indebted to the very foreign banksters who crashed their economy. And rather than telling those foreign banksters to take a hike like Iceland did, Spain's austerity-happy government is paying off the banksters by taking money from working people through cutting socials services like health care.

Spain's Prime Minister Mariano Rajoy argues the health care reforms will save his nation more than $9 billion this year, which can then be given to the banksters.

But, as one protesting nurse, Emilia Becares, told France 24 News, "There is no study that shows that privatising the management of hospitals leads to lower costs. This privatisation hurts patients' health care to benefit other interests."

Those "other interests" are, of course, the banksters and the for-profit healthcare hustlers.

The United States proves Emilia right. Privatization here has produced the highest health care costs of anywhere else in the developed world; the United States spends far more money on health care than any other OECD nation. And, although the banksters and the health care hustlers are making a fortune, average working people are dying at rates that shock the rest of the world: we rank near the bottom in health care outcomes.

So while conservative technocrats in charge of Spain are willing to use health care privatization to solve their short-term deficit woes, doing so will only make them worse over the long term.

Soon, Spanish hospitals, run for a profit, will decide if prescribing certain treatments and medical tests will boost or cut their quarterly profit goals. Spanish citizens, who used to have a right to health care, will now have to haggle with privatized corporate death panels that are more focused crunching numbers than saving lives.

As prices go up, preventative care will decline. There will be fewer visits to doctors. And the overall health of the population will plummet with the moneychangers in charge.

This means that over the long term the cost of healthcare to Spain will go up.

This is what Greece is now dealing with, since their public health care system was ripped apart by the banksters in 2011. Prior to the crisis, Greeks enjoyed complete universal health care. But when the banksters shook down the entire nation, they targeted the health care system, and told unemployed Greeks that they now have to pay for healthcare out of pocket. And if they don't have the money, then...well...too bad.

Greek doctor, Kostas Syrigos, told the New York Times about a woman with a tumor the size of an orange that had broken through her skin because she couldn't afford to see a doctor after the austerity cuts to health care.

Dr. Syrigos said, "Things like that are described in textbooks, but you never see them because until now; anybody who got sick in this country could always get help...In Greece right now, to be unemployed means death."

Sick and unemployed Americans face the same fate. According to a 2009 Harvard study, 45,000 Americans die every year because they don't have health insurance. And half of all bankruptcies in America are due to medical bills.

Most of the public health care systems across Europe were created after World War II, as the people understood that they needed to rebuild together, and should at the very least be providing free health care to each other, too.

But, the United States, triumphant after World War II, never learned this lesson. Instead, we handed the care of our citizens off to corporations and billionaires, and are today paying dearly for it with budget-busting health care costs, sick populations, and far too many premature deaths. But our healthcare banksters, like the CEOs of United Healthcare, are literally billionaires.

And those models for health care reform across the Atlantic are now disappearing one-by-one – the latest victims of conservatives and their bankster austerity programs. But at least in places like Greece and Spain, the people are putting up a fight against these profiteers. And it's a fight that's long overdue in America.

We should all ask ourselves why is it that thousands are taking to the streets to defend their public health care systems in Europe, but not once has there been a legitimate rally in America to defend our privatized health care system that kills tens of thousands of American every single year. Deep down inside, we know we're getting ripped off. Just like the Greeks and the Spaniards know they're getting ripped off.

Let's hope that the decision banksters made to target universal health care rights in Europe will inspire a new struggle in the United States that affirms we are indeed our brothers' and our sisters' keepers.

By James F. Tracy

In October a debate ensued on Memory Hole and at Project Censored regarding Alex Jones and Infowars’ legitimacy and trustworthiness as news sources. The exchange began when Nolan Higdon presented various predictions made by Jones that were not borne out by subsequent events.

Yet it looks as if the gloom and doom-style Jones has been taken to task for is being appropriated and given a “liberal” spin by Thom Hartmann–also a longtime proponent anthropogenic global warming theory. The progressive-left author and talk show host has begun touting his new conspiracy-flavored book, The Great Crash of 2016: The Plot to Destroy America–and What We Can Do to Stop It.

Hartmann and Jones are well-acquainted, having on occasion simulcast their weekday radio programs where they once expressed mutual appreciation of each others’ views and work. For example, on April 15, 2009 the two personalities co-hosted a remarkable hour-length segment in which they generally found common ground on numerous issues–civil liberties, the financial industry’s gigantic influence over federal governance, the growing militarized police state, and even local militias.

Indeed, at one point during the above referenced broadcast Hartmann remarked, “I think that actually as Americans, Alex, who believe in the Constitution and the Bill of Rights, there’s more that unites [libertarians and progressives] than divides us” (Alex Jones and Thom Hartmann 3/4 at 8:55).

Yet in subsequent years, the two personalities drifted apart. As the reality of Obama’s presidency and shifting political winds set in Hartmann went on to host a program at RT where he increasingly disparaged Jones and the Truth movement, and from this perch even seemed to vie for a post at MSNBC.

Unlike Jones’ hillbilly-meets-DARPA-whistleblower rants, Hartmann consciously plays the bespectacled scholarly-type, appealing to his self-styled dispassionate and rational progressive audience. Appearing on Democracy Now! this week, the liberal talker’s sturm und drang economic forecast at first glance resembles not only Jones, but also Texas Congressman Ron Paul, libertarian talk show host Peter Schiff and “Father of Reaganomics” Paul Craig Roberts. Among others, these economic analysts argue that the private Federal Reserve bank’s incessant and fervent money printing will inevitably lead to and intensify the coming economic cataclysm.

Hartmann appears to “borrow” from these observers by arguing that such a crash is indeed unavoidable. Yet in a clear sleight of hand the pedantic doomsayer completely evades the problem of monetary profligacy by suggesting how the Obama administration and Fed are earnestly staving off the final reckoning. Is this White House-inspired (or perhaps sponsored) propaganda? Here are some outtakes and reinterpretations from the recent interview below (beginning at about 2:05).

“Obama was successful in the first few months of his administration by putting enough of a band aid on it that they’re holding this back with bailing wire and bubble gum.”

[Translation: The Federal Reserve (US Taxpayer) shoveled untold trillions to the bankers and corporatists to temporarily prop up the economy with another gigantic stock market bubble, yet the Fed can't print forever.]

Hartmann: “But, Bush had hoped—he saw this coming, the Bush administration—had hoped [sic] that he could wait until November 2008 so that it would be after the election so that it wouldn’t hurt the Republican candidate. He was unsuccessful.”

[Translation: The two party system is continuously at odds and competing to represent the popular will. There’s absolutely no chance that such a crash was engineered by Wall Street financiers to ensure an Obama-Biden victory. Or, “free markets capitalism” inevitably leads to dire crises.]

Hartmann: “The Obama administration is now—because they’re not doing the real structural changes necessary—they’re hoping they can push it off until 2016 and that’s why we chose that date [in the book’s title]. Now there’s an enormous amount of effort in our government and in the Fed to try to hold this off ‘til after the election of 2016. Whether they’re successful or not I don’t know [sic]. This literally could happen overnight.”

[Translation: We are doomed! Again, any conflict worthy of public attention takes place directly on the political stage. The good guys—you know, the Democratic Party, the Federal Reserve, and the prevailing economic scheme controlled by central banking--aren't fleecing taxpayers and the economic system but rather saving them.]

Some representatives of the “fanatical right wing” that progressives so readily point to in arguments about the deficit and economy argue that such a crash is in fact being intensified by the careless monetary policies of the Fed, which continue and intensify with the tacit approval of the US Congress and Obama administration. In fact, the federal debt has grown seventy percent under Obama–from $10 to $17 trillion. Such a reckless monetary policy is tailor-made for politicians who cannot resist a money-printing press that allows them to “kick the can down the road,” while leaving Americans with the ever-expanding tab.

Hartmann attempts to commandeer the economic thesis long-articulated by libertarians and their advocacy for “sound money,” while tempering it for those who hang on every word uttered by Paul Krugman. The upshot of Hartmann’s (and the overall Keynesian) version, however, is that profligate monetary policy is not the cause of the present problem, but remains to a large degree its solution. Nevermind the fact that America’s industrial base has been thoroughly gutted.

For example, Hartmann argues how the buildup to the next disaster is a replay of the prelude to the 1929 crash and, moreover, how both are rooted in “conspiracies” and “plots” developed by “economic royalists,” “banksters,” and “globalism,” against which the federal bureaucracy (FDR and his postwar successors) wages a valiant struggle.

Yet Hartmann’s sensationalism doesn’t end there. He goes on to reference his previous anthropogenic  climate change propaganda, describing the deathly carbon-based greenhouse gases destined to do us all in should they be allowed to increase even minutely over the next several decades. But wait! The scenario is even more dire. According to Hartmann (at around 12:35 in the DN! interview video above), such apocalyptic climate change could take place almost overnight, and is something the (some would argue fraudulant) United Nations Intergovernmental Panel on Climate Change “is not talking about.”

“It’s a very significant stressor,” Hartmann somberly informs Goodman in the November 12 interview. “Scientists [and] people are hysterical or very concerned” about the imminent release of

trillions of tons of methane hydrate–methane frozen up in ice, in the arctic and around continental shelves. If that melts, then there will be a sudden global warming. And when you look at the five past extinctions on planet earth every single one was triggered by one of these methane releases.

This will come to pass unless, of course, we can drastically reform our behavior and energy consumption … and assuming the forthcoming economic crash doesn’t get us first, or both don’t hit simultaneously.

But, hey, whoever said that a talk show host should be held accountable for making extravagant claims and suggesting that the modern situation is almost completely hopeless? Further, is the promotion of unfounded conspiracy theories and historical revisionism really all that bad? If you’re championing the “correct” political stances then negativity appears to become prophetic, shadowy plots constitute accurate economic and historical analysis and projections, and UN-distilled interpretations of climate science and “green” advocacy literature are embraced as genuine climatological research. Taken as a whole, Thom Hartmann delivers the entire package in an absolute war on your mind that is without parallel.

Author’s  Note

I receive numerous questions from readers about our economic situation and the condition of civil liberty.

There is no way I can answer so many inquiries, and no need. I have written two books that provide the answers, and they are inexpensive. I have done my job. It is up to you to inform yourself. Kindle Reader software is available as a free online download that permits you to read ebooks in your own web browser.

My latest, The Failure Of Laissez Faire Capitalism And Economic Dissolution of the West , is available as an ebook in English as of March 2013 from Amazon.com and from Barnes&Noble.

My book is endorsed by Michael Hudson and Nomi Prims and has a 5 star rating from Amazon reviewers (as of March 23, 2013). Pam Martens’ review at Wall Street On Parade is available here

Libertarians who have not read the book have had an ideological knee-jerk reaction to the title. They demand to know how can I call the present system of crony capitalism laissez faire. I don’t. The current system of government supported crony capitalism is the end result of a 25-year process of deregulation.

Deregulation did not produce libertarian nirvana. It produced economic concentration and crony capitalism.

Amazon provides as a free read the introduction by Johannes Maruschzik to the German edition. Below is my Introduction to my book.

Paul Craig Roberts, March 27, 2012

Not only has your economy been stolen from you but also your civil liberties. My coauthor Lawrence Stratton and I provide the scary details of the entire story in The Tyranny of Good Intentions ^[5]. In the US law is no longer a shield of the people against arbitrary government. Instead, law has been transformed into a weapon in the hands of the government.

Josie Appleton documents that in England also law has been turned into a weapon against the people. http://www.spiked-online.com/site/printable/13420/ ^[6] Anglo-American law, the foundation of liberty and one of the greatest human achievements, lies in ruins.

Libertarians think that liberty is a natural right, and some Christians think that it is a God-given right. In fact, liberty is a human achievement, fought for by Englishmen over the centuries. In the late 17th century, the achievement of the Glorious Revolution was to hold the British government accountable to law. William Blackstone heralded the achievement in his famous Commentaries On The Laws Of England, a bestseller in pre-revolutionary America and the foundation of the US Constitution.

In the late 20th century and early 21st century, governments in the US and Great Britain chafed under the requirement that government, like the people, is ruled by law and took steps to free government from accountability to law.

Appleton says that the result is a “tectonic shift in the relationship between the state and the citizen.” Citizens of the US and UK are once again without the protection of law and subject to arbitrary arrests and indictments or to indefinite detention in the absence of indictments.

In the US, citizens can be detained indefinitely and even executed without due process of law. There is no basis in the US Constitution for these asserted powers. The unconstitutional powers exist only because Congress, the judiciary and the American people have accepted the lie that the loss of civil liberty is the price paid for protection against terrorists.

In a very short time the raw power of the state has been resurrected. Most Americans are oblivious to this outcome. As long as government is imprisoning and killing without trials demonized individuals whom Americans have been propagandized to fear, Americans approve. Americans do not understand that a point is reached when demonization becomes unnecessary and that precedents have been established that revoke the Bill of Rights.

If you are educated by these two books, you will be better able to understand what is happening and, thus, you will be in a better position to survive what is coming.

Introduction to The Failure of Laissez Faire Capitalism and Economic
Dissolution of the West: Towards a New Economics for a Full World

The collapse of the Soviet Union in 1991 and the rise of the high speed Internet have proved to be the economic and political undoing of the West. “The End Of History” caused socialist India and communist China to join the winning side and to open their economies and underutilized labor forces to Western capital and technology. Pushed by Wall Street and large retailers, such as Wal-Mart, American corporations began offshoring the production of goods and services for their domestic markets. Americans ceased to be employed in the manufacture of goods that they consume as corporate executives maximized shareholder earnings and their performance bonuses by substituting cheaper foreign labor for American labor. Many American professional occupations, such as software engineering and Information Technology, also declined as corporations moved this work abroad and brought in foreigners at lower renumeration for many of the jobs that remained domestically. Design and research jobs followed manufacturing abroad, and employment in middle class professional occupations ceased to grow. By taking the lead in offshoring production for domestic markets, US corporations force the same practice on Europe. The demise of First World employment and of Third World agricultural communities, which are supplanted by large scale monoculture, is known as Globalism.

For most Americans income has stagnated and declined for the past two decades. Much of what Americans lost in wages and salaries as their jobs were moved offshore came back to shareholders and executives in the form of capital gains and performance bonuses from the higher profits that flowed from lower foreign labor costs. The distribution of income worsened dramatically with the mega-rich capturing the gains, while the middle class ladders of upward mobility were dismantled. University graduates unable to find employment returned to live with their parents.

The absence of growth in real consumer incomes resulted in the Federal Reserve expanding credit in order to keep consumer demand growing. The growth of consumer debt was substituted for the missing growth in consumer income. The Federal Reserve’s policy of extremely low interest rates fueled a real estate boom. Housing prices rose dramatically, permitting homeowners to monetize the rising equity in their homes by refinancing their mortgages.

Consumers kept the economy alive by assuming larger mortgages and spending the equity in their homes and by accumulating large credit card balances. The explosion of debt was securitized, given fraudulent investment grade ratings, and sold to unsuspecting investors at home and abroad.

Financial deregulation, which began in the Clinton years and leaped forward in the George W. Bush regime, unleashed greed and debt leverage. Brooksley Born, head of the federal Commodity Futures Trading Commission, was prevented from regulating over-the-counter derivatives by the chairman of the Federal Reserve, the Secretary of the Treasury, and the chairman of the Securities and Exchange Commission. The financial stability of the world was sacrificed to the ideology of these three stooges that “markets are self-regulating.” Insurance companies sold credit default swaps against junk financial instruments without establishing reserves, and financial institutions leveraged every dollar of equity with $30 dollars of debt.

