http://www.youtube.com/watch?gl=US&feature=player_embedded&v=ffHFjlqIzKECan anyone doubt that this climate change from the rule of law to the rule of fraud is a monumental shift?
http://pakalert.wordpress.com/how-911-was-done/
http://www.thersa.org/events/vision/vision-videos/david-harvey-the-crises-of-capitalism
The government's entire strategy now - as during the S&L crisis - is to cover up how bad things are....
http://theeconomiccollapseblog.com/archives/the-federal-reserve-is-holding-a-conference-on-jekyll-island-to-celebrate-100-years-of-dominating-america-a-return-to-jekyll-island-the-origins-history-and-future-of-the-federal-reserve
But it is not only a matter of covering up fraud that has already happened. The government also created an environment which greatly encouraged fraud.
Here are just a few of many potential examples:
As William Black told me today:
http://theeconomiccollapseblog.com/archives/the-federal-reserve-is-holding-a-conference-on-jekyll-island-to-celebrate-100-years-of-dominating-america-a-return-to-jekyll-island-the-origins-history-and-future-of-the-federal-reserve
But it is not only a matter of covering up fraud that has already happened. The government also created an environment which greatly encouraged fraud.
Here are just a few of many potential examples:
- The government-sponsored rating agencies committed massive fraud (and see this)
- The Treasury department allowed banks to "cook their books"
- Business Week wrote on May 23, 2006:
"President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations."
- Regulators knew of and allowed the use of debt-hiding accounting tricks by the big banks
- Tim Geithner was complicit in Lehman's accounting fraud, (and see this), and pushed to pay CIA/AIG's CDS counterparties at full value, and then to keep the deal secret. And as Robert Reich notes, Geithner was "very much in the center of the action" regarding the secret bail out of Bear Stearns without Congressional approval. William Black points out: "Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth"
- The former chief accountant for the SEC says that Bernanke and Paulson broke the law and should be prosecuted
- Freddie and Fannie helped to create the epidemic of mortgage fraud
- The government knew about mortgage fraud a long time ago. For example, the FBI warned of an "epidemic" of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud, and the SEC has repeatedly ignored accounting fraud. Indeed, Alan Greenspan took the position that fraud could never happen
- Bernanke might have broken the law by letting unemployment rise in order to keep inflation low
- Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not
- Arguably, both the Bush and Obama administrations broke the law by refusing to close insolvent banks
- Congress may have covered up illegal tax breaks for the big banks
- Of course, deregulation by Larry Summers, Robert Rubin, Phil Gramm and many other high-level politicians and regulators also helped to grease the skids for fraud....
- http://www.treehugger.com/files/2010/11/rich-vail-fund-manager-gets-off.php
In other words, the fraud started at the very top with Greenspan, Bush, Paulson, Negroponte, Bernanke, Geithner, Rubin, Summers and all of the rest of the boys.The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of "an epidemic of mortgage fraud." But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting ....
This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.
***http://www.antipope.org/charlie/blog-static/2010/11/conspiracy-theories.html
The government that permits this to happen is complicit in a vast crime.
As William Black told me today:
In criminology jargon: they created an intensely criminogenic environment. I have no knowledge whether the national security aspects played any role, but the anti-regulatory dogma was devastating.....
WARS Are sold to the sheeple like Coke or Tooth Paste in USA and Israel....
White House chief of Staff Andrew Card famously said - in explaining why the Bush administration delayed until September 2002 to make its case for war in Iraq:From a marketing point of view, you don't introduce new products in August.War is - indeed - marketed just like soda or toothpaste.
In fact, the government hired some of the top public relations experts to sell the Iraq and other wars. See this and this.
As the head of Santa Clara University's Center for Applied Ethics wrote in 2003:Am I the only one who's queasy that the Bush Administration has quite publicly announced plans to sell us on war with Iraq the same way a soda pop company might hype a new soft drink?Everyone knows that truth is the first casualty of war.
Countries need to lie about their enemies in order to demonize them sufficiently so that the people will support the war.
That is why intelligence "failures" - such as the following - are so common:
- The U.S. Navy's own historians now say that the sinking of the USS Maine -- the justification for America's entry into the Spanish-American War -- was probably caused by an internal explosion of coal, rather than an attack by the Spanish.
- It is also now well-accepted that the Gulf of Tomkin Incident which led to the Vietnam war was a fiction (confirmed here).
That is also why governments from around the world have used false flag incidents for thousands of years to sell their people on whatever wars they wish to launch.Of course, the demonization process is catapulted far and wide by the mainstream media. Indeed, the corporate media is instrumental in spreading the lies so as to support war....Wars and conflicts are not always measured by how many soldiers, tanks, and airplanes are used in a conflict. Money and finance can sometimes have a greater impact and cause more destruction than what bombs and bullets can sometimes achieve.
- And two lies were used to justify the 1991 Gulf TV War: the statement that Iraqis murdered Kuwaiti babies and the statement that a quarter of a million Iraqi troops were massed on the border with Saudi Arabia (see also this article)(technically, the statement about Kuwaiti babies did not come from the U.S. government, but from a public relations firm hired by the government).
The U.S. is now positioning itself to inflate away its debt and financial liabilities, an action that will undermine everyone's currency position in global trade and employment. The impact from pursuing such an action has raised everyone's apprehension and fears that a currency war will produce the same environment that led to the Great Depression .... and they are probably right.
The nation is suffering from social dementia and the demographics show that in our near future more people will be losing their minds than losing jobs, homes, and health care.
Elections are not going to cure that....Unlike the 'trickle down' theory of wealth, greed and corruption really do trickle down.....The government that allowed private banking to control our money at all is responsible. The original nit wits who squeaked it in and the endless parade of babbling idiots who promote genocidal usury. Let's just all cheat!
Mathematically Perfected Economy of utter corruption to the core....(TM)Only the big corporations play to gain by war....
They sell weapons, machinery and food to allies and enemies. Antony Sutton criticized and denounced big corporations and Wall Street that helped fund Hitler and Stalin....USA, USA, Fuite En Avant into Oblivion......The French have a wonderful expression which is hard to translate into English:fuite en avant. This expression can roughly be translated as "flight forward", or "headlong rush", "panic-induced compulsion to further exacerbate a crisis or calamity" or even "unconscious mechanism that causes a person to throw himself/herself into a dreaded danger". No matter how one translates this expression, it is painfully obvious that this is exactly what took place in yesterday's elections in the USA: a sickening, disgusting electoral fuite en avant.Only an thorough analysis of the many decades of immoral and incompetent political rule by both Parties could truly explain what happened yesterday, but even a look at the comparatively recent acceleration into chaos and debacle is already a good indicator of the causes of the current disaster.Bush (I am talking about "Junior" here) and Obama will enter the history books as the two President who totally and shamefully squandered a truly historical opportunity to achieve otherwise impossible results.Following the inside Job of 9/11...., initially the entire world united behind the USA in an absolutely unprecedented show of sympathy and support for the USA....until they started opening their eyes to NORAD standing down....and Amalgam VIRGO....etc, and the flood of information following the debacle of the infamous 9/11 commission..... This was when the French socialist newspaper "Le Monde" had a headline saying "Nous sommes tous des Americains" (We are all Americans) and one million people demonstrated in the streets of Tehran to express their heartfelt support for the victims of the tragedy in New York. It took the Neocon's boundless arrogance, imperial hubris, crude illiterate "cow-boy" "diplomacy", xenophobic nationalism and narcissistic condescension to alienate the entire planet to never heard of before levels of anti-Americanism.... Following eight years of such horror, the world naively mistook Obama for a quasi-messiah, the man who would somehow change it all and bring back an old USA (which never really existed, but never-mind that).Obama (who had campaigned on an explicit promise to double the size of the US special operations forces and to increase of the US Army by 4 divisions!) was even given a Nobel Peace Prize before having actually done anything at all. Yet literally from day one, Obama back-stabbed his voters by betraying almost every promise he had made. The "yes we can!" and "change you can believe in!" brand salesman turned into an ugly and equally evil "Bush the Third" kind of President: a puppet of Wall Street, a puppet of the Israel Lobby, a puppet of CIA/MOSSAD, a puppet for the military-industrial complex, a puppet for the billionaires, a puppet for Big Pharma and Big Oil - a puppet for everything which is destroying the USA as a country and makes it hated by the rest of the planet. So one can hardly blame the American public for being "angry with Washington". But what is sickening is not the public's anger, but what it chose to do with this anger.If the Republicans are quite literally the party of open and unapologetic evil, then the so-called "Tea Party" is the militantly lunatic faction of that already quite demented party. I am not referring to all the policy "solutions" which the Tea-Partiers are advocating here, but to the kind of illiterate, ignorant, angry and frightened base instincts which they appeal to. This is Bush's nationalism, only squared. This is Reagan's "government is the problem", only pushed to even more absurd extremes ("Obamacare" is described as "socialism" by people who have absolutely no concept of what the word "socialism" means!). While originally the Tea Party did have some real libertarian roots, it was rapidly co-opted and fully taken under control by the behind-the-scenes "Big Business" (the Koch brothers, Karl Rove the assassin in charge of the White House Murder INC,...., etc.). Just like Hitler used illiterate morons for his SA, so will US Big Business use the "Tea Partiers" as the stormtroopers to further weaken the state and strengthen the corporate control over the USA.All this really begs the question of how stupid Americans really are, does it not?The truth is that stupidity does not explain what is going on. Sure, the entire propaganda structure of the US society (from a lobotomizing school system, to 4+ hours of TV exposure each day, to an almost overt cult of ignorance and illiteracy - many did vote for Dubya, remember?) has greatly contributed to the "stupidification" of the American public. But that's only part of the story. What is no less important is the absolute moral bankruptcy of the US society.Think about it: this is a society which suffers from what a friend of mine calls an "acute compassion deficit disorder". This country has the highest per capita ratio of people in prison and male rape is considered an unofficial but widely accepted form of torture for prisoners and most Americans think: screw them! They deserve it. Obey the law and you will not be raped. This country has an immense population of homeless and poor, many of whom hold one or several jobs, and what do most Americans think? Screw them! They are welfare bums! Medical problems are one of the leading causes of personal bankruptcy and homelessness? Screw them! We don't want "socialist" health-care in our "free" nation! The world hates the USA? Screw it! We brought these ungrateful bastards freedom and prosperity and they hate us? We will kick their sorry asses! Etc. etc. etc. This is the kind of ideology which permeates the ideological fabric of this ugly society.Mind you, the very same people who mindlessly parrot all these slogans will also show a lot of sincere generosity and compassion towards their fellow-citizens when they see them. Primarily, this "compassion deficit disorder" is an ideological phenomenon, not an expression of an individual morality. But then, the vast majority of Germans during WWII also retained their individual sense of decency and compassion, its collectively that they acted like vicious beasts.Americans even display this blinding ideology to "screw" themselves. Just look at the State of California in which a proposition to legalize marijuana was defeated. California is completely bankrupt, its jails are over-filled many times over, and weed is smoked all over the state. Anybody sane would therefore conclude that 99.99999% of Californians would agree to legalize marijuana, tax it and thereby take away the profits from the drug dealers and place them into a dying state. But no - Californians voted to keep their jails filled with non-violent offenders, to keep the drug trade up and running, to keep their state bankrupt and to have the Federal authorities further raid the providers of medical marijuana (which is legal under state law). How stupid can anybody get?!You want another example? Florida is a state totally devastated by promoters of urban sprawl, rabid and unplanned growth, and by a massive - and probably irreparable - destruction of Florida's water supply (no, not for drinking, but for watering golf courses and providing cheap water for industry). And yet, Floridians soundly *defeated* a proposition which was supposed to give them the right to vote on any changes to local comprehensive land use plans (Proposition 4). Yes, Floridians voted *not* to have such rights. How stupid can anybody get?!One thing is clear: the immense disillusion with Obama has resulted in a devastating backlash into a new era of triumphant Fascism and lunacy. For the rest of the world, this basically means, more of the same, only worse.At a time when banks are hoarding their assets and credit is dead, the US government will not inject more money into the economy, it will further make cuts into budgets even if that means utterly destroying an already moribund US economy. You can count on the Tea Partiers to push the USA into a full-scale and lasting depression by essentially asphyxiating the US economy. This, in turn, will negatively impact the rest of the world or, at least, that part or the world which still sheepishly follows the "Washington consensus" and its suicidal policies (Europe anybody?!)US imperial policies will only get worse. When real unemployment is somewhere in the range of 20% or more, and 40-50% for Blacks, you can be sure that the ranks of the military will swell with more angry jarheads ready to take on any "sand nigger" who dares to sit on the oil Americans 'need' to drive all their big SUVs. The war on Iran is on, my friends, make no mistake about it.And if fictional terrorist plots a la "shoe bomber", "undies bomber", "Times Square bomber" or the latest Yemeni "Postal bombers" do not do sufficiently terrify the general public, you can expect another false-flag operation a la 9/11 which will usher in yet another era of hysteria, fear and aggression.Eventually, of course, the USA will collapse under the weight of its own self-defeating hubris and idiocy. But in the meantime, things will get very, very ugly indeed. This is the inevitable consequence of any fuite en avant....and much more utter corruption from the power behind the power,....is forthcoming....
Prosecuting Fraud in America is the only way out.....As economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail.
And Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals - and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. See this, this and this.
Nobel prize winning economist Joseph Stiglitz just agreed. As Stiglitz told Yahoo's Daily Finance on October 20th:
This is a really important point to understand from the point of view of our society. The legal system is supposed to be the codification of our norms and beliefs, things that we need to make our system work. If the legal system is seen as exploitative, then confidence in our whole system starts eroding. And that's really the problem that's going on.
***A lot of the predatory practices in automobile loans are going to be able to be continued. Why is it OK to engage in bad lending in automobiles and not in the mortgage market? Is there any principle? We all know the answer to that. No, there's no principle. It's money. It's campaign contributions, lobbying, revolving door, all of those kinds of things
***
The system is designed to actually encourage that kind of thing, even with the fines [referring to former Countrywide CEO Angelo Mozillo, who recently paid tens of millions of dollars in fines, a small fraction of what he actually earned, because he earned hundreds of millions.].
***
I know so many people who say it's an outrage that we had more accountability in the '80's with the S&L crisis than we are having today. Yeah, we fine them, and what is the big lesson? Behave badly, and the government might take 5% or 10% of what you got in your ill-gotten gains, but you're still sitting home pretty with your several hundred million dollars that you have left over after paying fines that look very large by ordinary standards but look small compared to the amount that you've been able to cash in.
So the system is set so that even if you're caught, the penalty is just a small number relative to what you walk home with.
The fine is just a cost of doing business. It's like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.
***
I think we ought to go do what we did in the S&L [crisis] and actually put many of these guys in prison. Absolutely. These are not just white-collar crimes or little accidents. There were victims. That's the point. There were victims all over the world.
***
So do we have any confidence that these guys who got us into the mess have really changed their minds? Actually we have pretty [good] confidence that they have not. I've seen some speeches where they said, "Nothing was really wrong. We didn't get things quite right. But our understanding of the issues is pretty sound." If they think that, then we really are in a sorry mess.
***
There are many aspects of [deterring people from committing crime]. Economists focus on the whole notion of incentives. People have an incentive sometimes to behave badly, because they can make more money if they can cheat. If our economic system is going to work then we have to make sure that what they gain when they cheat is offset by a system of penalties.
And that's why, for instance, in our antitrust law, we often don't catch people when they behave badly, but when we do we say there are treble damages. You pay three times the amount of the damage that you do. That's a strong deterrent. Unfortunately, what we've been doing now, and more recently in these financial crimes, is settling for fractions – fractions! – of the direct damage, and even a smaller fraction of the total societal damage. That is to say, the financial sector really brought down the global economy and if you include all of that collateral damage, it's really already in the trillions of dollars.
But there's a broader sense of collateral damage that I think that has not really been taken on board. And that is confidence in our legal system, in our rule of law, in our system of justice. When you say the Pledge of Allegiance you say, with "justice for all." People aren't sure that we have justice for all. Somebody is caught for a minor drug offense, they are sent to prison for a very long time. And yet, these so-called white-collar crimes, which are not victimless, almost none of these guys, almost none of them, go to prison.
***
Let me give you another example of where the legal system has gotten very much out of whack, and which contributed to the financial crisis.
In 2005, we passed a bankruptcy reform. It was a reform pushed by the banks. It was designed to allow them to make bad loans to people to who didn't understand what was going on, and then basically choke them. Squeeze them dry. And we should have called it, "the new indentured servitude law." Because that's what it did.
Let me just tell you how bad it is. I don't think Americans understand how bad it is. It becomes really very difficult for individuals to discharge their debt. The basic principle in the past in America was people should have the right for a fresh start. People make mistakes. Especially when they're preyed upon. And so you should be able to start afresh again. Get a clean slate. Pay what you can and start again. Now if you do it over and over again that's a different thing. But at least when there are these lenders preying on you should be able to get a fresh start.
But they [the banks] said, "No, no, you can't discharge your debt," or you can't discharge it very easily.
***
This is indentured servitude. And we criticize other countries for having indentured servitude of this kind, bonded labor. But in America we instituted this in 2005 with almost no discussion of the consequences. But what it did was encourage the banks to engage in even worse lending practices.
***
The banks want to pretend that they did not make bad loans. They don't want to come into reality. The fact that they were very instrumental in changing the accounting standards, so that loans that are impaired where people are not paying back what they owe, are treated as if they are just as good as a well-performing mortgage.
So the whole strategy of the banks has been to hide the losses, muddle through and get the government to keep interest rates really low.
***
The result of this is, as long as we keep up this strategy, it's going to be a long time before the economy recovers ....The government is deploying all of its equipment to rescue the economy.
But rather than fixing the economy, the equipment is just getting swallowed up.
Why?
Ben Bernanke's answer to all of the water running out of the bathtub (high unemployment, falling home prices, slow growth, etc.) is to pour more and more water (easy money) into the tub (quantitative easing, zero percent interest rates, etc.)
Similarly, Geithner and Obama and Congress can throw all of the money at the giant banks through direct and hidden bailouts that they like, but - until the hole is plugged - nothing they do will work.
The water will just keep running away....
What's the hole that is swallowing up the economy? The failure to follow the rule of law.
The rule of law is what provides trust in our economy, which is essential for a stable economy.
The rule of law is the basis for our social contract. Indeed, it is the basis for our submission to the power of the state.
We are supposed to be a nation of laws, not of men. That's what humanity has fought for ever since we forced the king to sign the Magna Carta.
Indeed, lawlessness - the failure to enforce the rule of law - is dragging the world economy down into the abyss....
http://vineyardsaker.blogspot.com/2010/11/michael-hudson-explains-why-federal.html
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