Elaine Meinel Supkis
I get great emails from readers. Here are three of them. One is being kept anonymous but David Park's analysis is proudly his own and worthy of reading. And the one from Ron Paul is important to read. If any readers want to send a long email for posting here, I will happily post it! Because I really admire the information and sagacity of the readers here. We have a rather high collective IQ. Except when we start joking. Heh. Meanwhile, I am going to write another, big, fat piece explaining what happened this last week and how it reveals international stresses and queer policies and how we can 'grow up' and start acting like adults, not naive children.
Here is the first email which came right after I came back from Washington, DC:
I used to work at a Wall Street firm, but now I handle financial services for [a Congressman], and I was on the conference call that Paulson, Bernanke and the House Democratic Leadership held for all the members yesterday afternoon. It's supposed to be members only, but there's no way to enforce that if it's a conference call, and you may have already heard from other staff who were listening in.
Anyway, I wanted to let you know that, behind closed doors, Paulson describes the plan differently. He explicitly says that it will buy assets at above market prices (although he still claims that they are undervalued) because the holders won't sell at market prices. Anna Eshoo pressed him on how the government can compel the holders to sell, and he basically dodged the question. I think that's because he didn't want to admit that the government would just keep offering more and more.
I don't think that our leadership has been very good during this negotiation (or really, during any showdowns with this administration) at forcing the administration to own their position. If Paulson wants this plan, then he needs to sell it to the public, and if he sells a different plan to the public (the nonsense buying-at-market-price plan) then we should pass that. I'd rather see the government act as a market maker for the assets to get them transferred over to private equity firms and sovereign wealth funds and other willing holders. And if we need to recapitalize these companies, it seems like the cheapest way for the taxpayer is to go in and buy up the distressed debt and then convert that to equity.
Losses on the paper acquired are guaranteed. This is not a bug but a feature. The whole point of this exercise is an equity infusion to banks. The failure to be honest about it upfront will lead to a taxpayer backlash (or will lead to the production of phony financial statements for the rescue entity, which will lead to revolt by our friendly foreign funding sources).
Taxpayers have no upside participation.
There is no regulatory reform as part of the package. This would seem to be a minimum requirement for a donation of this magnitude.
There is no admission that deleveraging is inevitable. This plan seems to be a desperate effort to keep bad debt from being written down. Yet the sorry fact is that a lot of these assets simply will not be repaid.
There appears to be no intention to do triage. The financial services industry, on the back of an explosive growth in debt, has reached an unsustainable size. The industry will have to shrink. Yet the Administration does not address this issue; indeed, it appears it intends to forestall the inevitable. Regulators need to decide who will make it, who won't, and figure out what to do with damaged institutions. Instead, the reaction is ad hoc. The stunner was the contemplation of a possible merger between Morgan Stanley and Wachovia. As far as I can tell, the only thing the two firms had in common was coming into crisis on roughly the same timetable. For all I know, their IT systems are not compatible (many an otherwise promising bank merger has been scuttled over IT integration issues).
And here is the other that came this weekend:
On Sep 27, 2008, at 8:18 AM, David Parks wrote:
Elaine, all along, I’ve been attempting to understand outsourcing in relation to what you tell me about the systematic destruction of the US economy. I search the web a lot, attempting to figure out an overall picture of why wealthy US corporate globalists are turning on the nation of their birth and are systematically destroying it. I think an overall picture is finally emerging, and this picture is an ugly one.
The more I read your blog alongside global news and research, the more obvious it is to me that a US to Chinese sellout deal was secretly made long-ago between the Chinese and treasonous US globalist CEOs. Other deals have been made with the leaders of Britain, Canada and Mexico, but these deals were made to sucker those countries into the game these US based global elites are playing.
Chinese and other Asians were recruited to take over world manufacturing while financially propping up a failing US, British, Canadian and Mexican economy just long enough for US executives and elite investors to grab a huge chunk (around 70 percent now) of the US national wealth and leave the country while their stupid, paid political lackeys ignore US voters and sell out the US infrastructure to the Chinese, Europeans and others in a bargain basement fire sale.
Now, Mexican and Canadian and British jobs are being removed and outsourced to Asia. In other words, these allies were suckered so they wouldn’t prevent businesses from being removed from their nations also. For example, Hanes Apparel just announced that it is outsourcing 2000 US jobs and 6000 Mexican jobs to Asia.
What these elites really want is a North American decline leading to a poor, depopulated, rigid, orderly North America that they can easily manage from afar.
Of course Japanese elites are complicit in this also. Their goals are the same as those of US elites. They want rigid control of all of their national wealth, power and a drastic decline of their populations with their own privileged children controlling their nation and the world of the future.
For these ruthless elites, following Friedman’s idiotic free market and chaos theories are just a stupid farce used to dupe stupid people into going along with their own decline.