When the bubble burst, the former bankers running the US Treasury provided massive bailouts at taxpayer expense for the irresponsible gambles made by banks that they formerly headed. The Federal Reserve joined the rescue operation. An audit of the Federal Reserve released in July, 2011, revealed that the Federal Reserve had provided $16 trillion–a sum larger than US GDP or the US public debt–in secret loans to bail out American and foreign banks, while doing nothing to aid the millions of American families being foreclosed out of their homes. Political accountability disappeared as all public assistance was directed to the mega-rich, whose greed had produced the financial crisis.

The financial crisis and plight of the banksters took center stage and prevented recognition that the crisis sprang not only from the financial deregulation but also from the expansion of debt that was used to substitute for the lack of growth in consumer income. As more and more jobs were offshored, Americans were deprived of incomes from employment. To maintain their consumption, Americans went deeper into debt.

The fact that millions of jobs have been moved offshore is the reason why the most expansionary monetary and fiscal policies in US history have had no success in reducing the unemployment rate. In post-World War II 20th century recessions, laid-off workers were called back to work as expansionary monetary and fiscal policies stimulated consumer demand. However, 21st century unemployment is different. The jobs have been moved abroad and no longer exist. Therefore, workers cannot be called back to factories and to professional service jobs that have been moved abroad.

Economists have failed to recognize the threat that jobs offshoring poses to economies and to economic theory itself, because economists confuse offshoring with free trade, which they believe is mutually beneficial. I will show that offshoring is the antithesis of free trade and that the doctrine of free trade itself is found to be incorrect by the latest work in trade theory. Indeed, as we reach toward a new economics, cherished assumptions and comforting theoretical conclusions will be shown to be erroneous.

This book is organized into three sections. The first section explains successes and failures of economic theory and the erosion of the efficacy of economic policy by globalism. Globalism and financial concentration have destroyed the justifications of market capitalism. Corporations that have become “too big to fail” are sustained by public subsidies, thus destroying capitalism’s claim to be an efficient allocator of resources. Profits no longer are a measure of social welfare when they are obtained by creating unemployment and declining living standards in the home country.

The second section documents how jobs offshoring or globalism and financial deregulation wrecked the US economy, producing high rates of unemployment, poverty and a distribution of income and wealth extremely skewed toward a tiny minority at the top. These severe problems cannot be corrected within a system of globalism.

The third section addresses the European debt crisis and how it is being used both to subvert national sovereignty and to protect bankers from losses by imposing austerity and bailout costs on citizens of the member countries of the European Union.

I will suggest that it is in Germany’s interest to leave the EU, revive the mark, and enter into an economic partnership with Russia. German industry, technology, and economic and financial rectitude, combined with Russian energy and raw materials, would pull all of Eastern Europe into a new economic union, with each country retaining its own currency and budgetary and tax authority. This would break up NATO, which has become an instrument for world oppression and is forcing Europeans to assume burdens of the American Empire.

Sixty-seven years after the end of World War II, twenty-two years after the reunification of Germany, and twenty-one years after the collapse of the Soviet Union, Germany is still occupied by US troops. Do Europeans desire a future as puppet states of a collapsing empire, or do they desire a more promising future of their own?

In today's On the News segment: There is a new effort in Washington to loosen Wall Street regulations and water down the 2010 Dodd Frank Act is getting bipartisan support in Congress; Walmart is illegally targeting employees that took part in the Black Friday protests last year; Culinary workers in Las Vegas are standing up to Casino owners with acts of civil disobedience; and more.

Thom Hartmann here – on the news… 

You need to know this. Despite gridlock in Washington, a new effort to loosen Wall Street regulations and water down the 2010 Dodd Frank Act is getting bipartisan support in Congress.  Republican Representatives Patrick Henry and Scott Garrett are backing the measure, as is Democratic Rep. Gwen Moore.  Moore justified her support by saying the plan is only meant to relieve regulatory burdens on companies that do business with big banks.  Another democrat, Representative Jim Himes, even wants to roll-back Dodd Frank, and stick taxpayers with the bill, should the derivative market implode again.  But some Democrats still understand the dangers of banks-gone-wild, and are fighting for tougher regulations to protect us all.  Less than a week ago, Senator Carl Levin issued a scathing report on the devastation JP Morgan caused with risky multibillion-dollar derivative trades.  Levin said, “It is incredible that less than a week after new JPMorgan Whale hearings detailed how the bank's London office piled up risk, hid losses, and dodged regulatory oversight, that some House members are again supporting the weakening of derivative safegaurds.”  It's only been five years since the banksters crashed our economy by gambling with derivatives, and the modest legislation we've enacted is meant to prevent another economic meltdown.  Representative Alan Grayson, a leading voice for financial reform, criticized his colleagues for considering putting our nation at risk again. He said, “the road to hell is paved with these bills.”  We should be strengthening regulations on Wall Street, not giving banksters another free pass to gamble with our economic future.  Call Congress today and tell them they must stop the next derivatives debacle before it's too late. 

In screwed news... On Black Friday last year, Walmart employees made national headlines by staging a walkout to protest low-wages, unsafe working conditions, and anti-union management practices.  And now it appears the mega-retailer is illegally targeting employees that took part in the protest.  According to a new report by The Nation, The National Labor Relations Board has issued a complaint alleging that four companies, which are involved in staffing and managing Walmart's largest distribution center, have repeatedly threatened and punished warehouse workers for taking part in union activities.  The allegations include canceling employee breaks, increasing work hours, telling workers they are under surveillance, and even terminating six individuals for participating in pro-union activites.  As the NLRB was weakened by a recent Supreme Court ruling, that agency has been slow to process complaints and dole out punishments for Walmart's illegal practices. One employee told The Nation, “they're not terribly afraid to break labor law, because there's not really a penalty for doing so.”  Because Republicans continue to block agency nominations – effectively neutering the NLRB, Walmart workers shouldn't expect the agency to provide more help any time soon.  But employees have a legal right to demand higher wages and better working conditions, and they must not give up on this important fight.

In the best of the rest of the news... 

Culinary workers in Las Vegas are standing up to Casino owners with acts of civil disobedience.  Ninety-eight protestors were arrested yesterday for blocking traffic during a protest outside of the Cosmopolitan Hotel and Casino.  The workers have been in contract negotiations with casino management for about two years, demanding an agreement that outlines wages, benefits, and job security.  According to the Associated Press, the two-year-old casino is one of only a few in Las Vegas that is not unionized, despite the majority of workers saying they want representation. As protestors blocked the streets for about an hour, they chanted, “If we don't get no contract, you don't get no peace.”  Representatives of Deutsche Bank, that owns the casino, said they are stalling because they intend to sell the resort, and don't want to be burdened with a union contract. Any sale worth making, and any casino worth buying, can afford to pay it's workers a living wage.  Perhaps they should consider that it will be even more difficult to sell the casino if they can't get employees to work there.  Unions are under attack throughout our nation, and this is one more battle in the fight to preserve collective bargaining. We'll have to wait and see how this turns out. Stay tuned. 

In June of last year, Barclays Bank in the UK was fined 290 million Euros for it's role in the international Libor rate-rigging scandal.  So, it stands to reason that the bank executives don't deserve a reward for their actions... but yesterday, that's exactly what they got.  According to The Guardian, Barclays attempted to “bury” the news of bankster bonuses by announcing it the same day much of the city was distracted with news on a city budget.  But, reports of the 38.5 million euro payouts did not go unnoticed. The bank did not respond to claims it tried to bury the news of massive bonuses, but a person close to the company said the announcement date was selected back in December. John Hunter, of the UK Shareholder Association, said “society's first reaction is that bankers are a bunch of sleazeballs, and this makes them look even sleazier.”  It's bad enough that banksters are getting rewarded for lying and manipulating the financial markets, but it's even worse that they think no one will notice.  

And finally…  Talk about a return on investment. Reuters reports that an unnamed New York family bought a $3 dollar bowl at a yard sale, and they just sold the 1,000 year-old Chinese artifact at auction for $2.25 million dollars.  Apparently the family had the bowl displayed on a mantlepiece, and only learned of it's value after speaking with experts.  A Sotheby's representative said the piece is almost identical to one that's been featured in the British Museum for over 60 years.  So, next time you consider getting rid of a few things around the house, you may want to look a little more carefully at what you sell. One man's trash in another man's treasure.  And in this case, that treasure happened to be worth over $2 million dollars. 

And that’s the way it is today – Thursday, March 21, 2013. I’m Thom Hartmann – on the news. 

As the Eurozone financial crisis continues to plague the island nation of Cyprus, its citizens are receiving a crash course in how an out-of-control banking industry and its corrupt banksters can bring an entire economy to its knees.

The Cypriot economy has ground to a halt, thanks to massive losses that its oversized banking sector sustained from investments in Greece and a deep recession.

Banks in Cyprus have been shut all week, and are not due to reopen until next Tuesday at the earliest, to try to prevent a run on the banks.

When all is said and done, and if the Cypriot economy ever recovers from this financial collapse, Cypriots will hopefully have a new-found awareness of the banks, and implement better oversight and regulation over their financial industry.

That’s exactly what they did in Iceland, and its working wonders for the small island nation.

In 2008, when the global financial crisis began taking down economies one by one, Iceland was hit incredibly hard.

All three of the country’s major privately owned banks collapsed, and Iceland’s stock exchange, the OMX Iceland 15, plummeted. Pension funds were slashed, and businesses were wiped out.

Iceland could have responded to that financial crisis the same way that the United States did, and come up with a massive bailout package to save the banks, and let their crimes go unpunished.

Or, Iceland could arrest the banksters that brought down the economy, bail out those most affected by the collapse – the average Icelanders themselves – and begin to rebuild the financial industry.

Iceland chose the latter. Jail the bums.

In December of 2008, the Icelandic parliament passed a bill establishing an Office of the Special Prosecutor.

The job of this new office was to investigate suspected criminal conduct leading up to, in connection with, or in the wake of the banking crisis, and to follow up these investigations by bringing criminal charges against those responsible for the crisis.

Since the Office of the Special Prosecutor was created, Iceland has been rounding up their banksters one after another.

In March of 2011, Robert and Vincent Tchenguiz were arrested in London, as part of the Special Prosecutor’s Office investigation into the collapse of the Icelandic bank Kaupthing.

In December of last year, a Reykjavik court sentenced two of the top executives at Icelandic bank Glitnir to jail time.

And just yesterday, nine more banksters from the Iceland bank Kaupthing were indicted and charged for their roles in orchestrating five large-scale market manipulation conspiracies.

These are only a few of the arrests that have been made, as Iceland cleans up its banking industry, and holds its own corrupt banksters accountable for their actions in the 2008 financial collapse.

Meanwhile, here in the United States, the Wall Street banksters that brought our economy to its knees are still sitting pretty in their corner offices or retired with hundreds of millions of dollars of your money.

Just look at Jamie Dimon, CEO of JPMorgan.

In a recent report on JPMorgan’s monumental multi-billion dollar trading loss, Dimon is alleged to have criminally withheld from regulators key details about the bank’s daily losses.

And numerous other reports have suggested that Dimon may have been complicit in JPMorganChase engaging in additional criminal and/or unethical activity.

But Dimon and the rest of his fat-cat buddies are doing just fine today, continuing to rake in multi-million dollar bonuses or golden-parachute retirements.

And Dimon’s actions pale in comparison to executives at the HSBC bank, who recently admitted in court to allowing Mexican and Colombian drug cartels to launder nearly $900 million through their bank. If you'd done that, you'd be in jail for the rest of your life, but these are rich white banksters who give millions to politicians and political parties.

Executives of the banks also admitted to using various schemes to move around hundreds of millions of dollars to nations subject to trade sanction, including Iran, Cuba and Sudan. And, reports suggest that some of this money made its way into the hands of terrorist organizations. If you'd done that, you might be in Guantanamo. But, then again, you're not a bankster.

Despite these egregious criminal actions, the United States has yet to jail a single HSBC bankster.

So, what’s the bottom line to all of this?

Eventually, when Cyprus’ economy recovers, the Cypriot government will have a choice to make.

They can choose to let their banksters go free, and risk another financial meltdown like we in the United States have chosen to do. Or they can take the Icelandic approach, crack down on corruption in their financial industry, and prosecute and jail those responsible for causing and worsening the collapse.

At the start of the 2008 worldwide economic collapse, Iceland was in worse shape financially than just about every country in the world.

Today, Iceland is home to one of the fastest growing economies in the world.

They got from there to here by throwing their banksters in jail.

Hopefully Cyprus will take a page out of the Icelandic playbook, and lock-up the banksters.

And America should do the same thing, too!

In today's On the News segment: The bill the Senate is voting on next month to strengthen gun regulations could turn into one that actually enhances guns rights; nearly every state in our nation has reduced funding for public universities; the Westboro Baptist Church has a new neighbor; and more.

TRANSCRIPT:

Thom Hartmann here – on the news...

You need to know this. Next month, the Senate will vote on gun control legislation, but provisions that the majority of voters support won't be in the bill. Yesterday, California Senator Diane Feinstein's assault weapons ban was pulled from the legislation, despite a Pew Research poll showing 55% of Americans support the ban. Senate Majority Leader Harry Reid said he will allow the weapons ban to be offered as an amendment, but he will only introduce one measure, which increases the charges and penalties for gun trafficking. As Republicans would mount fierce opposition to the ban on military-style weapons, Mr. Reid said he felt sympathy for Diane Feinstein, but that her bill did not have the 60 votes needed to prevent a filibuster. The final bill may also include provisions to strengthen background checks, but it could be weighed down with pro-gun amendments from the other side of the isle. According to the New York Times, if that happens, the bill meant to strengthen gun regulations could turn into one that actually enhances guns rights. In an interview with reporters, Feinstein said, "How many assault weapons do you need circulating? To have these mass killings is such a blight on everything that America stands for." So, the gun lobby wins again, and modest legislation, which would help keep military-style weapons out of criminals' hands, can't even be put up for a vote. The American people deserve to know which side their representatives stand on. Either Senators are with the majority of Americans that want these weapons off the street, or their with the gun lobby. As President Obama said in his State of the Union, "they deserve a vote," and now is the time for that vote to happen.

In screwed news... In the five years since the 2008 financial meltdown, nearly every state in our nation has reduced funding for public universities. According to a new report from the Center on Budget and Policy Priorities, only North Dakota and Wyoming are investing in our future leaders at the same level they were before the Great Recession. The Think Progress Blog points out that some states have made these drastic cuts to education funding only to preserve tax breaks, leaving students on the hook for the skyrocketing tuition costs. Students in Arizona have been hit the hardest, with a 78% increase in college costs just since 2008 – all to preserve a $538 million corporate tax break enacted in 2011. So, while corporations in that state enjoy a 4.9% tax rate, students suffer with closed campuses, eliminated courses, inadequate school resources, and they pay nearly double the cost to obtain a degree. This is immoral... and extremely unwise. Our nation is 16th in the world at educating our future leaders, and huge cuts and ballooning tuition costs will only push us down further on that list. We must start investing in an educated workforce. If we're supposed to be the greatest country in the world, why don't we guarantee the right to a world-class education? This has to change.

In the best of the rest of the news...

