Allison Bricker

On Wednesday, we posted the Digg/Wall Street Journal interview of Treasury Secretary Timothy Geithner along with analysis provided by the Corbett Report. During the approximately twenty-minute interview, Secretary Geithner indicated that both the author of legislation such as H.R. 1207 and its vocal supporters must understand that opening the FEDERAL RESERVE’s books to Sunlight would “politicize the process”.

“The FED actually is subject to very comprehensive oversight by the Congress, by a series of external auditors…but you want to keep politics out of monetary policy. There are good reasons for that.”

 

Timothy Geithner
Secretary of the Treasury

Yes keeping politics out of monetary policy is important Secretary Geithner, and that is exactly why we need a full audit of the FEDERAL RESERVE.

Secretary Geithner is partially correct in his statement that the FEDERAL RESERVE is audited. What he fails to mention however, is that the transactions, which hold the potential to cause the greatest widespread damage; those dealing with foreign governments, other central banks, and international financial institutions, are prohibited from audit, and thus remain cloaked from any oversight whatsoever.

As such, H.R. 1207 and S. 604, both just barely over two-pages in length, merely seek to remove the aforementioned prohibitions thereby allowing Congress and ‘We the People’ to see the full impact of the FEDERAL RESERVE’s international dealings.

Thus, the potential for politicization comes not from the act or principle of demanding true transparency and accountability, but possibly from the FED’s own actions. It is not beyond possibility that a full-unabated audit could expose foreign interactions, which resemble those more closely aligned with that of a government unto itself than those of a central bank built for “economic stability”.

Foreign policy decisions, ergo the business of allies, enemies, and the subsequent support thereof financially or otherwise is  first and foremost a function of the United States Senate via its Constitutional authority of making and ratifying treaties.

It is most certainly not the purview of a private central bank shrouded in secrecy via a most repugnant unconstitutional regulation.

In conclusion, either allow the repeal of the prohibition contained in TITLE 31>SUBTITLE 1>CHAPTER 7> SUBCHAPTER II > § 714 > PARAGRAPH (b) or sell the idea of letting a central bank exist and operate under the cover of darkness as an Amendment to the United States Constitution.

As there are those of us who are indeed willing to pledge our lives, fortunes, and sacred honors to see the FEDERAL RESERVE meet with the same fate as the previous two Central Banks of the United States.

Joseph Marohl

“Lowlife grave dancers like me will make a fortune,” chimes billionaire J. Christopher Flowers, former golden boy of Goldman Sachs, quoted in the May 6 New York Times, speaking about the breaks the current banking crisis gives to wealthy opportunists. “The government has all the downside and we have all the upside.”

Since the collapse and near-collapse of a number of financial institutions last year, private equity managers like Flowers and the Carlyle Group are snapping up small national banks in hopes of getting their hands on charters that will enable them to take over the larger struggling banks—with the federal government’s help, if possible.

Looks like another instance of “disaster capitalism,” to borrow Naomi Klein’s phrase for the manipulation (and perhaps instigation) of global catastrophes in order to reap immeasurable profits.

Such ventures are much easier when the capitalists are in bed with government decision makers, of course, as anyone associated with the Carlyle Group could tell you.

The Carlyle Group, as you may know, is a global private equity investment firm based conveniently in Washington, D.C., close to the vein it likes to tap. Its assets include doughnuts (Dunkin’ Donuts), rental vehicles (Hertz), ice cream (Baskin Robbins), and missile launchers (United Defense Industries).

Carlyle’s United Defense took $1.8 billion in government contracts in the first year of the Iraq war. Altogether, Carlyle-owned companies won $9.3 billion in government contracts without placing a bid. Coincidentally, employees and board members of the Carlyle Group include representatives of the key families in recent world history—Bush, Bin Laden, Sarkozy—along with former British Prime Minister John Major and former Time magazine editor-in-chief Norman Pearlstine.

Now its predatory eyes are set on small banks.

“Morganization” is the more flattering name sometimes applied to such grave dancing, after John Pierpont Morgan, the railroad tycoon who, during what Mark Twain and Charles Dudley Warner unflatteringly nicknamed the “Gilded Age,” took over insolvent businesses (including banks) and found ways to make them profitable again.

When the Federal Treasury faltered in the final decade of the nineteenth century—the infamous decade of the robber barons and the (depending on whom you read) collapse or near-collapse of American capitalism—President Grover Cleveland picked Morgan to save the day, procuring heavy investments from the Bank of England and the Rothschilds in Europe, plus helping to think up the neat trick (so controversial at the time it lost Cleveland a third term) of replacing the gold standard with fiat currency (i.e. cash based not on gold but just on the fact that the government accepts it as payment).

