Blog Archives

It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness

http://griid.files.wordpress.com/2012/07/obama_loves_banksters.jpg

by George Washington
12/24/2012

The “fiscal cliff” is a myth.

Instead, what we are facing is a descent into lawlessness.

Wikipedia notes:

In many situations, austerity programs are imposed on countries that were previously under dictatorial regimes, leading to criticism that populations are forced to repay the debts of their oppressors.

Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations.

Economist Marc Faber calls the U.S. a “failed state“.   Indeed, we no longer have a free market economy … we have fascism, communist style socialism, kleptocracy, oligarchy or banana republic style corruption.

Let’s look at some specific examples of our descent into lawlessness.

Lawless Looting and Redistribution of Wealth

The central banks’ central bank – the Bank for International Settlementswarned in 2008 that bailouts of the big banks would create sovereign debt crises … which could bankrupt nations.

That is exactly what has happened.

The big banks went bust, and so did the debtors.  But the government chose to save the big banks instead of the little guy, thus allowing the banks to continue to try to wring every penny of debt out of debtors.

Treasury Secretary Paulson shoved bailouts down Congress’ throat by threatening martial law if the bailouts weren’t passed. And the bailouts are now perpetual.

Moreover:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

  • A lot of the bailout money is going to the failing companies’ shareholders
  • Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”

And as the New York Times notes, “Tens of billions of [bailout] dollars have merely passed through A.I.G. to its derivatives trading partners”.

***

In other words, through a little game-playing by the Fed, taxpayer money is going straight into the pockets of investors in AIG’s credit default swaps and is not even really stabilizing AIG.

Moreover, a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing.  Indeed, the Fed bailed out Gaddafi’s Bank of Libya), hedge fund billionaires, and big companies, but turned its back on the little guy.

A study of 124 banking crises by the International Monetary Fund found that propping up banks which are only pretending to be solvent often leads to austerity:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.

***

All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.

In other words, the “stimulus” to the banks blows up the budget, “squeezing” public services through austerity.

Numerous top economists say that the bank bailouts are the largest robbery and redistribution of wealth in history.

Why was this illegal?   Well, the top white collar fraud expert in the country says that the Bush and Obama administrations broke the law by failing to break up insolvent banks … instead of propping them up by bailing them out.

And the Special Inspector General of the Tarp bailout program said that the Treasury Secretary lied to Congress regarding some fundamental aspects of Tarp – like pretending that the banks were healthy, when they were totally insolvent.  The Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely.  Making false statements to a federal official is illegal, pursuant to 18 United States Code Section 1001.

So breaking the rules to bail out the big, insolvent banks, is destroying our prosperity.

Lawless Justice System

A strong rule of law is essential for a prosperous and stable economy, yet the government made it official policy not to prosecute fraud, even though criminal fraud is the main business model adopted by the giant banks.

The perpetrators of the biggest financial crime in world history, the largest insider trading scandal of all time, illegal raiding of customer accounts and blatant financing of drug cartels and terrorists have all gotten away scot-free without any jail time.

There are two systems of justice in America … one for the big banks and other fatcats, and one for everyone else.

While Iceland prosecuted its top criminal bankers, and thus quickly got through its financial problems and now has a vibrant economy, the American government has done everything it can to cover up fraud, and has been actively encouraging criminal fraud and attacking those trying to blow the whistle.

The rule of law is now as weak in the U.S. and UK as many countries which we would consider “rogue nations”.    See this, this, this, this, this, this, this, this, this, this and this.

This is a sudden change.  As famed Peruvian economist Hernando de Soto notes:

In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.

Moreover, U.S. government personnel are on the take.  They have become so corrupt that regulators are literally sleeping with industry prostitutes … while they pimp out the American people.

The corruption of government officials is staggering, and the system of government-sponsored rating agencies had at its core a model of bribery.

We’ve gone from a nation of laws to a nation of powerful men making one-sided laws to protect their own interestsin secret. Government folks are using laws to crush dissent. It’s gotten so bad that even U.S. Supreme Court justices are saying that we are descending into tyranny.

It’s not a “fiscal cliff” … it’s an attempt to rape America … just like Greece and Ireland have been plundered.

Economics professor Randall Wray writes:

Thieves … took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in firesales at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.