Senator Elizabeth Warren is a warrior for the middle class. And in between taking on the banksters, and calling Republicans out for the pro-1% policies, Warren is also working on a book to document the battles she's fought on behalf of working people of our nation. In an interview with the Associate Press on Tuesday, Sen. Warren said the new book, called "Rigged," will tell the story of her time on a Congressional Oversight Panel, how she helped set up the Consumer Financial Protection Bureau, and how she ran a successful senate campaign to defeat Scott Brown. Warren said, "the title refers to how the economic system is too often rigged against families that work hard and play by the rules. The story is national, but it's also personal." Leave it to Senator Elizabeth Warren... not only does she fight everyday for the middle class, but manages to find time to document the story.

Next time you hear the Republican talking point about the U.S. having the highest corporate tax rate in the world, remember this: In 2012, some of our nation's largest corporations actually got huge refunds. For instance, General Electric made $81 billion dollars in profits last year, yet received a whopping $3 billion dollar tax refund. Bank of America is another tax-dodger, as the company earned over $75 billion last year, yet wrote off so many legal settlements the company was eligible for a tax refund of over $1 billion. It is a privilege to do business in our nation, and to make huge profits off of hard-working American citizens, yet we're actually paying corporations to be here. If Republicans are so worried about the debt and the deficit, they should be putting an end to this corporate welfare. If companies want to use our commons to make huge profits off our fellow citizens, let's demand they start paying their fair share.

And finally... The Westboro Baptist Church has a new neighbor. About six months ago, Aaron Jackson, a founding member of a charity organization called Planting Peace, bought the house directly across the street from the anti-gay group. The purchase is part of a new nonprofit he calls "Equality House." Mr. Jackson found out the house while playing around on Google Earth, and was struck with a brilliant idea. He said that as soon as he saw it was for sale he thought, "Oh my gosh, I could buy a house in front of the [Westboro Baptist Chuch]! And I'm going to paint that thing the color of the pride flag." And yesterday, that's exactly what he did. Out front of the newly-painted rainbow exterior, Mr. Jackson also flies the pride flag, and he is already working on the next steps in his fight for LGBT equality. Congrats to Aaron Jackson for standing up to Fred Phelps and his homophobic, hate group. In the words of Jesus, "love thy neighbor, as thy self." I wonder if that includes neighbors living in a rainbow covered house...

And that's the way it is today – Wednesday, March 20, 2013. I'm Thom Hartmann – on the news.

The news about the Cyprus banks has been on the radar screen recently.

Somehow, the most frequently asked question is what will Russian oligarchs do about it, because it’s them who have created an offshore world of their own there.

Will they seek new offshore havens? Get the money back to Russia? Stay in Cyprus and adapt to the new realities of life on the island? In fact, the oligarchs and their money are an issue of minor importance. It all brings more serious things in focus, like, for instance, the future of world banking system that had became sick a long time ago. The Cyprus events produce evidence the system is at death’s door… 

Now, about the signs testifying to the assertion.

First. The banking system has lost the makings of an entity sticking to market laws.  The last financial crisis has produced ample evidence of it. The banks displayed lack of vitality. If not for states lending a helping hand, there would have been no banks anymore, they would have all gone to the wall and vanished by now.  Buying out dubious bad debts, acquiring shares in capital stock, granting various stabilization loans, the US and Western Europe injected flows of money into the system.

The US has injected around two trillion dollars of taxpayers into the banking sector.  In fact, it was nothing else, but the nationalization of the largest financial bodies, the Wall Street topping the list. The banks nationalization in the United Kingdom was no less impressive.

True, the nationalizations in question have not been measures of strategic scope, but rather actions of tactical level.  Gradually the state has started to pull out of banking sector and the situation has by and large returned to what it was in 2007-2008.  Such state intervention was called “banking socialism” in the West. A taxpayer is being made accustomed to the idea it’s him who has to bail out large banks. Everybody knows the phrase “Too Big to Die”. It is addressed to Wall Street and London City. Still, the “banking socialism” appears to be too egregious against the background of comprehensive economic liberalism and stokes protest among 90% of people.

Second. For many centuries money-lenders have lobbied banking secrecy laws. It has always been a lynchpin of Western democracy and capitalist financial system.Nowadays the banking secrecy is vanishing in the hays. US financial regulators (first of all  the U.S. Securities and Exchange Commission), the US Justice Department and US Tax Services launched an attack against Switzerland, or its banks to be more precise. This country has always been known to be a bastion of banking secrecy. The attack boiled down to providing information on those who evaded paying taxes to the US government.

The struggle lasted for around three years. Switzerland gave up. The banking secrecy institute doesn’t exist anymore there.  The success has inspired the United States. Foreign Account Tax Compliance Act – FATCA went into effect on January 1 2013. Actually, it requires all banks in the world to be the agents of US Tax Services. The law is an attempt to establish a direct control by the United States over world banks and financial bodies.  It goes without saying, that if the attempt is a success, there will be no banking secrecy in the world anymore.

Third. Banks have stopped to make profits as loan granting institutions. It’s not a phenomenon taking place only during crisis, but rather a fact of everyday life in the days of what we call normal economic growth. The reason is simple.  The United States Federal Reserve System,  the European Central Bank, the Bank of England, the Bank of Japan let the printing press go in full swing after the last financial crisis. It had been considered to bea crime before. Now it is called “quantity alleviation”, sounds smart and nice to ear.

Money has become cheap and accessible. It cannot be expensive when the annual interest rates in the US and Japan are at zero level (0.25%).   Abundance leads to low interest rates for commercial banks. A profit from granting loans becomes an illusion. Banks become something hard to find a definition for instead of being institutions dealing with deposits and loans as they used to be. They convert into kind of transit-distribution entities rechanneling the production of printing presses into far away corners of the world to buy real assets. First of all, I mean undercover FBI activities in 2007-2011.

It has been mentioned many a time. Let’s remember the details. The Federal Reserve System gave out $16 trillion in loans to American and foreign banks in the given period of time.  According to the audit conducted in the summer of 2011, the loans were never included into the Federal System’s balance sheets. Besides, the loans were granted without the approval by Congress, as required by law. Finally, not a dime had been redeemed by the time of audit. The debts appear not to be paid back till now. Looks like colossal sums of money were directed to different parts of the world to buy assets that had abruptly lost values in the interests of the Federal System’s share-holders, that is the Rockefellers and the Rotchilds.  It’s like feast in time of plague. The banks failed to become deposit-lending institutions again.

Fourth. The latest events in Cyprus serve as final symptoms of lethal disease. World banksters (they are called this way for behaving more like gangsters)have lost any shame. They have stuck the paws into the pockets of clients, ignoring such “prejudices” as national and international law. From legal point of view, the introduction of taxes on bank deposits is an encroachment on the rights of clientele – the very same private property that should be protected at any cost as they have said so many times.  It’s not income taxes on deposits (a normal thing in many countries), but the partial confiscation of money that fully belongs to clientele according to the contracts between banks and customers. Nothing else but confiscation was meant   according to the order given by some murky structures of the European Union; the order of this kind could have been given only by global banksters.

The Cyprus confiscation brings something to mind. For instance, the confiscation of foodstuffs by Bolsheviks in the times of Civil War in Russia. Or the order by Franklin Delano Roosevelt in 1939 demanding all gold was to be given to the state by legal entities and individuals in a month.   Actually, it is banking Bolshevism what we are facing.  It has corresponding features.  One is ample financial flows from the state to banks; the other is the confiscation of deposits. It’s limited by Cyprus so far. But it’s just a probe to start with.

Banks lose confidence in the world. Nobody wants to deal with banksters of one’s own accord.  Is it the end of world banking system? I doubt it. People can me made deal with banks. Coercion is not excluded. There is too much Bolshevism in the behavior of contemporary banksters.  It brings to mind Financial Capital by Rudolf Hilferding, the book written half a century ago. Hilferding praised the bankers management skills that helped to establish the formation of a more stable “organized capitalism”. He saw little difference between this type of capitalism and socialism.  The kind of socialism Leon Trotsky Bronstein dreamed of. The system of internment camps.  There is a solid ground to believe the banksters have rushed to drastically reform world banking system to make it match the new world order.  New world order could be compared to “organized capitalism”. Or camp socialism. Whatever you prefer.

P.S.  Late on March 19 the news came the parliament of Cyprus defeated a controversial bailout proposal that would have taxed bank deposits. Still the need to drastically change the world banking system remains. Probably the attempts to impose this kind if tax will be repeated, if not in Cyprus, then in some other country. One way or another, the probe is launched. Now about the deposits. For centuries bankers have made fortune on deposits. The profit has been received thanks to interest rates. These days appear to be coming to the end. For instance, large Swiss banks started to introduce commissions for putting money in deposits. This example may be followed by bankers of other countries. The commission is actually a tax paid not to the state but to a private structure dealing with deposits and loans with government’s permission (license). No matter what happens in Cyprus, the world banking system is in for great shocks and unavoidable transformation.

The Attorney General of the United States made the following 2 statements within 48 hours:

• The president can assassinate American citizens on U.S. soil

• The big banks shouldn’t be prosecuted, as that would destabilize the economy

These statements may – at first glance – seem unconnected.  And the mainstream media is treating them as separate.

True, the government is hell-bent on keeping the giant banks afloat, even though virtually all independent economists, financial experts and bankers are calling for them to be broken up, and Americans overwhelmingly want the government to get tougher on prosecuting Wall Street fraud.

But there might be more to it then than that … and Holder’s statements may be intimately connected.

For example, the Department of Homeland Security, FBI, and other government agencies worked hand-in-hand with the big banks to violently crack down on the Occupy protests.

And what was Occupy protesting?  One of the core complaints of the Occupy protesters was that there are two systems of justice: the little guy gets thrown in jail for the smallest infraction, while banksters escape prosecution for their criminal fraud.  (Occupy also protested the fact that that the big banks got bailed out, while the rest of us got sold out.  And see this.)

In other words, it is exactly the Department of Justice’s policy of not prosecuting big bank crimes which was one of Occupy’s core complaints … and – in response – the federal government sent in the goons to crack heads and trash the free speech rights of the protesters.

This is not an isolated incident.

The big banks literally own the politicians.

For many years, the government has used anti-terror laws mainly to crush political dissent and to help the too big to fail businesses.

Asking questions about Wall Street shenanigans, speaking out against government policies, and protesting anything are all considered grounds for being labeled a “potential terrorist” by the government.  Whistleblowers are also being treated as terrorists.

Indeed, the government agency with the power to determine who gets assassinated is the same agency that is at the center of the “ubiquitous, unaccountable surveillance state aimed at American citizens.”

If this sounds like breathless fearmongering, please remember that the U.S. military now considers the American homeland to be a “battle zone” (and see this).

And the banking system is considered “critical infrastructure” by the Department of Homeland security.

Another Connection Between Big Banks and Drones

There is another connection between big banks and drones.

The big banks have a direct role in encouraging and financing war. And see this.

And Ron Paul noted in 2007:

Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny.

The big banks own the Federal Reserve.

Indeed, some say that all wars are really bankster wars.

Have no fear. While millions of Americans are struggling to survive day to day, and the economy is in the tank, the millionaire banksters on Wall Street are doing just fine.

Just ask Jamie Dimon, CEO of JPMorgan-Chase. At JPMorgan's investor conference yesterday, Dimon bragged to a crowd of uber-wealthy investors that, "[W]e actually benefit from downturns."

In other words, they've so rigged the system that when millions of Americans are without jobs, and struggling to put food on the table and provide for their families, Dimon and his Wall Street fat cat buddies are doing better than ever, making a profit off of your misery.

But such an appalling statement really shouldn't come as a shock. After all, numerous reports have suggested that JPMorgan-Chase and other big banks engaged in criminal and/or unethical activity, and it's possible that Dimon did too.

It's inexcusable that these banks continue to rake in millions, after destroying our economy and devastating the middle-class. One way or another, the rampant corruption on Wall Street needs to stop.

That's where Sen. Elizabeth Warren comes in.

Since Warren was sworn into the Senate fewer than two months ago, she's been kicking ass and taking names. Using her influential seat on the Senate Banking Committee, Warren has already called out the nation's top financial regulators for failing to take Wall Street firms who broke the law to trial.

In a February 14 hearing, Warren told regulators that, "We face some very special issues with big financial institutions. If they can break the law and drag in billions and billions in profits, and then turn around and settle — paying out of those profits — they don't have much incentive to follow the law."

Warren continued taking on this nation's corrupt financial industry yesterday, pressing Federal Reserve Chairman Ben Bernanke about the risks and fairness of having banks that are "too big to fail." Warren asked Bernanke, "We've now understood this problem for nearly five years. So when are we going to get rid of 'too big to fail?'"

Warren also asked whether the big banks should have to repay taxpayers the whopping $83 billion a year they get from what is essentially a government subsidy. Interestingly enough, this amount nearly matches the big banks' annual profits, and without it, CEOs like Jamie Dimon wouldn't be able to get their multimillion-dollar bonuses and windfall payouts.

While Warren's efforts to point out the corruption and greed on Wall Street are great, she's only one woman, and she alone can't take down the big banks and successfully regulate them. The entire system needs to be changed.

For too long now, we've been following the Bush Administration approach to dealing with the big banks.

When the banks began to freeze and the economy began to crash, the Bush Administration had two choices. One was taking the route that FDR took. FDR put the safety and well-being of the American people and homeowners first, and soon the economy began to improve and the banks bounced back, with regulations.

Unfortunately, the Bush Administration chose option two: Bailout the banks with 700 billion dollars in taxpayer money, have the Fed give them trillions in free lines of credit, let them get back on their feet and hope for the best. We all know how well that's worked out.

It's time to stop propping up the banks, and end "too big to fail."

One way to do that is to bring back the Glass-Steagall Act. Under Glass-Steagall, we had two kinds of banks. One, like your neighborhood bank, did checkbooks, home loans, and savings accounts. Their technical name was "commercial banks."

The second kind of bank was what were called "Investment Banks," places like Merrill Lynch used to be, where you bought and sold stocks, bonds, and commodities. Betting banks.

Glass-Steagall said that these two types of banks had to be different and separate, couldn't even be owned by the same people, and couldn't get into each others' business. So you always knew that your bank wasn't gambling in the back room with the money in your checking or savings account, and wasn't out hustling your mortgage to some foreign investment fund.

But Republican Senator Phil Gramm and his banker buddies didn't like that at all. So in the final year of the Clinton Administration, they put an end to the Glass-Steagall act that had been protecting us ever since the Great Depression.

The result, just like in 1929, was predictable. The banks gambled, lost, and crashed. And took us all down with them.

It's time to put back into place that firewall between commercial and investment banks, and end banks that are too big to fail. And to stop big bank crony CEOs like Jamie Dimon from padding their wallets at our expense. Let's make banking back into the boring and safe industry that it was before Phil Gramm and his Republican buddies came along.

Sheriff Elizabeth Warren

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Posted on Feb 17, 2013

John Darkow, Cagle Cartoons, Columbia Daily Tribune, Missouri

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It is bizarre that Chuck Hagel, a war hero with a long record of sensible views on the deployment of military power, gets blocked as the president’s nominee to run the Pentagon, while Jack Lew, steeped in Wall Street greed, sails through as Treasury secretary. Chuck Hagel, a former two-term GOP senator from Nebraska and President Obama’s choice for Defense Secretary, testifies before the Senate Armed Services Committee during his confirmation hearing on Capitol Hill in Washington. A Senate panel on Wednesday, Feb. 6, 2013, abruptly postponed a vote on Chuck Hagel’s nomination to be defense secretary. (Photo: AP/J. Scott Applewhite)

There is, of course, nothing new about a Treasury secretary having profited from high-level Wall Street connections. After all, Robert Rubin and Hank Paulson, two former honchos at Goldman Sachs, headed the Treasury in the Clinton and Bush administrations, respectively. And Timothy Geithner, whom Lew would be replacing, was head of the New York Federal Reserve when it acted to bail out the too-big-to-fail financial hustlers led by AIG and Citigroup. The revolving door between Wall Street and the Treasury is the key cause of the Great Recession.