Just three months ago, Morgan’s namesake J.P. Morgan Worldwide Securities Services was selected by the Federal Reserve to oversee the mortgage-backed securities (MBS) purchase program. Plus ça change, plus c’est la même chose.

Back in the day, Morgan’s fingers were in a lot of pies. Morgan was instrumental in the development of business consolidation and the modern concept of the corporation, as well as the early globalization of the marketplace. Morgan was also the principal financier of Nikola Tesla’s pioneering experiments in electricity. But whereas Tesla’s vision was to provide free power to all, Morgan accurately predicted the windfall that privatized energy would be in the twentieth century and formed General Electric instead. (Tesla, more or less a footnote to history now, still inspires some sympathy—or contempt—as the idealistic genius who tore up a contract with Westinghouse that would have made him, like Morgan, a billionaire.)

Even to mention such debacles draws accusations from the corporate mass media and its minions that one is engaging in class warfare. Of course, the charge is made only when the underdogs are snapping back at the top dogs. Top dogs, of course, can profit from actual bombs-and-missiles warfare, sacrificing countless lives on both sides, usually the lives of underdogs, and the media continue to paint them as national benefactors, no matter how many graves they boastfully dance on.

Right now, according to the New York Times article linked above, all that blocks the private equity firms is federal law, which would be more encouraging if it weren’t dreadfully clear by now that corporate interests and fantastically wealthy individuals can sway American lawmakers with just an arched eyebrow, while the media paint them as humbly beseeching the American people’s mercy and good favor in a time of national crisis—same old same old.

Now there’s a great push by private equity managers to get Washington to change the law that technically forbids ownership of banks by nonfinancial companies, law inspired in reaction against some of the excesses and strong-arm tactics, way back when, of men like Morgan and John D. Rockefeller—whose personal wealth bolstered crumbling U.S. banks against an array of panics stretching back to the end of the Civil War, to these speculators’ own considerable profit and some weakening of antitrust laws.

But blocking the way of the would-be grave dancers are (1) Secretary of Treasury Timothy Geithner, a man sometimes described as enthralled by (and probably to) the financial industry, and (2) the Federal Reserve, the two-headed (private and public) U.S. banking system, which Dennis Kucinich recently quipped was no more “federal” than Federal Express. This gives me small hope, indeed.

It would seem, as best as I can tell, that the odds favor the fantastically wealthy, again; and, as J. Christopher Flowers exulted four months ago, the government will get the shitty end of the stick (the part we non-billionaire taxpayers get to hold for all our heroic efforts at “saving the economy’) and the weasels will get “all the upside.”

Joseph Marohl

I could go on screaming.

Timothy Geithner said Sunday that, while the economy is showing signs of recovery, unemployment will probably continue to rise.

Is this news?

Correct me if I’m wrong, but it has been my understanding that the interests of workers and investors have almost always been opposed—that is, stocks become more valuable as public companies make greater profits, and a fairly typical way to raise profits is to downsize, that is, fire current employees … in some cases, these are employees deemed “redundant”; in others, these are employees replaceable by vendors, often overseas.

About a week ago, I heard someone on the radio saying that consumer spending has been high now for the past two months, which is to say that, except for big ticket items that require big-ticket loans—hard to get for some time now—people have continued to shop, just as we’ve been so well conditioned to do.  (Wal-Mart, for instance, has been virtually recession-proof.)

What people had stopped buying were stocks, favoring instead actual goods and services, and who can blame us? Besides, now that most employers have replaced pensions and in-house retirement plans with 401(k)s and the like, and with big-end employers dropping redundant employees and viewing more and more of their employees as expendable, is it no wonder then that the rank-and-file workers (or former workers) have been stuffing their 401(k)s less and less?

Banks and auto companies and others, for all I know, have long been propping up the illusion of profits in large part by trimming expenditures—typically in the form of workers’ paychecks. Remaining employees were often urged, with a certain level of snide bathos, to “do more with less.”

So, isn’t it to be expected that a good share of America’s “economic recovery” means a recovery for investors—not so much for workers? and won’t attendant crackdowns on bad loans, foreclosures, and stricter conditions for credit mainly benefit the well off, while the working middle class and poor are … well … having to do even more with even less?

Then, later, this afternoon, while channel-surfing, I caught a bit of the 2006 documentary Maxed Out: Hard Times, Easy Credit, and the Era of Predatory Lenders, which, given my persistent state of being chin deep in debt, I owe myself to watch through someday. The bit I saw convincingly depicted the ways, nefarious but entirely legal, the better off are able to relieve the worse off of their money by exploiting the poor’s ignorance, trust, basic decency, and fear—and, having done so, to view the poor with contempt, anger, and smug self-justification for their supposed stupidity and laziness.

The part of the film I saw emphasized that it has been the high-risk borrowers—those for whom repayment at a (usually high) rate of interest is both hard and, increasingly, as fees and interest accumulate, improbable—who have provided lenders with a good 50 percent of the lenders’ profits. Mostly, these profits occur in the ways lenders are able to sell bad debt to collection agencies, but I also imagine that these borrowers, naïve in the ways of money and credit, are also less likely to be diligent in keeping an eye on their accounts, while also being less likely to seek legal escapes such as bankruptcy, either out of ignorance or out of a high sense of duty to repay a debt—even to the point of personal catastrophe.

Hasn’t a big bone of contention about those drafting recovery plans been how much (if at all) to help poor workers and to either protect their jobs or provide needed services in the absence of gainful employment—or, now anyway, savings? The recovery money—and forget for a second the fatuous ways that this money is being generated … out of thin air—is mainly aimed at CEOs and the big investors, isn’t it? And it is in these people’s interests to cut employment even further, to restore some appearance of profit, right?

After slavery, poor workers—mostly migrant or otherwise short-term employees—were encouraged to owe—and owe big—to the company store and/or to accept scrip, instead of legal tender, for payment. As time progresses, especially for the better paid workers, this system has been elaborate to the point of invisibility—but it appears that it’s been quite a while since productive labor has provided anyone with a way out of poverty and debt.

I’m a reasonably intelligent man, but, sometimes distressingly, I’ve never been money wise, partly because I have not educated myself in this area and partly because the pursuit of money has never been my particular talent or my idea of living well. I’m unlikely to change now, much to my loss, perhaps. Still, I’ve wised up enough to recognize that the cards are stacked against me and others like me, and to recognize that the media and economic savants largely sway me to identify needs antithetical to my own as requiring my preeminent consideration and self-sacrifice.

The more I come to understand the current crisis, the more it seems to me that the rot is widespread and old, old, old, going back over a hundred years, and, more often than not, masquerading as cleverness, diligence, equal opportunity, and free choice.

Jeff Lewis

I remember having had discussions with lots of folks about the plight of the American Indians at the time of the release of the Academy Award winning film, Dances with Wolves, back in 1990. The film ignited a new round of reflection regarding the systematic atrocities perpetrated by whites and their governments in both American hemispheres, as they proceeded to destroy entire civilizations of indigenous humans from the landscape of the Americas.

People would often wax, “Imagine what it must have been like to wake up and find that everything you had grown up knowing was undergoing inexorable change from forces beyond your immediate ability to control.” That is how I felt after I read the feature article in the current issue of Rolling Stone Magazine, The Big Takeover, written by Matt Taibbi.

The article reviews the recent history of how this country and the world came to the precipice of the current economic meltdown facing us all. The author, Matt Taibbi, chronicles step by step the key events beginning in 1998 that caused the present financial calamity. It was as though I was reading an account written by an author who is a cross between George Orwell and Lewis Carrol.

Highlights include an explanation of the range of the new acronyms that have sprung up in our banking/securities litany;

• AIGFP–American International Group Financial Products, the most culpable entity in the catastrophe.

• CDO–Collateraled Debt Obligation. “A box full of diced up assets.”

• CDS–Credit Default Swap. Sold as a bet on the outcome, like an insurance policy. In seven years it racked up $500 billion in sales.

• OTS–Office of Thrift Supervision. A small agency set up to regulate “thrifts (formerly S&Ls) that regulated AIG.

• CFMA–Commodity Futures Modernization Act. Created by former Senator Phil Gramm (R-TX) that basically said credit default swaps were not gaming and not a security and therefore were unregulated.

An ongoing dynamic in the financial arena is the constant change of their vernacular that creates a language of its own. A language that is too esoteric for common English speaking folk. The author points out that slaves were not permitted to learn to read. Allowing such skills meant that they could become literate and consequentially more informed and powerful, concepts antithetical to subjugation.

As you read accounts of the machinations of this elite cadre of players, you develop a keener insight into their unworldly mind set. Nothing has brought that notion more to light than the bonus controversy that has erupted, in Richter Scale dimensions, upon the American public learning of the bonus structure of AIG and those targeted to receive bonuses of over $1 million minimum per person. Increments of hundreds of millions and billions of dollars are near impossible for the average citizen to grasp, but one million is a number they can relate to, if for no other reason than the popular TV shows touting million dollar payouts to winners. Deal or no deal, it is plain to see that AIG got a sweet deal.