What these elites really want is a massive depopulation of North America and Japan through economic depression. Because of our recent national foreign affairs belligerence, we cannot avoid wondering if elite plans might also include large-scale warfare.
There are many worthwhile arguments for limiting population growth, but these efficiency-oriented corporate globalists want a drastic reduction right now. They have always envied rigid control the Chinese communists have over their populations, and they want a somewhat similar control system in place here.
What I’ve recently discovered as I search across the web is that Costa Rica is the new paradise on earth for wealthy US elite millionaires, billionaires and their lackeys.
Wealthy globalist elites have bought up much of the land in Costa Rica and they are moving there in large numbers. In the future they will live on large estates in luxurious mansions with their handmaidens, butlers and servants and manage their North American and worldwide holdings from afar.
While Costa Rica, much like Cuba during the 1950s, becomes the home and tax-free haven and sin-filled paradise for mega-rich American globalists and their lackeys, the US infrastructure will be allowed to collapse economically, socially and structurally. Then, it will be sold off piecemeal to foreign and global interests, thus enslaving native North Americans (Mexicans, US citizens and Canadians). If anyone doubts this, google Costa Rica real estate and view the million dollar plus real estate listings there.
So, rich elite globalists making money and simultaneously reducing populations is the basis for this terrible economic mess.
If this line of thinking is even somewhat correct, the following could occur:
The US infrastructure, including factories, roads and businesses, will be nearly completely sold off to foreign investors and distant global elites by broke municipalities at bargain basement prices. Foreign owners will let the North American people go hungry long enough so they won’t protest when they are put back to work for a few bucks (more likely, euros) per hour. Also, aggressive, poor Americans will be a willing pool for recruitment into military and mercenary ventures around the world, and such ventures will further reduce world populations. Look at Iraq today.
A great worldwide social leveling will occur as the US becomes somewhat like former colonial India, where distant owners dictate wages and living conditions for its rigidly oppressed masses while rich, distant owners collect huge profits and live in secure luxury in distant, tax free locations away from those who might come after them during peasant rebellions.
Those distant elite globalists will attempt to continue installing puppet regimes in Washington to harshly rule over impoverished US masses.
The Washington-controlled US military, in a much diminished, but nuclear form, will continue being the hired guns that impose imperial, semi-colonial order around the world and inside the US itself. This keeps young, potentially rebellious Americans, employed maintaining globalist order around the world while their parents wallow in poverty at home.
Computerized surveillance of US citizens lives and actions and even their thoughts will make suppression of any rebellious ideas in the US masses more cost-effective. Poorly educated, brainwashed and misled young thugs will make up future law enforcement. This dumbing-down process is already occurring in the public schools that are “teaching the test.” This teaches that there are only one, two or three pre-defined answers to any question and a certain thing is either right or wrong. For, the most part, however, public schools are now warehousing kids and imposing a lot of strong psychological discipline upon them until they become old enough to join the military or law enforcement, or become future impoverished servants for elites. They will become adults who are too discouraged, downtrodden and impoverished to form families and reproduce.
Because of depression poverty and oppression, the US, Canadian and Mexican birthrate will decline drastically. This will accomplish the goals of distant global elites. They seem to envision a future US that is somewhat like the US portrayed in the Kevin Costner movie, The Postman. They might even envision their offspring someday returning to an environmentally friendly, depopulated North America.
One wonders what is preventing of all of this from becoming our future in North America (Mexico, US and Canada)?
History gives us some ideas about this:
As the Roman Empire matured, the farmer-soldiers who fought and died for Rome were no longer given pensions and land by greedy conservatives who wanted the land for themselves and who had corrupted the Senate. This led to military dictatorships for Rome and the empire lasted a considerable while longer in a much corrupted and diminished form before The Church finally took over. In any case, a majority of Roman citizens lost all control of their government and the empire, and Rome’s fabulous glory days were gone.
In the US today, we see a declining empire:
Since a corrupt Supreme Court has decided US elections, and computerized voting machines have made rigging elections, from a local level to the national level, very easy for those in power, the will of the people has a much diminished effect on elections. Corporate produced and controlled propaganda is poured out by the mainstream US media. Since both political parties are bought and corrupted by wealthy globalist elites, and candidates are chosen beforehand, the people have little input into the process of government nowadays.
If voters become angry because they have lost power in the US, any outright rebellion will be brutally crushed by elites and their numerous, excessively funded, well-armed, semi-military style law enforcement agencies or by the military itself or by private security contractors. Dissenters will be harassed and persecuted until any peaceful protests are stopped.
This begs a huge question. What group still has enough power to oppose this oligarchic system that is being imposed on US citizens by global elites, with the help of zealous lackeys and exceedingly foolish, supporting foundations and think tanks that continually cook up new methods for oppressing the people.