So, what’s the big deal that Lew ran two divisions at Citigroup for three years when homeowners were swindled out of their life savings? What’s a $2 million payout to Lew compared with the well over $100 million that Rubin got at that same bank during the years he helped steer it to disaster? In Lew’s case there was also the matter of his investing in one of Citigroup’s offshore schemes on the Cayman Islands that President Obama had roundly condemned, but the few Republicans who brought it up at the nominee’s confirmation hearing this week offered only a mild rebuke for such chicanery.

The big deal, ignored by Democrats on the Senate Finance Committee and underplayed by the Republican critics, is that the Treasury Department, under two presidents during this financial crisis, has bailed out the banksters while doing next to nothing to help the victims of those institutions. Even now, in the third stage of a “quantitative easing” that will leave $4 trillion in taxpayer debt, the Federal Reserve, with the Treasury’s blessing, continues to bail out the banks by taking toxic assets off their books while the banks refuse to undertake any serious mortgage readjustments. 

The appointment of Lew might make sense if he had learned from his Wall Street experience that the era of unfettered greed ushered in by the deregulation mania of the Clinton and Bush years has proved a disaster. But Lew is anything but a Wall Street turncoat and continues to feign ignorance as to the causes of the banking disaster. Even though he profited mightily from his years at Citigroup—whose merger between investment and commercial banking was made legal only by the reversal of Glass-Steagall—he denies that deregulation had anything to do with that bank’s ruinous practices.

Asked at a previous confirmation hearing by Sen. Bernie Sanders, I-Vt., whether deregulation had contributed to the crisis, Lew responded: “I don’t personally know the extent to which deregulation drove it, but I don’t think deregulation was the proximate cause.” Yet Obama now inexplicably turns to Lew to help reregulate the system. Why look to a perp rather than a victim to redress the crime?

The irony in the simultaneous rejection of Hagel by some senators is that he has been a victim of the irrational application of military power. Hagel, severely wounded during the Vietnam War that few today would argue ever made any national security sense, has long urged caution in foreign military involvement. Hawks complain that he opposed the surge in the U.S. presence in Iraq after having at first gone along with the war. Hagel should be admired for having honored the “fool me once” maxim in not wanting to escalate an invasion justified by blatant lies, but instead his prudence has been scorned.

The case is the same with Hagel’s courage to dare to suggest that Israel’s outsized influence on U.S. Mideast policy may be counterproductive to efforts to find a way to end almost a half-century of occupation of the Palestinian people. There are plenty of well-informed citizens on the front lines in Israel who would agree, but few in ruling U.S. political circles.   

The Republicans have turned on Hagel because he dared turn on them in the 2008 election when he refused to endorse Sen. John McCain. All other objections to his nomination are just noise, and what is really at issue is the failure to consider the national interest in its most dangerous manifestation: the waging of war. In contrast to their tepid objections to Lew, who will be easily confirmed, the Republicans still seem determined to derail the Hagel nomination. It is clear that their motivation in both confirmation processes is nothing but partisan and that the public interest will once again be ignored.

© 2012 TruthDig.com

Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.

Senate Republicans Take a Stand Against the Public Interest

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Posted on Feb 14, 2013

AP/J. Scott Applewhite

Chuck Hagel, a former two-term GOP senator from Nebraska and President Obama’s choice for Defense Secretary, testifies before the Senate Armed Services Committee during his confirmation hearing on Capitol Hill in Washington. A Senate panel on Wednesday, Feb. 6, 2013, abruptly postponed a vote on Chuck Hagel’s nomination to be defense secretary.

By Robert Scheer

It is bizarre that Chuck Hagel, a war hero with a long record of sensible views on the deployment of military power, gets blocked as the president’s nominee to run the Pentagon, while Jack Lew, steeped in Wall Street greed, sails through as Treasury secretary. 

There is, of course, nothing new about a Treasury secretary having profited from high-level Wall Street connections. After all, Robert Rubin and Hank Paulson, two former honchos at Goldman Sachs, headed the Treasury in the Clinton and Bush administrations, respectively. And Timothy Geithner, whom Lew would be replacing, was head of the New York Federal Reserve when it acted to bail out the too-big-to-fail financial hustlers led by AIG and Citigroup. The revolving door between Wall Street and the Treasury is the key cause of the Great Recession.

So, what’s the big deal that Lew ran two divisions at Citigroup for three years when homeowners were swindled out of their life savings? What’s a $2 million payout to Lew compared with the well over $100 million that Rubin got at that same bank during the years he helped steer it to disaster? In Lew’s case there was also the matter of his investing in one of Citigroup’s offshore schemes on the Cayman Islands that President Obama had roundly condemned, but the few Republicans who brought it up at the nominee’s confirmation hearing this week offered only a mild rebuke for such chicanery.

The big deal, ignored by Democrats on the Senate Finance Committee and underplayed by the Republican critics, is that the Treasury Department, under two presidents during this financial crisis, has bailed out the banksters while doing next to nothing to help the victims of those institutions. Even now, in the third stage of a “quantitative easing” that will leave $4 trillion in taxpayer debt, the Federal Reserve, with the Treasury’s blessing, continues to bail out the banks by taking toxic assets off their books while the banks refuse to undertake any serious mortgage readjustments. 

The appointment of Lew might make sense if he had learned from his Wall Street experience that the era of unfettered greed ushered in by the deregulation mania of the Clinton and Bush years has proved a disaster. But Lew is anything but a Wall Street turncoat and continues to feign ignorance as to the causes of the banking disaster. Even though he profited mightily from his years at Citigroup—whose merger between investment and commercial banking was made legal only by the reversal of Glass-Steagall—he denies that deregulation had anything to do with that bank’s ruinous practices.

The irony in the simultaneous rejection of Hagel by some senators is that he has been a victim of the irrational application of military power. Hagel, severely wounded during the Vietnam War that few today would argue ever made any national security sense, has long urged caution in foreign military involvement. Hawks complain that he opposed the surge in the U.S. presence in Iraq after having at first gone along with the war. Hagel should be admired for having honored the “fool me once” maxim in not wanting to escalate an invasion justified by blatant lies, but instead his prudence has been scorned.

The case is the same with Hagel’s courage to dare to suggest that Israel’s outsized influence on U.S. Mideast policy may be counterproductive to efforts to find a way to end almost a half-century of occupation of the Palestinian people. There are plenty of well-informed citizens on the front lines in Israel who would agree, but few in ruling U.S. political circles.   

The Republicans have turned on Hagel because he dared turn on them in the 2008 election when he refused to endorse Sen. John McCain. All other objections to his nomination are just noise, and what is really at issue is the failure to consider the national interest in its most dangerous manifestation: the waging of war. In contrast to their tepid objections to Lew, who will be easily confirmed, the Republicans still seem determined to derail the Hagel nomination. It is clear that their motivation in both confirmation processes is nothing but partisan and that the public interest will once again be ignored.

Click here to check out Robert Scheer’s new book, “The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.” Keep up with Robert Scheer’s latest columns, interviews, tour dates and more at www.truthdig.com/robert_scheer.

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(Photo: SeniroLiving.org)There are two kinds of debt. One that’s relatively harmless. And one that can destroy us all.  

There’s public sector debt – or government debt – which is over $16 trillion. This is the sort of debt that politicians scream and holler about when they demand austerity.

And then there’s private sector debt – the debt owned by you and me and millions of Americans across the nation in the form of credit cards, home and auto loans, along with America's corporate debt. This sort of debt doesn’t seem to bother politicians at all, even though total private sector debt is $38 trillion, more than double government debt.

Now here’s what you need to know. Public sector debt is not a problem at all. Our national debt, despite the big number, is not a threat to the nation.

Currently, our national debt is roughly 100% of GDP. After World War 2, it was much higher – over 120% of GDP.  But, rather than freaking out in the 1950’s and demanding austerity spending cuts, both Republican and Democratic Presidents and lawmakers grew our nation out of this so-called debt problem with government spending.

There were massive government investments to build the Interstate Highway System, send returning GIs to college, and to grow the social safety net.

And it worked. With more government investments, more Americans were put to work, which meant they had more money to spend, which meant more businesses hired more people to keep up with the higher demand, which meant Americans all around were earning more money and paying more revenue into the government through taxes. Our debt-to-GDP ratio plummeted from its peak of over 120% in the 1950’s to around 20% in the 1970’s.  

Then Reagan came in, gave billionaires a massive tax cut, increased defense spending, and our national debt exploded again. But, two Presidents later, Bill Clinton had the budget balanced and the nation on track to completely eliminate the national debt within ten years.

George W. Bush blew up that plan with his tax cuts, wars, corporate giveaways, and his economic crash, so now we have a pretty massive debt, although not as big as the one Truman and Eisenhower faced and beat.

Our nation has a long history, from the Revolutionary War to the Civil War to World War II of dealing with our national debt, and reducing debt levels that are much higher than we see today. That’s why government debt is not a problem right now. With just a small amount of political will, it can be solved pretty easily: more government investments to put people to work and more taxes on the rich so that they pay their fair share again have always solved it in the past.

On the other hand, private sector debt is a huge problem. Not only is it devastating the livelihoods of millions of Americans around the nation, but it’s also pushing our economy toward collapse.   

After World War 2, total private debt was below 50% of GDP. Today, it’s more than 250% of GDP, which is even higher than it was during the Great Depression.

There are several reasons for this.

The first is that when Reagan stopped enforcing the Sherman Anti-Trust Act, businesses started merging and acquiring each other like crazy. Because of changes in the rules on how that could be done, Private Equity or LBO firms came into existence, driving the monopolistic merger process with trillions in debt. Today virtually every corporate merger involves the company taking on huge debt, while the executives and the Pirate Equity boys take home billions. The result is that most of this private sector debt is corporate debt, and it's dangerously high, a teetering, towering house of cards. 

And then there's household debt.  

Since Reagan, Americans have not been paid more for their increased productivity, so wages have failed to keep up with the rising costs of housing, energy, education, and healthcare. To make ends meet, Americans had to extend their credit lines and home mortgages, thus sinking further into debt.

Also, there was the housing bubble, which was caused by banksters pushing mortgages – or debt – on millions of Americans, knowing that those same Americans were unlikely to be able to pay down those mortgages and debt.

But the banks made a ton of money selling off that bad debt to other investors before the market went bust, and skimming fees off the top of every single transaction.

And, of course, all of the losses that the banksters did incur during the crisis were promptly repaid by our government thanks to the bailout.

But nobody seemed to care about the debt that everyone else who wasn’t a bankster still had. Nobody except the banks, which are still trying to suck more and more money out of their indebted customers, and are now bringing back debtor’s prisons to help in this effort.

In Arkansas, a breast cancer survivor, Lisa Lindsay, was thrown in jail because she didn’t pay a $280 medical bill, which was charged to her by mistake.

Debtors’ prisons haven’t officially been used in America since before the Civil War. But today, a third of the states in the country allow debt collectors to use the public court system to go after people who owe them money. So, rather than being thrown in jail for specifically owing money, Americans are thrown in jail for not showing up to court hearings or not paying legal fines stemming from their debts.  

There’s even a law in Arkansas that allows landlords to throw tenants in jail if they're late on their rent. According to a recent report by Human Rights Watch, hundreds of tenants in Arkansas who’ve fallen on hard times and can’t pay their rent are taken to court and sometimes jailed.

So, in a roundabout way, the debtors prisons have returned to America.

This is a huge problem because economies depend on consumers – people like you and me – spending money. But, if we’re in debt up to our eye-balls, and being thrown in prison for that debt, then we can’t spend money to stimulate the economy.

As economist Steve Keen told me, “That’s why we’re in a crisis.”

He added that it wasn't the government deficit we have to worry about.  Instead, he said, “It’s the dynamics of private debt that have determined the crunch we’re in now.”

While debt can be useful and free up more spending in the economy, we’ve reached a point where businesses and individual Americans can no longer afford to go deeper into debt. 

And a major reason why the economy continues to stagnate after the collapse is because Americans are paying down their debt rather than spending money in the economy. And the more Americans continue to pay down their debt instead of spending, the worse the economy will get.

When this happens, Keen told me, “You plunge off the cliff.” 

Even government stimulus can’t help at this point. Whether it was Bush’s stimulus at the end of 2008 that gave everyone a couple hundred bucks, or Obama’s stimulus in 2009, any extra money Americans get from the government is diverted away from the economy and put instead toward paying down their huge individual debts, which has no stimulative effect on the economy at all.  

If private debt was 50% of GDP like in the 1950’s, then Americans could afford to both buy things and pay down their own debt.  And ditto for businesses. But at 250% of GDP, that private sector debt strangles the economy and sets the stage for a looming economic collapse.

So then, what’s to be done?

We should wipe the worst and most destructive of the private sector debt, the debt that prevents people from spending.

Keen calls for a debt jubilee. That means using the government to simply pay off much of the individual debt across America, from mortgages to student loans to credit cards.

This is also the approach Occupy Wall Street is taking with its “Strike Debt” campaign, though the organization is also relying on private donations to help buy people’s overdue debt at a cheap price and then completely wipe it out.   

A debt jubilee isn’t a radical idea. In fact, it’s promoted in the Bible in the Book of Leviticus, which calls for a debt jubilee every 49 years.  As Leviticus 25:10 reads, "This fiftieth year is sacred—it is a time of freedom and of celebration when everyone will receive back their original property, and slaves will return home to their families."

Debt cancellation is supported in the Koran, too. And it was used in Ancient Athens and many Native American societies.

Wiping out private debt would unleash enormous spending in our economy in ways we haven’t seen since the boom years of the 1950’s and 1960’s. The only reason it’s not seriously being considered by our lawmakers today is because a debt jubilee would diminish the profits of the banksters who thrive – and prey – on an indebted nation.

But, in the not-to-distant future, as our economy continues to collapse under the weight of tens of trillions of dollars in private sector debt, our nation will be faced with an ultimate choice: Strike Debt or watch our economy completely collapse in a way that will make 1929 look like a picnic.

Let’s make the right choice now!     

In December of 1773, a group of Bostonians boarded ships belonging to the East India Company and committed one of the largest acts of vandalism in the history of the world – throwing, what would be today, millions of dollars’ worth of tea into the harbor.

This “Tea Party,” as it was called, was a revolt against transnational corporate power, and its corrupt stranglehold on the British government.

But, fast forward 240 years later, and the Tea Party is now owned by transnational corporate power, and is being used to subvert our democratic government.

How did this happen?

A new study published in the scientific journal, Tobacco Control, and reported on by Stephen Webster on Raw Story reveals that today’s corporate-funded Tea Party goes back a long ways – well before the election of Barack Obama.

Talk of a new Tea Party to advance corporate interests in America began in the 1980’s and 1990’s, when tobacco companies invested heavily in building new broad alliances with other organizations in hopes of fighting back against the emerging anti-smoking agenda in Congress.

According to researchers, tobacco companies like RJR, Lorillard, and Philip Morris funneled millions of dollars into an organization called Citizens for a Sound Economy (CSE).

And guess who founded CSE? None other than…David Koch.

