Cross posted from Washington’s Blo
U.S. Attorney General Eric Holder said today:
I am concerned that the size of some of these institutions [banks] becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy
As we’ve repeatedly noted, this is wholly untrue.
If the big banks were important to the economy, would so many prominent economists, financial experts and bankers be calling for them to be broken up?
If the big banks generated prosperity for the economy, would they have to be virtually 100% subsidized to keep them afloat?
If the big banks were helpful for an economic recovery, would they be prolonging our economic instability?
In fact, failing to prosecute criminal fraud has been destabilizing the economy since at least 2007 … and will cause huge crashes in the future.
After all, the main driver of economic growth is a strong rule of law.
Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won’t recover:
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.
***
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.***
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.
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.
Indeed, professor of law and economics (and chief S&L prosecutor) William Black notes that we’ve known of this dynamic for “hundreds of years”. And see this, this, this and this.
(Review of the data on accounting fraud confirms that fraud goes up as criminal prosecutions go down.)
The Director of the Securities and Exchange Commission’s enforcement division told Congress:
Recovery from the fallout of the financial crisis requires important efforts on various fronts, and vigorous enforcement is an essential component, as aggressive and even-handed enforcement will meet the public’s fair expectation that those whose violations of the law caused severe loss and hardship will be held accountable. And vigorous law enforcement efforts will help vindicate the principles that are fundamental to the fair and proper functioning of our markets: that no one should have an unjust advantage in our markets; that investors have a right to disclosure that complies with the federal securities laws; and that there is a level playing field for all investors.
Paul Zak (Professor of Economics and Department Chair, as well as the founding Director of the Center for Neuroeconomics Studies at Claremont Graduate University, Professor of Neurology at Loma Linda University Medical Center, and a senior researcher at UCLA) and Stephen Knack (a Lead Economist in the World Bank’s Research Department and Public Sector Governance Department) wrote a paper called Trust and Growth, showing that enforcing the rule of law – i.e. prosecuting white collar fraud – is necessary for a healthy economy.
One of the leading business schools in America – the Wharton School of Business – published an essay by a psychologist on the causes and solutions to the economic crisis. Wharton points out that restoring trust is the key to recovery, and that trust cannot be restored until wrongdoers are held accountable:
According to David M. Sachs, a training and supervision analyst at the Psychoanalytic Center of Philadelphia, the crisis today is not one of confidence, but one of trust. “Abusive financial practices were unchecked by personal moral controls that prohibit individual criminal behavior, as in the case of [Bernard] Madoff, and by complex financial manipulations, as in the case of AIG.” The public, expecting to be protected from such abuse, has suffered a trauma of loss similar to that after 9/11. “Normal expectations of what is safe and dependable were abruptly shattered,” Sachs noted. “As is typical of post-traumatic states, planning for the future could not be based on old assumptions about what is safe and what is dangerous. A radical reversal of how to be gratified occurred.”
People now feel more gratified saving money than spending it, Sachs suggested. They have trouble trusting promises from the government because they feel the government has let them down.
He framed his argument with a fictional patient named Betty Q. Public, a librarian with two teenage children and a husband, John, who had recently lost his job. “She felt betrayed because she and her husband had invested conservatively and were double-crossed by dishonest, greedy businessmen, and now she distrusted the government that had failed to protect them from corporate dishonesty. Not only that, but she had little trust in things turning around soon enough to enable her and her husband to accomplish their previous goals.
“By no means a sophisticated economist, she knew … that some people had become fantastically wealthy by misusing other people’s money — hers included,” Sachs said. “In short, John and Betty had done everything right and were being punished, while the dishonest people were going unpunished.”
Helping an individual recover from a traumatic experience provides a useful analogy for understanding how to help the economy recover from its own traumatic experience, Sachs pointed out. The public will need to “hold the perpetrators of the economic disaster responsible and take what actions they can to prevent them from harming the economy again.” In addition, the public will have to see proof that government and business leaders can behave responsibly before they will trust them again, he argued.
Note that Sachs urges “hold[ing] the perpetrators of the economic disaster responsible.” In other words, just “looking forward” and promising to do things differently isn’t enough.
Robert Shiller – one of the top housing experts in the United States – says that the mortgage fraud is a lot like the fraud which occurred during the Great Depression. As Fortune notes:
Shiller said the danger of foreclosuregate — the scandal in which it has come to light that the biggest banks have routinely mishandled homeownership documents, putting the legality of foreclosures and related sales in doubt — is a replay of the 1930s, when Americans lost faith that institutions such as business and government were dealing fairly.
Indeed, it is beyond dispute that bank fraud was one of the main causes of the Great Depression.
Economist James K. Galbraith wrote in the introduction to his father, John Kenneth Galbraith’s, definitive study of the Great Depression, The Great Crash, 1929:
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.
***
The government that permits this to happen is complicit in a vast crime.
Galbraith also says:
There will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that’s a process which needs to get underway.
Galbraith recently said that “at the root of the crisis we find the largest financial swindle in world history”, where “counterfeit” mortgages were “laundered” by the banks.
As he has repeatedly noted, the economy will not recover until the perpetrators of the frauds which caused our current economic crisis are held accountable, so that trust can be restored. See this, this and this.
No wonder Galbraith has said economists should move into the background, and “criminologists to the forefront.”
The bottom line is that the government has it exactly backwards. By failing to prosecute criminal fraud, the government is destabilizing the economy … and ensuring future crashes.
Postscript: Unfortunately, the government made it official policy not to prosecute fraud, even though criminal fraud is the main business model adopted by the giant banks.
Indeed, the government has done everything it can to cover up fraud, and has been actively encouraging criminal fraud and attacking those trying to blow the whistle.
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I’ll admit I’ve resisted the idea that BHO is anything besides a lawless and corrupt liar. As evidence accumulates of his administration screwing up virtually everything it touches, I’m forced to consider adding “incompetent” to the mix.
Even after reading this piece though, I think I can cling to the lawless/corrupt bits for a while longer. But I’m beginning to waver…
Not that it really matters, for so far the Powers That Be have managed to arrange that our alternatives are always worse.
I still favor pro-lawless and pro-corrupt myself. “Incompetent” does not explain it. Real incompetence would be randomly incompetent in all directions. The Obama Administration has very competently overseen even greater wealth-poverty divergence than what the Bush Administration was able to arrange for. The Obama Admin. has been very competent so far at shielding its social class comrade FIRE sector players from serious investigation or prosecution or even any inconvenient loss of bussiness or money. The O.A. has been very patiently manipulating the budget terrorization process in line with Shock Doctrine precepts in order to approach its goal of Catfood Cuts to SS/Mcare/Mcaide. (And it looks as if Obamacare was stealth-engineered to facilitate the entire privatisation into the Obama Exchanges of Medicaide in its entirety in those states which have understood the stealthy channel carefully dug in advance for them to flow down.)
And the O. A. mass-mind managers continue to understand their liberal and progressive marks very well, offering them all the right shuck-and-jive stringalong-things such that the liberals and progressives stay desperately strung along.
I see no incompetence here.
We should not attribute to incompetence, cowardice, or even naked greed what can only be explained by malice, mental disease (megalomania/messiah complex?), or vast conspiracy. The consistent cumulative evidence of broken promises and escalating violence proves, beyond any reasonable doubt, a calculated intent to deceive — especially when weighed against Obama’s manifest intelligence, the entirety of the “hope and change” campaign, MSM oligopoly censorship, distracting tea party noise, and the sophistication of propaganda in the continual reframing of BHO as a man of the people and of peace. In aggregate, the evidence of premeditation with malice aforethought is simply overwhelming, IMO. BHO is no common con. I’ve often said in separating word and deed, he makes his idol, Reagan, look like a ham-amateur.
It is still difficult to comprehend the ultimate end game. It shouldn’t surprise us to find Israel in the thick of it, but Obama seems to be a key chess piece in a concerted, systemic campaign that follows Klein’s Shock Doctrine playbook to destroy the New Deal and reestablish plantation economics or an even greater agenda worthy of Alex Jones — global currency and totalitarian world government.
It’s not just failure to prosecute, but also the No Bond Haircuts/sabotage of accounting principles. Overall, the policy call can be summarized as Japanification. We are losing about 1%/yr of GDP growth due to the drag and random ‘whocoodaknew’ bailout requirements that are built in like trap doors.
The other thing failure to prosecute causes is massive failure of legitimacy. This infects social discourse, confidence in markets and the rule of law, and politics per se.
Good contribution GW.
Agree, Wall Street has become impervious to regulation and prosecution – it’s a Corporatocracy (Transparency International, the body who publish a standardized ‘Corruption Index,’ shows that for 2012, the US ranked 19th among nations) that has utterly arrogated the legal process, the DOJ and the Attorney General.
Wall Street has recently discovered that, even when any member of its cadre of TBTF banks breaks the law, launders drug money or trades with the enemy, it’s now easier and cheaper to avoid prosecution vis-à-vis the executive branch’s DOJ, than to lobby Congress and nullify or negate pending legislation that might result in a prosecution in the first instance – if you are above and beyond the law, who cares about the law makers?
So if regulation, legislation and prosecution don’t work we’re left only with “death and taxes”. Putting death to one side (for a moment), the only option remaining is tax: a ‘Too Big to Fail Tax (TBTFT); a progressive tax (say, 0.1%, that’s $30 million on $30 billion in assets, up to 1% on a trillion dollars in deposits) from which, by definition small banks (under $30 billion in deposits) would be exempt; a tax that could deliquesce the TBTF problem and generate revenue to offset the deficit. A bi-partisan tax if ever there was one – difficult to vote against (only the state representatives of Delaware might have an issue). Implement it, incrementally, over three years – give the banks the time to downsize in an orderly fashion. They’ll split their business along the lines of a Glass-Stegall fault-line by default (then look at a Tobin Tax for the risky, leveraged, but enfeebled investment banks).
And, what is out there to stop these taxes from being passed on directly to the people who use these banks? Nothing, as far as I see it the smaller banks become more competitive — they attract more accounts (up to their limiting factors) vs. the mega-banks – don’t like the higher fees at Mega Corp? Move your account to LittleBankOnThe Prairie & Co.
If taxation doesn’t work, we’re left only with death.
I agree, superb work, GW. Thank you.
OH DEAR GOD YES! …… YESS
You had me at the title
Also,
“It’s not a crime if the President has lots of contracts with lots of people”
Somebody already took the best reply! Darn!
But I will second it, wholeheartedly. :D
Wait…wait..wait..
You mean like how a failure to prosecute war crimes inevitably leads to more war crimes?!
(grunt)…Must…look…forward…(pant)
Seriously, although I completely agree with the sentiment of GW and others about the prosecution of criminal fraud, I sometimes kind of find it hard to believe that we’re starting(stopping?) the discussion there.
9/11 aside – and that’s a big aside – the leaders/elite of our country nearly a decade ago blatantly waged illegal aggressive war, murdered millions of innocent people, tortured/imprisoned thousands of others and engaged in sundry other war crimes and everyone walked away scot free.
But somehow we are surprised that they haven’t been brought to justice over their involvement in the ongoing financial fraud?!
Oh, murder’s one thing but STEALING!!!
The criminality of the elite shouldn’t be pigeonholed especially as they relied upon the same members of our Vichy government to assist in the the commission of ALL of these crimes – i.e., war and financial.
The ability to steal trillions of dollars from unsuspecting people the world over?
Well-placed bribes worth billions into the pockets of political minions here and there.
The ability to wage war, murder, assassinate, torture and imprison people with impunity?
Priceless.
Well on target!
If, and that is a BIG IF…..the average American subscribed to your view their “intellectual” world would probably collapse.
As I was reading your post what came to mind was someone digging a pit…..scratching the surface reveals “something smelly”; digging deeper (into US “foreign policies”) and deeper reveals a greater stink.
Until the average US citizen gets their heads out of where the sun doesn’t shine; walks away from the major media which controls the intellectual trends (and of behavior) and opts out in a major way from the insensate consumer economy we will get nowhere…..
Most educational institutions don’t teach “real” history; it is not in the interests of those schools who receive so much funding from their own taxpayers to disallusion those same as to the real history of the US in the world.
You are also so correct about not prosecuting our own officials for war crimes…etc…..etc…..
No one is supposed to be above the law….but we don’t even really recognize international laws…..
If we do not prosecute (don’t hold your breath!) those war crimes, if we don’t throw some of these CEO’s of the financial institutions into solitary, then both segments of our society will continue and will escalate their crimes on the American citizens and those around the world.
We are slackers when it comes to prosecuting crimes we commit in our own names; we are now showing very explicitly that we will not even prosecute financial crimes against those saem peoples.
Trust has been crushed in this last financial explosion; trust will not be restored until we “level the playing field”!
Eric Holder and his boss are nothing more than prostitutes.
~
Chairman of the Department of Economics at George Mason University: Politicians Are NOT Prostitutes … They Are Pimps
http://www.washingtonsblog.com/2009/10/chairman-of-the-department-of-economics-at-george-mason-university-politicians-are-not-prostitutes-they-are-pimps.html
Right-wing troll alert.
Hunh? He’s the author.
Please. Comparing Holder to a prostitute is insulting to prostitutes.
Holder is such a gutless and despicable piece of trash. And the problem is he is unremarkable – 98% of the “elites” are just like him.
Or to put it succinctly, he’s a Nebbish.
Between this story and the piece the Times had about the revolving door between the SEC and Wall Street, I am starting to wonder whether the middle class will ever be relevant during policy discussions in D.C. Clearly it’s not now, and won’t be anytime in the future.
And as far as the impact on the economy . . . um, who forgot to tell Eric how we got here in the first place? Basically his logic is this–we cannot go after banks because they will destroy the economy, so we have to let them continue on their way, even if that means they will destroy the economy. Can I play AG for a few years???
After Alberto Gonzales, I figured the trajectory for future Attorney General appointees would be sharply upward.
Unfortunately, it appears that I was greatly mistaken and naively optimistic.
“Catch-22 says they can do anything we can’t stop them from doing.”
“22-Catch says they can’t do anything we can stop them from doing”.
So is there anything we can stop them from doing? And how would we actually stop them from doing it? And re-arranging something or something’s form or context to make that something un-doable will stop them from doing it just as surely as stopping them by brute force from doing a do-able thing. Are there some things we can turn from “do-able” into “un-do-able”?
Soooo, in the eighties, AT&T, which posed no existential threat to anyone, much less the entire United States of America, was summarily broken up. Quaere, then. What is the difference between then, and now?
Maybe it’s not just TBTF. Maybe it’s just purely TFBP. (Too F***ing Big Period)
The economy will not recover until the perpetrators are behind bars and the people who’ve had their homes, savings and lives stolen from them are made whole again.
TARP, foreclosure fraud, ZIRP, QE to infinity – where and when does it end? When I try to explain to people who think they haven’t been impacted by the outright fraud and theft that they indeed have, I’m met with blank stares. How many seniors have had to adjust their lifestyle because their savings now draw nothing? Somehow they can’t seem to make the connection.
It amazes me that while the banks and the federal government continue to loot the masses, the masses believe the propaganda that it was “those subprime people the banks were forced to lend to” who brought the global economy to its knees.
Had to giggle when reading your post!
Been there, done that!
Receive nothing but a “thousand yard stare”!
The average American consumer is suffering from mass financial and intellectual schizophrenia………..a kind that does lead to a Cach 22….
If they believe what “we” try to tell them it would turn their world completely topsy turvy….if they don’t they can continue to feel frustrated, maybe even screwed,…but they can continue to “live the American Dream” albeit with some restricitons…..
They still get to play the “game”.
Obviously, the “top” eschelons of every facet of regulatory artifice is corrupt.Obviously the executive power is corrupt.Everyday, their crimes are articulated on sites like these.They are so brash,they don’t even seem to feel like they have to hide anymore.They know just saying”I didn’t mean to steal your money,waste your decade”;is enough to escape any legal entanglement.
just for starters, who are “they”?
When each card in our economic house of cards can rightly claim it is not “they alone”,who is holding up the facade.
We can’t just take the executive officers and board members of the fortune 100, and the entire upper eschelons of every executive branch of gov’t(which are currently failing to “enforce” the laws).every op-ed apologist,every shill,every think tank prostitute.Every supreme court justice.Every circut court or state supreme court judges who enable the ongoing crimes….”out back and shoot them”,or out front, and tar and feather them before they are hanged.These things are too many….who will hear the call?Who gets to make the decision?.And really, how long would it take for others to fill their roles.1 minute?two?
It seems to me we need to modify the trough these pigs eat at.We need to seriously debate, and change our monetary system.Get rid of the fed,(the dark dank opaqueness where this odor and filth eminate from),And return the money creation powers to the Treasury.
112th congress, HR2990 “The NEED Act”
Make these people work for a living again.
The real problems we have stem from the top.The biggest players.When they are rotten,everything smells.
TFBP would explain why we now have Sequestration. The maw of our government has grown so insatiable that no thoughtful, targeted, intelligent effort to satisfy it’s appetites will suffice. Instead, we make indiscriminate sacrifices…virgins, sheep, whatever, in hopes of pacifying the beast.
Wrong Mcwatt;
They can and will do anything they ‘want to’ because nobody has the guts to stand up and stop them.
President O does not have the authority, moral or legal, to assasinate people, yet he will continue to do so, because nobody stops him. Infact, he is a hero and a posterboy for the hardliners. The supposed delays and weighty considerations are merely lipstick on the pig. A sop to his once liberal constituency.
Banks have to be regulated in order to curtail excessive financial power and their ability to rig the system. Regulate banks so they have to source their funds first before they lend instead of simply creating money. Anyone that can create money may run amok with the system.
Screw prosecuting.. just break them up, shut them down, or whatever else needs to be done.. as Yves said before, the regulators, the government, has all the power. If the g-men say jump then the bankers jump or they get shut down tomorrow, as in 50 suits and 75 badges walk into your office and escort you away.
Holder is such a little weasel it’s disgusting.
Amen and then some. What we need is triple damages – paid to every citizen who suffered because of these crooks. It won’t help much of anything to send a small army of banksters to jail. That just frees up their positions for the next slimey perps. We need to change the system. Take over the Federal Reserve and do a population-wide bailout. We also need to acknowledge that this mess is far more complex than a mortgage crisis. It goes back at least 150 years. That’s how long we’ve been patching this stupid tire. All the way back to great-great granddad.
So it follows emotionally that in order for trust to “be restored” we’d have to turn back the clock and prosecute the crooks so everyone could go forward with trust and confidence, from say 1880. A timely response to crime is the essence of trust. That cannot happen.
So we need, really really need, to change the institution of finance from privateers (a model that originated under Elizabeth the First in the 1500s) to public finance, utility finance, and MMT. As Yves advocates, turn the banks into utilities.
Our system for the entire duration of the 20th c. was based on the seductive idea of perpetual growth and all of the ignored contradictions that idea contained. So, really, how does a remiss government destabilize an economy that was never an economy and was always unstable? Riddle me that.
And just for my own sense of revenge, I’d like Obama and Holder to be strung up like Mussolini – for the historical record.
The Obama Presidency is nothing other than the getaway car of the fraudsters. he was promoted by the fraudsters the exact same way Clinton was. First he is given the key note address at the Democratic national convention in the Presidential campaign preceding the campaign cycle in we he himself has been selected to run. Then the presstitutes spend the next four years fawning over the so-called bright new refreshing political face, and he will have the entire press corps campaigning for him from then on right through the next election. Mr. Clinton is reported to have received over 80 million dollars in “speaking fees” since his retirement. This is the reward that Obama believes will be in store for him as well.
…by the way, how much do you think it would cost to bribe the Nobel committee to nominate the Nobel Prize for Peace recipient of your choice? What do you think the message was that Obama got from that?
…Clinton and Obama both should be awarded Nobel Prizes for Financial Crimes Against Humanity and for the Betrayal of Human Progress. Don’t even get me started on Bush.
THE KEATING FIVE
It is simple. He was told not to prosecute when he took office – the fraud was already blatant. Obama needed Wall Street money to get reelected.
He is now “justifying” (or trying to do so) the fact that he did not prosecute when the iron was hot.
Many banks have paid fines. But fines will not stop the fraud. Only jail sentences will help in that regard.
And yet, there is a precedent. Remember the Keating Five scandal in 1989? The “Five” were all Senators, including John McClain and John Glenn. Keating went to jail, but the Senators all served out their terms. The two Johns were reelected …
No, the only measure that will mitigate the fraud is by diminishing the incentive to undertake it. That is, a wholesale reform of the Tax Code. For as long as banksters can take home 80% of the loot (legally) why should they not fraud the system?
Who will refuse to take that risk, when the payoff is soooooo juicy?
The only measure that will prevent fraud is a jail-sentence, provided that the fraud is not too massive and too difficult to prosecute.
So, let’s snip the incentive to fraud in the bud in the first place, and have the Justice Department hounds go after the jerks who try it anyway.
There’s lots to agree with here. A dishonest finanical system turns the banking function into a giant tax/drain on the rest of the economy. Banks are no longer an intermediary(a useful role) but serve to extract profits from the financial eco-system akin to a parasite attached to a salmon.