Economics professor Michael Hudson agrees … saying that the banks are trying to roll back all modern laws and make us all serfs.

Professor Hudson explained in 2008:

You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.

Indeed:

Foreign Policy magazine ran an article entitled “The Next Big Thing: Neomedievalism“, arguing that the power of nations is declining, and being replaced by corporations, wealthy individuals, the sovereign wealth funds of monarchs, and city-regions.

Indeed, this isn’t the “Great Recession”, it’s the Great Bank Robbery. The big banks have pillaged and looted the rest of the world.

A lawless justice system is ruining the economy.

Lawless Central Bank

The non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest.   Nobel prize winning economist Joseph Stiglitz agrees, saying that the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy. The former vice president at the Federal Reserve Bank of Dallas said said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. “Nontransparency in government programs is always associated with corruption in other countries, so I don’t see why it wouldn’t be here,” he said.

Moreover, the Fed has broken the law by withholding information from Congress, letting unemployment rise in order to keep inflation low, and otherwise exceeding its authority under the Federal Reserve Act.

Acting in a lawless and unaccountable fashion is hurting the economy.

Lawless Attack on Democracy

The ability of the people to participate in their government’s decision-making is vital for a nation’s prosperity. But we no longer have democracy or a republican form of government in America.

The big banks own Washington D.C. politicians, lock stock and barrel.  See this, this, this and thisTwo leading IMF officials, the former Vice President of the Dallas Federal Reserve, and the the head of the Federal Reserve Bank of Kansas City, Moody’s chief economist and many others have all said that the United States is controlled by an “oligarchy” or “oligopoly”, and the big banks and giant financial institutions are key players in that oligarchy.

Laws are being passed in secret, and not even Congress knows what’s going on.

In other words, not only the justice system, but the entire system of American representation has been corrupted, thus harming the economy.

Lawless Infringement of Freedom

Personal freedom and liberty – and freedom from the arbitrary exercise of government power – are strongly correlated with a healthy economy, but America is descending into tyranny.

Authoritarian actions by the government interfere with the free market, and thus harm prosperity.

U.S. News and World Report notes:

The Fraser Institute’s latest Economic Freedom of the World Annual Report is out, and the news is not good for the United States. Ranked among the five freest countries in the world from 1975 through 2002, the United States has since dropped to 18th place.

The Cato institute notes:

The United States has plummeted to 18th place in the ranked list, trailing such countries as Estonia, Taiwan, and Qatar.

***

Actually, the decline began under President George W. Bush. For 20 years the U.S. had consistently ranked as one of the world’s three freest economies, along with Hong Kong and Singapore. By the end of the Bush presidency, we were barely in the top ten.

And, as with so many disastrous legacies of the Bush era, Barack Obama took a bad thing and made it worse.

But the American government has shredded the constitution, by subjecting us to indefinite detention, taking away our due process rights, deploying drones above our heads, spying on all Americans, and otherwise acting in attacking our freedoms.

Indeed, rights won in 1215 – in the Magna Carta – are being repealed.

Economic historian Niall Ferguson notes, draconian national security laws are one of the main things undermining the rule of law:

We must pose the familiar question about how far our civil liberties have been eroded by the national security state – a process that in fact dates back almost a hundred years to the outbreak of the First World War and the passage of the 1914 Defence of the Realm Act. Recent debates about the protracted detention of terrorist suspects are in no way new. Somehow it’s always a choice between habeas corpus and hundreds of corpses.

Of course, many of this decades’ national security measures have not been taken to keep us safe in the “post-9/11 world” … indeed, many of them started before 9/11.

And America has been in a continuous declared state of national emergency since 9/11, and we are in a literally never-ending state of perpetual war. See this, this, this and this.

In fact, government has blown terrorism fears way out of proportion for political purposes, and “national security” powers have been used in many ways to exempt big Wall Street players from the rule of law rather than to do anything to protect us.

So lawlessness infringement of our liberty is destroying our prosperity.

Lawless Initiation and Prosecution of War

It is well-documented that war destroys the economy.

Top U.S. government employees lied us into war, and used illegal torture, assassinations and other crimes of war in prosecuting the wars they unnecessarily started. They were – at a minimum – criminally negligent for failing to stop 9/11 (and see this).