The purpose of CSE was to build a coalition of tobacco companies and corporate polluters to oppose regulations on smoking and air pollutants being considered in Congress. It’s estimated that at least 5.3 million was funneled into CSE by Big Tobacco.

Then in 1993, a Philip Morris PR flack wrote a memo outlining a strategy of fighting any new taxes by joining up with other anti-tax groups to create a “New Boston Tea Party.”

The memo reads, “Grounded in the theme of ‘The New American Tax Revolution’ or ‘The New Boston Tea Party,’ the campaign activity should take the form of citizens representing the widest constituency base mobilized with signage and other attention-drawing accoutrements such as lapel buttons, handouts, petitions and even costumes.”

Ultimately, the tobacco companies failed and were hit with a massive $200 billion settlement in 1998.

But in 2002, the David Koch’s CSE purchased a website, USTeaParty.com. Eventually, plans for this Tea Party were put on hold. After all, A Republican corporatist, George W. Bush was in the White House, and Republicans were in control of Congress.

Only after the banksters crashed our economy, and Democrats swept into Congress, would the so-called Tea Party be revived. And sure enough, it was revived by CSE. Only, by now, CSE had split into two Astroturf corporate-funded organizations: Americans for Prosperity and Freedom Works.

From 2009 until today, these organizations have used corporate media outlets like Fox so-called News to promote their “Tea Party” – bussing in uninformed Americans from all around the country to wave signs and rally against their own best interests – to rally on behalf of the 1%.

So, as early as the 1990’s, a campaign funded by corporate fat cats and big polluters like the Kochs who opposed new regulations and taxes, was underway. It was a campaign specifically referred to by some in the tobacco industry as a “New Boston Tea Party.”

Of course the original participants of the Boston Tea Party 240 years ago would have been horrified by this.

Many people today think that the Tea Act—which led to the Boston Tea Party—was simply an increase in the taxes on tea paid by American colonists. That’s where the whole “taxation without representation” meme came from.

Instead, the purpose of the Tea Act was to give the East India Company full and unlimited access to the American tea trade and to exempt the company from having to pay taxes to Britain on tea exported to the American colonies. It even gave the company a tax refund on millions of pounds of tea that it was unable to sell and holding in inventory.

In other words, the Tea Act was the largest corporate tax break in the history of the world. And since, at the time, most of the British government and royalty were stockholders in the East India Tea Company, it was also a classic example of crony capitalism.

The purpose of the Tea Act was to increase the profitability of the East India Company to its stockholders (which included the king) and to help the company drive its colonial small-business competitors out of business. Because the company temporarily no longer had to pay high taxes to England and held a monopoly on the tea it sold in the American colonies, it was able to lower its tea prices to undercut those of the local importers and the mom-and-pop tea merchants and teahouses in every town in America.

In response, the colonists dressed like Indians in the middle of the night, boarded ships, and commenced the dumping of hundreds of chests of tea overboard – an act that would eventually light the fuse to war.

And yet, today, the Tea Party represents just the opposite. It’s funded by billionaire corporatists who, just like the shareholders of the East India Company, want to pay keep their corporate tax breaks and want freedom to lie, abuse, and pollute wherever and whenever they want.

So this is an appeal to all the Americans out there who consider themselves proud Tea Partiers. Don’t be duped! The Boston Tea Party wasn’t started by a tobacco company – it was against a tobacco company.

The original Boston Tea Party wasn’t just against a tyrannical monarch across the Atlantic. It was also against transnational corporate power that was ruining the economy here in the colonies.

And while our American Revolution eventually defeated this monarch, kicking off an era of self-government around the world, the forces of the rich and transnational corporate power lingered on. And today, they are on the attack, crashing our economy, bankrupting our government, and polluting our environment.

Their tyranny must be defeated now.

Code Pink protesters disrupt the start of John Brennan's Senate confirmation hearing. (Image: Getty Images)Those defending the language on imminence in the white paper released last week are right on one count: it is not new language. Below the fold, I’ve excerpted the language on imminence from three different formulations on imminence –Brennan’s speech at Harvard, the white paper, and Holder’s Northwestern speech — to show the consistency (and also, with John Brennan’s September 16, 2011 speech, exactly two weeks to Anwar al-Awlaki notice that this was now US policy).

All three point to al Qaeda’s non-combatant structure to describe the need for a more flexible concept of imminence. Both the white paper and Holder’s speech discuss a “window of opportunity,” which I find to be one of the more provocative aspects of this definition. And while Holder’s speech appears to have been edited to make it pretty, it is almost precisely the ideas presented in the white paper on imminence. There is clear continuity between Brennan’s 2011 speech, the white paper, and Holder’s speech.

Which is why I’m interested in the language Brennan used last week when responding to Angus King’s proposal for a FISA court for drone (and what should be targeted killing generally).

It’s telling not because it introduces wholesale new ideas. But because it makes clear what is implicit — but unstated — in the three other formulations.

A person who poses an imminent threat does not have to have committed any crime in the past. Imminence is exclusively about the future possibility of violence, not necessarily past involvement in it.

BRENNAN: Senator, I think it’s certainly worth of discussion. Our tradition — our judicial tradition is that a court of law is used to determine one’s guilt or innocence for past actions, which is very different from the decisions that are made on the battlefield, as well as actions that are taken against terrorists. Because none of those actions are to determine past guilt for those actions that they took. The decisions that are made are to take action so that we prevent a future action, so we protect American lives. That is an inherently executive branch function to determine, and the commander in chief and the chief executive has the responsibility to protect the welfare, well being of American citizens. So the concept I understand and we have wrestled with this in terms of whether there can be a FISA-like court, whatever — a FISA- like court is to determine exactly whether or not there should be a warrant for, you know, certain types of activities. You know… KING: It’s analogous to going to a court for a warrant — probable cause…

(CROSSTALK)

BRENNAN: Right, exactly. But the actions that we take on the counterterrorism front, again, are to take actions against individuals where we believe that the intelligence base is so strong and the nature of the threat is so grave and serious, as well as imminent, that we have no recourse except to take this action that may involve a lethal strike.

The white paper actually has the most language about past deeds, but with the language about membership plus past involvement in activities that pose an imminent threat that I keep pointing to, it doesn’t actually require past deeds either. It does, however, at least imply that an American must be involved in past crimes to be deemed an imminent threat.

John Brennan’s language last week does not.

And that’s precisely the explanation he gave for why the courts aren’t the appropriate place to measure imminent threat: because they only get involved when people have already committed crimes. This new definition of imminence envisions declaring people to be imminent threats even before they’ve committed a crime.

One note about this. Brennan ties all this to the President’s responsibility “to protect the welfare, well being of American citizens.” The biggest threat to the well being of the American citizens is not terrorists at this point, not by a long shot. It’s the big banksters who serially collapse our economy and require bailouts (and, it should be said, are often funding terrorists and drug cartels along the way because it is profitable).  Does this definition of “imminent” threat extend to the banksters who are a much more systematic front than the rump of al Qaeda is at this point?

In any case, be warned. If the plan for a FISA Drone (and Targeted Killing) Court moves forward, it will not be measuring guilt — what courts were established to measure. But instead, potential future guilt.

Eric Holder, Northwestern Speech, March 5, 2012

First, the U.S. government has determined, after a thorough and careful review, that the individual poses an imminent threat of violent attack against the United States; second, capture is not feasible; and third, the operation would be conducted in a manner consistent with applicable law of war principles.

The evaluation of whether an individual presents an “imminent threat” incorporates considerations of the relevant window of opportunity to act, the possible harm that missing the window would cause to civilians, and the likelihood of heading off future disastrous attacks against the United States.   As we learned on 9/11, al Qaeda has demonstrated the ability to strike with little or no notice – and to cause devastating casualties.   Its leaders are continually planning attacks against the United States, and they do not behave like a traditional military – wearing uniforms, carrying arms openly, or massing forces in preparation for an attack.   Given these facts, the Constitution does not require the President to delay action until some theoretical end-stage of planning – when the precise time, place, and manner of an attack become clear.   Such a requirement would create an unacceptably high risk that our efforts would fail, and that Americans would be killed.

Whether the capture of a U.S. citizen terrorist is feasible is a fact-specific, and potentially time-sensitive, question.   It may depend on, among other things, whether capture can be accomplished in the window of time available to prevent an attack and without undue risk to civilians or to U.S. personnel.   Given the nature of how terrorists act and where they tend to hide, it may not always be feasible to capture a United States citizen terrorist who presents an imminent threat of violent attack.   In that case, our government has the clear authority to defend the United States with lethal force.

Unknown Author, White Paper, November 8, 2011

First, the condition that an operational leader present an “imminent” threat of violent attack against the United States does not require the United States to have clear evidence that a specific attack on U.S. persons and interests will take place in the immediate future. Given the nature of, for example, the terrorist attacks on September 11, in which civilian airliners were hijacked to strike the World Trade Center and the Pentagon, this definition of imminence, which would require the United States to refrain from action until preparations for an attack are concluded, would not allow the United States sufficient time to defend itself. The defensive options available to the United States may be reduced or eliminated if al-Qa’ida operatives disappear and cannot be found when the time of their attack approaches. Consequently, with respect to al-Qa’ida leaders who are continually planning attacks, the United States is likely to have only a limited window of opportunity within which to defend Americans in a manner that has both a high likelihood of success and sufficiently reduces the probabilities of civilian casualties.

[snip]

By its nature, therefore, the threat posed by al-Qa’ida and its associated forces demands a broader concept of imminence in judging when a person continually planning terror attacks presents an imminent threat, making the use of force appropriate. In this context, imminence must incorporate considerations of the relevant window of opportunity, the possibility of reducing collateral damage to civilians, and the likelihood of heading off future disastrous attacks on Americans.

[snip]

With this understanding, a high-level official could conclude, for example, that an individual poses an “imminent threat” of violent attack against the United States where he is an operational leader of al-Qa’ida or an associated force and is personally and continually involved in planning terrorist attacks against the United States. Moreover, where the al-Qa’ida member in question has recently been involved in activities posing an imminent threat of violent attack against the United States, and there is no evidence suggesting that he has renounced or abandoned such activities, that member’s involvement in al-Qa’ida’s continuing terrorist campaign against the United States would support the conclusion that the members is an imminent threat. [my emphasis]

John Brennan, Harvard Law Speech, September 16, 2011

Others in the international community—including some of our closest allies and partners—take a different view of the geographic scope of the conflict, limiting it only to the “hot” battlefields. As such, they argue that, outside of these two active theatres, the United States can only act in self-defense against al-Qa’ida when they are planning, engaging in, or threatening an armed attack against U.S. interests if it amounts to an “imminent” threat.

In practice, the U.S. approach to targeting in the conflict with al-Qa’ida is far more aligned with our allies’ approach than many assume. This Administration’s counterterrorism efforts outside of Afghanistan and Iraq are focused on those individuals who are a threat to the United States, whose removal would cause a significant – even if only temporary – disruption of the plans and capabilities of al-Qa’ida and its associated forces. Practically speaking, then, the question turns principally on how you define “imminence.”

We are finding increasing recognition in the international community that a more flexible understanding of “imminence” may be appropriate when dealing with terrorist groups, in part because threats posed by non-state actors do not present themselves in the ways that evidenced imminence in more traditional conflicts. After all, al-Qa’ida does not follow a traditional command structure, wear uniforms, carry its arms openly, or mass its troops at the borders of the nations it attacks. Nonetheless, it possesses the demonstrated capability to strike with little notice and cause significant civilian or military casualties. Over time, an increasing number of our international counterterrorism partners have begun to recognize that the traditional conception of what constitutes an “imminent” attack should be broadened in light of the modern-day capabilities, techniques, and technological innovations of terrorist organizations.

© 2013 Empty Wheel

Marcy Wheeler writes the blog Emptywheel. Her book, Anatomy of Deceit: How the Bush Administration Used the Media to Sell the Iraq War and Out a Spy, provided a primer on the CIA Leak case surrounding Valerie Plame and her husband, Joe Wilson. She has a Ph.D. from University of Michigan; her research focused on the oppositional uses of a particular literary-journalistic form that arose with the industrial press. Marcy is a recipient of the Hillman Award for blog journalism.

Code Pink protesters disrupt the start of John Brennan's Senate confirmation hearing. (Image: Getty Images)Those defending the language on imminence in the white paper released last week are right on one count: it is not new language. Below the fold, I’ve excerpted the language on imminence from three different formulations on imminence –Brennan’s speech at Harvard, the white paper, and Holder’s Northwestern speech — to show the consistency (and also, with John Brennan’s September 16, 2011 speech, exactly two weeks to Anwar al-Awlaki notice that this was now US policy).

All three point to al Qaeda’s non-combatant structure to describe the need for a more flexible concept of imminence. Both the white paper and Holder’s speech discuss a “window of opportunity,” which I find to be one of the more provocative aspects of this definition. And while Holder’s speech appears to have been edited to make it pretty, it is almost precisely the ideas presented in the white paper on imminence. There is clear continuity between Brennan’s 2011 speech, the white paper, and Holder’s speech.

Which is why I’m interested in the language Brennan used last week when responding to Angus King’s proposal for a FISA court for drone (and what should be targeted killing generally).

It’s telling not because it introduces wholesale new ideas. But because it makes clear what is implicit — but unstated — in the three other formulations.

A person who poses an imminent threat does not have to have committed any crime in the past. Imminence is exclusively about the future possibility of violence, not necessarily past involvement in it.

BRENNAN: Senator, I think it’s certainly worth of discussion. Our tradition — our judicial tradition is that a court of law is used to determine one’s guilt or innocence for past actions, which is very different from the decisions that are made on the battlefield, as well as actions that are taken against terrorists. Because none of those actions are to determine past guilt for those actions that they took. The decisions that are made are to take action so that we prevent a future action, so we protect American lives. That is an inherently executive branch function to determine, and the commander in chief and the chief executive has the responsibility to protect the welfare, well being of American citizens. So the concept I understand and we have wrestled with this in terms of whether there can be a FISA-like court, whatever — a FISA- like court is to determine exactly whether or not there should be a warrant for, you know, certain types of activities. You know… KING: It’s analogous to going to a court for a warrant — probable cause…

(CROSSTALK)

BRENNAN: Right, exactly. But the actions that we take on the counterterrorism front, again, are to take actions against individuals where we believe that the intelligence base is so strong and the nature of the threat is so grave and serious, as well as imminent, that we have no recourse except to take this action that may involve a lethal strike.

The white paper actually has the most language about past deeds, but with the language about membership plus past involvement in activities that pose an imminent threat that I keep pointing to, it doesn’t actually require past deeds either. It does, however, at least imply that an American must be involved in past crimes to be deemed an imminent threat.

John Brennan’s language last week does not.

And that’s precisely the explanation he gave for why the courts aren’t the appropriate place to measure imminent threat: because they only get involved when people have already committed crimes. This new definition of imminence envisions declaring people to be imminent threats even before they’ve committed a crime.

One note about this. Brennan ties all this to the President’s responsibility “to protect the welfare, well being of American citizens.” The biggest threat to the well being of the American citizens is not terrorists at this point, not by a long shot. It’s the big banksters who serially collapse our economy and require bailouts (and, it should be said, are often funding terrorists and drug cartels along the way because it is profitable).  Does this definition of “imminent” threat extend to the banksters who are a much more systematic front than the rump of al Qaeda is at this point?

In any case, be warned. If the plan for a FISA Drone (and Targeted Killing) Court moves forward, it will not be measuring guilt — what courts were established to measure. But instead, potential future guilt.

Eric Holder, Northwestern Speech, March 5, 2012

First, the U.S. government has determined, after a thorough and careful review, that the individual poses an imminent threat of violent attack against the United States; second, capture is not feasible; and third, the operation would be conducted in a manner consistent with applicable law of war principles.

The evaluation of whether an individual presents an “imminent threat” incorporates considerations of the relevant window of opportunity to act, the possible harm that missing the window would cause to civilians, and the likelihood of heading off future disastrous attacks against the United States.   As we learned on 9/11, al Qaeda has demonstrated the ability to strike with little or no notice – and to cause devastating casualties.   Its leaders are continually planning attacks against the United States, and they do not behave like a traditional military – wearing uniforms, carrying arms openly, or massing forces in preparation for an attack.   Given these facts, the Constitution does not require the President to delay action until some theoretical end-stage of planning – when the precise time, place, and manner of an attack become clear.   Such a requirement would create an unacceptably high risk that our efforts would fail, and that Americans would be killed.

Whether the capture of a U.S. citizen terrorist is feasible is a fact-specific, and potentially time-sensitive, question.   It may depend on, among other things, whether capture can be accomplished in the window of time available to prevent an attack and without undue risk to civilians or to U.S. personnel.   Given the nature of how terrorists act and where they tend to hide, it may not always be feasible to capture a United States citizen terrorist who presents an imminent threat of violent attack.   In that case, our government has the clear authority to defend the United States with lethal force.

Unknown Author, White Paper, November 8, 2011

First, the condition that an operational leader present an “imminent” threat of violent attack against the United States does not require the United States to have clear evidence that a specific attack on U.S. persons and interests will take place in the immediate future. Given the nature of, for example, the terrorist attacks on September 11, in which civilian airliners were hijacked to strike the World Trade Center and the Pentagon, this definition of imminence, which would require the United States to refrain from action until preparations for an attack are concluded, would not allow the United States sufficient time to defend itself. The defensive options available to the United States may be reduced or eliminated if al-Qa’ida operatives disappear and cannot be found when the time of their attack approaches. Consequently, with respect to al-Qa’ida leaders who are continually planning attacks, the United States is likely to have only a limited window of opportunity within which to defend Americans in a manner that has both a high likelihood of success and sufficiently reduces the probabilities of civilian casualties.

[snip]

By its nature, therefore, the threat posed by al-Qa’ida and its associated forces demands a broader concept of imminence in judging when a person continually planning terror attacks presents an imminent threat, making the use of force appropriate. In this context, imminence must incorporate considerations of the relevant window of opportunity, the possibility of reducing collateral damage to civilians, and the likelihood of heading off future disastrous attacks on Americans.

[snip]

With this understanding, a high-level official could conclude, for example, that an individual poses an “imminent threat” of violent attack against the United States where he is an operational leader of al-Qa’ida or an associated force and is personally and continually involved in planning terrorist attacks against the United States. Moreover, where the al-Qa’ida member in question has recently been involved in activities posing an imminent threat of violent attack against the United States, and there is no evidence suggesting that he has renounced or abandoned such activities, that member’s involvement in al-Qa’ida’s continuing terrorist campaign against the United States would support the conclusion that the members is an imminent threat. [my emphasis]

John Brennan, Harvard Law Speech, September 16, 2011

Others in the international community—including some of our closest allies and partners—take a different view of the geographic scope of the conflict, limiting it only to the “hot” battlefields. As such, they argue that, outside of these two active theatres, the United States can only act in self-defense against al-Qa’ida when they are planning, engaging in, or threatening an armed attack against U.S. interests if it amounts to an “imminent” threat.

In practice, the U.S. approach to targeting in the conflict with al-Qa’ida is far more aligned with our allies’ approach than many assume. This Administration’s counterterrorism efforts outside of Afghanistan and Iraq are focused on those individuals who are a threat to the United States, whose removal would cause a significant – even if only temporary – disruption of the plans and capabilities of al-Qa’ida and its associated forces. Practically speaking, then, the question turns principally on how you define “imminence.”

We are finding increasing recognition in the international community that a more flexible understanding of “imminence” may be appropriate when dealing with terrorist groups, in part because threats posed by non-state actors do not present themselves in the ways that evidenced imminence in more traditional conflicts. After all, al-Qa’ida does not follow a traditional command structure, wear uniforms, carry its arms openly, or mass its troops at the borders of the nations it attacks. Nonetheless, it possesses the demonstrated capability to strike with little notice and cause significant civilian or military casualties. Over time, an increasing number of our international counterterrorism partners have begun to recognize that the traditional conception of what constitutes an “imminent” attack should be broadened in light of the modern-day capabilities, techniques, and technological innovations of terrorist organizations.

© 2013 Empty Wheel

Marcy Wheeler writes the blog Emptywheel. Her book, Anatomy of Deceit: How the Bush Administration Used the Media to Sell the Iraq War and Out a Spy, provided a primer on the CIA Leak case surrounding Valerie Plame and her husband, Joe Wilson. She has a Ph.D. from University of Michigan; her research focused on the oppositional uses of a particular literary-journalistic form that arose with the industrial press. Marcy is a recipient of the Hillman Award for blog journalism.

Submitted by Brandon Smith from Alt-Market

China Surpasses U.S. As Number One Global Trading Power

Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk.  This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, and consumer hub, and currency powerhouse.  In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar.  I was, of course, attacked as a “doom monger” and “conspiracy theorist”.  Five years later, the critics have changed their tune…

For the past decade, China has been slowly but surely issuing Yuan denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency.  This process has gone mostly ignored by the mainstream financial media.  However, I and many other independent analysts could not overlook the red flags.  I tried to summarize as much of the situation and facts as I could in my article ‘How The U.S. Dollar Will Be Replaced’, which was published in May of last year:

http://www.alt-market.com/articles/784-how-the-us-dollar-will-be-replaced

The biggest question for me was, if China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, WHY did they feel the need or desire in 2005 to begin issuing Yuan denominated debt?  Why begin borrowing capital from foreign creditors?  They certainly didn’t need the money.  Why were they moving away from export dependency and building a consumer base?  And why attempt to proliferate their currency?  Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation?  Didn’t the Chinese want their currency cheap so that they could maintain export superiority?  What did the Chinese know in 2005 that we didn’t?

Well, apparently they were either psychic, or SOMEONE gave them advanced warning.  They knew that there would be a crisis in American consumption and that this would lead to severe reduction in imports, which is why they began building trade deals within the ASEAN trading bloc to insulate themselves.  They knew that there would be considerable devaluation in the dollar, which is why they converted much of their long term treasury holdings to short term treasury bonds that they could dump with far more ease, and they knew that the IMF would be promoting Special Drawing Rights as a new reserve replacing the dollar, which is why they have been spreading the Yuan everywhere, earning them favor with the global banksters and inclusion in the basket currency.  In fact, China has been pumping Yuan into global markets even faster than the Federal Reserve has been printing the dollar:

http://www.zerohedge.com/news/2013-02-08/china-accounts-nearly-half-worlds-new-money-supply

China is flooding the system with Yuan!  This means only one thing; China is no longer seeking to maintain the traditional trade relationship it has had with the U.S.

To make my case even more clear, I would point out that China has not only become the world’s largest gold producer, but also its largest BUYER, recently surpassing India.  Official estimates place Chinese gold purchases in 2012 at around 800 tons; an astonishing increase in their stockpile. 

The U.S. and the Federal Reserve can’t even deliver gold it is supposed to be holding for others, including Germany.

China has also recently quadrupled imports of rice and tripled wheat and corn imports in only one year.  Why?  Again, I ask, what do they know that we are not being told?

http://ajw.asahi.com/article/economy/business/AJ201302020056

As I have stated for many years, China is being groomed as an alternative economic engine in opposition to the U.S., and that this will lead to an eventual dump by them of the Greenback.  This scenario is not only based on my opinion, it has also been spoken of openly by elitist financiers, including George Soros:

This past month, the same plan has been reiterated by Zhu Min, the deputy managing director of the IMF.  In his statement, he proclaimed that the shift by China into a more consumer based system had been successful, and that the Yuan or RMB, was on the way to becoming a world reserve currency:

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130118000075&cid=1102

I believe that the moment for the epic changeover, and all the political and financial conflict that comes with it, has begun…

It has been announced this week that China surpassed the U.S. for the first time ever as the number one trading power in the world:

http://www.bloomberg.com/news/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.html

U.S. exports and imports last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s total trade in 2012 amounted to $3.87 trillion. China had a $231.1 billion annual trade surplus while the U.S. had a trade deficit of $727.9 billion:

“It is remarkable that an economy that is only a fraction of the size of the U.S. economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mail. “The surpassing of the U.S. is not because of a substantially undervalued currency that has led to an export boom,” said Lardy, noting that Chinese imports have grown more rapidly than exports since 2007.”

“According to O’Neill (Goldman Sachs Jim O’Neill), the trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create.

“One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,” O’Neill said, mentioning China’s inclusion in the International Monetary Fund’s Special Drawing Rights currency basket. “To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.”

For those who are still not aware of why this is such a big deal, it is essentially a turning point moment in global trade.  There is no doubt that China will now be inducted into the SDR, and that their importance as a trade and consumption center will quickly lead to a move away from the dollar.  To put it simply, the dollar is going to lose its world reserve status VERY soon.  Many will cheer this change as necessary progress towards a more “globally conscious” economic system.  However, it’s not that simple.  Total centralization is first and foremost the dream of idiots, and in any mutation (or amputation) there is always considerable pain involved.  The proponents of this “New World Order” (their words, not mine) seem to have placed the U.S. squarely in their crosshairs as the primary recipient of this fiscal pain.

In my early analysis, I felt it possible that Japan would be inducted willingly into the new ASEAN trading bloc and that they would swiftly fall in line with a dump of the dollar, mainly because their export markets were suffering greatly due to the decline in American purchases.  Now it appears that Japan has not been as pliable as the globalists wanted, and so, a war may be on the table in the Pacific.

Rhetoric in Chinese newspapers has been very heated and provocative, and the tensions surrounding the Senkaku/Diaoyu Islands is reaching a boiling point.  The two countries have done everything so far EXCEPT shoot at each other, and that will be happening in due course now that China is allegedly locking offensive radar onto Japanese ships.  Even Chinese films released in the past two years have been soaked with anti-Japan propaganda, most of them usually set during WWII around the brutal invasion and subjugation by the Japanese in Chinese provinces.

The recipe is one of inevitable disaster, with the U.S. at the center of a boiling pot.  As I pointed in my last economic piece, we must now look to events rather than numbers to gain insight into where we are headed.  The time has come.  China is nearly ready for IMF inclusion.  Volatility around the world is high.  Our government has a final decision to make on the Fiscal Cliff in March, not to mention the sudden push for possible gun registration and confiscation.  My instincts tell me that so many explosive aspects coalescing together at the same tenuous moment is not a coincidence.  The next few months call for hyper-vigilance and every ounce of energy we can muster to educate as many people as possible in as short a time as possible.

I say again, China has surpassed the U.S. in global trade.  A drop of the dollar is the obvious next step…

February 7, 2013  |  

Thirty years after her death, Ayn Rand’s philosophy of selfishness and billionaire empowerment rules the world. It’s a remarkable achievement for an ideology that was pushed to the fringes for most of her life, and ridiculed on national television in a notorious interview with Mike Wallace.

But, it’s happened. And today, the United States and other independent governments around the world are crumbling while Ayn Rand’s billionaires are taking over.

With each new so-called Free Trade agreement – especially the very secretive Trans Pacific Partnership, which has less to do with trade and more to do with a new law of global governance for transnational corporations – Ayn Rand’s reviled “state” (or what we would call our democracy, the United States of America) is losing its power to billionaires and transnational corporations.

Ayn Rand hated governments and democracy. She considered them systems of mob rule. She grew up in Russia, and as a child watched the Bolsheviks confiscate her father’s pharmacy during the Russian Revolution. Likely suffering from PTSD from that incident, Ayn Rand devoted her future writings to evil government, including the "evil" of its functions like taxation, regulation, and providing social services to the poor and sick.

She divided the world into makers and takers (or what she called “looters”).

On one side are the billionaires and the industrialists. People like Dagny Taggert, a railroad tycoon, and Hank Rearden, a steel magnate. Both were fictional characters in her book Atlas Shrugged, but both have real-world counterparts in the form of the Koch Brothers, the Waltons, and Sheldon Adelson. According to Rand, they are the “Atlases” holding up the world.

So, in Atlas Shrugged, when the billionaires, tired of paying taxes and complying with government regulation, go on strike, Ayn Rand writes that the American economy promptly collapsed.

On the other side are the “looters,” or everyone else who isn’t as rich or privileged, or who believed in a democratic government to provide basic services, empower labor unions, and regulate the economy. They are the leeches on society according to Rand (and according to Mitt Romney with his 47% comments). And, as she told Mike Wallace in in 1959, they do not even “deserve love.”

To our Founding Fathers, looking out for the general welfare of the population was an explicit role of the government, one of its most important and the reason this nation was created when we separated from Britian.

But to Ayn Rand, a government that taxed billionaires to help pay for healthcare and education for impoverished children was not just unwise economically, it was also immoral.

Nature abhors a vacuum – both in the wild and in politics.  So, when people, organized in the form of a government, are removed from power, then money organized in the form of corporations and billionaires moves into the vacuum to take power – which is exactly what’s happening today, worldwide.

In the thirty years after her death, the United States crept closer and closer to Ayn Rand’s utopia. Reagan dramatically slashed taxes on the rich and went after labor unions. Clinton deregulated financial markets for the rich, ended welfare as we know it, and committed our nation to one globalist corporate free trade agreement after another.

And, under Bush and Obama, we’ve seen the rapid privatization of our commons, the further erosion of social safety nets, and more losses of national sovereignty with more so-called free trade agreements.

In Europe, we’re seeing sovereign governments neutered by Conservative technocrats. According to Ayn Rand, the rich can never be asked to sacrifice. So instead, it’s working people across the Eurozone who have to pay for the bad investments that the banksters made in the run-up to the global financial collapse.

Thirty years after her death, Ayn Rand’s philosophy of selfishness and billionaire empowerment rules the world. It’s a remarkable achievement for an ideology that was pushed to the fringes for most of her life, and ridiculed on national television in a notorious interview with Mike Wallace.

But, it’s happened. And today, the United States and other independent governments around the world are crumbling while Ayn Rand’s billionaires are taking over.

With each new so-called Free Trade agreement – especially the very secretive Trans Pacific Partnership, which has less to do with trade and more to do with a new law of global governance for transnational corporations – Ayn Rand’s reviled “state” (or what we would call our democracy, the United States of America) is losing its power to billionaires and transnational corporations.

Ayn Rand hated governments and democracy. She considered them systems of mob rule. She grew up in Russia, and as a child watched the Bolsheviks confiscate her father’s pharmacy during the Russian Revolution. Likely suffering from PTSD from that incident, Ayn Rand devoted her future writings to evil government, including the "evil" of its functions like taxation, regulation, and providing social services to the poor and sick.

She divided the world into makers and takers (or what she called “looters”).

On one side are the billionaires and the industrialists. People like Dagny Taggert, a railroad tycoon, and Hank Rearden, a steel magnate. Both were fictional characters in her book Atlas Shrugged, but both have real-world counterparts in the form of the Koch Brothers, the Waltons, and Sheldon Adelson. According to Rand, they are the “Atlases” holding up the world.

So, in Atlas Shrugged, when the billionaires, tired of paying taxes and complying with government regulation, go on strike, Ayn Rand writes that the American economy promptly collapsed.

On the other side are the “looters,” or everyone else who isn’t as rich or privileged, or who believed in a democratic government to provide basic services, empower labor unions, and regulate the economy. They are the leeches on society according to Rand (and according to Mitt Romney with his 47% comments). And, as she told Mike Wallace in in 1959, they do not even “deserve love.”

To our Founding Fathers, looking out for the general welfare of the population was an explicit role of the government, one of its most important and the reason this nation was created when we separated from Britian.

But to Ayn Rand, a government that taxed billionaires to help pay for healthcare and education for impoverished children was not just unwise economically, it was also immoral.

Nature abhors a vacuum – both in the wild and in politics.  So, when people, organized in the form of a government, are removed from power, then money organized in the form of corporations and billionaires moves into the vacuum to take power – which is exactly what’s happening today, worldwide.

In the thirty years after her death, the United States crept closer and closer to Ayn Rand’s utopia. Reagan dramatically slashed taxes on the rich and went after labor unions. Clinton deregulated financial markets for the rich, ended welfare as we know it, and committed our nation to one globalist corporate free trade agreement after another.

And, under Bush and Obama, we’ve seen the rapid privatization of our commons, the further erosion of social safety nets, and more losses of national sovereignty with more so-called free trade agreements.

In Europe, we’re seeing sovereign governments neutered by Conservative technocrats. According to Ayn Rand, the rich can never be asked to sacrifice. So instead, it’s working people across the Eurozone who have to pay for the bad investments that the banksters made in the run-up to the global financial collapse.

As we saw in Greece in 2011 with the deposing of Prime Minister George Papandreou, and all across the state of Michigan over the last few years with financial managers laws, when democratic governments are unwilling to do the bidding of the rich, they're immediately replaced by corporate lackeys who will.

The Taggerts and the Reardens are holding the reins of government today.

Which explains why Corporate America paid an average tax rate of just 12% in 2011 – the lowest rate in 40 years. It explains why 400 billionaires in America now own more wealth than 150 million other Americans combined. And it explains why fewer impoverished Americans are getting less federal assistance than at any time in the last half-century.

Ayn Rand envisioned a world without governments – a world where the super-rich are free to do as they wish.

We tried that during the so-called Gilded Age of the late 19th Century – before Ayn Rand was alive. If she'd watched the ruthlessness of the Robber Barons like she did the Bolsheviks, she may have reached different conclusions.

She may have realized that American Presidents like Teddy Roosevelt, Franklin Roosevelt, and Dwight Eisenhower were right when they made sure that wealth was more evenly distributed and the Billionaire Class was held in check.

Or she may have come to understand that corporations and billionaires owe their wealth to the state and not the other way around. Without favorable patent and copyright laws, a court system, an educated workforce, and an infrastructure to move goods about the country, then no one would be able to get rich in America.  We'd be like the Libertarian paradise of Somalia.

As Harry Moser, the founder of the Reshoring Initiative,argued in The Economist, “Corporations are not created by the shareholders or the management. Rather they are created by the state. They are granted important privileges by the state (limited liability, eternal life, etc). They are granted these privileges because the state expects them to do something beneficial for the society that makes the grant. They may well provide benefits to other societies, but their main purpose is to provide benefits to the societies (not to the shareholders, not to management, but to the societies) that create them.”

Sadly, this understanding of how democratic republics work - and why - has been lost this generation.

And Ayn Rand’s disciples are making sure the next generation never finds it again.

Idaho State Senator John Goedde, who chairs that state Senate’s Education Committee, introduced a bill this week that would require all students to read Ayn Rand’s book “Atlas Shrugged” before they can graduate. Goedde explained that the book made his son a Republican and that it “certainly gives one a sense of personal responsibility.”

Between stupidity like this, and the re-birth of Ayn Rand through corporate-funded think tanks and Hollywood movies, the Billionaire Class wants to make sure the next generation buys into a toxic ideology that’s quite literally destroying the world as we know it.

They don’t want the 21^st Century to be “America’s Century.” They want it to be the “Billionaire’s Century.” And if they succeed, then the middle class in America - and through most of the developed world - will go extinct.

In today's On the News segment: The nation's largest nurses union - National Nurses United - has joined the fight against the Keystone XL pipeline; the Progressive Caucus announced it will introduce legislation known at the "Balancing Act" to reduce the deficit and stimulate the economy; Republicans are promising to block the next nominee to head up the Consumer Financial Protection Bureau (CFPB); and more.

TRANSCRIPT:

Thom Hartmann here – on the news...

You need to know this. On Tuesday, President Obama urged Congress to put off the looming sequester of nearly a trillion dollars in spending cuts. But if he wants to find a suitable replacement to reduce the deficit and stimulate the economy – he should look to the left-wing of his own party: the Congressional Progressive Caucus. On Tuesday, the Progressive Caucus announced it will introduce legislation known at the "Balancing Act", that will scrap the sequester – raise new revenue from the rich who aren't paying their fair share – and make critical investments in our economy and infrastructure. To begin with, the Progressive Caucus' proposal will raise $960 billion in revenue to replace the sequester, by closing tax loopholes for the billionaire hedge fund managers, closing loopholes for corporations that ship American jobs overseas, and by cutting off billions in taxpayer subsidies to Big Oil. The plan also cuts our war budget by $300 billion. With the extra revenue, the Caucus proposes new investments in education, in infrastructure, and in the middle class, with new tax cuts that actually help working people. Altogether – the proposal will slash the deficit by $3.3 trillion – and at the same time create more than a million jobs. Voters spoke loud and clear last November, when they re-elected President Obama, and elected a more progressive Congress. Now it's time to give the American people what they want: policies that revive the middle class, and make the rich and corporate American pay their fair share in taxes again. Call your Member of Congress and tell them to support the Congressional Progressive Caucus' Balancing Act.

In screwed news... An institution as old as America itself is in its death throes. Today – the United States Postal Service announced that it's cutting back its delivery of mail on Saturdays – and will instead go to a five-day-delivery schedule of mail. This change is set to go into effect in August – and will reportedly save the post office $2 billion a year. This could be the first of a long series of cutbacks for the Oost Office, which is hemorrhaging billions of dollars every year, as a result of poison pill legislation passed by Republicans in Congress, and signed by President Bush in 2006. That law required the Post Office to pre-fund its retiree health benefits 75 years out into the future – for workers who aren't even born yet. This requirement sucks five billion dollars of revenue out of the Post Office every year – and is a burden that no other business or government agency has ever had to bear. Without this requirement, the Post Office would be running surpluses. But Republicans knew exactly what they were doing when they passed the law – they were killing the Post Office and its half-million unionized workers. And today – with the announcement that the Post Office is cutting Saturday mail delivery, Republicans are patting themselves on the back, because everything is going according to plan. Ben Franklin himself started the Post Office – and it's one of America's most successful traditions. It's in the Constitution! Unfortunately – unless we pressure our lawmakers to take bold steps to save the Post Office, it will just be the latest casualty in the Republicans war on unions.

In the best of the rest of the news...

Why are Republicans promising to block the next nominee to head up the Consumer Financial Protection Bureau, which gives working people numerous protections from bankster fraud? Well, because banksters are paying them to do it! Last week, 43 Republican Senators signed a letter to the President, saying they would block any new nominee to the CFPB, unless the agency is weakened so it has less oversight of Wall Street. Turns out, those 43 Senators have received over $143 million from the financial industry. The six Republican Senators, who were elected in 2012, received more than $7 million from Wall Street just in the last election cycle. Those weren't contributions – those were investments – and now Wall Street wants their return on their investments, by having their Republicans kill the Consumer Financial Protection Bureau.

Those battling the Keystone XL pipeline just received some much-needed reinforcements. The nation's largest nurses union – National Nurses United – has joined the fight against that toxic pipeline. As people who understand first-hand the health effects of a hotter, more polluted planet, National Nurses United is in a unique position to highlight health concerns related to the pipeline. National Nurses United Co-President Deborah Burger said, "Nurses care for patients every day who struggle with health crises aggravated by environmental pollution in its many forms... As a society, we need to reduce the effects of environmental factors, including climate change, that are making people sick, and endangering the future for our children. That's why we oppose the Keystone XL pipeline." As with any fight against entrenched, well-funded special interests like Big Oil – organized people need as much help as they can get to take on organized money. Kudos to National Nurses United for getting involved in the fight to save the planet.

And finally...if you're a Member of Congress – you might want to think twice about vying for that "prized" NRA endorsement. A new Public Policy Polling survey found that an NRA endorsement will actually hurt most political candidates. The poll surveyed voters around the nation – asking them if an NRA endorsement would make them more or less likely to support a particular candidate. According to the results, 26% of voters said the NRA's endorsement makes them more likely to support a candidate. BUT, a much higher 39% said it would make them less likely to support a candidate. Among independents, 41% said an NRA endorsement will diminish their support for a candidate. Remember, this is the same organization that spent millions in 2012, to elect pro-gun lawmakers – yet fewer than 1% of its contributions went to winning candidates. This is not an organization to be feared. If anything, it should be put in a museum.

And that's the way it is today – Wednesday, February 6th, 2013. I'm Thom Hartmann – on the news.

February 5, 2013  |  

Is Eric Holder’s “See No Evil, Hear No Evil” Department of Justice finally getting serious about investigating fraud on Wall Street? At first glance, it would seem so, given the news that the Department of Justice has filed civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.

On the one hand, there is no question that without the credit rating agencies the Wall Street guys would not have been able to pull off this colossal heist against the American people, and the ratings agencies cannot be excused.  In fact, Standard & Poor’s employees openly joked about the company’s willingness to rate deals “structured by cows” and sang and danced to a mock song inspired by “Burning Down the House” before the 2008 global financial collapse, according to the DOJ lawsuit. On the other, the ratings agencies are simply the gift wrappers. DOJ has yet to go after the banksters who created these packages in the first place and who seem to be in the clear as a result of a series of unconscionably low settlements recently reached with the Justice Department.

I suppose we ought to be grateful for these baby steps in the right direction. The ratings agencies themselves have admitted to US government enquiries recently that they took money in return for ratings that were not based on any fundamental assessments other than the cash they were being paid. They have lied about the risk of default in many corporate cases and then marked down debt when the game was up further destabilizing the financial system. Hence, to say that their behavior was at the heart of the great crisis is absolutely correct.

Of course, that inevitably begets the obvious question: what took you so long and why leave it at S&P? As early as September 2004, the FBI warned that there was an “epidemic” of mortgage fraud and predicted that it would cause a financial crisis if it were not stopped. It was not contained. Everyone agrees that the mortgage fraud epidemic expanded massively after the FBI warning and still not one Wall Street figure of any note has gone to jail.

Under Treasury Secretary Geithner, and the Keystone Cops of the Department of Justice, led by Eric Holder and Lanny Breuer, we established a doctrine of “too big to jail” for the very institutions which perpetrated massive frauds on millions of Americans. Those who called for regulations that would take even that most minimal of steps necessary to reestablish the rule of law and restore our nation’s democracy and financial stability were essentially ignored. Geithner’s express rationale was that the financial system's extreme fragility made vigorous investigations of the elite frauds too dangerous, in effect giving the banksters a get-out-of-jail-free card and in effect enshrining crony capitalism and imperiling our economy, our democracy, and our national integrity.   

So what’s changed? Well, obviously one has to ask if the departure from Treasury of Mr. Geithner, along with the ignominious resignation of the odious Lanny Breuer at the DOJ heralds a new approach, or are there are other motives in mind? 

There is a school of thought which suggests that this lawsuit is an attempt by the US government to intimidate the ratings agencies against any further US debt downgrades. If so, it’s a pretty stupid shakedown. The truth is that sovereign governments like the US empower these agencies simply by listening to them, in the same way they listen to the IMF, and put the interests of these undemocratic and crooked agencies ahead of their own national interests.

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay. And welcome to this week's edition of The Black Financial and Fraud Report with Bill Black, who joins us now from Kansas City, Missouri, where he teaches economics and law at the University of Missouri–Kansas City. He's a white-collar criminologist, a former financial regulator, and author of the book The Best Way to Rob a Bank Is to Own One.

Thanks again for joining us, Bill.

BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you.

JAY: So what caught your attention this week?

BLACK: Followups and feedback to the Frontline special The Untouchables on the failure not only to prosecute, but to even investigate the elite banksters who caused the ongoing crisis.

And so the following things have happened. Lanny Breuer, the head of the criminal division and the most outspoken proponent of too-big-to-prosecute has unexpectedly resigned. It's possible that he'd been planning it, but that wasn't public. And so people are speculating whether he's doing so in response to the heavy criticisms he received in the Frontline documentary.

And the Office of the Comptroller of the Currency responded to a written article that Frontline did in conjunction with the broadcast, and that writing quoted me—and that's what the Office of the Comptroller of the Currency focused on. They said that it was ridiculous to make a comparison between the 30,000 criminal referrals by the Office of Thrift Supervision back during the savings and loan crisis and the zero criminal referrals by the Office of Thrift Supervision in the current crisis, because that didn't count criminal referrals that the associations, the savings and loans made. Of course, savings and loans don't make criminal referrals against their CEOs, so I had a bit of fun responding to that. But the OCC response in essence says that there were no criminal referrals because there were no crimes. So, again, this is the virgin crisis theory of life.

Now, the second thing is a commentary in The Economist—of course, a generally conservative but intelligent news magazine about commerce. And it—you know, if you didn't have this, you'd have to create it in The Onion as satire. This column says that the real problem with fraud in the current crisis is the victims, right? The victims allowed themselves to be defrauded, and therefore it's important not to have prosecutions, because this way victims will learn that they have to protect themselves.

JAY: Well, I would think con men all over the world would be happy with that guideline.

BLACK: Well, as I said, it really belongs in The Onion, the satirical magazine. But no, The Economist lacks any sense of irony and actually does say that you should blame the victims of the fraud as the principle folks that you should blame out of this crisis. And the guy has this weird historical analogy to Athens back in the Peloponnesian Wars and such that is of stunning irrelevance. So I'm spending some amount of time preparing a new response to that one.

But the third one is Iglesias, who has written a column in which he said, well, it's too bad that Frontline seems to have been successful, in that the populists are winning—he calls them the "populists"—in this criticism of Geithner and Holder, the attorney general, and Lanny Breuer, still the head of the criminal division, and that we really should be probably applauding them, because it was essential, if you're going to bail out the biggest banks, that you not allow any prosecutions, because if you had allowed any prosecutions, then the banks would have been driven by prosecutions back into insolvency.

So, you see, really you have to make sure—this is even worse than blaming the victims, in a way—you have to make sure that the victims get no recovery from the frauds, because if the victims got recovery, well, the victims suffered such massive losses, roughly $20 trillion lost in wealth, that it would bankrupt the fraudulent banks. And of course we can't allow that. So we have to make sure that we have no prosecutions, because otherwise it would be illogical.

And Iglesias is not someone who is familiar with regulation or economics or finance, but he does have an undergraduate education in philosophy—he's a philosophy major. And this column, like a earlier one he did in 2001 that was somewhat similar, are remarkable in that they're utterly devoid of any discussion of ethics or what it would mean in terms of a democracy if you could have the most elite institutions gain a competitive advantage over honest institutions by fraud, become so massively large that they couldn't be closed down, and would have dominant crony capitalism power over the government that would lock in their hegemony forever, essentially.

