Preface: The war between liberals and conservatives is a false divide-and-conquer dog-and-pony show created by the powers that be to keep the American people divided and distracted. See this, this, this, this, this, this, this, this, this and this. So before assuming that privatization is a good thing, read on.
Greece is thinking of selling some islands. Austria is thinking of selling mountains to pay off their national debt. Cities throughout the U.S. are thinking of privatizing their parking meters.
What’s going on?
Well, as I predicted in December 2008, bailing out the giant, insolvent banks would cause a global debt crisis:
The Bank for International Settlements (BIS) is often called the “central banks’ central bank”, as it coordinates transactions between central banks.
BIS points out in a new report that the bank rescue packages have transferred significant risks onto government balance sheets, which is reflected in the corresponding widening of sovereign credit default swaps:
The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened.
In other words, by assuming huge portions of the risk from banks trading in toxic derivatives, and by spending trillions that they don’t have, central banks have put their countries at risk from default.
Top independent experts say that the biggest banks are insolvent (see this, for example), as they have been many times before.
And a study of 124 banking crises by the International Monetary Fund found that propping banks which are only pretending to be solvent hurts the economy:
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.
By failing to break up the giant banks, governments are forced to take counter-productive emergency measures (see this and this) to try to cover up their insolvency. Those measures drain the life blood out of the real economy … destroying national economies.
Selling the Farm to Pay for Debt Incurred to Make the Rich Richer
Matt Stoller notes:
Privatization takes inherently governmental functions — everything from national defense to mass transit and roads — and turns them over to the control of private actors, whose goal is to extract maximum revenue while costing as little as possible.
***
It isn’t true, as a general rule, that privatization shrinks the public sector. When investor demand for high returns is combined with the natural monopolies of public assets, what often results instead is citizens finding themselves saddled with high fees and poor service.
Even more perniciously, selling infrastructure such as toll roads puts the coercive power of the state in the hands of private actors. We have great public assets built by prior generations. We should and could be building a better country for our children, rather than liquidating what we have.
***
Rep. Peter DeFazio (D-Ore.) pointed out the truth of the Obama administration’s stimulus program: “Larry Summers hates infrastructure. And some of these other economists — they don’t like infrastructure. … They want to have a consumer-driven recovery.”
Both domestic manufacturing and taxation are opposed by the current corporate and political elites. Take the liberal establishment economist Alan Blinder, who horrified former Intel chief Andy Grove when he celebrated as “success” the fact that America today cannot make televisions. Or Michael Boskin, an economic adviser to President Reagan, saying potato chips, microchips, what’s the difference?
The real infrastructure trend in America today is privatizing what is left. House Transportation and Infrastructure Committee Chairman John Mica has been holding hearings on privatizating Amtrak’s Northeast corridor — ostensibly because private capital can more easily bring in high-speed rail.
Kansas Gov. Sam Brownback just turned over arts funding to the private sector, making Kansas the only state without a publicly funded arts agency. Cities across California, meanwhile, are trying to outsource nearly all municipal functions. Chicago famously sold its parking meter revenue to a consortium headed by Morgan Stanley. The Arizona Legislature sold and then leased back its state capitol.
Are these good deals? History would say no. The granddaddies of privatization were Fannie Mae and Freddie Mac, the housing giants whose public role was supporting the secondary mortgage markets. These companies were “private” in the sense that they operated without public accountability. But eventually, their losses ended up on the public’s balance sheet.
Most privatization deals of core public assets have the same essential structure as Fannie and Freddie. Listen to a Goldman Sachs managing director, John Ma, who expressed his reservations about the privatization of Amtrak’s Northeast corridor.
“Structuring these public-private transactions are always a delicate balancing act,” Ma explained, “of what risks the public sector will retain and what risks you’ll try to transfer to the private sector.” Privatization doesn’t actually make something private; it simply divides risks between public and private entities.
In fact, the real allure of privatization is that it offers what looks like a free lunch. The public receives revenue, but privatization keeps the costs hidden by deferring them to the future. Political actors get to close deficits without raising taxes on wealthy interests. And the political muscle is provided by the people who ultimately benefit from the deal — the same way that Countrywide, Fannie Mae and allied private bankers brutalized their political critics in the name of homeownership.
***
For Democrats, the benefits are more subtle. Privatization allows them to paper over the party schism between liberals and neoliberals by spending money for social aims through what is, essentially, an off-balance-sheet channel.
Does this sound like Greece? Creating off-balance-sheet shenanigans to hide debt and try to kick the can down the road, and then having to sell off public assets and impose austerity to try to climb out of the sinkhole of debt?
There’s a reason for that .
Shock Doctrine
As I explained in 2008:
Well-known Austrian economist Friedrich von Hayek wrote:
“Emergencies” have always been the pretext on which the safeguards of individual liberty have eroded.
[Obama’s former chief of staff] Rahm Emanuel famously said:
Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.
Naomi Klein documented in the Shock Doctrine that the Neoliberals and Chicago school followers advocated a kind of “disaster capitalism”. Specifically, whenever a natural, economic, war-related, or other disaster strikes, these folks pounce and use the opportunity to quickly impose a brand of economic policy which benefits the elite at the cost of everyone else (by increasing unemployment, pushing the cost of essential goods through the roof, and otherwise increasing poverty), while people are still in shock and before they can react.
Publishers Weekly’s review of the Shock Doctrine puts it this way:
The neo-liberal economic policies—privatization, free trade, slashed social spending—that the Chicago School and the economist Milton Friedman have foisted on the world are catastrophic in two senses, argues this vigorous polemic. Because their results are disastrous—depressions, mass poverty, private corporations looting public wealth, by the author’s accounting—their means must be cataclysmic, dependent on political upheavals and natural disasters as coercive pretexts for free-market reforms the public would normally reject.
Amazon’s review of Klein’s book states:
“At the most chaotic juncture in Iraq” civil war, a new law is unveiled that will allow Shell and BP to claim the country’s vast oil reserves… Immediately following September 11, the Bush Administration quietly outsources the running of the ‘War on Terror’ to Halliburton and Blackwater… After a tsunami wipes out the coasts of Southeast Asia, the pristine beaches are auctioned off to tourist resorts… New Orleans residents, scattered from Hurricane Katrina, discover that their public housing, hospitals and schools will never be re-opened.” Klein not only kicks butt, she names names, notably economist Milton Friedman and his radical Chicago School of the 1950s and 60s which she notes “produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today.”
And Pulitzer prize winning journalist David Cay Johnston provided an interesting example of disaster capitalism, noting that 2 days after 9/11, Congress was thinking about how to help the ultra-wealthy:
[Johnston]: Both parties are doing this. They’re doing it because they’re listening to a narrow group of very well to do people who do not want to pay taxes, who do not want to share in the expenses of the country that has made them rich. And they want you to pay their taxes. Those are the people who get access. Every politician will say you to, you can’t buy my vote. Generally, that’s true. The problem is that you and I don’t have the real access, and the proof that Congress is thinking about the super rich came two days after 9/11. The House Republican leadership introduced ten bills to address 9/11. One of them was a tax bill. What did it do? It gave estate tax relief, which did nothing for the firefighters and police officers and army sergeants at their desk and nurses and the busboy at the World Trade Center. All of those people that were killed. A tiny handful of people, but that’s what Congress thought these people needed, was estate tax relief even though 99% wouldn’t pay estate taxes.
[Interviewer:] It’s slipping it in as a very opportune time.
[Johnston]: That was just for this group of people. That was just for this group of people, but it’s indicative of what Congress is thinking about, what’s on the minds of Congress are not the concerns of ordinary Americans who want to educate their children, you know, who want to engage in enjoying life. Their concerns are about the super rich and within the super rich, those who are very anti-tax.
As I noted last year, this is a game which both liberals and conservatives play:
Whether that agenda is labelled “conservative” or “liberal”, it is almost certain to benefit the powers-that-be, rather than the average American.
Some inside the halls of power have tried to warn of this risk:
Senator Leahy and the New York Times are questioning Paulson’s use of shock and awe:
- Senator Leahy said “If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it’s an emergency”
- The New York Times wrote:
“The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.”
***
Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.
Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.
“This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”
But the first world is still being turned into the third world:
When the International Monetary Fund or World Bank offer to lend money to a struggling third-world country (or “emerging market”), they demand “austerity measures“.
As Wikipedia describes it:
In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government’s fiscal deficit spending is felt to be unsustainable.
Development projects, welfare programs and other social spending are common areas of spending for cuts. In many countries, austerity measures have been associated with short-term standard of living declines until economic conditions improved once fiscal balance was achieved (such as in the United Kingdom under Margaret Thatcher, Canada under Jean Chrétien, and Spain under González).
Private banks, or institutions like the International Monetary Fund (IMF), may require that a country pursues an ‘austerity policy’ if it wants to re-finance loans that are about to come due. The government may be asked to stop issuing subsidies or to otherwise reduce public spending. When the IMF requires such a policy, the terms are known as ‘IMF conditionalities’.
Wikipedia goes on to point out:
Austerity programs are frequently controversial, as they impact the poorest segments of the population and often lead to a wider separation between the rich and poor. 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.
What Does This Have to Do With the First World?
Since the IMF and World Bank lend to third world countries, you may reasonably assume that this has nothing to do with “first world” countries like the US and UK.
But England’s economy is in dire straight, and rumors have abounded that the UK might have to rely on a loan from the IMF.
And as former U.S. Comptroller General David Walker said :
People seem to think the [American] government has money. The government doesn’t have any money.
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.
Al Martin – former contributor to the Presidential Council of Economic Advisors and retired naval intelligence officer – observed in an April 2005 newsletter that the ratio of total U.S. debt to gross domestic product (GDP) rose from 78 percent in 2000 to 308 percent in April 2005. The International Monetary Fund considers a nation-state with a total debt-to-GDP ratio of 200 percent or more to be a “de-constructed Third World nation-state.”
Martin explained:
What “de-constructed” actually means is that a political regime in that country, or series of political regimes, have, through a long period of fraud, abuse, graft, corruption and mismanagement, effectively collapsed the economy of that country.
What Does It Mean?
Some have asked questions like, “Is the goal to force the US into the same kinds of IMF austerity programs that have caused riots in so many other nations?” Some predicted years ago that the “international bankers” would bring down the American economy.
I used to think, frankly, that such kinds of talk were crazy-talk. I’m not so sure anymore.
Catherine Austin Fitts – former managing director of a Wall Street investment bank and Assistant Secretary of the Department of Housing and Urban Development (HUD) under President George Bush Sr. – calls what is happening to the economy “a criminal leveraged buyout of America,” something she defines as “buying a country for cheap with its own money and then jacking up the rents and fees to steal the rest.” She also calls it the “American Tapeworm” model, explaining:
[T]he American Tapeworm model is to simply finance the federal deficit through warfare, currency exports, Treasury and federal credit borrowing and cutbacks in domestic “discretionary” spending …. This will then place local municipalities and local leadership in a highly vulnerable position – one that will allow them to be persuaded with bogus but high-minded sounding arguments to further cut resources. Then, to “preserve bond ratings and the rights of creditors,” our leaders can he persuaded to sell our water, natural resources and infrastructure assets at significant discounts of their true value to global investors …. This will be described as a plan to “save America” by recapitalizing it on a sound financial footing. In fact, this process will simply shift more capital continuously from America to other continents and from the lower and middle classes to elites.
Writer Mike Whitney wrote in CounterPunch in April 2005:
[T]he towering [U.S.] national debt coupled with the staggering trade deficits have put the nation on a precipice and a seismic shift in the fortunes of middle-class Americans is looking more likely all the time… The country has been intentionally plundered and will eventually wind up in the hands of its creditors This same Ponzi scheme has been carried out repeatedly by the IMF and World Bank throughout the world Bankruptcy is a fairly straightforward way of delivering valuable public assets and resources to collaborative industries, and of annihilating national sovereignty. After a nation is successfully driven to destitution, public policy decisions are made by creditors and not by representatives of the people …. The catastrophe that middle class Americans face is what these elites breezily refer to as “shock therapy”; a sudden jolt, followed by fundamental changes to the system. In the near future we can expect tax reform, fiscal discipline, deregulation, free capital flows, lowered tariffs, reduced public services, and privatization.
And given that experts on third world banana republics from the IMF and the Federal Reserve have said the U.S. has become a third world banana republic (and see this and this), maybe the process of turning first world into the third world is already complete.
The Raping of America
Dylan Ratigan writes:
In Chicago, it’s the sale of parking meters to the sovereign wealth fund of Abu Dhabi. In Indiana, it’s the sale of the northern toll road to a Spanish and Australian joint venture. In Wisconsin it’s public health and food programs, in California it’s libraries. It’s water treatment plants, schools, toll roads, airports, and power plants. It’s Amtrak. There are revolving doors of corrupt politicians, big banks, and rating agencies. There are conflicts of interest. It’s bipartisan.
And it’s coming to a city near you — it may already be there. We’re talking about the sale of public assets to private investors… In an era of increasingly stretched local and state budgets, privatization of public assets may be so tempting to local politicians that the trend seems unstoppable. Yet, public outrage has stopped and slowed a number of initiatives.
***
On Wall Street, setting up and running “Infrastructure Funds” is big business, with over $140 billion run by such banks as Goldman Sachs, Morgan Stanley, and Australian infrastructure specialist Macquarie. Goldman’s 2010 SEC filing should give you some sense of the scope of the campaign. Goldman says it will be involved with “ownership and operation of public services, such as airports, toll roads and shipping ports, as well as power generation facilities, physical commodities and other commodities infrastructure components, both within and outside the United States.” While the bank sees increased opportunity in “distressed assets” (ie. Cities and states gone broke because of the financial crisis), the bank also recognizes “reputational concerns with the manner in which these assets are being operated or held.“
The funds themselves are clear when communicating with investors about why they are good investments — a public asset is usually a monopoly. Says Quadrant Real Estate Advisors: “Most assets are monopolistic in nature and have limited competitors, creating the opportunity for stable, long-term investment returns. Investment choices include economic assets and social assets.” Quadrant notes that the market size is between $12-20 trillion, roughly the size of the American mortgage market. “Given the market and potential return opportunities, institutional investors should consider infrastructure a strategic investment allocation.”
As with mortgage securitizations, the conflicts of interest are intense. Pennsylvania nearly privatized its turnpike, with Morgan Stanley on multiple sides of the deal as both an advisor to the state and a potential bidder. As you’ll see, these deals are often profitable because they constrain the public’s ability to govern, not because they are creating value. For instance, private infrastructure company Transurban, now attempting to privatize a section of the Beltway around DC, is ready to walk away if local governments insist on an environmental review of the project. Many of them have clauses enshrining their monopolistic positions, preventing states and localities from changing zoning, parking, or transportation options.
While the trend is worldwide, privatization of public infrastructure only came to America en masse in the 2000s. It is worth discussing, because where it has happened it has sparked deep and intense anger.
***
The American Legislative Exchange Council (ALEC), the influential think tank that targets conservative state and local officials, has launched an initiative called “Publicopoly”, a play on the board game Monopoly. “Select your game square”, says the webpage, and ALEC will help you privatize one of seven sectors: government operations, education, transportation and infrastructure, public safety, environment, health, or telecommunications.
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The Obama administration has been encouraging Chinese sovereign wealth funds to invest in American infrastructure as a way to bring in foreign capital. It was Chicago Mayor and Democratic icon Richard Daley who privatized Chicago’s Midway Airport, Chicago’s Skyway road, and Chicago’s Parking Meters. Out of office after 22 years, he is now a paid advisor to the law firm that negotiated the parking meter sale.
Ratings agencies are also in the game, rating up municipalities willing to privatize assets, or even developing potential new profit centers around the trend (see the chapter titled “Significant Debt issuance Expected with the Privatization of Military Housing” from this September 2007 Moody’s report).
Where To?
The strikes and riots in Greece, Spain, England and elsewhere are one reaction to the raping of their countries by creditors and politicians.
Others talk about taking the power to create debt away from the giant banks. But the banks (and the politicians which they own) – are obviously against that idea.
Max Keiser believes that Americans will simply stop making their mortgage payments en masse, an idea which many have discussed (and see this).
Will people stand up and demand that the bondholders and other creditors take haircuts? Or will we all be scalped of our national assets, our pension funds, our money … and our freedom? Remember, more and more national security and police services are being outsourced to the private sector, and such military, intelligence and police powers are being used to protect big business. And see this.
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When will we tell the usury and counterfeiting class to take a hike? Government does not need so-called “credit” and the private sector should not have it so what need for “the cavaliers of credit”? There is none. Government can create its own money debt-free and the private sector can finance investment with common stock as money. And if some so-called “credit” is needed then let the banks alone assume the risk of extending it.
This is what an economy gets for “mandating” that all new medium of exchange has to be the demand deposits from debt, meaning it has to be borrowed into existence.
“The war between liberals and conservatives is a false divide-and-conquer dog-and-pony show created by the powers that be to keep the American people divided and distracted.”
