Posts Tagged ‘Inequity’

Banking On Banksters

May 19, 2014

I was gloomy as I saw what happened in 2008 and thereafter: the very financiers who had stolen all the money, were given trillions, to replace what they had stolen. It was as inconceivable as the worst horrors of history, but it proceeded.

In exchange the crooks did not even have to recognize they had been wrong. When it dawned on our unworthy leaders that it looked bad, all this giving from the poor to the richest fortunes in the world, they invented something else: easing money creation for top banks, so that they could “reimburse” the Public: that’s called “Quantitative Easing” (or “the Twist”, or…)

It’s a pleasure to now have Paul Krugman seeing the light, six years later, in “Springtime For Bankers”.  Oh, don’t jump for joy, yet. No, Paul is not seeing the light about “Quantitative Easing”, that’s still beyond what he can conceive at this point. But he has finally seen that the exalted status of banking itself is the problem, and, more generally that:

…”economic policy since the onset of the financial crisis has been a dismal failure. It’s true that we avoided a full replay of the Great Depression. But employment has taken more than six years to claw its way back to pre-crisis levels — years when we should have been adding millions of jobs just to keep up with a rising population. Long-term unemployment is still almost three times as high as it was in 2007; young people, often burdened by college debt, face a highly uncertain future.

Now Timothy Geithner, who was Treasury secretary for four of those six years… thinks he did a heckuva job.

He’s not unique in his self-approbation. Policy makers in Europe, where… a number of countries are in fact experiencing Depression-level distress, have even less to boast about. Yet they too are patting themselves on the back.

How can people feel good about track records that are objectively so bad?…

In both Europe and America, economic policy has to a large extent been governed by the implicit slogan “Save the bankers, save the world” — that is, restore confidence in the financial system and prosperity will follow…

Mr. Geithner’s book is devoted to a defense of the U.S. financial bailout, which he sees as a huge success story — which it was, if financial confidence is viewed as an end in itself… But where is the rebound in the real economy? Where are the jobs? Saving Wall Street, it seems, wasn’t nearly enough. Why?

One reason for sluggish recovery is that U.S. policy “pivoted,” far too early, from a focus on jobs to a focus on budget deficits. Mr. Geithner denies that he bears any responsibility for this pivot, declaring “I was not an austerian.” In his version, the administration got all it could in the face of Republican opposition. That doesn’t match independent reporting, which portrays Mr. Geithner ridiculing fiscal stimulus as “sugar” that would yield no long-term benefit.

But fiscal austerity wasn’t the only reason recovery has been so disappointing… there was, arguably, a lot the Obama administration could have done to reduce debt burdens without Congressional approval. But it didn’t; it didn’t even spend funds specifically allocated for that purpose. Why? According to many accounts, the biggest roadblock was Mr. Geithner’s consistent opposition to mortgage debt relief — he was, if you like, all for bailing out banks but against bailing out families…

…leading experts on this subject are the economists Atif Mian and Amir Sufi, whose just-published book “House of Debt” argues very much the contrary. On their blog, Mr. Mian and Mr. Sufi point out that Mr. Geithner’s arithmetic on the issue seems weirdly wrong — order of magnitude wrong — giving much less weight to the role of debt in holding back spending than the consensus of economic research…

In the end, the story of economic policy since 2008 has been that of a remarkable double standard. Bad loans always involve mistakes on both sides — if borrowers were irresponsible, so were the people who lent them money. But when crisis came, bankers were held harmless for their errors while families paid full price.

And refusing to help families in debt, it turns out, wasn’t just unfair; it was bad economics. Wall Street is back, but America isn’t, and the double standard is the main reason.”

Some hold that Timothy Geithner is creep central. This plutocrat got his jobs because of his connections, and is now president of “private equity” (understand: conspiracyplutocratic central) firm Warburg Pincus. Obama was forced to select the 2008 crisis maker Geithner over his spiritual father, the extremely well connected Lawrence Summers, because Summers’ towering reputation as a sexist, derivatives and plutocratic fiend, was so colossal that even the powers that be cringed.

It’s true that, as chief of the New York Fed, Geithner was the prime proximal architect of the 2008 crisis, so hell could not have been in better hands.

Last week, the New York Times censored by comments about “glaciers disintegrating”, probably because the message that the melting would go faster by one order of magnitude than announced, did not go down well.

This time, one deigned to publish me (progress: in the past such a comment on finance would have been censored). Here it is (beefed up):

“Save the bankers, save the world?” It is worse than that. The bankers are who create the money, and they do so, by re-distributing it, to whom, and what, they feel worthy.

The financial crisis 2008 revealed that bankers had lent the money to unprofitable projects, on such a scale that banks went bankrupt.  In the European Union, and the USA.

It’s true some of the money, in the USA, was lent directly to families who could not pay back anymore the debts they had incurred. How did this happen on such a scale? Because those millions of home owners had been tricked into incurring these debts by misrepresenting the payments those people would have to make.

Thus the bankers behaved like gangsters. However, in spite of the colossal misery they caused, none of these gangsters was prosecuted.

Moreover, bankers had also created a lot of money they lent for highly leverage financial derivatives operations that went very wrong (they went wrong, in part because, by all betting that what they thought could not happen would not happen, the bankers made sure that it would happen). An example of this hedging gone wrong is the bankruptcy of American International Group, AIG (that cost nearly 200 billion dollars).

The futility of separating one side of the Atlantic from the other was made blatant by AIG. The specific unit of AIG that leveraged AIG into oblivion was operating from London.

Highly leverage derivatives was another way bankers went wrong. Those derivatives, in particular the financial ones, dwarf the real economy.  This means the banks are financing a virtual economy, not the real one.

The same phenomenon festers in Europe. The money was not lost for everybody, though: the richest have got much richer.

Rogue bankers create money for themselves and their friends. The public is then asked to bring fresh money to refloat the banks that the bankers and their friends just stole. Then innocent entities get accused (subprime mortgage holders, the Euro, etc.)

In New York, one, just one junior trader was prosecuted for the 2008 crash. He was French, of course. In France Jerome Kerviel was condemned to three years in jail (and initially a multi-billion dollar fine), for having, allegedly,  lied to his employer.

It has not struck the corrupt mind of “justice” that it’s a corrupt organization that allows just one man to trade 80 billion dollars. A corrupt organization in a corrupt system.

Kerviel indeed vociferously asserts that there was an extensive conspiracy to protect Societe’ Generale, one of the world’s biggest bank.

Meanwhile American justice pursues criminally some Swiss bankers. Swiss bankers are from a country small enough to eat raw. French bankers are another matter, and American bankers are, naturally untouchable (American banks are made to pay fines… from QE).

The European economy has been ravaged to give as much money to the bankers and their accomplices as what they had just stolen. And this “austerity” is still going on. Tellingly, in Europe, only the far left and far right parties are starting to understand the extent and nature of the theft, and talk about it. No wonder that they will progress in the European elections, because, increasingly, people are starting to understand the truth. Hey, Nobel Laureate Paul Krugman is nearly there!

The bankers have been saved. The world is therefore still at their mercy.  “Save the bankers, save the world” is in truth: ”Save the gangsters, save the world”. This financial plutocracy is there to stay, We The People are left to pray. On our knees.

Patrice Aymé

Unexamined, Unequitable: 9/11/73

September 14, 2013

I do not just believe in Systems of Thoughts but also in Systems of Mood. For example if one installs oneself in a mood of indifference, cruelty, or inequity, that mood, by affecting all of one’s neurochemistry, will pervade all of one’s mental system. This holds not just within individuals, but for entire superorganisms: societies. Logic is punctual, moods are global, they tweak all logics.

Charles Blow contemplates theOccupy Wall Street Legacy, and strikes an optimist note:“The rich have recovered, but the rest still struggle. This cannot long stand.” Yes, the people should stop struggling, and just humbly submit to their Lords before the latter get real angry, as they did on 9/11/1973. That’s when the legal government of Chile was assassinated, and replaced by a made in USA neoconservative butchery.

Major USA Crime Yet Unexamined

Major USA Crime Yet Unexamined

First the Chief of Staff of the army, a constitutionalist, had to be killed. General René Schneider was Army Commander-in-chief at the time of the 1970 Chilean presidential election, in which Salvador Allende won a plurality on September 4, 1970, on his fourth try for the presidency. A congressional vote was required to confirm the winner.

Allende was a Medical Doctor from the upper Chilean society. Having seen misery in hospitals, he founded the Unidad Popular (“Popular Unity”) coalition. He was minister of health in 1938, a deputy and a senator. Contrarily to what is often claimed, Allende was a socialist, not a Marxist. In personal conversations with his closest friends, he never evoked Marx. Allende lived in a mansion.

Hollande, the French president who waged war in Mali and wants to “punir le dictateur Assad“, is also a socialist. Yet he is not from the upper society and does not own a mansion.

The basic problem with Allende was that he was under the misconception that Chili was owned by Chileans.

The CIA spent 2.7 million dollars to defeat Allende in 1964, plus much more millions from Royal houses in Europe, the Vatican, Christian Democratic parties, the Catholic church of the USA, all sorts of frantic plutocrats. The money was used for what the ambassador of the USA, Edward Korry called “an enormous propaganda campaign” (American propaganda campaigns, Korry added, that he witnessed in many countries; even in Europe).

The same strategy was used in Italy in 1948, or Chili in 1970 (this time with a CIA seed of ten millions): create an anti-Socialist terror (source: Nixon’s ambassador to Chile, again).

Incidentally this shows that the concept of plutocracy is all-embracing, and that the Royal Houses are part of it. They should all be unceremoniously replaced by the Republic, and the main reason invoked ought to be, precisely, this sort of criminal conspiracies against humanity that they have been involved in. (Catalonia independencia is a good place to start!)

This is not just dead history: all those who repeat that Allende was a Marxist are still part, consciously or not, of that propaganda, that conspiracy, serving the masters.