The outrage is justifiably exacerbated by the fact that the recipients are the very individuals that brought AIG to its knees while their compensation has come from the U.S. taxpayers themselves; easily an example of “insult to injury.” This supposed “Bailout” is nothing more than rich bankers bailing out rich bankers with the taxpayers credit card, according to the author.

The “coup de gras” of the article is the revelation of the seemingly unbridled power of the Federal Reserve. According to Taibbi, the Federal Reserve has already loaned out $3.7 trillion and extended credit for investment guarantees amounting to $5.7 trillion! As of this writing, AIG’s total indebtedness is still not known.

When inquiries were made to the FED from Congressman Alan Grayson (FL), about where the money is going, to whom, and in what amounts, he was stonewalled. The Fed cited an act passed in 1950, “The Accounting Auditing Act”, which states the Fed cannot be audited by Congress or anyone else. In conjunction with the FEDERAL RESERVE, the Department of Treasury has yet to reveal exactly where all the TARP funds have gone, nor have they released any scorecards on the health of the nation’s banks. A widely held view is that people in Hank Paulson’s rolodex were the first to receive payments, but smaller, regional banks have sat on the sidelines, waiting for their phone calls and applications to be responded to that were submitted last fall.

I, for one, am concerned that Treasury Secretary Tim Geithner and President Obama’s Chief Financial Advisor, Larry Summers, are being compromised by their prior associations with these financial renegades that seemingly have brought the world to the doorsteps of total economic collapse.

In Bob Dylan’s first major album hit, “Free Wheelin”, he wrote about the murders that took place on the campus of the University of Mississippi in 1962, during the admission of the school’s first black student, James Meredith, in a song titled “Oxford Town.” His last line in the song is, “Somebody better investigate soon.”

Source: RollingStone “The Big Takeover” by Matt Taibi, published March 19th, 2009

Allison Bricker

During an inquiry to Senator Evan Bayh’s (D-IN) Washington D.C. office regarding the then future confirmation vote of Timothy Geithner, The Smoking Argus Daily’s call was answered by voicemail.  After identifying myself, leaving contact information, the nature of my call, and our publication deadline, I was instructed to press one to confirm my message.  However, upon confirming my message, the automated voice relayed that the message could not be delivered due to the Senator being over his mailbox limit of unanswered messages and the call was then automatically disconnected.

We find this absolutely deplorable that a Senator who spends over $1 million Dollars annually staffing his four various offices would be so arrogantly uninterested in corresponding with constituents or fielding questions from the press.  It is amazing to me, such arrogant audacity on the heels of a controversial confirmation vote as to not have a staff member available to answer the phone.  -Public servant indeed.

The Smoking Argus Daily then phoned Indiana’s Senior Senator, Senator Lugar (R-IN) in hopes he might advise the careless Junior Senator to tend to his inbox in lieu of casting yet another vote to benefit one his wife’s company’s.¹

In the end , Senator Evan “I’m too busy for Constituents” Bayh ended up voting ‘aye’ for tax cheat Timothy Geithner¹ as the next Secretary of the Treasury.  A tax cheat in charge of Treasury as well as the Internal Revenue Service, and inattentive elected officials.  Perhaps fellow readers, we just chalk this up to another fine example of the much ballyhooed “Change” in Washington.

We did manage to reach Senator Bayh’s Press Secretary on Tuesday in hopes of receiving some form of official comment as to the justification for voting to confirm Tim “Turbo-Tax” Geithner.  However, after confirming and reconfirming our email address to said Press Secretary, the promised statement never arrived.  Perhaps it is a difficult task, attempting to rationalize a vote for a Tax-Cheat-in-Chief while the rest of us our coerced into compliance via withholding and the joy of multiple schedule 1040′s.

Source(s): ¹Journal Gazette “Across the boards” -Published: December 16, 2007 • ²Confirming Timothy F. Geithner, of New York, to be Secretary of the Treasury

Allison Bricker

Dr. Paul spoke yesterday to Bloomberg Television about the pending nomination of New York FEDERAL RESERVE Bank President, Timothy Geithner’s Senate confirmation as Secretary of Treasury. It appears that regardless of the fact that Tim Geithner failed to pay $34,000 in taxes, he will indeed become the “purser in chief” over our tax dollars. The following video also features the debut of our new editorial video crawl. We hope you find the crawl useful and look forward to any comments and/or suggestions you may have in how we may improve it further.

Allison Bricker

“Change” was the cornerstone of President-Elect Obama’s campaign. Often spoken and vaguely defined, his hypnotic lip service to a nation weary of the “Bush Years” was enough to sweep him from the well of the Senate straight into the White House. The problem here is that as the days since the election become weeks, the individuals President-Elect Obama is selecting to fill out his staff and cabinet are more of the same old career politicians who have spent their lives sucking from the public trough. As the chart below illustrates, these are the same scoundrels which through their love of central nanny state planning, helped ensure the current economic crisis and erosion of inherent liberties.

This list reads like a veritable “Who’s Who” of beltway Washington Aristocrats, and these are just the sourced appointments to the Obama White House. Unconfirmed reports are also circulating that James Steinberg former Clinton Administration deputy national security adviser is on the short list to be President-Elect Obama’s choice for National Security Adviser.¹ How is someone to believe that President Elect Obama will help fix an imploding economy and divided nation when the same people who helped cause the mess are elevated yet again to positions of power?

The answer of course is that they will not. Moreover, a closer inspection of these filthy power hungry individuals yields even less hope for rolling back the massive unconstitutional powers decreed to the Executive Branch under President Bush. The truth is, the face of the puppet may have changed from bumbling dote to articulate persuasive figurehead, but outside of that it is business as usual.

If we look at the public statements and actions of those listed above, we see that their motivation comes solely from attaining more for themselves while throwing scraps to “we the people”. Eric Holder, who is on pace to be the next Attorney General for example, said in a 1999 interview:

“The court has really struck down every government effort to try to regulate it. We tried with regard to pornography. It is gonna be a difficult thing, but it seems to me that if we can come up with reasonable restrictions, reasonable regulations in how people interact on the Internet, that is something that the Supreme Court and the courts ought to favorably look at.”²

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As we reported weeks ago, it is almost a certainty that an Obama Administration will seek to end the free flow of ideas exchanged across the internet vis-a-vi the “Fairness Doctrine 2.0″. Do we as Americans need the government to tell us what is “reasonable” or”safe” to listen to, read, or view? The Founders knew that allowing government to dictate what was “reasonable” was guaranteed to lead to one thing and one thing only, censorship.

Further complimenting President-Elect Obama’s socialist plans for our healthcare industry, are his picks for Chief of Staff and Secretary of State, Rahm Emanuel and Hilary Clinton respectively. Both were lead architects of the failed “Hilary Care” during the Clinton Administration.³ Rahm Emanuel as we reported is also the architect and ferverent supporter of forced unpaid labor via his “Compulsory Civil Service” program. Between Hillary Clinton and Rahm Emanuel they have received over $15.9 million in campaign contributions from healthcare industries, central bankers, criminal financiers, and bailout recipients.⁴ Care to guess which healthcare companies/individuals will receive government certification to administer and oversee the universal healthcare program?

Next, continuing President-Elect Obama’s perverse definition of “change” is his choice for Secretary of the Treasury, Timothy Geithner. Mr. Geithner is currently the President of the New York branch of the Federal Reserve. This guarantees that an Obama Administration will continue this debt based fiat currency system that is to the sole benefit of the private Central Bankers who own the Federal Reserve. The obvious conflict of interest in having a Federal Reserve branch President in charge of the U.S. Treasury, relying on his fellow Federal Reserve Central Bankers to loan the government money via Reserve Notes, should go without saying, and most likely will thanks to a mainstream media intoxicated by President-Elect Obama.

Additionally, many of us would love to be a fly on the wall during the times when Lawrence Summers, former Secretary of the Treasury under the Clinton Administration and Hillary Clinton are in the same room. It would be most interesting to see how Hillary Clinton interacts with Mr. Summers, the former President of Harvard who resigned in disgrace in 2006 after remarking that “issues of intrinsic aptitude” could explain underrepresentation of women in the fields of science and engineering.⁵ Nice to know “Change” in Obama’s mind means appointing a misogynist who feels women are just too stupid in comparison to men.

In conclusion, during the next four years we will see campaign promises fall by the way side, massive government programs designed to fix the last batch of failed government programs, central planning and intervention into our economy which will exacerbate and prolong the coming depression; while benefiting central bankers, as well as a further shredding and trampling of our liberties and Constitution.

It is my opinion, President-Elect Obama’s definition of “Change” reeks of 1984 “doublespeak”.

Source(s): ¹Business Day – “Contenders for Key Posts in New Cabinet” • ² May 28, 1999 NPR Morning Edition • ³ Slate – “Obama’s Muscle” • ⁴ OpenSecrets.org – Hillary Clinton Record/Rahm Emanuel Record • ⁵ The Economic Times – “Lawrence Summer to become Obama’s Top Economic Adviser”