Hear! Hear!
Ron Paul/Elizabeth Warren 2012
Liberty above all else, and when it is trampled upon, furious legal vengeance inflicted to those that attempt to do so. Let’s get the issues in a pincer attack and decapitate those dishonest fools on both sides of the aisle.
Do not immediately discount as impossibility, in 2006, they were still getting obama’s story straight…
Are you joking or?
Yes, there is a degree of novelty and humor in everything I say. Which part did you find to be the funniest? If it’s the ludicrous nature of my recommended presidential ticket, tell me who your ideal pairing would be.
From what I understand (I’m from the UK), Ron Paul is an ‘Austrian’ economist, a school created by a rich white man with an active disdain for the poor.
They may call it ‘liberty’, but what they mean is ‘the ability of business to do whatever the hell it wants’.
Well said.
While I’m no die hard Austrian myself (I view it like I view the bible-good lessons NOT a religion), I would hardly describe the theory of economics as having an “active disdain for the poor.” I believe what you’re describing is the corporatist culture that we have currently where we have liberty for the rich (regulatory capture/corporate welfare/legal invincibility) and no liberty for the poor (sound money/social equity/unfair laws).
If you think that Ron Paul would not change any of those things because he subscribes to the Austrian school of economics, I believe you’re mistaken. Too each his own though, cheers mate.
Tom,
The Austrian school/libertarian movement was founded intentionally by a rich white man with an active disdain for the poor:
http://forum.prisonplanet.com/index.php?topic=192293.0 (second page under mr anonymous and the blah blah)
Ron Paul may not be a bad man himself, but the Austrian School is the most extreme version of corporate welfare, beloved by the rich.
‘End the Fed’ is just ridiculous – money is not a good and should not be created by ‘the market’; we’ve tried private money creation and it led to massive fraud, debasement and, frankly, confusion.
Austrian economics would lead to the most extreme version of rentier rule, even worse than what we have now!
It gives me heart to see this blog refer to the theatre of left right divide in politics. They’re the same party but it’s the people they divide.
theatre is correct – aka kabuki theatre
Protests in city squares, against the police (who are working stiffs themselves, and who don’t realize the are protecting the folks that eviscerated their pensions) is just more red/blue false battle to keep people from focusing on the real problem.
Simon Johnson’s quiet coup, indeed.
The next election will be a new dude with a new sounding series of promises (to later be broken)….election rope-a-hope-a-dope.
But sociopaths don’t quit…they have to become known quantities widely throughout society, and directly engaged throughout their daily life, by everyone they encounter,
until it is impossible for them to carry out their daily looting
of their fellow citizens, let alone get a meal in peace.
That is where this is going to end up…
Austria is not selling mountains to pay down national debt. That’s nonsense.
The sale price for both combined id only $175,000 and all you can do is to rename the mountains. No development allowed. That’s all. Has been done before. Nothing to do with national debt.
I do agree with parts of the article… However, I should point out that the Chicago School was a net positive for Chile, for ex., the best performing economy in South America. Privatization is also not always bad… as long as it’s not done with a gun at your head (like in Greece today). Some of it should have been done long ago, when the government would get top money from the sales. (On the other hand, the Greek government has been notoriously corrupt, so the money would probably end up in private bank accounts in Switzerland).
But didn’t privatization take place in Chile “with a gun at your head”? How many tens of thousands of Chileans were ordered to march off military transports, straight into the Pacific Ocean, because they opposed the regime that the Chicago Boys were advising?
You could not be more wrong on that point, I looked at the data on Chile and discussed it in ECONNED. You had a plutocratic land grab and a debt-fuelled asset bubble which collapsed in the early 1980s, which produces a mini Depression and led Pinochet to restore quite a few labor rights and engage in Keynesian backpedaling. While some of Allende’s policies were not wise, the US engaged in economic as well as political warfare, which made the performance under him much worse than it otherwise would have been.
Chile? Former public entities were tied with a ribbon and given to former Pinochet supporters. The Chilean “democratic” government operates hand in hand with Chilean media and the Catholic Church. Chilean law doesn’t provide for divorce. Catholic teachings prevail regarding sex education. Abortion and birth control are verboten in the mainstream Chilean press.
The proponents of the Chicago School’s free market capitalism that was welcomed in Chile couldn’t have gotten as rich as they are without the state. Sound familiar?
Changing laws to constrain the public’s ability to govern? “Infrastructure,” thanks to the fast footwork of Larry Summers has now been slightly redefined to mean the privatization of existing infrastructure! Forget the troubling fact that that kind of privatization just socializes risk. And forget too that it does nothing but hurt the economy to hold up the insolvent banks. What is happening in the US is simply a “criminal leveraged buyout” of the country. Hey! I have the solution: Let us offer the banks and the people with too much money and not enough conscience a great deal: a new investment instrument called the FYS. The fuk you swap. It works like this: we the people will write up paper insuring the buyer of the paper by the express terms of the paper. The buyer can design any kind of investment insurance they want for as much as they want, millions, billions, trillions. Whatever. And these instruments are worse than naked – they are down right exhibitionist. They do not have to be pegged to any reality known to commerce. They are the equivalent of CDSDSDSs: credit default swap default swap default swaps. Definitely risk cubed. Minced. Fantasized. And the terms will say in the fine print that if your insured bet fails you will be broke but you can always eat your paper. And these instruments will be backed by the full faith and credit of the citizens of the United States… and any other country that wants to join us.
What is happening in the US is simply a “criminal leveraged buyout” of the country. Susan Truxes
Succinctly said!
We need fundamental reform in money creation – especially separate government and private money supplies so the bankers cannot destroy the nation’s economy again.
Forget the convenience of a single government/private money supply. The benefits are trivial compared to the costs – both moral and economic.
I for one like being bent over and anally violated by bankers and politicians. Doesn’t everybody ?
This is exactly what Larry Summers helped do to the people of the former USSR. State assets were sold to investors for pennies (or less) on the dollar. Anyone who objected was called a ‘Communist’, a ‘fascist’, an ‘ultra-nationalist’, etc. Summers and Jeffrey Sachs then helped implement policies that repeatedly devalued the rule, destroying Russians’ life savings.
rule = ruble
The prolem here is “we the people” letting the political body treat public property as is theirs. Nothing could be further from the truth. There is something called the unorganized public , which is EVERYBODY. The body politic is the organized public. Well the right to dispose of the property rests in everyone not the de facto leaders.
It gets more sickening everday.
Who is John Galt?
I saw him earlier this afternoon selling dime bags in the park. He was the one wearing a Che Guevera T-shirt.
Instant classic….yet Che weeps…
john Galt is the excuse the Rich have used to steal, rape and rob Americans of life, liberty and the pursuit of happiness. the destruction of the American way of life. That is who John Galt is. the excuse to force America at gunpoint to give up their lifestyles, valuables, future and hope. Obama is the latest incarnation.
such a wonderful plan executed by the RepublicanDemocratic puppets. Gov. Walker is John Galt. Geithner, Greenspan is John Galt.
lol. America has been John Galted into the modern age of feudalism.
With St. Ronnie standing proud on that house on the hill while his army of thieves did their darndest to plunder our economy, pollute our land, waters, and skies. Such well planned and executed destruction of American values, that would make Ivan the Terrible tremble in fear of being caught up in that web of evil.
Evil beyond the Fascist Germans, Imperial Japanese, Maoist, and Stalinists dreams come true.
That is John Galt. the total disregard from human society, and not just the American version, by those capable of inflicting irreparable harm and complete destruction to those “little people” Leona Helmsley so famously despised. Purveyors of Solyent Green.
john Galt is the excuse the Rich have used to steal, rape and rob Americans of life, liberty and the pursuit of happiness. the destruction of the American way of life. Bernard
Ayn Rand was a hypocrite. Government was all well and good if it served her purpose such as a government enforced gold-standard.
FatCat! here, so listen up sore losers, or else!
No more bitching! No more complaining! Take your loss with dignity! Take your defeat with the little honor I still grant you! Keep your heads down with humility!
Let me explain so even you could understand:
I won, you lost!
I own, you owe!
I rule, you obey!
Is that clear?!!!
FatCat!
I am asking again: IS THAT CLEAR ?!!!
FatCat!!!!!!!!!!!!!!!
I pinged you on the Greece post….ObeseFeline.
Skippy…BTW a cat is domesticated and most do not hunt, therefore, at odds with there DNA, fossil record is full of this stuff, may our embrace….one day hang on a wall….eh.
He’s one of the fatcat familiars, hoping to be one someday, all the while he licks dirty dollar-bills for a living. Get to work boy ! Those dollars aren’t clean enough.. lick harder !