Actually Nixon did not call Allende a Marxist. He knew better. Nixon called Allende a “bastard”, a “SOB”. Richard Nixon, the famous criminal,  decided he got a vote too. Nixon ordered that Allende would not go from quasi elected president to president. Nixon ordered the CIA to “smash that bastard” (revealed his ambassador, Edward Korry). Three Chilean generals met with the US ambassador. They informed him that the chief of the Chilean army would strictly follow the Chilean Constitution, and refuse to make a coup.

So Kissinger and Richard Helms (CIA chief) sent weapons and ammunitions to Chiliand personnel to Chili to assassinate general Schneider, October 24, 1970. Some of the weapons were sent by diplomatic pouch (without telling the ambassador). The result surprised Nixon. Full of indignation about that Washington-organized assassination, even rightist Congressmen voted for Allende, who was duly elected president.

Allende launched a program of nationalizations, in particular of USA owned banks and copper mines.  He also launched a national health program, free milk in schools, a pursuit of the land redistribution program already started under his predecessor, Eduardo Frei. Behaving exactly like the Roman Republic of old, the Chilean government limited the latifundia (large farms) to 80 hectares. That too was part of Allende’s electoral platform.

Allende brought up the lowest wages by up to 30%, while slowing inflation by a third. Fiscal spending went up from 21% to 27% of GDP. A huge housing program was launched.

The CIA convinced key Chilean military officers to carry out a coup. USA Defense Intelligence Agency agents secured the missiles used to bombard La Moneda Presidetial Palace (the film of the bombardment is easy to access on the Internet).

In light of all this, what to do with Mr. Blow’s optimism?

“The rich have recovered, but the rest still struggle. This cannot long stand,”  sings Blow. Why could not it stand? After plutocracy took power in Rome, it took more than 1,800 years for the a fully democratic constitution to return, in France in 1789 (contrarily to what Obama claimed last week, the Constitution of the USA, as it allowed for racial slavery until 1865, was not truly democratic). Interestingly, the Roman empire itself had officially returned by 800 CE. Thus democracy is more fragile than plutocracy!

Blows hopes that:“Extreme levels of inequality are politically untenable and morally unacceptable, and that eventually the 99 percent will demand better. “

Well it was unacceptable that the government of the USA would kill high Chilean authorities, just because American plutocrats owned the world’s largest copper mines in Chili. But where is the inquiry? There is a lot of flag waving on 9/11. But how many Americans know there are two 9/11s, and that, in a deep sense, both were engineered at the highest levels of the USA?

The inquiry in the death of the UN general-secretary was recently reopened, 52 years after the fact. Dag Hammarskjöld was shot down by the usual suspects (Anglo-Saxon mining plutocrats) and it was covered-up by the usual suspects (their accomplices in the USA-UK governments).

Unfortunately, instead of reopening the past to examine it carefully, right now the majority seems to be demanding that dictators be allowed to gas children in peace. Instead of asking what happened on 9/11 in 1973, the majority seems to be inspired by Uncle Vlad, the way it used to be inspired by uncle Joe.  

The economic theory in use today is, simply, wrong. First, to measure the economy, it evaluates riches, in other words, how the wealthy are doing.

Salvador Allende, president of Chili, had made a superb discourse at the United Nations, much applauded, where he explained that corporations answered to no one, and were above the law. This is why Nixon  gave the order to “smash Allende“. And Allende was smashed. To this day, how many thousands were killed is unknown.

“Eventually the 99 percent will demand better,” dreams Blow optimistically. However the only reason Martin Luther King was allowed to dream was because president Eisenhower had stood and delivered.

Ike comically said:”Earl [Warren, Supreme Court chief] wants big black negroes to sit next to small white little girls at school.” It was innocuously funny: Ike did send the army to enforce desegregation in schools in the 1950s. He did not ask Congress (against!) or public opinion (against!). The dream came after the fact.

Meanwhile in Chili, the daughters of two generals who were neighbors and good friends until 9/11 are running for the presidency. Ms Matthei’s father, Gen Fernando Matthei became a senior goon of Pinochet.

Ms Bachelet has already been president (one cannot do two presidencies in a row in Chili). She will probably win again (as her first presidency was excellent). Her father, General Alberto Bachelet, remained loyal to the Republican Constitution. He was arrested, tortured and killed. She wants to re-examine what happened on 9/11/73. So things are looking up in Chili.

Less so at that point in the USA. Hence the need for Professor in Chief Obama to enlighten the obscure masses, with basic lessons in ethics and strategy: “crimes against humanity are intolerable, repeat after me!” 

What the 66% have been demanding is that crimes against humanity be left unpunished. Why should the 66% demand an equitable society, when they don’t want to stop a tyrant who gaz children?

In any case, it’s high time for the USA to examine the murderous interference of Nixon in the completely legal government of a country that had been fully constitutionally democratic for about as long as the USA itself. And it’s high time not to forget that the same advisers who were behind Nixon (such as Kissinger and Friedman and Kaiser) were also the creators of the so called neo-liberal order… Which is neither new, nor liberal. But drenched in blood, inequity, misery, and the old tradition of killing people one cannot rob in peace.

***

Patrice Ayme