Iceland!
But then the powers that be will reign: drones, ndaa, Homeland Security, pepper spraying/shackling of Occupiers ( THIS government would have a field day with MLK marchers) by the likes of Obama/Bloomberg/Kwan.)
http://www.prisonplanet.com/obama-i-am-not-a-dictator-im-the-president.html
Why does this president think the room GASped at his recent line “I am not a dictator?” Blatant arrogance.
Sequester steps on the throats of the little guy. Take their homes, nick them @ the gas pump: presuming they are still lucky enough to have a job to go to, and God forbid if they have to buy a loaf of bread for their family…!
Banks are no longer an intermediary(a useful role) … CoC
Banks don’t lend savings; they create temporary money (“credit”) as they lend it. The “loanable funds” theory has been disproved.
Didn’t James Jr., that scion of the regulatory state, just defend Jack Lew?
I’m sorry, but you can’t (apparently hypocritically) talk about prosecuting criminal bankers at, say, Citibank and then turn around and defend their paid enablers and seek to put them into the government.
I know the self named “progressive” economists think the public is stooopid, but just how stooopid are we supposed to pretend to be for them?
Look, Holder isn’t going to prosecute people who are going to be signing his checks later. The Mob really needs to get in on this, offering sweet consigliare jobs to former prosecutors. (Although given that for all practical purposes HSBC is the Mob, so I guess we are already there.)
BEST. ARTICLE. EVER. Will be forwarding to as many folsk as I dare…thank you!
The financial services industry – they knew or should have known what they were doing – legally….’I did not know’ or ‘no one could have foreseen’ — is no defense. Nor should justice abdicate it’s duty to prosecute by claiming to protect the economy… laws were broken systematically and knowingly.
Proof howls from the past
Tax Facts – published in the 1920’s below:
He isn’t really a big time crook unless you must let him alone to prevent the loss of public confidence.
Speaking of plastic surgery, isn’t there some way of transferring bone from a politician’s head to his back.
A good president is one who happens to be on the job when you are having a run of good luck.
There is a bright side, after watching great minds combat the recession you should be rid of your inferiority complex.
“Laborers knowing that science and invention have increased enormously the power of labor, cannot understand why they do not receive more of the increased product, and accuse capital of withholding it. The employer, finding it increasingly difficult to make both ends meet, accuses labor of shirking. Thus suspicion is aroused, distrust follows, and soon both are angry and struggling for mastery.
It is not the man who gives employment to labor that does harm. The mischief comes from the man who does not give employment. Every factory, every store, every building, every bit of wealth in any shape requires labor in its creation. The more wealth created the more labor employed, the higher wages and lower prices.
But while some men employ labor and produce wealth, others speculate in lands and resources required for production, and without employing labor or producing wealth they secure a large part of the wealth others produce. What they get without producing, labor and capital produce without getting. That is why labor and capital quarrel. But the quarrel should not be between labor and capital, but between the non-producing speculator on the one hand and labor and capital on the other.
Co-operation between employer and employee will lead to more friendly relations and a better understanding, and will hasten the day when they will see that their interests are mutual. As long as they stand apart and permit the non-producing, non-employing exploiter to make each think the other is his enemy, the speculator will prey upon both.
Co-operating friends, when they fully realize the source of their troubles will find at hand a simple and effective cure: The removal of taxes from industry, and the taxing of privilege and monopoly. Remove the heavy burdens of government from those who employ labor and produce wealth, and lay them upon those who enrich themselves without employing labor or producing wealth.”
1920’s
“In spite of the ingenious methods devised by statesmen and financiers to get more revenue from large fortunes, and regardless of whether the maximum sur tax remains at 25% or is raised or lowered, it is still true that it would be better to stop the speculative incomes at the source, rather than attempt to recover them after they have passed into the hands of profiteers.
If a man earns his income by producing wealth nothing should be done to hamper him. For has he not given employment to labor, and has he not produced goods for our consumption? To cripple or burden such a man means that he is necessarily forced to employ fewer men, and to make less goods, which tends to decrease wages, unemployment, and increased cost of living.
If, however, a man’s income is not made in producing wealth and employing labor, but is due to speculation, the case is altogether different. The speculator as a speculator, whether his holdings be mineral lands, forests, power sites, agricultural lands, or city lots, employs no labor and produces no wealth. He adds nothing to the riches of the country, but merely takes toll from those who do employ labor and produce wealth.
If part of the speculator’s income – no matter how large a part – be taken in taxation, it will not decrease employment or lessen the production of wealth. Whereas, if the producer’s income be taxed it will tend to limit employment and stop the production of wealth.
Our lawmakers will do well, therefore, to pay less attention to the rate on incomes, and more to the source from whence they are drawn.”
Written around 1925
Then some other stuff:
“We, the People, are the rightful masters of both the Congress and the Courts. Not to overthrow the Constitution, but to overthrow the men who have perverted it.” – Abraham Lincoln
We had to struggle with the old enemies of peace–business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me–and I welcome their hatred.”
Election eve speech at Madison Square Garden (October 31, 1936)
Franklin Delano Roosevelt
It goes on and on.
….this is so upsetting. We were certain the missing dollars were being skimmed by school teachers and family workers that were given elaborate benefits like say, health-care.
now hush…it’s all about the market…didn’t you get the memo?
Of course, with it brings the wealth creation and trickle down, all code for a greed-based, narcissistic hyperindividualism that radiates with a new sociopathic lack of interest in others.
The president and his DOJ has the power to break the law at will whenever he deems that doing so promotes the interests of his monied backers. That America’s most celebrated journalist not only supports this, but demands that all presidents follow this model of lawlessness, is a sad state of where we’re at.
Who is America’s most celebrated journalist? I missed the memo.
The big lie of the financial crises was that banks only had liquidity problems – not insolvency issues. Prime them with cheap money and everything would work out fine. A big Pay Day loan so to speak.
Holder is just one of many pawns continuing to proprogate this lie through his complete failure to acknowledge and prosecute bank fraud. We can safely assume he is getting his marching orders from the White House and Wall Street. Where is Christian-Judeo guilt when we need it? Justice truly is blind.
Every time I visit this site (daily) and read the comments it enables the descriptions of the commenters of being, “(economic) militants”, “subversive thinkers”…etc…..
I can hear the drones already!!!!!!
If U.S. Attorney General Eric Holder is not prepared to do his job and uphold the law where it applies to the largest banks then he ought be relieved of his position as an AG.
Is he not complicit in the crimes by way of overlooking prosectution, not effecting a deterrent and by not removing criminal elements in order to prevent further offending ? Does anyone know how the written (USA) law stands on this ?
Does Mr.Holden really believe that the guilty will not re-offend and that having set the preceedent ( of exemption for prosectution) others will not be encouraged to take greater risk and transgress the regulations and rule of law, both local and international ?
If any bank is too “big to prosecute” then it is too big to be allowed to break the system with impunity ( not that even small banks should be allowed), if the effect of the prosecution on the world bank system is proportional to the size of the bank, then the effect of the transgression will equally proportional to the effect on whole world banking system.
If Mr.Holden believes that the banks are too big to prosecute why did he not prosecute individuals within the bank who are guilty ?
The scary part for me is that there are only political solutions to all this, and pretty obviously those solutions cannot be done within the existing duopoly. Both brands of the duopoly are of a piece with the organized criminals. And the entry barriers to the league they play in are prohibitive.
If you adhere to the same playbook.
Look at M5S in Italy however and you see an alternative playbook where a significant political entity can be more or less conjured up in a few years on a shoestring budget on the internet. When the disconnects between what government does and what the electorate want reach some point in a democracy, the system becomes less stable and disruptive change to the status quo becomes easier to trigger. And the internet makes one hell of a potential trigger– cheap, fast, powerful, dangerous and beyond effective control.
That said I don’t feel the time is right here in the US–not yet at any rate. But that could change in six months!
If you see the Internet go dark in 6 months, you’ll know the governators agree with you.
If the Internet were taken down by the ruling Corporate BizNazi Goverplex, millions of people would still have millions of stand-alone computers. How might people create a whole “network-of-people” . . . amateur couriers carrying
discs or hard-drives or memory sticks or whatever those data-storage techno-thingies are called . . . between and among those millions of owners of millions of computers? Something like how Solidarity activists moved notes and memos around during the Jaruszelski Martial Law Period in Poland?
Are people preparing to catapult the samizdata?
It’s basically impossible to take the Internet down. It’s much more decentralized than you realize. If people concluded that it was being taken down, they’d start taking over the junction rooms, and/or reconnecting the wires at different junction rooms.
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