FatCat,
you have the perspective delivery down, never fails to amuse.
And in the same vein of humor as yours, trust me, we have YOUR solution for you that you beg of!
lol
Perhaps I am looking at this at a tangent but I cannot help thinking this kind of article assigns intent which is not really there. Most of the people seen as the elite (with exception of a few wall street types) do not set out with the intention of increasing the disparity between themselves and those lower down, in fact they probably in their own way are concerned about it. They honestly think they are doing the best they can and are trying to redress the problems with their actions.
Despite that I think there is a problem, seperate to intent which means most things they try are possibly making things worse over the longer term.Selling the crown jewels so to speak, bailing out banks and political detachment from the population are not really about an intent to maintain the elite. To understand why, I think you need to delve into the physcology of the present elite and to understand the changes that have taken place in politics and the boardroom.
Firstly there has been a shift in politics and the boardroom in the people who rise to the top. Today these tend to be the salesman and deal maker rather than the policy maker and engineer. These people tend to be extroverts who need to surround themselves with Yes people and find it difficult to relate to people outside their scope of people. These are people who loose sight of practicalities in blue sky schemes and don’t allow for differing views. The good ones recognize that they are just the salesman and deal makers for others ideas, but to often they lose sight of the real picture, go off at a tangent and let their egos and need for Yes people lead them down an inadvisable track.
Secondly this particular generation of elites probably had their formative years in the 1960’s. This generation had a positive outlook, tried to change the rules to be more benign and threw lots of new ideas into the melting pot of society. Whilst those attributes are not bad they give a bias to positivity and putting lipstick on a pig, a bias to still sort of working within the rules to effect change and a bias to being tolerant and benign to the extent that nobody really ever gets punished. Its the next generation which will probably tear up the rule book, in both good and bad ways and really shake things up and will leave the longest lasting impact.
The rise of the salesman and deal maker I think are here to stay, except I perceive in the future they will start to be the scapegoats, so the rising star becomes more of a flash in the pan. Politicans and CEO’s tenure will tend to become shorter and shorter with their lives becoming a roller coaster ride. As all things rise so do they wane as conditions change, with short termism finally catching up with the elite.
When history does catch up with the elite it may be worth remembering that there is a subtle difference between intentional and misguided actions.
Right!!!!….because shorting the shit you are pushing to your clients isn’t *intent*…it’s just misguided.
Oh please, please, please put down the bong.
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Fannie Mae and Freddie Mac, the housing giants whose public role was supporting the secondary mortgage markets. These companies were “private” in the sense that they operated without public accountability. But eventually, their losses ended up on the public’s balance sheet.
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That tells the whole truth.
If government rulers want less homeless, more social cohesion from less homeless, less crime and drug war from excessive homelessness, then why not subsidize affordable housing. Tell me something! How much tax from local, county, state, and federal rulers on the construction of one home? $90,000 is the figure given in recent syndicated news release. For lot of people $90,000 is more than half of home price. $90,000 is almost half of mortgage fees and principle. Do you see how easy it would be for our gamut of rulers to simply stop taxing the housing industry out of business? You don’t need Freddie/Fannie for housing subsidy. You only need to stop taxing.
You want to tax it away from us then subsidize it back to us? Plus overhead of the take then give-part-back game? Look the Freddie/Fannie paper mill is the biggest racket in this country. This country now needs total 2 year tax holiday of all taxes including payroll tax, income tax, income prison, import duties, sales tax, and all those taxes on tax money. With that kind of tax holiday our sleeping giant economy will take off like a Boeing 797 out of hell. Take off and pull all other countries down the high speed rail. With this roaring economy our treasury ratings will hit AAAAAAAAAA. Every bond ghoul in the hemisphere will be buying up bonds at our zero-coupon-99yr-bond-auctions, our auctions to fund government operations without counter-productive taxation.
We have a brief moment of opportunity.
Carpite diem!
Get it
!
“then why not subsidize affordable housing. ” You want the government to turn suburban sprawl into another entitlement? Or do you want more housing projects? Or, do you want the government to tear down suburbans sprawl areas and build resilience communities for a low energy future?
Any discussion about the government continuing to invest in housing and infrastructure has to include a realistic assessment of how much energy will be available in the next 50-100 years. Hint: It’s not going to grow.