The Future Looks Grim ...
None of the money being given to the banks really will trickle down, of course. Instead, the largest upward transfer of property in over seventy years will occur. The policy of giving money to the wealthiest sectors – these days the financial sector – turns the trickle-down economy into a euphemism for the concentration of wealth. The pretense is that America’s economy needs the financial and property overhead in order for the "real" economy to "take off" again. But a stronger financial sector selling yet more debt to the economy at large threatens to deter recovery, not to speak of a new takeoff.
Seeing the imminent shrinkage of the U.S. market, lenders and investors are dumping their shares, not only those of U.S. firms but also stocks in European and Asian export sectors. This is the "inner contradiction" of today’s financial rescue operation. Finance itself cannot survive in the face of a stifled domestic "real" economy.
Michael Hudson | Financial Warfare against Labor and Industry
I've been reading Michael Hudson again. He makes sense. Hudson served as Chief Economic Advisor for Dennis Kucinich’s 2008 presidential campaign. Kucinich, a moderate who introduces legislation giving substance to the platitudes mouthed by the plutocrats, was on to a hiding to nothing and was beaten like a dog. Fact is, people like Kucinich lend respectibility to a system absolutely corrupted. It's better that, rather than perpetuate the myth of private and public sectors, he stands aside to bare the Hydra-headed monster Eisenhower's military-industrial complex has become.
Let's get a couple of things straight. Business in the States is not being nationalized. Government, in a blatant, front-page MSM coup d'etat, has been privatized. The Federal Reserve, a private institution, has been fully integrated into a U.S. Holding Company hellbent on self-enrichment through the reinflation of myriad bubbles paid for by middle to lower-income foreign and U.S. taxpayers. The PNAC And AIPAC boys, their mammoth bases strung like imperial pearls across the Middle East and Asia, have fulfilled their mission. Today, the site of struggle is the economy, the generals of the revamped presidency come out of the Council for Foreign Relations and the Brookings Institute, and the global poor are the enemy.
The New Mushroom Cloud ...
And I mean global. With Pakistan set to get a flogging and no slowdown in the military's propaganda war against Iran, India, Japan, Russia, and China, the economic decimation of EU and Asian economies salted over decades with junk dollars, is now in full swing. What answer have these economies to an onslaught by the global reserve currency? Nothing. China cannot dump her dollar reserves. Why? MAD. Mutually Assured Destruction. All the Japanese can do is watch in envy as the U.S. Holding Company, subjecting its people to the same economic policies adopted by the eviscerated Asian Tiger through the 80s and 90s, turns said policies to the advantage of its voracious elite while bankrupting every economy enslaved by the greenback.
Consider this. Barack's Boys are busy drafting legislation to oversee the soon-to-be-announced auto-industry bailout. They're calling for a Car Czar, five cabinet secretaries, and the head of the Environmental Protection Agency (EPA). The whole charade is being choreographed by Senator Christopher Sleazeball Dodd, the chairman of the Senate Banking Committee (why do these people look so dissolute. Barney Frank would put a pig wearing lipstick to shame). There is no need for this bullshit. What happened to the SEC (ho ho) and, in the wake of Enron and Worldcom, SOX? There are regulatory laws aplenty, but enforcing them would inconvenience the banksters now ruling the roost from Pennsylvania Avenue.
If you can't get round to listening to Hudson, he offers below a nine-step program of recovery for recidivist money moguls. There's no need — unless the motive is distinctly ulterior, to fix the markets, flood the globe with dollars, or play Senate Committee Hearing with car dealers. Over to Hudson:
Here are some purely fiscal and financial changes that a future presidential candidate might propose — changes that I don’t expect to be hearing any more about during the next four years. Just to get the discussion going, why shouldn’t these merely marginal changes within the existing system be implemented right now by a presidential candidate who is still bragging about his “mandate for change”:
• Regarding fiscal policy, re-introduce the estate tax, along with (at the very least) the Clinton era’s progressive-tax schedule.
• Tax capital gains at the same rate as wages and profits, rather than at half the rate; and make these taxes be paid at the point of sale of real estate or other assets, not deferred ad infinitum if the gains simply are invested in yet more wealth.
• Require a cost-benefit analysis of any publicly backed infrastructure spending so as to recapture all “external economies” (such as windfall real estate price gains) as the first line of financing such investment.
• Tax corporate borrowing that is used merely to pay stock dividends or buy back one’s own stock at least at 50%.
• Close the practice of offshore tax avoidance, and bring criminal cases against accounting firms abetting this practice.
• Only let a building be depreciated once, not repeatedly as a tax writeoff.
• Refocus state and local taxation on the property tax, remembering that whatever the tax collector relinquishes is simply "freed" to be paid to the banks as interest.
• In the sphere of bad-debt banking, when a government agency takes over a bank or company that has negative net worth, the stockholders must be wiped out as their stock has lost all market value. Bondholders must stand in line behind the government in case of insolvency.
• Write down mortgage debts to the ability of property owners to pay and/or the present market value. Banks that have made loans to these borrowers must take responsibility for their decision that the owners could afford to pay. Even better, apply New York State’s existing Fraudulent Conveyance law, and simply annul loans that are beyond the ability of debtors to pay.
None of this involves real structural change. It is simply more economically efficient under existing laws and practices — something like actually enforcing environmental law, anti-fraud and anti-crime laws, and the original intent of our tax legislation. It is a small step back toward the Progressive Era a century ago — the era that set America on the path of prosperity that made the 20th century the American century.
Michael Hudson | The Obama Letdown
Of course, we all know Hudson's correct. These are changes he won't be hearing any more about during the next four years. He can write till his fingers turn to bloodied stubs but nobody who matters will pay him any mind. The man's a loser, destined for a KBR Resettlement Camp somewhere in the Ozarks or Rockies. In fact, all this raving about the writing on the wall reminds me of 2002. The nut of it is that the war waged by the rich on the poor is being ratcheted up and the Dream Team are firmly in charge.Over at the New York Times, Frank Rich reminds us exactly who they are:
Lawrence Summers, the new top economic adviser, was the youngest tenured professor in Harvard’s history and is famous for never letting anyone forget his brilliance. It was his highhanded disregard for his own colleagues, not his impolitic remarks about gender and science, that forced him out of Harvard’s presidency in four years. Timothy Geithner, the nominee for Treasury secretary, is the boy wonder president of the Federal Reserve Bank of New York. He comes with none of Summers’s personal baggage, but his sparkling résumé is missing one crucial asset: experience outside academe and government, in the real world of business and finance. Postgraduate finishing school at Kissinger & Associates doesn’t count.
Summers and Geithner are both protégés of another master of the universe, Robert Rubin. His appearance in the photo op for Obama-transition economic advisers three days after the election was, to put it mildly, disconcerting. Ever since his acclaimed service as Treasury secretary in the Clinton administration, Rubin has labored as a senior adviser and director at Citigroup, now being bailed out by taxpayers to the potential tune of some $300 billion. Somehow the all-seeing Rubin didn’t notice the toxic mortgage-derivatives on Citi’s books until it was too late. The Citi may never sleep, but he snored.
Frank Rich | The Brightest Are Not Always the Best
Fuckers. For a fresher refresher, I found Richard Cook's April and May 2007 articles, An Emergency Program of Monetary Reform for the United States and Monetary Reform and How a National Monetary System Should Work over at Global Research.