In the name of fighting our enemies – the U.S. has directly been supporting Al Qaeda and other terrorist groups for the last decade. See this, this, this, this and this.

Our use of torture has also created many more terrorists than it has prevented.

Security experts – including both conservatives and liberals – agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this, this and this.

Indefinite detention, drone-strikes on innocent civilians, occupation of foreign countries, and most of America’s other tactics in the “war on terror” increase terrorism.

Terrorism feeds the cycle of war … and is thus harming our economy. (and because terrorism spooks people, they spend less, which further harms the economy).

So lawlessness in starting and prosecuting war is destroying our prosperity.

Postscript:  We’re not facing a “fiscal cliff”.  We’re facing a descent into lawlessness.  Stopping the fraudulent schemes, endless bailouts and imperial adventures is the place to start.

Source

Fiscal Cliff Threatens America’s Economic Freedom

Anthony B. Kim
December 5, 2012 at 3:09 pm

The clock is ticking. Massive tax hikes are threatening to push America’s already declining economic freedom over the “fiscal cliff,” a politician-made economic catastrophe.

President Obama’s proposal to avert the fiscal cliff is a $1.6 trillion tax hike plus new stimulus spending, along with expanded power for himself to raise the debt ceiling without congressional approval. The House Republican leadership has offered a counter to the President’s frivolous proposal, but the counterproposal appears to cave on tax increases and punt on entitlements. Heritage’s Alison Fraser and J. D. Foster point out that “the Republican counteroffer, to the extent it can be interpreted from the hazy details now available, is a dud. It is utterly unacceptable. It is bad policy, bad economics.”

Such bad policies and economics will have a drastic impact on our economic freedom, which is already in trouble after four years of the “Yes, We Can” Administration’s programs and spending. Since 2008, America’s economic freedom has been declining at alarming rates: America has fallen from fifth freest economy in the world to 10th freest. (continues below chart)

As the Heritage Foundation’s Index of Economic Freedom demonstrates, economic freedom is the path to prosperity. The decline of America’s economic freedom means that our economy is losing its capacity to achieve dynamic and sustained economic growth. That’s bad news for American individuals, families, and entrepreneurs, who will reap fewer rewards for their hard work in the future.

Waning economic freedom means lost opportunities for average Americans. The opportunity cost of bigger government is paid for in the loss of economic vitality. A future with fewer jobs and lower incomes can wait at the bottom of the fiscal cliff, or it can follow just as surely from ill-designed policies to avoid it.

There is a better way. The Heritage Foundation has proposed Saving the American Dream, a sweeping pro-growth tax and spending reform roadmap designed to grow the economy and restructure entitlement programs to provide real economic freedom and long-term security for the American people.

As Heritage’s Kim Holmes noted in Understanding American Prosperity, “All of us—not just our politicians—must be vigilant, determined to safeguard liberty and the American Dream. And that means understanding that the foundation of American prosperity rests in economic freedom.”

Posted in Enterprise and Free Markets

Source

Texas Hold’em: To Hell With It, Let’s Jump Off the Fiscal Cliff

Obama must not know Texas Holdem.

by Derek Hunter

We’ve all heard about the “fiscal cliff.” But what does it mean? The media won’t bother to explain it in any detail, and people aren’t looking it up on their own. So, a great many Americans think it’s a physical place, a vacation destination of some sort. I understand people are busy with their lives, but a majority of Americans just voted to re-elect President Obama, a man whose failed leadership created this harmonic convergence of economic mess that is the fiscal cliff. So I say, “To hell with it; let’s jump.”

President Obama is still in campaign mode, traveling the country to sell his unserious proposal of $1.6 trillion in tax hikes, more insane spending and a laughably small amount of spending cuts. So much for a “balanced” plan. But the president couldn’t even be bothered to deliver his “plan” to Congress himself. He sent Treasury Secretary Timothy Geithner, an alleged financial wizard who claims he “misfiled” his taxes because he couldn’t properly use the near idiot-proof TurboTax.

Democrats are unwilling to take seriously the coming crush of entitlement spending. They took entitlement reform off the table before negotiations even began, and their megaphones in the media don’t put down their pompons long enough to report honestly about any of it.

The House of Representatives has passed an extension of the current tax rates, and the Democratic-controlled Senate has done exactly nothing with it. The Senate could vote to just extend the current rates they support and deal with it in a conference committee, but it won’t. It won’t do anything because the party that controls the Senate doesn’t want anything done.