Just look back in history to Rome to find the answer. This answer is the US intelligence services and the US military-industrial complex.
Why might these entities someday turn on their masters?
Out of patriotism and self-interest. As the US becomes poorer and poorer due to printing and computer-generating worthless money, outsourcing manufacturing of real wealth and a resulting deep economic depression, funding for expensive US intelligence agencies and the costly US military will dry up, and the dollars these people are paid will become worthless.
Professional US soldiers are already discovering what Roman soldiers long ago discovered. After they have patriotically given twenty long, hard years of their lives murdering others and dying to appropriate wealth for US elites and their corporations, they find that they are being cheated out of their share to the spoils they helped steal for the empire. In a declining, economically depressed future, even US generals will no longer be able to enter the revolving door military contractor network since the unemployed taxpayers cannot afford to keep those overly expensive corporations funded because of a destroyed tax base.
US intelligence agencies might be even more aware of the way things are headed since they attempt to analyze and plot future scenarios daily, and they always attempt to maintain some control over their turf. If they see the nation that pays their salaries drastically declining and come to realize exactly who is responsible, they might oppose those responsible sometime in the future.
The point is that these greedy, wealthy, elites want to run US and global corporate enterprises from a safe distance and away from the misery they create while they pay no taxes whatsoever and live in sin and luxury.
The Internet and international banking is their godsend. They see the world as being controllable from a distant haven while they are insulated from retribution by distance and private armies of security contractors.
Elite globalists pulling off this vast scam depends entirely on whether they can keep duping everyone who might see through their plans and attempt to stop them.
They have broken the US economically, and they will break even the vast US military-industrial complex if they are allowed to continue their piracy without opposition.
Most of those advocating war never served one day in the nation’s military, and feel no loyalty whatsoever to the soldiers they sent into harms way. This idea begs a question. Why would these wealthy anti-military elitists engage the US in ongoing, distant, foolish warfare where the best generals and soldiers are out of the country while the country itself is being looted by corporate elites? It’s just observation and question.
Continual, distant warfare and a vast empire is too expensive to maintain if a nation is already broke because controlling globalists have decided that they deserve to keep most of North America’s and the world’s wealth while the North American nations expire.
Several major groups need to unite to save the US nation or even the North American union of Mexico, the US and Canada. Groups that need to unite are North American citizens, government bureaucrats, major intelligence agencies, and the US military itself, including supporting military contractors.
Globalists are not friends of any of these groups
Globalist corporate elites are cleverly outmaneuvering everyone while stealing the wealth of the entire North American continent and much of the world while the above noted groups and agencies are kept busy infighting among themselves or against phony straw man enemies, or are kept busy oppressing others they should be uniting with.
The US military is kept busy fighting proxy wars for allies and to gain more wealth and influence for the global corporations that mainly benefit wealthy elites who are destroying North America and consequently the military itself.
Close allies know the US is declining and they want to use the US military as quickly as possible, before it declines, to oppress their neighbors before the US crashes for good. It matters little to allies whether the US sinks as long as the US military helps them achieve a lasting superiority over their neighbors.
It will be interesting to see what happens when the more powerful of these groups wakes up and understands exactly what is going on. Will they have the courage to set things right? Will they have the courage to restore the US nation to a Constitutional Democracy so it can continue and again prosper at some time in the distant future?
How might this be accomplished?
The answer to this is so simple that it is amazing.
Each of the above groups need to return to doing what the US Constitution tells them they should do.
Citizens and voters need to vote. They need to vote for politicians who take a stand that appears to be aimed at the overall good of the nation, while putting aside selfish interests for the time being.
Courageous politicians need to rebel and pass laws that provide public funding of all election activities that will enable them to break their ties to global corporatists who now have them enslaved. Yes, they are just miserable, wealthy slaves nowadays, with even less freedom than the increasingly impoverished masses they rule over. Because of their misery, they often escape with alcohol, drugs, sex, perversions and other gross immoralities—all symptoms of terrible personal moral decay and unhappiness.
Intelligence agencies need to gather intelligence that is in the interest of the nation itself, and they need to pass it on to the appropriate people who are genuinely working for the long-term interests of the nation.
They need to resist becoming a secret, private army that does the evil bidding of globalists who could care less about the US nation and its people. These globalists pay no taxes and provide almost no tax money to the US or to the intelligence agencies themselves. Traditionally, one works for the interests of those who pay their salaries. The US intelligence agencies need to return to working for the interests of those who pay their salaries, the American taxpayers.
If the taxpayers eventually sink into poverty, funding for all government agencies will decline also. Of course, global billionaires, living in Costa Rica and other Caribbean pirate coves could care less about a US decline.
The Constitution gives the US military the job of defending the nation and its people against foreign enemies. The military needs to do its job.