JAY: Yeah, let me give some defense of Lenny Breuer. They were handed this—.

BLACK: That's good, because he needs a defense lawyer.

JAY: Yeah, I know. I'm an obvious likely defender of them. But the argument would go this way, that, you know, the way American economy has worked over this whole last century has given rise to a situation with these massive financial monopolies, and it is to a large extent a big confidence game, and in every sense of the word, and if you start arresting some of these CEOs, especially at a time that was so precarious in '08-'09 and is still, in reality, very precarious, even though they don't want to admit it, that you might unravel the whole financial system again, because nobody's going to trust anybody again, and it becomes chaotic, and everybody pulls their money out, and that, you know, if you're not willing to go that other step, which is to create some kind of public banking alternative, then you are left with a situation that you can't prosecute these guys, 'cause it's just too much risk to the whole global system.

BLACK: Well, as someone who actually was a defense lawyer, I would suggest continuing your current career, 'cause—. So the logic of that is that the only way to maintain trust in an institution that is fundamentally fraudulent is to make sure you never investigate and develop the facts that it is fraudulent, and if people are successfully deceived, then they will have trust in the organization.

JAY: Well, isn't that the logic that they're following?

BLACK: It is pretty close. That's what I've often said, that, like, you know, seriously, folks, your idea is that you were going to achieve financial stability by leaving the felons in charge of our largest banks. That is really creative finance.

JAY: Thanks very much for joining us, Bill.

BLACK: Thank you.

JAY: Thank you for joining us on The Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

Liberty and Justice Are Not Irreconcilable

I voted for Gary Johnson (and am a huge fan of Ron Paul), and respect and fully-support the libertarian passions for freedom and free markets.

But I am also a tireless crusader for enforcing the rule of law.

You might assume that these are opposite philosophies.  For example, a reader asks:

Your work on the dangers of the American nuclear industry has been really comprehensive, and you have drawn attention to the deception, manipulation, neglect, and willful ignorance of the nuclear industry. For example, I just watched the Al Jazeera video you posted earlier this year (3/12), in which the NRC and the nuclear industry are (rightly) criticized for waiting for harm to happen, instead of preventing it. At the same time, you identify as libertarian, and I believe you supported Gary Johnson in the presidential election. He is opposed to public regulation of industry and has said that post-harm lawsuits -- for example, in medical contexts -- are sufficient to encourage businesses to self-regulate for public safety. Could you please explain how you reconcile the libertarian position against regulation with your clear recognition that too-loose self-regulation of the nuclear industry imperils the public?

Nuclear Power Would Not Exist In a Free Market

Initially, it is undisputed that nuclear power plants would not exist if operators had to obtain funding and insurance through the free market. Private insurers won’t touch nuclear energy. Investors run the other way, because the odds of losing all of their investment are so high.

No private company in the world would operate a nuclear plant unless the government put a very low cap on liability. In many parts of the world, governments cap liability at a mere $13 billion dollars.

This is a little insane, given that “the risk of a nuclear catastrophe … could total trillions of dollars and even bankrupt a country”.

Indeed:

If there was a free market in energy, nuclear power would be over … immediately.

AP notes:

Nuclear power is a viable source for cheap energy only if it goes uninsured.

***

Governments that use nuclear energy are torn between the benefit of low-cost electricity and the risk of a nuclear catastrophe, which could total trillions of dollars and even bankrupt a country.

***

The cost of a worst-case nuclear accident at a plant in Germany, for example, has been estimated to total as much as €7.6 trillion ($11 trillion), while the mandatory reactor insurance is only €2.5 billion.

“The €2.5 billion will be just enough to buy the stamps for the letters of condolence,” said Olav Hohmeyer, an economist at the University of Flensburg who is also a member of the German government’s environmental advisory body.

The situation in the U.S., Japan, China, France and other countries is similar.

***

“Around the globe, nuclear risks — be it damages to power plants or the liability risks resulting from radiation accidents — are covered by the state. The private insurance industry is barely liable,” said Torsten Jeworrek, a board member at Munich Re, one of the world’s biggest reinsurance companies.

***

In financial terms, nuclear incidents can be so devastating that the cost of full insurance would be so high as to make nuclear energy more expensive than fossil fuels.

***

Ultimately, the decision to keep insurance on nuclear plants to a minimum is a way of supporting the industry.

“Capping the insurance was a clear decision to provide a non-negligible subsidy to the technology,” Klaus Toepfer, a former German environment minister and longtime head of the United Nations Environment Programme (UNEP), said.

U.S. News and World Report reports:

The disaster insurance for nuclear power plants in the United States is currently underwritten by the federal government, Cooper says. Without that safeguard, “nuclear power is neither affordable nor worth the risk. If the owners and operators of nuclear reactors had to face the full liability of a Fukushima-style nuclear accident or go head-to-head with alternatives in a truly competitive marketplace, unfettered by subsidies, no one would have built a nuclear reactor in the past, no one would build one today, and anyone who owns a reactor would exit the nuclear business as quickly as possible.”

See this and this.

In other words, this is not a free market.  Instead, the public has funded the nuclear industry.  As such, we - the owners - should get some control over how nuclear plants operate.

Likewise, the government created the mega-banks, big oil and the other mega-corporations.

Free Market Champions Demand Prosecution of Fraud

A strong rule of law is the main determinant of prosperity.  On the other hand, failure to prosecute fraud is destroying our prosperity.

Nuclear meltdowns, the financial crisis and the Gulf oil spill all happened for the same reason:  fraud to make a few more pennies, and a subsequent cover-up to try to protect the wrongdoers and continue "business as usual". And see this.

This is not free market economics.

Indeed, the father of free market economics - Adam Smith  - leading Austrian economists, and other free market advocates are for the prosecution of fraud:

There is a widespread myth that free market supporters are against regulation or prosecuting fraud.

In fact, Adam Smith – the father of free market capitalism – was for regulation of banks, and believed that trust is vital for a healthy economy. Because strong enforcement of laws against fraud is a basic prerequisite for trust, Smith would be disgusted by the lack of prosecution of Wall Street fraudsters today.

Smith railed against monopolies and their corrupting influence. And Smith was pro-regulation, so long as the regulation benefited the little guy, as opposed to the wealthiest:

When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.

Richard Posner – one of the leading proponents over the course of many decades for removing the reach of the law from the economy – has now changed his mind.

So has another leading proponent of deregulation and turning a blind eye towards fraud: Alan Greenspan.

While some promoters of a fake version of Austrian economics are anti-regulation and against prosecuting fraud, the main Austrian economists were unambiguously for them.

William K. Black – professor of economics and law, and the senior regulator during the S&L crisis – notes that leading Austrian free market economists said that fraud must be prosecuted:

Real Austrian economists … hate elite frauds and want them prosecuted vigorously. Ludwig von Mises and Friederich Hayek are the two most famous Austrian economists.

Hayek, F.A. The Road to Serfdom

To create conditions in which competition will be as effective as possible, to prevent fraud and deception, to break up monopolies— these tasks provide a wide and unquestioned field for state activity.

The Constitution of Liberty

There remains, however, one other kind of harmful action that is generally thought desirable to prevent and which at first might seem distinct. This is fraud and deception. Yet, though it would be straining the meaning of words to call them ‘coercion,’ on examination it appears that the reasons why we want to prevent them are the same as those applying to coercion. Deception, like coercion, is a form of manipulating the data on which a person counts, in order to make him do what deceiver wants him to do. Where it is successful, the deceived becomes in the same manner the unwilling tool, serving another man’s ends without advancing his own. Though we have no single word to cover both, all we have said of coercion applies equally to fraud and deception.

With this correction, it seems that freedom demands no more than that coercion and violence, fraud and deception, be prevented, except for the use of coercion by government for the sole purpose of enforcing known rules intended to ensure the best conditions under which the individual may give his activities a coherent, rational pattern…..

Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions…. Liberty and responsibility are inseparable.

Mises, L.

Government ought to protect the individuals within the country against the violent and fraudulent attacks of gangsters, and it should defend the country against foreign enemies.

Black also notes that fraud is a leading cause of financial bubbles and malinvestment – two of the greatest sins which Austrian economists rightly fight against.

Unless financial fraud is prosecuted, bubbles will be blown … and when they burst, the economy will tank. Fraud – along with bad Federal Reserve policy – is what causes bubbles in the first place.

The Proof Is In the Pudding: Fewer Prosecutions Equals a Worse Economy

Obama has prosecuted fewer financial crimes than any president in decades – less than Ronald Reagan, less than George H.W. Bush, less than Bill Clinton, and less than George W. Bush.

The economy is worse than it has been since the Great Depression, if not before.

See the connection? See this and this.

Everyone Supports Laws Protecting Contract and Private Property Rights

Even the most radical free market advocates support laws protecting contract and private property rights. In other words, they support the judicial branch of government and the basic laws Congress passes to support such rights.

There are obviously good, pro-competitive laws and bad, anti-competitive laws.

Paul Craig Roberts – a true conservative, who was a Wall Street Journal editor and Assistant Secretary of the Treasury under Ronald Reagan, and is widely credited with being the “father of supply-side economics” – points out:

Regulation can increase economic efficiency and … without regulation external costs can offset the value of production.

***

 

Thirty-three years ago in an article in the Journal of Monetary Economics (August 1978), “Idealism in Public Choice Theory,” I developed a model to assess the benefits and costs of regulation. I argued that well-thought-out regulation could be a factor of production that increases GNP. For example, regulation that contributed to the quality and safety of food and medicines contributed to specialization in production and lower costs, and regulations enforcing contracts and private property rights add to economic efficiency.

 

On the other hand, bureaucracies build their empires and extend their regulations into the realm of negative returns. Moreover, as regulations increase, economic managers spend more time in red tape and less in productive activity. As rules proliferate, they become contradictory and result in paralysis.

I had hopes that my analysis would result in a more thoughtful approach to regulation, but to no avail. Liberals continued to argue that more regulation was better, and libertarians maintained than none was best.

Do Anti-Law Advocates Really Want Anarchy?

All sports need a referee. Some players will be bigger or more talented than others, which is great. They have a better chance of outcompeting the other guy and winning.

But without basic rules and referees, ruthless players might use a knife or kick the other guy in the knee. Perhaps we could suspend all rules, and maybe everyone would whip out a knife break the other guy’s kneecap. That’s fine … but that’s not the game of football.

Radicals who believe that we should not have any laws against fraud are implicitly arguing for anarchy. They might not use that word, but that is what they’re arguing for.

But the same Founding Father who argued for periodic revolutions to keep the government honest also argued against tearing down something unless you have something better in mind to replace it? Thomas Jefferson, the most vocal advocate of the citizens’ right to revolt to ensure honest government also cautioned against tearing something down unless it was for the express purpose of replacing it with something better.

Real, deep-thinking anarchists (as opposed to those using fake anarchy philosophy in order to promote lawlessness by the super-elite) are not for destroying all organization.  Instead, they argue for self-organization and self-regulation. See this, this and this.

JP Morgan and Goldman Sachs aren’t reining in one another’s fraud.  Bank of America and MF Global didn’t police each other’s fraud.   Tepco and BP didn’t make sure the companies made accurate reports about their safety measures.  Solyndra and Koch Industries didn’t guard against abuse by the other company.

So if one wants to argue that the Federal government should not regulate financial players, fine (perhaps our country is too big and complex to manage, and the federal government has become too corrupt) … but who should?

The states? Cities? Communities? Neighbors?

Human beings have the ability to form social contracts. Our D.C. government has largely breached it social contract with the people.

But we shouldn’t tear down the federal government unless we replace it with something better.

No one wants to tear down the state of organization so completely that we go back to monkeys (without the ability to talk), or one-celled critters . . . so the question is how do we want to organize?

Do you want to live as a “savage”? In reality, the natives had survival skills, cultural traditions, and knowledge developed over many hundreds or thousands of years (including knowledge gained before the migration from Asia to America), stored in the database of oral traditions. The settlers had traditions and knowledge as well. If we tear away all of that organization, life is going to be pretty challenging.

It is easy for a teenager to criticize his parents, but a lot harder to actually create a better adult life for himself. A teenager looks silly and immature when he criticizes everything his parents do without understanding the challenges he’ll face as an adult. But a young person who rebels against his parents and then creates a better adult life is doing important and heroic work.

In other words, anarchy as an economic model could work if economic players organized in such a way as to police against fraud and criminal behavior (the equivalent of pulling out a knife or taking out someone’s kneecap in the middle of a football game).

This is a long-winded way of saying that we should not stop the government from enforcing fraud laws unless we come up with a more effective way to stop fraud.

The Real Problem ...

While liberals tend to distrust big corporations and conservatives tend to distrust the federal government, it is really the malignant, symbiotic relationship between the two is the root problem.

Too much government overreach? Giant unaccountable corporations?

Maybe ... but the root problem is that corrupt government officials and corrupt corporate fatcats have merged into a crime syndicate.

Do you get it?    Before we can have a real free market, we need to burst the bubble of fraud.

Before we can have a functioning government, we need to stand up to corrupt government officials.

We all need to step out of the left-right dichotomy which is distracting us and dumbing us down.

We need liberty and justice.

Forget the Housing, Bond or Derivatives Bubbles … Fraud Is the Biggest Bubble of All Time

The housing bubble which burst in 2007 or so was the biggest bubble of all time.

Many argue that the bubble in U.S. bonds has surpassed the housing bubble as the largest ever.

Of course, given that the derivatives market is more than a thousand trillion dollars, and that is is backed by thousands of times less collateral, a good case can be made for arguing that derivatives are the biggest bubble.

But if you really think about it, the largest bubble in history is fraud, because it includes all of the above and more.

Specifically, the housing crisis was caused by fraud. The government encouraged fraud, and helped cover it up.

Huge swaths of the derivatives market are manipulated by fraud. See this, this, this and this. But instead of cracking down on the fraud, the government is backing it.

And the bubble in bonds was caused by super-low interest rates. See this, this and this.

Low interest rates – in turn – are caused by the government’s zero interest rate policy and quantitative easing.

And how did the government sell these programs? By saying that they were necessary to help the economy and create more jobs.

But in reality, zero interest rate policy is just another stealth bailout for the big banks. And quantitative easing only helps the super-elite … and hurt the economy and the little guy (Bernanke knew back in 1988 that QE doesn’t work for its advertised purposes.)

In other words, the government’s low interest rate policies were based upon a fundamental misrepresentation as to their purpose and probable effect.

Indeed, experts say that all bubbles are enabled by fraud.

But there are signs that the fraud bubble is collapsing.

Trust is falling to all-time lows as to many government and private institutions. Why? Because institutional corruption is so rampant that it is becoming obvious to everyone from Joe Sixpack to amateur and sophisticated professional investors.

While liberals tend to distrust big corporations and conservatives tend to distrust the federal government, we all agree that the malignant, symbiotic relationship between the two is the root problem. Indeed, when government and corporatism merge, it is hard for anyone to trust what is going on.

When government officials are as corrupt as the criminal enterprises they are suppose to regulate, even the mainstream media can’t ignore it any longer.

And the people lose all trust in the system.

No matter how hard the boys work to cover up their ongoing misdeeds, the fraud bubble may finally be popping …

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ReSiLieNT DYNaMiSM

"Indeed, there is no risk-off setting for the global economy...leaders from the public and private sectors need to adopt a "risk-on" mindset to catalyzse dynamic growth.

Davos Executive Summary

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A functioning police state needs no police.

William S. Burroughs