What few leftists will tell you is they want tax rates to increase on everyone. That’s why the president campaigned on extending them for the middle class for only one year, not permanently. They know, just like hiking rates on top earners, that will harm the failing economy, but they don’t give a damn. They want more money.

Liberals have no interest in even inching toward a government that lives within its means because, unlike every other individual, company and entity in the world, government is the only entity that can simply vote itself more means. Max out your credit cards, then tell Visa you’re raising your own credit limit, and let me know how that works out for you.

Republicans should start now, raising a lot of money and running ads about how Democrats are unserious and responsible for taxes going up. Spend money to explain the situation to the American public. The media never will report it, and Republican leaders, such as John Boehner and Mitch McConnell, don’t have the bully pulpit or ability to communicate Ronald Reagan did. So paid media is the only option.

In the meantime, the people voted for Obama, so let them have Obama. Just make sure to pin every ounce of failure on his chest like a scarlet letter.

Yes, sequestration will cause serious cuts in defense spending, but the military can handle it. Liberals become aroused at the prospect of cutting defense, and liberal voters in Virginia and Maryland would be hardest hit as defense contractors lay off Obama voters in those blue states. I say good. Sometimes voters have to take their medicine, even if it’s a suppository.

It won’t be easy, but the military will adapt. That’s what the military does, and that’s why it is the best in the world. And half the automatic sequester cuts will come from domestic spending – bureaucracies also filled with Obama voters, who will be less able to deal with them. If they can’t adjust their spending to absorb the cuts, they’ll have to lay off people. Again, good.

If Republicans refuse to extend unemployment benefits, these newly unemployed Obama voters eventually will get to experience first-hand the lifestyle their vote empowered. Welfare state overlords on welfare. Can you think of a better education for bureaucrats than to be forced onto the very programs they administered, so they themselves experience the soul-sucking, aspiration-killing impact of what they’ve done to others? Karma is exactly what they say it is.

Or, if Republicans don’t have the “intestinal fortitude” for this (which leadership hasn’t displayed in years), the House should pass a middle-class tax cut but keep the top rates the same. And make them permanent. That would force Democrats to reject an actual middle-class tax cut, not the “keeping-rates-the-same” nonsense they’re now trying to sell to the American people as a tax cut.

We know Democrats aren’t interested in cutting taxes for the people they claim to fight for, so call their bluff. Nancy Pelosi, Harry Reid and Barack Obama like lying about middle-class tax cuts, so pass the bill and see how they react.

But none of this will work if Republicans don’t start a smart, aggressive, expensive and sustained ad campaign that circumvents the media. The key word is “smart,” and it’s also the catch. The Republican Party needs to treat itself like Keith Richards and embrace failure and go with all new blood. If the party doesn’t shed those who brought us the debacle of Nov. 6, no strategy will work. Just like voters who re-elected a failed, incompetent president expecting a different outcome, Republicans can’t retain the same failed team and expect to win.

Democrats have no interest in addressing our massive deficit and out-of-control spending; it’s up to Republicans. The question is this – do Republicans have the will? We’ll all have to have to take our medicine sooner or later. If we don’t take advantage of the opportunities now, that suppository will end up being like a cyanide pill.

Source

Fear, Everywhere, Fear

By Alan Caruba

If my emails and the headlines I am reading indicate anything, there is widespread fear among Americans that something terrible has occurred with the reelection of President Obama. Not all Americans, though. Those who voted for Obama appear to remain oblivious despite the threat of a “fiscal cliff” or the new taxes in Obamacare that will kick in on January 2nd.

We have a Secretary of the Treasury, Timothy, Geithner, calling for an end to debt ceilings, apparently believing that America can continue to borrow money to pay for the interest on its escalating debt, now pegged at $16 trillion and growing daily. The U.S. borrows $4 billion a day. Anyone with a credit card knows that their payments increase as they struggle to deal with their personal debt. Eventually they either declare bankruptcy or turn to companies that negotiate a payment to release them.

If America was to default on its debt, the dollar, already in free fall, would be worth nothing. We would be bartering shiny beads and anything else to buy food and other necessaries. We would become Zimbabwe where you need a million of their dollars to buy a loaf of bread.