One could go on and on about the massive reforms that need to be made within the bloated US military-industrial complex system, but, at this time, that is not appropriate.
What is appropriate is simply stating that the military-industrial complex needs to realize that the nation can no longer afford to go entirely broke supporting foreign wars of aggression for global corporations and allies, some of which are not even American.
This is disastrously foolish for the nation and for the military itself. Global oil corporations will not sell cheap Iraqi oil to US citizens at bargain basement prices. They will make huge profits selling this oil on the worldwide market while US citizens cannot afford to buy heating and transportation fuel. And we should remember that allies will soon forget the US after complete domination of their neighbors is accomplished.
US military contractors need to realize that WWII glory days are gone. They need to adjust to a changed world. Drawn out wars just to use up hardware so more can be built, have long ago become just too expensive to continue. Creating worthless funny money and borrowing from potential enemies to sustain our military spending leads to disaster. How stupid can one nation become? Military contractors, with all of their existing expertise and wealth, simply need to rebuild what remains of the domestic heavy industry, manufacturing infrastructure of the US into a self-sustaining, updated, state of the art form that will provide future jobs and domestic products for US citizens. Think super quality Japanese-style manufacturing on steroids in America, for American markets--probably a really naïve and foolish idea, but I said it anyway.
Well, it’s going to be interesting watching what happens as major US groups slowly realize they have been completely suckered and taken for a downhill ride into the abyss by self-serving US global corporate elites. Will they act in time to save the nation?
We should all remember,
Globalists are not our friends.
And this email here is from the Ron Paul Congressional Office:
Dear Friends: The financial meltdown the economists of the Austrian School predicted has arrived.
We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market's attempt to re-establish rational pricing of houses and other assets.
Last night the president addressed the nation about the financial crisis. There is no point in going through his remarks line by line, since I'd only be repeating what I've been saying over and over - not just for the past several days, but for years and even decades.
Still, at least a few observations are necessary.
The president assures us that his administration "is working with Congress to address the root cause behind much of the instability in our markets." Care to take a guess at whether the Federal Reserve and its money creation spree were even mentioned?
We are told that "low interest rates" led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.
Not a word about any of that, of course, because Americans might then discover how the great wise men in Washington caused this great debacle. Better to keep scapegoating the mortgage industry or "wildcat capitalism" (as if we actually have a pure free market!).
Speaking about Fannie Mae and Freddie Mac, the president said: "Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk."
Doesn't that prove the foolishness of chartering Fannie and Freddie in the first place? Doesn't that suggest that maybe, just maybe, government may have contributed to this mess? And of course, by bailing out Fannie and Freddie, hasn't the federal government shown that the "many" who "believed they were guaranteed by the federal government" were in fact correct?
Then come the scare tactics. If we don't give dictatorial powers to the Treasury Secretary "the stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet." Left unsaid, naturally, is that with the bailout and all the money and credit that must be produced out of thin air to fund it, the value of your retirement account will drop anyway, because the value of the dollar will suffer a precipitous decline. As for home prices, they are obviously much too high, and supply and demand cannot equilibrate if government insists on propping them up.
It's the same destructive strategy that government tried during the Great Depression: prop up prices at all costs. The Depression went on for over a decade. On the other hand, when liquidation was allowed to occur in the equally devastating downturn of 1921, the economy recovered within less than a year.
The president also tells us that Senators McCain and Obama will join him at the White House today in order to figure out how to get the bipartisan bailout passed. The two senators would do their country much more good if they stayed on the campaign trail debating who the bigger celebrity is, or whatever it is that occupies their attention these days.
F.A. Hayek won the Nobel Prize for showing how central banks' manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day - and which are being proposed, just as destructively, in our own:
Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.
To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection - a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end... It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.
The only thing we learn from history, I am afraid, is that we do not learn from history.
The very people who have spent the past several years assuring us that the economy is fundamentally sound, and who themselves foolishly cheered the extension of all these novel kinds of mortgages, are the ones who now claim to be the experts who will restore prosperity! Just how spectacularly wrong, how utterly without a clue, does someone have to be before his expert status is called into question?
Oh, and did you notice that the bailout is now being called a "rescue plan"? I guess "bailout" wasn't sitting too well with the American people.
The very people who with somber faces tell us of their deep concern for the spread of democracy around the world are the ones most insistent on forcing a bill through Congress that the American people overwhelmingly oppose. The very fact that some of you seem to think you're supposed to have a voice in all this actually seems to annoy them.
I continue to urge you to contact your representatives and give them a piece of your mind. I myself am doing everything I can to promote the correct point of view on the crisis. Be sure also to educate yourselves on these subjects - the Campaign for Liberty blog is an excellent place to start. Read the posts, ask questions in the comment section, and learn.
H.G. Wells once said that civilization was in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.