Writing recently on her Fox Business blog, Gerri Willis spelled out the huge rise in taxes Americans are facing. “All told, next year, total taxes will go to almost 50% for the middle class; the very group that the president says he wants to protect. That means 50 cents out of every dollar earned has to go to the government. Half of everything will go to an entity that didn’t earn that money, and shouldn’t be entitled to all that dough.”

What kind of madness is it that the Teamsters union would impose such senseless rules that it would weaken Hostess to the point of bankruptcy, preferring to let the company die rather than to protect the jobs of 18,500 bakers? Other unions are engaged in attacks on a weakened economy. What kind of nation is it that its government employees are lobbying Congress to not only increase their pay, but to exempt them from the impact of the spending cuts scheduled to kick in?

There is a full-scale attack on the privacy Americans have taken for granted, protected by the fourth Amendment that says “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated…”

On November 14th, the Heritage Foundation asked “Do you trust the government with your computer?” The government has had “13 breaches and failures of its own cybersecurity just in the last six months.” Even so, “the President and his allies in the Senate are pushing forward to regulate America’s cyber-doings, without any clues about how much this will cost or how it will work.”

“It has become the norm with this President—if Congress fails to accomplish his objectives, he goes around it with executive orders and federal regulations. He’s doing it again. Congress did not pass the Cybersecurity Act of 2012 before the election, so the President has issued a draft of an executive order to put much of that legislation in place without lawmakers voting.”

This is the very essence of tyranny and the President has had four years to perfect it. Are conservative think tanks the only ones paying any attention? It would appear so.

A new proposed law in the Senate would strip Americans of any privacy as they communicate with one another by email. A vote for the law would allow warrantless access to American’s email and is scheduled for a vote shortly. It would allow 22 federal agencies as well as state and local law enforcement to access one’s emails with nothing more than a subpoena. This is totally unconstitutional.

Already $16 trillion in debt, the government is looking for ways to take over the $3 trillion that is held in private retirement plans such as 401(k) plans and IRA’s. A recent hearing by the Treasury and Labor Departments addressed the nationalization of the nation’s pension system. The director of the National Senior’s Council, Robert Crone, warns “It is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up.”

As we move closer to an Electoral College vote confirming Obama’s reelection, whistleblowers are coming forth in Ohio, Florida and elsewhere to reveal that significant voter fraud was a contributing factor, but it receives little or no media coverage. One must ask how 99% of votes in Philadelphia districts went to Obama and ask why nothing is being done to investigate this and other offenses such as the 141.1% of the vote recorded in Florida’s St. Lucie County. That is statistically impossible, but it robbed Rep. Allen West (R) of his seat in Congress.

This isn’t government. It is gangsterism. It is “the Chicago way.”

The monster Homeland Security Agency just graduated its first class of FEMA Corps, kids aged 18-24, recruited from the President’s Americorps volunteers, that will become a full time, paid standing army. Fears of FEMA camps abound and in the aftermath of Hurricane Sandy, people seeking shelter and food were herded into one that resembled a concentration camp of the Nazi regime and told not to use various means of communication to contact the media or outside community. They went from hurricane victims to prisoners of the government.

In so many ways, the freedoms protected by the U.S. Constitution are in danger of disappearing along with the separation of powers it requires.

Little wonder that citizen’s petitions from a growing number of states are called for secession. Or that governors are refusing to set up the Obamacare exchanges required by a law that has taken control of twenty percent of the nation’s economy; their budgets held hostage to Medicaid.

On an individual level, people who have jobs are fearful of losing them. College graduates are fearful of the huge debt they carry for the loans they received. People wonder if they can afford to get married. Married couples fear the cost of having another child. Homeowners fear not being able to pay their mortgages. Seniors fear that their savings won’t last as they live longer.

There is ample reason to fear not only the collapse of the nation’s economy, but the loss of liberty in America.

© Alan Caruba, 2012

Source

Video: United States Budget Dilemma

Published on Mar 14, 2012 by Hal Mason

ALARMING! Washington’s Dilemma!. Soaring debt and a budget Congress can’t balance. This VIDEO explains WHY. Every person in AMERICA should watch this video! Over 2.7 million VIEWS! http://www.whitehouse.gov/omb/budget

%d bloggers like this: