The TARP is Dead! Long Live the TARP.

 

Simon Johnson at Baseline Scenario has written some excellent pieces, in particular his great exposition of the US as banana republic in the Atlantic.

 

But lately he seems to be auditioning for an administration slot, or a Smugman-type Party-line columnist gig.

 

Thus we have this piece, “The TARP is Gone”, which is basically echoing the corporate line even as it clucks its tongue about some of the ongoing, oh so unfortunate “abuses” of the Bailout and the rackets it rescued.

 

TARP was an essential piece of a necessary evil – that is, it saved the American financial system from collapse. 

 

I agree with every word of this except “necessary”, except from the point of view of the finance tyrants.

 

People who are opposed to bailouts of any kind like to argue that TARP was not really necessary. Banks could have been allowed to fail and the economic fallout around the world would not have been so dramatic. 

 

I love the elitist populist-bashing condescension of “like to argue..”

 

We citizens do in fact argue that the effects of letting the system destroy itself would’ve been nothing less than economic and political liberation from history’s most insidious tyranny.

 

Indeed we should’ve not only allowed the banks to fail, but seized the opportunity to affirmatively finish the job. That’s what the people voted for in 2008.

 

Meanwhile the economic fallout on Main Street would’ve been far less vicious than the Permanent Depression we’ve condemned ourselves to with our passivity in the face of this crime. And the kleptocracy intends to compound the crime far beyond this. The Bailout is the permanent regime, “austerity” is meant to steal the last few pennies they missed with the Bailout, and from there we’re to be restored to feudal slavery.

 

Instead, we could’ve dedicated our resouces to bolstering Main Street while we finished off Wall Street. Community banks and credit unions, receiving any necessary government backstopping (far less than the Bailout would’ve sufficed), could’ve provided all necessary services. The government could also have temporarily propped up any necessary corporate paper progam directly instead of continuing to launder it through the big banks. This would have been a temporary bridge to a definancialized economy, as we quickly wound down financialization, globalization, and all corporate welfare. Then we’d wind down the government itself. We’d have achieved freedom.

 

Johnson refers to “the first draft of [the TARP's] history”, as if this is history and not the war front of today, including the historiography.

 

As we can see with posts like this, a current propaganda weapon of the Bailout America regime is to say the TARP = the Bailout, the Bailout has ended, it was all necessary, and the most we need to do from here is undertake some “reform”.

 

But the truths are that this is permanently Bailout America for as long as we submit to its tyranny, the Bailout will and must continue in perpetuity since the banks are insolvent and their continued existence and power depend completely upon it, and there will never be reform under this kleptocracy.

 

The one and only road to freedom remains the same as it was in 2008 – break free of the finance sector’s tyranny by whatever means necessary.

 

This struggle over the “first draft of history” is one of the battlefronts. This is of course not “history”, but very much a current event. We’re discussing the present and future, not the past.

 

But calling it past history is one of the enemy’s weapons.

Krugman Watch June 28 (Sarajevo Day)

 

The significance of Paul Krugman is that he’s the most prestigious of the corporate liberal hacks. This is on account of what the general quasi-educated readership believes to be his great intellectual accomplishments. (Burnished by his alleged Nobel Prize; but in fact the economics Prize is really a pseudo-prize which was fabricated in the 70s for precisely this purpose, to bestow fraudulent authority upon neoclassical economists; and by now all nobble prices are fraudulent anyway, as proven by their giving the “peace” prize to a war criminal. This was intended to encourage and whitewash further war.)

 

It’s also because of Krugman’s excellent record of opposition to Bush and the Republicans. He was so cogent and often eloquent in his attacks on Bush that many people who don’t know the history or forgot it believe he opposed Bush policies as opposed to supporting the policies but attacking as a partisan Democrat. And what about those who remembered the real Krugman from the 90s?

 

The globalization hawk who wrote “in praise of cheap labor” (the same piece where he lasciviously indulged his fantasy of people having to literally live in toxic waste dumps and proclaimed that working at McDonald’s should be the normative job condition; of course he claimed to seek improvements on this, but actions and results are always the proof, never bogus caveats) and proclaimed his vision of utopia:

 

A highway interchange, a parking lot filled with cars, a traffic jam, suburban tract housing, an apartment building with numerous satellite dishes, an office with many computer screens, office workers on a busy street, high-rise office buildings, a “factory farm” with many chickens, a supermarket aisle, a McDonald’s arch.

 

Many who remembered this thought Bush had made him see the error of his ways and that he repented. I too thought it might be possible.

 

Of course we know today that the New Progressive Krugman is the same old neoliberal Thugman. Since Obama came in Krugman has done five things:

 

1. He has supported the Bailout and supports its perpetuation forever.

 

2. In particular, he was lead propagandist floating the scam of Swedish-style nationalization. needless to say the kleptocracy would never have taken big banks into receivership and either liquidated them or nursed them back to health, either way on terms favorable to the people. (And of course even real Swedishism would still never work outside Sweden. Here the rackets are too existentially thuggish and even if resolved and reinstated on a Swedish basis would quickly go back to their old crimes. It really didn’t work even in Sweden, as we see from the Swedish banks’ Baltic depredations. No, you can never “resolve” or temporarily “nationalize” private bank rackets. They have to be absolutely eradicated.)

 

The system never wanted to do anything like this, but Krugman was there as ringleader of the idea, just in case Obama felt politically pressed enough that he had to pretend to do it.

 

Of course it would only have been a pretense. Just as in practice Bagehot’s rule (lend freely, only to solvent banks at penalty rates on good collateral) was transformed to “give freely to insolvent banks at near-zero rates on no collateral at all”, so in Obama and Geithner’s hands “nationalization” would have been just a pure unloading of all toxic assets off the balance sheets and onto the public, at which point the banks would have gotten off scot free.

 

That was Krugman’s notion of the ideal Bailout.

 

3. He was lead agitator among the ”educated liberals” on behalf of the health racket bailout. He knows this is a vicious reactionary assault and simply systematically lied about it, out of his corporatist ideology and Democrat partisanship.

 

Read here for what the Bush-era Krugman thought about health reform and about possible political scams the Republicans might try. How strange, that he flipped 180 degrees on both the policy and the tactics as soon as a Democrat came back in.

 

4. Simpatico with administration rhetoric, he’s tried to play astroturfer on the China currency manipulation issue. The goal of Obama, Geithner, and Krugman is good old misdirection by xenophobia. Demonize the (non-white) foreigner. It’s the Yellow Peril again.

 

The truth is that the US and Chinese kleptocracies together comprise the Chimerica entity, which wages war on the peoples of both America and China. The US gangsters want the American people to blame this vague but menacing nebula, “China”, for what are actually US system crimes. The same dynamic occurs in China.

 

Just as the real business of the Chinese people is to get rid of the Chinese gangs, so the real business of the American people is to get rid of the home-grown US rackets. Propaganda criminals like Krugman want to distract us from our interests. We mustn’t let them.

 

5. Krugman now supports the war. Now that Obama has taken full personal ownership of the war, and did so with great glee and gusto, now that it’s a Democrat war, Thugman supports it.

 

But he doesn’t say so. He, who wrote so often and with such passion on this allegedly non-economic issue during Bush (of course it really is a fully economic issue), has suddenly gone suspiciously silent. Suddenly he implicitly agrees with all the critics who whined during the Bush years that he shouldn’t be writing about war or anything other than straight economic topics. 

 

That’s because he wants to keep basking in the reputational nimbus of his anti-war heroism. He thinks if he had to join in with all the other liberal hacks who have been reborn as jingos, it would harm his brand and impair his effectiveness as an economic hack astroturfer. So now he keeps his mouth shut.

 

 

So that lays bare the real Thugman agenda. But lately his main preoccupation has been an internecine squabble over the timing of “austerity”. I wrote about this before, describing how where it comes to “austerity” Krugman objects to the timing of a particular class war tactic, but does not object to the class war assault as such, and that’s why he argues the way he does, refusing call austerity by its rightful name, robbery, and refusing to call his colleagues in crime “class warriors”, because he actually agrees with them on principle and strategy and only disagrees on tactical tempo. Today I wanted to revisit and refine the message, as well as place it within the real Krugman Context.

 

In today’s column Krugman again affirms his overall support for the Permanent Bailout:

 

In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.

 

It looks like we’re even making some progress in forcing some marginal honesty out of his rhetoric. Where before he would fraudulently blame Republicans for Democratic actions where the Dems had total licence to do whatever they wanted and therefore by definition did do whatever they wanted, today he says:

 

The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.

 

This is still a lie. The Reps still have zero power to do anything the Dems don’t let them do, and the agenda here is being driven not by alleged “conservative” Dems but by the Dems period. What he’s calling conservative is the Dem establishment mainstream, as well as what the alleged “progressive” Dems agree to every time.

 

So existentially there’s no such thing as relative “conservatives” among the Democrats, while “progressives” are nonexistent in both relative and absolute terms. There are simply the Democrats as such, who economically and in war are a right wing conservative party in an absolute sense.

 

The recap of this column, as a Krugman update, is simple.

 

1. He still credits “invisible bond vigilantes” as representing a real motivation, albeit a wrongheaded one.

 

Why the wrong turn in policy? The hard-liners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it’s true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.

It’s almost as if the financial markets understand what policy makers seemingly don’t: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.

 

 

He still refuses to speak the truth:

 

Austerity is robbery.

 

Those who advocate austerity are robbers.

 

Any excuse like “invisible bond vigilantes” is nothing but a pretext to try to justify robbery.

 

But they really want austerity for its own sake because they want to continue robbing.

 

2. Thugman doesn’t object to the robbery as such. That’s proven by his support for the Bailout as such, as well as such crimes as his astroturfing for the health racket bailout.

 

3. It’s just that in this case he thinks it’s tactically premature for the US as well as trade surplus countries to undergo the austerity stripping. The column basically says as much. To requote:

 

In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.

 

The Bailout plus the hijacked Obama stimulus = Krugman’s idea of the correct looting policy for now. He thinks the Bailout stage still has further legs.

 

(Here’s a broader analysis of Krugman’s looter ideology, his place as neoclassical synthesist.

 

The reality of the Great Depression convinced many economists and business observers in the late 1930s that Keynes was right, and led to widespread references to the “Keynesian revolution.” Keynes’s proposals related to stimulating effective demand through civilian government spending were not directly applied in the 1930s, however, and it was the Second World War that lifted the United States and other advanced capitalist economies out of the Great Depression. After the war, Keynes’s analysis was debased by such figures as Paul Samuelson at MIT, leading to what was sometimes called the “neoclassical-Keynesian synthesis,” or more frequently the “neoclassical synthesis.” In what Keynes’s younger colleague, Joan Robinson, famously dubbed “bastard Keynesianism,” Keynes’s more revolutionary insights were all excluded and his analysis was reincorporated with the neoclassical theory in a subordinate form.9 Mainstream economists came to the conclusion that the capitalist economy could be effectively managed by monetary and fiscal policy fine tuning, with an emphasis on the former. This was because the economy was once again implicitly assumed to act in accordance with Say’s Law, moving naturally toward a full-employment equilibrium, now redefined as a “natural rate of unemployment.” Neoliberal globalization, deregulation, the removal of all restrictions on the movement of capital, the creation of sophisticated new financial architectures, were seen as constituting the essence of all economic logic on a world scale.

Hence, by the 1970s (and even more so after the stagflation crisis of that decade) Keynes had been relegated to a “special case theory of Depression economics,” applicable only when monetary policy could no longer be effectively used to boost the economy.10 But such a condition was no longer believed to be relevant, since, as University of Chicago economist Robert Lucas declared in 2003 in his presidential address to the American Economic Association, the problem of depression and even of the business cycle had essentially been solved. This view was reiterated in 2004 by Ben Bernanke, then a Federal Reserve Board governor, now chairman of the Federal Reserve Board. For Bernanke the Great Depression was no longer of theoretical interest; rather the problem to solve was the “Great Moderation,” i.e., the reduced volatility of the capitalist economy in the 1980s and ’90s. What needed investigating, he argued, were the reasons for the effective end of the business cycle, which he attributed to more sophisticated monetary policy, arising initially out of the insights of Milton Friedman’s monetarism.11

Today figures like Krugman are seen as partly challenging these conclusions, and as representing the return of Keynesian economics. But this is not a return to Keynes in the sense of his general theoretical critique of capitalism’s fundamental flaws. Rather it is a return to Keynesianism as a “special case” of “depression economics,” where monetary policy is ineffective and expansive fiscal policy needs to be given priority.12 The ascendancy of neoclassical economics, which bastardized and subordinated Keynes’s mildly critical view of capitalism, is not itself challenged. Nor is capitalism questioned. Rather it is assumed that mistakes were made in monetary policy and in regulatory systems that have pulled the economy back down into the “special case” of Keynesian “depression economics.”

Hence, what Keynes called the “outstanding faults” of the capitalist economy are hardly addressed as such.

 

He believes in Keynesianism, yes. But only in its corporatist looting form. Maybe at best he dreams that some of the bounty will trickle down. That’s definitely what he claims to believe.)

 

4. So while he objects to austerity in this context, he has to find grounds to do so which still obfuscate the fact that everything the system is doing, from globalization and financialization as such to lies like trickle-down to the Bailout to “austerity” and onward through the corporate nightmare, is ROBBERY.

 

Paul Krugman strives to whitewash this because he’s a trickle-down corporatist ideologue and Democrat partisan, both of which mean in practice he supports the worst economic crimes in history. It means he’s a hardened activist of kleptocracy, and he’s doing everything he can to serve it. 

Bailout World, 2nd Stage of Kleptocracy (New Feudal War 2 of 4)

 

The fictive “growth” which was really nothing but the result of asset bubbles peaked and started to be rolled back in 2007. The rout temporarily climaxed in 2008, as trillions in phony wealth disappeared when the hologram machine went dead. This laid bare the true extremism of the “Great Moderation”, really a crazed raging of booms and busts, bubbles and crashes, all this throbbing over the backbeat of an inexorable debt curve trending terrifyingly, impossibly upward since the 1980s. It was impossible to sustain, and nobody meant for it to be sustained. It was just supposed to carry the middle class along while this doomed cohort’s political and economic strongholds were destroyed. The steady degradation of wages and job security, the assault on the unions, the co-opting of pension systems into stock market thralldom, Walmartization and offshoring, and the ”ownership society” propaganda offensive including the systematic demonization of all values other than Social Darwinism; all this combined to reduce the people to a mass of totally dependent and antisocial atoms. It was a comprehensive top-down strategy.

 

This rendered them incapable of resisting the kleptocracy’s next step. Since the ponzi debt bubble was unsustainable both in itself as well as on account of the physical limits of Peak Oil, the bank rackets and their prostitute government knew the system must crash. I don’t know if they intentionally crashed it at that time it did, but it doesn’t matter. They knew global financialization was (and is) nothing but a monumental ponzi scheme; they knew it would crash, just as they know it will crash again. So all their actions were and are full of intent with regard to the coming, premeditated crash. They intentionally crashed the economy and they’ll intentionally crash it again.

 

What came next was the ultimate disaster capitalist operation: the Bailout.

 

It started out gradually with the Fed “facilities” and the creeping oozes of “forbearance” and QE. It had to be stepped up with high-profile bailouts like those of Fannie and Freddie and AIG. Then with considerable fanfare and a propaganda campaign, the TARP was launched. Since then the plan has been to equate the fraudulent TARP with the Bailout itself, although the Bailout has since moved on to other avenues. The system tries to pretend the TARP is just about paid back, at minimal taxpayer cost (though even this is a lie). Meanwhile the main conduits of looting the taxpayer have been free money from the Fed (much of it directly lent back to the government at a higher rate); laundering Bailout loot through the MBS purchases and guarantees of Fannie and Freddie (whose official exposure limits were raised literally to infinity at the end of 2009, rendering quaint TARP inspector Barofsky’s previous exposure estimate of $23.7 trillion), the Fed, and Treasury; and the Too Big to Fail premium.

 

What has the Bailout cost so far? Including amount of at-risk exposure, TARP inspector Neil Barofsky put it at $23.7 trillion, while Nomi Prins estimated $14.4 trillion. These were both prior to the exposure limits on the GSEs being raised to infinity at the end of 2009. A more recent tally is that of SourceWatch (updated monthly). They didn’t know how to tally the new infinity so seem to have assimilated it to the status quo ante, coming up with a number close to that of Prins, $13.89 trillion.

 

Those are nominal numbere but don’t represent the real value to the banks. How do we measure how much each dollar stolen is really worth? I’m not sure. One metric that occurred to me is to take the interest Goldman Sachs had to pay Warren Buffett in fall 2008, add to that the Too Big to Fail premium, and prorate all the Bailout trillions according to it. Another possible measure might be how much MBS should really cost according to the market, “the terms private uninsured investors would require” as Yves Smith put it. Or perhaps a combination of metrics, depending on which is most accurate for a particular part of the Bailout.

 

And today? The government’s political ability to pass TARPs is probably exhausted, while Obama failed in last autumn’s attempt to get dictator power for the Treasury secretary to enact them on his own. But no matter. Today the main Bailout conveyances are free money from the Fed (QE), and MBS purchases at inflated prices by the Fed and Fannie and Freddie. These are intended to both directly convey loot to the banks and to prop up the prices of all the worthless toxic garbage on their truly bankrupt balance sheets. This in turn enables the insolvent banks to engage in accounting fraud (allowed both directly, as when Congress bullies the FASB or when the “supreme” court soon overturns Sarbanes-Oxley, and also indirectly under the rubric of “forbearance”, which is a fancy way of saying the government turns its head while the bank perpetrate fraud) which enables management to massively embezzle on a personal level in the form of “bonuses”.

 

The other day, after all the fanfare about the (also insolvent) Fed ending its QE and purchase programs, ”Heckuva job Bennie” Bernanke announced that he might expand the Fed’s balance sheet (currently at $2 trillion, an already fearful number) to $5 trillion! That’s the level of support he’s thinking would be necessary to sustain the Bailout. There followed articles wondering if he’s suffering from nervous exhaustion. It wouldn’t be surprising if Bennie’s nerves are cracking. He’s got one huge zombie to keep propped up and ambulating. 

 

The Bailout is now the permanent socioeconomic paradigm in the US and Europe. The new regime is Bailout America. Globalization was the final frontier for one last massive colonial plunder expedition at the summit of the oil age. Now there’s no longer a new plunder frontier over the horizon. All sectors are in decay, and we’re at Peak Oil. There won’t and can’t be any more shifting costs to the outside. Now the gangsters can only terminally cannibalize the inside. Western domestic corporatism was the first level of this assault, and the Bailout is the accelerated and intensified version.

 

Proximately, the bailouts were supposed to solve an alleged “liquidity crisis” and “get the banks lending again”, which would trickle down to “Main Street”. It was the prospect of this failing to happen which was alleged to make these bank rackets “too big to fail.”

 

But every word of it was a lie. There was never a liquidity crisis; the banks are just bankrupt. They cannot lend and never intended to lend, and there’s no one to lend to anyway. The massive amounts of taxpayer money being conveyed to them was simply to be hoarded, gambled, and used for monopoly consolidation (M&As).

 

This is the new order, for as long as the system can be zombified this way. The government simply hands the banks free money through various conveyances. It allows systemic accounting fraud to represent the rackets’ balance sheets as solvent. It even actively abets the fraud with phony “stress tests”. The banks do whatever they want with the handouts. The government even covers some of their gambling “losses” via loan guarantees and other scams. It lets them fraudulently report the returns as “profit”. This in turn allows the banksters themselves to completely loot their own banks on a personal level, in the form of “bonuses”. It doesn’t matter because there’s more government-stolen public money being conveyed in tomorrow.

 

This is it. Obama, Treasury, the Fed, Congress, and their European counterparts, are fully committed to Bailout America and Bailout Europe. They have no ideas left and no alternative policy which could either keep the financialization tower propped up, or which would be ideologically/kleptocratically acceptable now that they’re fully committed to gangster psychopathy.

 

This is not and was never intended to be some temporary crisis measure. Just as the Global War on Terror is intended to be the permanent basis of foreign policy and domestic intimidation, so the Bailout is meant to be the permanent basis of US government and economic policy as such. The two combine as the twin vehicles of radical corporatism.

 

(The so-called domestic economy has become completely intermingled with the Pentagon budget by now. Any large “civilian” corporation you can think of, e.g. in the food or entertainment sectors, is likely to have fat Pentagon contracts.

 

So the Permanent War itself is a key part of the general corporatist Bailout.)

 

Wall Street spins from the center of a web of corporate welfare. The government exists only as the threads, along which all the people’s wealth and freedom slide away. Every other racket ramifies out along the lines directed by the finance sector. It’s a command economy which maintains private rent extractions. That’s the economic definition of fascism. So this is in fact “Bailout America” in the same way you might call another fascist regime “fascist Italy” or ”Nazi Germany.”

 

Meanwhile unemployment goes up with grim implications of permanency, while public spending and programs everywhere are decimated. For good measure we’re insulted and laughed at with taunts like “green shoots” and “recovery”. The truly demented can even spew the atrocious oxymoron, “jobless recovery.”

 

So we see how every cent of the Bailout was not just a total loss to us, but how that money is being used as a weapon against us, as the feudalists further entrench their position. The big banks have never added social value, only destroyed. From the social point of view, they were not only never Too Big to Fail, they were always too predatory and destructive to be allowed to exist.

 

The worst delusion of all is that anything could possibly have been better for America than to let the whole parasite sector go down in 2008 while the government (if we the people actually had a government) did whatever was necessary to bolster Main Street through whatever level of hardship we had to endure.

 

That pain would’ve been far less than that to which we’ve now been doomed since the US was transformed into Bailout America. Now the only possible outcome remains the collapse of the sector, which is just as terminally insolvent as ever. But this inevitable eventual collapse is now bound to be far more painful, far more total, than ever would have been the case if the bubble had been allowed to burst and reality to resume in 2008.

 

But in the meantime we’ve added the horrors of whatever level of robbery and tyranny the kleptocracy will be able to resort to once the Bailout itself becomes insufficient to keep everything propped up. As the Bailout becomes fiscally and politically impossible to sustain, the system moves on to the next step, direct liquidation of pensions, public amenities, all public property, civil society itself. This is Austerity. (Again, never for the rich and powerful themselves; just for humanity.) I’ll deal with that in Part 3.

 

This is the infinite crime of all the Bailout leaders, and it remains the insanity and depravity of anyone who still thinks the Bailout was/is “necessary” or “helpful.”

 

This is the Bailout: A fully rationalized command economy dedicated to maximizing loot extraction from the country by the big banks, under conditions of Peak Oil and debt’s attempt to deflate.

 

It’s a disaster capitalist adaptation of prior “normal” financialization, which was in turn the form of neoliberal kleptocracy, which was the system’s adaptation to the terminal stagnation of capitalism commencing in the late 1960s.

.

.

http://attempter.wordpress.com/2010/06/22/how-kleptocracy-congealed-the-new-feudal-war-1-of-4/

 

http://attempter.wordpress.com/2010/06/30/new-feudal-war-part-3-austerity/

 

http://attempter.wordpress.com/2010/07/05/part-4-the-full-fury-of-the-new-feudal-war-the-intended-end-state/

Beyond the Freedom Flotilla: Neoliberal Assault (2 of 2)

 

Outside the US tabloid media zone the world remains transfixed by the horror of the Israeli government’s murderous act of piracy and its ongoing holding of the boats it hijacked and hundreds of hostages kidnapped on the high seas.

 

As I said in my previous two posts on this, I think this act had a dual purpose. Israel’s specific, proximate goal was of course to enforce its illegal blockade. But the lengths of aggression and piracy (even technically to acts of war) to which it was willing to go, and the nature of the blockade itself, which the Israelis have openly admitted is intended not to achieve practical security goals but to punish the people of Gaza, demonstrate that this government’s mindset goes beyond any reality-based goal, and is really trying to enforce total domination for its own sake wherever these criminals believe their power prerogative extends.

 

In the end, as always with totalitarians, the true crime isn’t the proximate allegation, which in this case the Israelis can’t even get straight. (That the humanitarianism of the mission was bogus? But they have all the cargo now; they’ve had it for two days. The fact that they can’t even plausibly try to plant contraband proves the complete innocence of the cargo.)

 

No, as always with such thugs, the true crime is defiance itself. Sure enough, the Israelis sound the most outraged when they simply sputter that the Flotilla was a “provocation”. Yes, indeed it was, and was meant to be. It was meant to challenge Israel’s illegal and illegitimate blockade as such. It was meant to challenge this tyrannical arrogation of power, an arrogation based not on authority or law, both of which on the contrary it flouts, but on brute force. The mission was the same as the eternal mission of all decent people who challenge tyranny. And just as they challenge tyranny on principle, so tyranny seeks to prop itself up on its own anti-principle, which is simply the lust for power and greed for phony wealth itself.

 

Which brings us to the larger significance of this act. On a global scale a great crime is progressing. The criminals seek to condemn ever more people to permanent impoverishment and servitude. The goal of the global finance elite and its flunkey governments is the restoration of feudalism itself, not only across the Global South but throughout the West itself.

 

I’ll give a quick recap.

 

1. As capitalism matured it should, according to reality and to its own textbooks, have seen profits fall to marginal levels. There should be very little profit left in the economy by now. Instead, the entire economy should have long since been functioning smoothly and efficiently, with sufficient goods and services in every sector, while government largely shrunk as it would have little role to play as economic arbiter. There would be rough equality of wealth and power distribution, little wealth and power concentration. Democracy would become steadily more healthy and strong.

 

This is how capitalism was supposed to function. This is what its promoters always promised. This is what would have happened, if every word hadn’t always been a lie.

 

2. In the reality of greed fundamentalism, elites were never textbook capitalists but always gangsters. No one ever wanted to be a capitalist. No one ever wanted to compete and innovate. They wanted to concentrate wealth and power, period.

 

As capitalism reached its terminal profit crisis in the latter 20th century, the power elites resolved to deploy an ever more aggressive command economy. They’d use the power of government to substitute extorted and stolen rents for their diminishing “capitalist” profits.

 

Globalization and financialization comprised the campaign of oligopoly capitalism to prop itself up while stringing along the Western middle classes. They substituted debt for production while obscuring the assault on all public amenities and power. Real wages have steadily eroded since the 70s while wealth concentration has exponentially risen. (That juxtaposition right there is a basic metric of robbery.) The system attacked unions on every political and “legal” level. Social Security has been steadily undermined via ploys like the rigging of inflation metrics (to fraudulently depress COLA increases). Other entitlements have been similarly eroded. Globalization’s open border for unskilled labor provides the basic force of gravitation for all wages, while outsourcing and offshoring destroyed many mid-level jobs completely, forcing and ever greater number  of workers into the undifferentiated unskilled mass. (The system did somewhat protect most kinds of professionals for a long time, but now that’s been eroding for many as well.) Walmartization provides a kind of linchpin, the direct conduit for addicting ex-citizens to cheap consumerism while directly destroying self-proprietors and middle class jobs in general, along with the communities anchored by the people who held such jobs.

 

In this way the temporary “middle class”, fueled by debt and cheap oil, had the carpet slowly pulled out from under it. Meanwhile the basic unproductivity of the Western system was covered up by bubbles, culminating in the housing bubble (itself fueled propagandistically by the Big Lie that you should rely on your house to provide for your retirement, not any other pension; this nicely provided cover while public entitlements and private pensions were gradually being subverted).

 

3. The crash of 2007-8 was the beginning of the collapse of this final bubble. No bubble could any longer be sustained on just propaganda. Now the command economy had to take a direct, very heavy hand. Thus we’ve had the advent of the Bailout and a new level of the disaster capitalist rampage, since the global economy is now nothing but an ongoing disaster, and the criminals have no outlets left but to drive disaster ever harder in order to extract profits from it.

 

In the new regimes, Bailout America and the Bailout Eurozone, all government policy (not just monetary, not just fiscal, but all policy) is now predicated on massive redistribution of public wealth to the banksters. The mechanisms have been too many and varied for me to recapitulate them here, but I and many others have written about them many times.

 

But this Bailout can’t be propped up forever. How long will anyone keep buying dollars? The bonds of indebted countries? Everyone knows these are all ponzi schemes. So in the end the Bailout itself must succumb to the same diminishing returns on “confidence” which did in the ”regular” debt economy. Again the bubble must collapse. Reality wants to deflate.

 

4. So the next step is liquidation. It’s the good old “structural adjustment”. The old odious debt which the criminal West used to inflict such suffering on non-industrialized economies is now being brought home to the Western middle classes themselves. Today the term of art is “austerity”.

 

The fact that the “conventional wisdom” (to paraphrase Voltaire, it’s neither “conventional” nor “wise”, but manufactured propaganda intended to whitewash crime) is now that of the deficit terrorists, that the message is “the markets don’t really fear inflation now but might fear it in the future, so governments should act in obedience to this hypothetical future fear”, means the finance vanguard thinks the end is in sight for what free money can do for them, and that in order to continue their extractions they’ll have to move into more direct class warfare. It’ll no longer be sufficient to simply gut the interest returns for savers on pensions; now the pensions themselves must be directly stolen.

 

In the Baltics, in Eastern Europe, now intended for Greece,  now intended for Iceland, and next up Spain, Portugal, Italy, Ireland, and soon after the UK, and soon after that the US itself, the non-rich will have their wages, salaries, and pensions liquidated (i.e. stolen) while all public property is privatized (i.e. stolen).

 

Even as you take home ever less in pay and see all prospects for paying for any kind of emergency, illness, or retirement become hopeless, at the same moment you’ll find yourself having to pay ever more extortionate tolls for anything and everything which used to be provided by the fabric of society itself. Driving on any road, receiving any government service, police, fire, calling 911 itself, are just examples of everyday critical extortions we’ll face.

 

Even basic health care will become completely unaffordable (and this at the same time that the system intends to collect Obama’s fascist insurance mandate for a worthless piece of paper), all public parks will be fee-generating private parks, libraries will cease to exist altogether, all environmental, health, consumer, and safety regulations will be removed. Access to the courts themselves will be restricted to the rich. Even the poll tax may be reinstated (although by now at least at the federal level the vote is so meaningless they might not bother with that one).

 

Anyone who doubts the malevolent intentions of Obama and the US kleptocracy on this score needs to learn about Obama’s “deficit commission”. This Star Chamber is dedicated to achieving what Bush failed to do, privatize Social Security. (Thus Obama hopes to outdo his predecessor in consummating the heritage of their shared hero, Reagan.) Pete Peterson and the Washington Post have led the call to bring the full force of “austerity” to America. Obama is simpatico with this goal. With his extralegal and anti-democratic commission he hopes to achieve this and far more. The ultimate goal is to strip all government spending except on corporate welfare, war, and the police state. (Although both war and the police state are being privatized as well.)

 

5. So that sums it up, where we are today. The gangster elite intends to reinstate feudalism, with all of us reduced to the literal serfdom of debt. As our debts become utterly impossible to ever pay, we’ll be indentured in various ways, become sharecroppers at every kind of job, and debt prison under hideous chain gang conditions will be applied as a constant threat to anyone who doesn’t meekly comply with his servitude, since we’ll all be convicts anyway in one big country-wide debtor prison.

 

But there’s an obvious alternative to all this. We debtors and cash cows can simply overthrow the debt at will. We can impose the debt jubilee from the bottom up. (That’s the same debt liquidation “our” governments would have allowed to naturally transpire in 2008 the way the real market wanted it to, if these really were our governments and not irrevocably rogue kleptocracies.)

 

The kleptocracy must expect real resistance at some point. This isn’t like the 60s, which was basically political protest against political crime on the part of the system. It was epiphenomenal. Today the struggle is far more elemental. It’s a zero sum fight to the death at the socioeconomic core. This is end game for neoliberalism and corporatism – totalitarianism of total collapse of their wealth and power. Liquidation of the people, or liquidation of their own power.      

 

So however repulsively meek the American people have been so far and perhaps will be in the future, the elites don’t expect things to be so easy everywhere else. In Iceland and Greece especially we’re seeing some will to resist the gangsters. We can expect protest and resistance of many sorts to become stronger and to see people fight back with ever greater resolve, if the people can ever develop a real consciousness of the crimes which afflict them, and the morale of the struggle which feeds on struggle itself.

 

Conversely, the criminals must want to strangle the very thought of resistance in its cradle. A few well-placed blows could sufficiently demoralize people that they’d more pliantly submit to their fate. This is part of the classical shock doctrine. It’s worked before in specific countries like Chile. Today it has to work on a global scale.

 

If we put the murderous assault on the Flotilla in that context, it looks like a rather clumsy attempt to provide such an object lesson. It’s clumsy because Israel’s so hated that outrage over its crimes seems to be one of the few things that can reconcile many peoples and governments. Indeed it’s consistently been used as a divide-and-conquer astroturfing tactic by every Arab government. It’s also clumsy because much like the Wall Street banks, Israel itself can exist in this form only through welfare handed out by the US government. Israel’s gratuitous crimes, which the despicable Obama must now stand isolated to defend, add yet another burden to the already absurdly overextended US government commitment. Once again we see how the best thing we have going for us is the tactical incompetence of the system thugs.

 

So we’ll have to expect the gangsters to become ever more violent and tyrannical as they try to tighten their feudal grip. Throughout history it’s always been this way, and the end of the oil age, the end of the exponential debt age, portend the most vicious reaction yet. The restoration of feudal organization in the form of debt slavery can only be accomplished through a combination of extreme violence and extreme slavishness on the part of the victims. Shock treatment means, among other things, applying the former to enforce the latter.

 

So the Israeli pirates weren’t just firing literal shots into the boats, but a far more profound metaphorical shot across the bow of the much larger Freedom Flotilla in prospect, all over the world. The killers hope that if they demoralize us pre-emptively, they won’t have to board us on the high seas of history at all. They’ll board us in our docile ports, at our jobs, in our unemployment, in our homes, in our thoughts.

 

So that’s the way we need to see this, and this is the propaganda and action of terrorism we must never allow to defeat us. Another flotilla has already embarked for Gaza. Everywhere, let’s put our own ships to sea.

The Freedom Flotilla and the Neoliberal Assault (1 of 2)

 

Israeli pirates physically stopped the Freedom Flotilla, but the spirit and idea of the Flotilla continue on their voyage to Gaza and to everyone besieged by the neoliberal/corporate onslaught.

 

As more information comes out, the Israeli “side” sure doesn’t look any better. The IDF’s own media presentation can’t obscure the fact that they launched an attack on the high seas. They’re reduced to whining that their commandos were resisted with improvised implements. The pirates’ own video seems to show the overmatched activists heroically resisting a professional assault any way they could.

 

Nothing Israel or their US lapdogs say can elide the basic, dispositive fact: The Israelis attacked civilian ships in international waters. All else is peripheral to this. (Although as I just described, their own video shows they’re lying when they claim they were “ambushed” by the activists.)

 

So the pro-Israel flunkey position boils down to:

 

1. The High Seas belong to Israel.

 

2. Therefore they have the right to commit piracy. (Technically, it may in fact be an act of war rather than piracy. But it has to be one or the other. Morally, and from the point of view of man’s law, it’s a crime. It’s first degree murder. War, piracy, do the legalities matter anymore? All law has been hijacked by the power elites and will be infinitely twisted to their ends. So human beings are left with only moral and political categories.)

 

Meanwhile, as the world comes together to condemn this crime, Bailout America stands alone in its lame attempts to exonerate Israel. As predicted, Obama’s response is to oppose placing blame on the killers, but instead wanting a bland, impersonal statement against abstract “violence”.

 

Prime Minister Benjamin Netanyahu of Israel canceled plans to come to Washington on Tuesday to meet with Mr. Obama. The two men spoke by phone within hours of the raid, and the White House later released an account of the conversation, saying Mr. Obama had expressed “deep regret” at the loss of life and recognized “the importance of learning all the facts and circumstances” as soon as possible.

 

Yes, we need the pertinent facts. In this case, we already have the overwhelmingly pertinent fact: Aggression on the high seas. International waters. Piracy. That renders all else insignificant.

 

(It’s no surprise that Obama agrees with the Israelis’ claim to “sovereignty” over the high seas. Obama has already tacitly surrendered US sovereignty in its own waters. He has alienated sovereignty in the Gulf of Mexico to the stateless non-legitimate entity BP. When a government does that, it abdicates any legitimacy it had in itself. Clearly Obama believes in no principle of sovereignty or law whatsoever. Clearly he believes in nothing but corporate prerogatives and might-makes-right.) 

 

Decent people of course recognize this, thus the unanimous condemnation among all who aren’t part of the Western globalization power structure.

 

As for the video showing the victims fighting back, good for them! Although this was no ”ambush” the way the Israelis’ lie would have it, even if it had been that would make no difference. Whether you look at it  morally or in the most legalistic terms, either way on the high seas they have every right to resist pirates attacking the ship. It’s exactly as if a robber were breaking into your home. (It’s funny the way the IDF calls the activists “rioters” on their own ship. That’s like the burglar calling the homeowner who pounces on him a rioter in his own home.)

 

This is really naked state terrorism. The proximate motivation here is Israel’s will to enforce its regional totalitarian dominance. From that point of view, for nonviolent activists to challenge the blockade, that is to challenge Israeli “authority”, is an offense punishable by death. That was the proximate occasion for the dispatch of this death squad, to carry out a mass execution.

 

At the next level, we see how as always the Global War on Terror is a pretext for the aggressive deployment of power. Hamas has of course been a threat to Israelis, although not to Israel itself. But just as with “terrorism” worldwide, which poses no existential threat to any western entity but is everywhere used as the pretext to justify police states and imperialism, so here Hamas is really the pretext for Israeli neoliberalism to aggressively extend its power and robbery and tyranny.

 

What is Israel? As I wrote in February, it’s not just any country, but serves as the spiritual and organizational core for the totalitarian security-industrial and disaster-capitalist complex. The global aspects of these have radiated out from that core, for example through China to the West.

 

Two excerpts from Naomi Klein’s Shock Doctrine describe it well:

 

What makes Israel interesting as a guns-and-caviar model is not only that its economy is resilient in the face of major political shocks such as the 2006 war with Lebanon or Hamas’s 2007 takeover of Gaza, but also that Israel has crafted an economy that expands markedly in direct response to escalating violence. The reasons for Israeli industry’s comfort level with disaster are not mysterious. Years before US and European companies grasped the potential of the global security boom, Israeli technology firms were busily pioneering the homeland security industry, and they continue to dominate the sector today…From a corporate perspective, this development has made Israel a model to be emulated in the post-9/11 market. From a social and political perspective, however, Israel should serve as something else – a stark warning. The fact that Israel continues to enjoy booming prosperity, even as it wages war against its neighbors and escalates its brutality in the conquered territories, demonstrates just how perilous it is to build an economy based on the premise of continual war and deepening disasters.

 

Israel serves as the frontier outpost and proving ground for all imperial assaults:

 

Israel’s case is extreme, but the kind of society it is creating may not be unique. The disaster capitalism complex thrives in conditions of low-intensity grinding conflict. That seems to be the end point in all the disaster zones, from New Orleans to Iraq. In April 2007, US soldiers began implementing a plan to turn several volatile Baghdad neighborhoods into “gated communities”, surrounded by checkpoints and concrete walls, where residents would be tracked using biometric technology. “We’ll be like the Palestinians”, predicted one resident, watching his neighborhood being sealed in by the barrier. After it becomes clear that Baghdad is never going to be Dubai, and New Orleans won’t be Disneyland, Plan B is to settle into another Colombia or Nigeria – never-ending war, fought in large measure by private soldiers and paramilitaries, damped down just enough to get the natural resources out of the ground, helped along by mercenaries guarding the pipelines, platforms, and water reserves.

 

Claude Salhani referred to the “spill over of trouble” from the Middle East. Nowhere is this more true than with the toxic mindset and practices of Israeli crypto-totalitarianism. That’s what corporate imperialism wants, to bring all its trouble home. Disaster is its business, as we’ve seen over and over in recent decades. Since 2008 disaster has been enshrined as the official basis of the US economy and polity themselves. Between the institution of the permanent Bailout, already in place under Bush but with full cooperation from candidate Obama, and then Obama’s enshrinement of Bush’s permanent war and war crimes regimes as official US policy (as opposed to a Bush/Cheney aberration), we now have the enshrinement of a new, toxic regime, Bailout America.

 

This brings us back to the Flotilla atrocity and its broader implications. Just as Israel’s version of the “war on terror” is one iteration of the Global War on Terror, so Israel’s will to enforce regional domination is a regional iteration of the neoliberal global will to total domination. The real terrorists, in deed and propaganda, are the neoliberal thugs themselves.

 

As the banksters and globalization elites contemplate the next stage of their economic assault, in particular as they attempt to fit the peoples of the countries onto the various torture devices of “austerity”, they face increasing protest. Possibly resistance. That’s why the Freedom Flotilla, which seeks to be exemplary in the eyes of freedom activists the world over, was the target of this brutal assault. The robbers want the example to be a demoralizing and terrorizing one. The real target audience for this exercise in terrorist propaganda is activists and anybody contemplating protest and resistance, all over the West. The real targets are Greek protestors and anybody else who might get uppity about being crucified on “austerity”.

 

What does US “diplomacy” say?

 

The United States, which habitually defends Israel in the council, said that the attempt to run the blockade by sea was ill advised. “Direct delivery by sea is neither appropriate nor responsible, and certainly not effective, under the circumstances,” said Alejandro Wolff, the deputy permanent representative of the United States.

 

Yes, when pirates attack the ship and slaughter the passengers and crew, delivery tends to be “not effective.” The veiled threat is clear: “To all you activists, do you think [whatever resistance you contemplate] will be effective? Not if we kill you instead.”

 

So now we’ve seen overt fascist terrorism before the eyes of the world.

 

The crime is the same as where Obama claims the right to put out a hit on anybody he chooses, anywhere, without trial, on his “authority”. The crime is to challenge corporate domination. To engage in assertive nonviolent activism against the global kleptocracy is a capital crime. This was a mass execution.

 

So as I said yesterday, this is a war of example against example, lesson against lesson, idea against idea. The killers want to efface the exemplary courage of the Flotilla crewmen by drowning our courage in the blood we’ve seen flow. As always with the tactic of terrorism, they want to use terrorism to force fear and resignation to overwhelm courage and exuberance and resolve in the minds of the people.

 

So far it doesn’t seem to be working, as the world has spoken with one voice its revulsion and rage. But the real test is the long grind. I hope Hamas learns a lesson from this and takes up the tactic of assertive nonviolence rather than playing into the hands of the killers by reciprocating with further violence against civilians. That’s just what the Israelis and the neoliberals at large want – the dialectical burning of the world in a gyre of terrorism and state terrorism. Their world is the burning world. They expect to lauch their arsonist sorties from secure fortresses while the rest of the world alternately slaves and tears itself to shreds.

 

But if instead we the people unite for the Ghandiesque counteroffensive on a global scale; if we can keep dictating the battlefield and the pace through assertive nonviolence; and if we don’t let the thugs quash our intelligence and resolve with the fog of fear and hate; if we do all this, we’d turn the flames around. The nightmare they’ve prepared for us would become their nightmare, while we’d emerge from the smoke into a new sunlight.

 

The Freedom Flotilla is holding that course and will do so for as long as we hold the course with them.

The Battle Lines

 

.

 

The rain taps out a melancholy march.

The skies smooth out to a flattened gray.

The road of day now opens with lament,

Straining out its sad song upon the world,

Demanding an overdue destiny,

Compelling our souls to march along.

The road of the rain is a passive path,

We only need blink and the world is drowned……

 

The small points of light amid the sea of darkness, the lonely calls to resistance like in Greece, are the only light by which it’s possible to see any hope for humanity. The Greek bailout is a new evolution of the Bailout, as it must become ever more aggressive to propagate itself.

 

Here we see the exact same battle lines which are so clear in Bailout America replicated on the stage of the great globe itself. The battlefront in the hominid civil war is stark.

 

We have the kleptocracy – the big banks, all other corporate rackets, all Western governments, and the rootless globalization cabals like the IMF and the EU which never had any authority or legitimacy even in theory, all of these basing their strength upon the financialization of all economy and politics.

 

This financialization assault, nothing other than the modern form of criminal looting, is upon humanity itself, upon all peoples, all taxpayers, all workers, upon all real, productive economic activity, upon all human politics, all democracy, all true freedom.

 

The gangsters fight to: 1. loot; 2. prop up the exponential debt tower. Each stage in the Bailout serves only these two goals, while supplementary campaigns like the “war on terror”, the “war on drugs”, and the general assault on civil liberties, are intended to shore up government power as it has to eventually become overtly tyrannical and violent to keep the Bailout going.

 

Basically, the elites want to loot as much as they can on a personal basis for as long as they can keep the debt system zombified. They know the debt system is doomed to collapse, and probably sooner rather than later, which is the reason for the brazenness of the robbery (“bonuses” and such) which seems so politically stupid . They know they have no political future, so normal political calculations are a moot point. Soon only violence will suffice for them. They know they have no economic future, so it’s time to get while the getting’s good.

 

Since it’s becoming impossible for the kleptocracy to keep stealing while pretending to maintain any sort of semblance of human society, we’re now reaching the point of the more direct liquidation of the people. All public programs, pensions, health care, all social spending and public property, are targeted for conversion to bank property, and then through laundering and “bonus” looting, to the personal property of the banksters and their minions. That’s the purpose of “austerity” in the Baltics, in Iceland (so far rejected by the people), now in Greece, soon in Portugal, Spain, Ireland. Soon in the UK. And in Bailout America, as we see with the growing chorus in the MSM and among corporate academics and intellectuals, “entitlements”, Social Security and Medicare, are the main target for liquidation and conversion to private bankster property. This is Obama’s great goal, his great “I Have A Nightmare”, his great tribute to his ultimate hero Ronald Reagan.

 

As we see, the very existence of a ”middle class” was nothing but a tactical concession on the part of monopoly finance corporatism. Just like with the Bolsheviks and their NEP (New Economic Policy) and the ephemeral middle class this allowed to arise, so the Western “capitalist” middle class was meant to be temporary and was despised every step of the way. It is now being liquidated, as was always the intended eventual goal.

 

Our very governments no longer exist, having been hijacked by finance. A ”government” which sees its only allowed activities to be borrowing, privatizing public property, and police state repression, which will only ever tax in order to directly steal from the poor to give to the rich (as we see with the growing calls in Bailout America for tax increases on the non-rich only, like a VAT), is no longer a government in any legitimate sense. By definition kleptocracy has no legitimacy or authority, and its “power” is based only upon violence and the threat of violence. Meanwhile rootless globalist cabals like the IMF, the EU, the WTO, NAFTA and planned assaults in the Americas like the SPP and the FTAA, are not states or governments even by any theoretical measure, but rather unelected, purely unaccountable, authoritarian bureaucracies, ruling not through any legitimate political procedure but through bureaucratic decree. They have their closest analogue in a lawless administrative dead zone like the Nazis’ General Government of Poland (where all the crimes of a place like Auschwitz were not technically illegal at all).

 

(Speaking of illegality, just like how in the US the TARP and the rest of the Bailout were technically illegal according to the PCA law, which requires the resolution of all insolvent banks including so-called TBTFs, so things like EU “facilities” to launder bailouts for Austrian and Swedish banks through EU “loans” to debt slaves like Hungary, Romania, and Latvia are illegal according to the no-bailout rules of the EU treaty.

 

So that should put in the proper perspective today’s calls in Bailout America for “resolution authority” or No-Bailout promises. These are always lies, and anyone who proposes either is always a liar.)

 

Democracy itself has been abstracted by sleight of hand. We should grab the con man, turn him upside down and SHAKE HIM until our freedom, and our national wealth, fall back out of his pocket.

 

We see how we’ve come either to the end of politics and freedom, or back to the beginning. The original beginning where the choice can be to submit to violence and tyranny, to lash out blindly with inchoate destruction in return, or to find anew the real political genius of humanity, our real political heritage, its basis in covenant and principle.

 

This is the end of the fossil fuel age. The real economy, always bound by the limits of nature, will never again be so profligate as it was during the fossil fuel blip, really an outlier on the chart of history. The normal course of economy and history shall resume.

 

This is the end of exponential debt and “growth”. The finance economy, in spite of its lies and delusions, was also completely dependent upon endlessly growing supplies of cheap energy. But even if we disregard Peak Oil, debt and growth weren’t sustainable on their own. This was proven in 2008, as the biggest, best bubble attempt the system could inflate blew up on its own, and since then they’ve been able to do nothing, and have literally no ideas, but to try to keep this terminal bubble as inflated as possible as long as possible. But as we see with Greece and from there the EU in general, this reflation attempt is doomed, and everybody knows it.

 

Normal history and economic production shall resume. But does this mean normal feudal political relations, serfdom and slavery, must again prevail as well? Or can the spirit of the American Revolution, so long despised, rejected, ignored, neglected, traduced, and hijacked, also resume?

 

As we return to history, we can, if we choose, if we muster the will, carry with us some piece of political progress. As we return to civilization’s normal economic level we can maintain political and economic rights. We don’t need feudal political organization.

 

But for that Peak Oil by itself, as a force of history, isn’t enough. While freedom activists cannot directly challenge the kleptocracy while it remains intact, we can indirectly subvert it through relocalizing our politics and economies as much as possible, through becoming as self-reliant (as individuals, families, and communities) as possible, and through preparing to seize the coming opportunity of exponential debt collapse. That will be the great moment of decision, where the fragments of elite power will seek to fully refeudalize. That’s when relocalization will have to become militant, if it wants to build new democracies, new vistas of freedom.

Stock Market: Flaw, Conspiracy, Terror

 

So last Thursday was one of the craziest single days we’ve had since the Bailout began. While in Congress two serious reform measures seemed to have chance but were of course beaten back, one voted down and one gutted, the stock market performed its oddest dance yet.

 

Everyone’s still perplexed or outraged by the market’s bizarre behavior. The day was already storming along at tremendous volume and losing hundreds of points when at 2:41 the Dow commenced a 1000 point plunge in 15 minutes, followed by an improbable surge. At the bell the Dow was down 347.8 points on the day.

 

During the pivotal 25 minutes the trading behaved suspiciously. Small players found themselves boxed out. Liquidity often disappeared. Prices which were supposed to flow continuously were making dubious quantum leaps. What really happened?

 

Before getting to that, let’s pause to put the stock market in context. We all know this stuff, but I think it helps to have reminders so that we always keep the big picture in mind. So the right context for any discussion of the stock market is:

 

1. It has become in principle parasitic. It does not exist to channel available investment capital to productive investments as per the market fundamentalist lies. At best the real investment capital flows in during the IPO. After that stocks exist mostly as a pair of dice or a deck of cards. Almost everything that happens in the market is stuff which should be relegated to the realm of extralegal, noncontractual gambling.

 

2. Institutional investors have been assimilated into this casino. The goal of this is to further enforce the submission and compliance of the people. For example, anyone with a private pension (and I think the same is true of most or all state pensions) is held hostage by the stock market, since most of the money is in stocks. For years now they’ve been trying to do the same with Social Security privatization, and this seems to be Obama’s ultimate goal.

 

3. Even the way the market’s run is a scam in practice. That brings us to Thursday’s action.

 

Everyone correctly rejects the MSM bullshit about a “fat finger”. That’s nonsense, as this piece demonstrates. The surge in volume was well underway before the crash.

 

So what are the levels of the structural “flaws” in this system, from structural stupidity to greed to systematic political terrorism to conspiracy theory?

 

A. Structurally the system seems prone to let itself be stampeded as events trigger procyclical algorithms which turn steep downward trending into avalanches. The “circuit breakers” allegedly built into the system to forestall such chain reactions seem to have failed in this case.

 

Meanwhile even as the sell side was going berserk, the vaunted liquidity and market making functions (which are supposed to be the reason HFT is allowed to exist) abdicated.

 

According to Yves Smith’s anonymous correspondent:

 

3. While the market was well offered, it was not well bid. Liquidity disappeared. For example, in P&G, 200 shares traded at $44.10 at 2:51:04 in the afternoon and one second later, at 2:51:05, three hundred shares traded at $47.08. That’s a three dollar jump in one second. Bids disappeared, spreads blew out, and no one was trading except a handful of orphaned algo orders, stop sell orders, and maybe a few opportunists who had loaded up the order book with low ball bids (“just in case”). High frequency accounts and electronic market makers were, by all accounts, nowhere to be found.

It boils down to this: this episode exposed structural flaws in how a trade is implemented (think orphaned algo orders) and it exposed the danger of leaving market making up to a network of entities with no mandate to ensure the smooth and orderly functioning of the market (think of the electronic market makers and high freqs who can pull bids instantaneously as opposed to a specialist on the floor who has a clearly defined mandate to provide liquidity).

 

So this is the big mystery – where did these guys run off to, and why?

 

B. Everyone has a variation on the obvious answer – it was a scam. It was greed-based market manipulation. It would’ve been orchestrated to force sell orders to pile up, so big players could buy them up more cheaply. (As for how they could be confident the price would then surge back up, who knows – secret government buys?)

 

On its face this is plausible, since we know there’s no level of con or crime which would abash these gangsters. The only limit to their crimes is their capacity to commit them. Everyone agrees on this, which is why the only debate seems to be whether this level of orchestrated market manipulation is possible yet.

 

C. Then we get to the politics of the day. Much to the chagrin of Obama, Dodd, and Wall Street, those nasty peasants got uppity enough that the Senate actually had to vote on the Brown-Kaufmann break-up-the-banks amendment, while the Sanders Fed audit amendment also loomed big. These were both defeated, B-K by a 61-33 vote, with half the Democrats rushing to vote against the people, while Sanders was induced to cave in to the point that his audit will be a castrated one-time-only publication of the history of now-defunct Fed facilities. Meanwhile open money operations going forward will remain outside the bounds of accountability, democracy, constitutionality. (And that’s just the deal as we heard so far; there’s still time for it to get worse, for Sanders to cave in completely, as he’s done before like with his single-payer amendment to the health racket bailout bill.)

 

The stock market has a history throughout the Bailout of punishing anything which looked bearish on the Bailout itself. When Lehman was allowed to go bankrupt, when the TARP was first voted down, when Geithner was irresolute in describing how the new administration would push forward with the Bailout, and on up to the feared and loathed amendments on Thursday, upon these and other discouraging stimuli the market has tanked.

 

It’s clear that this is no accident, that on the contrary this is systematic terrorist action intended to strike fear in the people and punish any sign of action or inaction in the public interest.

 

D. However, I don’t think we need to assume there’s actually some master cabal, the way this piece speculates. It’s a chilling piece. (And the Senator is an excellent portrayal of the cowardly “progressive” who can’t bear the thought of anybody breaking a nail, so he caves in as soon as there’s any trouble.)

 

I’m not saying it’s impossible that there actually is a secret council of the highest Wall Street elites which decides exactly when and how to tank the market, and sends down orders to that effect. (And I’m not sure how politically useful such a conspiracy theory could be.) But I doubt it. There’s no need for some master coven to literally plot things to that extent. Everybody on Wall Street knows what the Street wants to do. Unlike the workers (alas…), they have a clear perspective on their short-term interest (long-term interest’s a different story) and good discipline, so they act as a group. When they see the Bailout and their gangster prerogatives under any kind of significant pressure or uncertainty, they act to punish America. That’s a core verity of Bailout America, and how the real America has been kidnapped and stowed away. It’s an elite version of herd behavior.

 

So while A through C are clearly true, and this clearly is blackmail, that’s enough to explain the phenomena we’ve seen. C is both necessary and sufficient, though D could also be true.

 

So in conclusion, we see how the system is set up to begin with in a reckless, sociopathic way. It can never, other than by accident, provide any of the benefits alleged for it (anything from the grand purpose of rationally directing investment capital to guaranteeing liquidity during an acute market plunge). In fact these guarantees represent political fraud, since “legally” the entities, the traders and “market makers”, have no such mandates.

 

Ironically, the short story I linked above is too lenient on the system, since it implies that events this severe could only occur through a strenuous, coordinated action by the finance cabal. But the reality allows for disasters to occur by accident or absent-mindedness as well.

 

But this doesn’t absolve them of criminal intent. Although I don’t think cadres receive orders in sealed packets to tank the market when Congress is getting uppity, that’s just because they don’t need to.

 

Whether or not they have means to orchestrate exactly that kind of crash, they certainly have means, motive, and opportunity to crash the market in general. The ideological algorithm is simple:

 

Progress for the Bailout, for corporatism, secrecy, congressional freeze-outs of ”populist” amendments, etc. = good, seek market stability, bull, buy.

 

Any hint that ideas in the public interest are advancing or even getting a hearing = bad, seek chaos, bear, sell, crash.

 

The stock market’s often insane, and the one time it has a coherent agenda is where it functions as a collective terrorist entity, like a malevolent column of army ants.

A Rocky Day For the Bailout

 

Yesterday was quite a day, with lots of sound and fury signifying in the end very little other than reinforcement of what we already know about this busted system.

 

The biggest headline among several big stories was the Dow’s temporary plunge almost 1000 points followed by an equally dramatic recovery of much of the lost position. The market still ended up down 347 points. The media’s all aflutter with descriptions of this which hardly reach the level of explanations. The most absurd way of looking at it is to blame it on an alleged trader error. Even if this discrete “error” actually happened at all, it’s still not an accident by any means.

 

There are three structural explanations here. One regards the actual mechanism of HFT trading. It’s largely based on pro-cyclical computer algorithms which respond to stimuli by accelerating the trend of those stimuli. So if a large dip occurs, the computers automatically start selling off in compliance with the dip, thereby exacerbating it. This is characteristic of our whole fragile, interdependent system. At every level, from the way our desperation to keep the oil flowing at the same rate through ever more tenuous extraction lines increases the chances of catastrophic failures like the Gulf blowout (where there are reports that the situation is far worse than BP and the administration are allowing to be made public) to the way the Bailout keeps requiring ever more thin, expansive band-aids to cover the rapidly expanding cracks in the Tower walls (I’ll get to Greece in a moment), to the minute-to-minute falls and surges of the computer trading lemmings, everywhere we’ve become critically exposed, critically vulnerable, utterly fragile.

 

The other explanation of the stock lurch is the market’s political terrorism function. Throughout the crisis the market has always stood ready to punish any sign of the government acting in the public interest (for example rejecting the TARP, or contemplating Bernanke’s rejection, or the SEC’s suit against Goldman), or even looking irresolute in its will to the infinite Bailout (letting Lehman go down, or when early in 2009 Geithner looked tentative in laying out the administration’s plan to aggressively further the Bailout). So yesterday there was lots of buzz about Congress possibly “doing something” for once. The market had the attitude that this must be punished, and so it was. Not that I think Brown-Kaufmann would have passed, or that we’d be getting a full audit plan, if yesterday’s crash hadn’t occurred. But it provided reinforcement for the general Capitol Hill attitude that Congress must never do anything to upset Wall Street or the markets, and it’s that attitude which causes these attempts to be defeated, even when they seem buoyed by such a surge of public enthusiasm that it seems to penetrate even the hermetic vaults of the corporatist Congress. I’ll get to Congress in a minute.

 

(I’m not saying there’s a specific cabal on Wall Street which decrees when the market must tank. There doesn’t have to be – all the big players understand that signs of government wobbling need to be punished with a sell order. Many of them probably don’t even consciously see it as punishment. It’s simple ideology that government must be flamboyantly pro-bank, and that wherever this enthusiasm seems to be flagging, that’s a bad sign, and it’s probably best to start liquidating positions to take profits now. The aggregate effect is terrorist extortion. The market holds a gun to the head of the country. That’s the way they want us to see things, and for as long as we continue to cave in and not call the bluff, we’ll remain under the market’s thumb. [If you want to read a disgusting example of this ideology, the mindset of these cretins, check this out.])

 

Third, the markets must become ever more jittery as the Zombie Debt Monster becomes harder and harder to keep upright and in motion. Everybody knows it must collapse once and for all, which could happen at any time, so everyone who’s riding what they know is a phony, purely Bailout-driven rally looks anxiously to every moment wondering when will be the right moment to sell once and for all. Greece, the Gulf of Mexico, and even the sham Congress are indicators which render the moment full of portent. Anything can trigger a sell-off. And someday soon the terminal sell-off must commence. 

 

As for public enthusiasm and the isolation of Congress, by yesterday there did seem to be such a surge and such a penetration. While I still don’t expect a real bill, I’ll grant that yesterday they put on the best show yet. Senator Feingold now proclaims that he’ll join a filibuster of any sham bill. (Of course, I’ll believe that when I see it.) A few days ago Brown-Kaufmann looked like it wouldn’t be allowed to come up for a vote at all. Yesterday, in what I suppose is mild progress, it did get a vote. It was still resoundingly defeated, with the No votes including half the Democrats. So there the show was a little better than expected, but it was still all show.

 

Meanwhile Bernie Sanders seems to have made a deal which will greatly cut back the scope of his proposed Audit the Fed amendment but preserve one good part. The deal would direct the GAO to conduct a one time only audit of the existing and previous Fed lending facilities by December, at which time we’d learn who was handed trillions in public money. This would be good to know, but the deal meanwhile guts the plans to audit the Fed’s embezzlement going forward. It would leave the existing politicization of the FOMC sacrosanct and unaccountable. So if this ends up being the deal, we’d end up with a mostly gutted audit. It would be better than nothing, but still a defeat. That’s if this ends up being the deal. They’re not expecting to vote on it till next week, so that’s plenty of time for the deal to be altered further, or for Sanders to cave in completely.

 

I’ll conclude with Greece, which is currently the raging battlefront where the Bailout’s vanguard is facing stiffening resistance, both politically and from economic reality. The Greek parliament voted Yes to the economic immolation of the people, in direct flouting of the people’s will as expressed by the rage in the streets. This is reminiscent of the similarly rogue US Congress voting Yes on the TARP, though of course we cannot compare the resolve of American protest. (Pro-bank commentators keep saying protest is common in Greece, as if that’s a bad thing which somehow invalidates the protests of today. On the contrary, that’s a barometer of a far more vigorous populace among whom the spirit of democracy is not completely quenched. Chronic street protest is one of the correct, rational, virtuous responses to chronic kleptocracy and creeping police statism at the top. To say that in general Greeks protest far more than Americans does not condemn the Greeks, but the Americans. To imply the opposite is simply another way of alleging that the power structure is truthful and sound and right and should be obeyed.) Next up will be the vote in Germany, where the people are also hostile to the Bailout.

 

A ”Greek” bailout, like every other specific manifestation of the Bailout, is simply another bailout for the big banks, in this case the German and French banks who hold the largest part of the debt. I’ll again link to this graphic which lays out the debt relations. The entire Bailout is nothing but:

 

1. the now permanent looting expedition of the bank rackets, and

 

2. the only way the whole structure of the globalized debt economy, which is one big zombie, can be propped up and ambulated at all.

 

Every iteration of the Bailout serves only these two goals.

 

So it follows in parallel with these two goals that we the non-rich are:

 

1. slated to be the permanent victims and slave stock for this permanent looting, and

 

2. the only way to save ourselves to arrest the progress of the Bailout so that the whole zombie collapses.

 

The structure is existentially unsustainable and must collapse of its own weight, but how long this will take is unknown. We don’t know to what extent political resistance can accelerate the process, or even to what extent political resistance is dialectically hardwired into the unsustainability function itself.

 

Either way, political resistance is helpful and morally necessary.

 

So that’s a brief recap. Despite some political theater in Congress and some real action in Greece, the Bailout is still hacking its way forward and reform is still stalled. The structural fraudulence of the system is being physically embodied in the oil eruption of the Gulf, economically and politically embodied in the Bailout’s torturous progress in the Eurozone. Even in America, little by little things are getting tougher for them.

 

The day ended as another loss for humanity, but we put up a slightly better fight this time, while we continue to receive indications that the planet and history itself are weighing in on our side.

 

No matter what happens in the short run, in the end the Earth will always win out over the petty insults of a few of its ugliest creatures. The Bailout will fail, and the kleptocracy will perish.

The SEC Sues Goldman

 

Yesterday the SEC sued Goldman Sachs for civil fraud. The case centers on Goldman’s 2007 ABACUS CDO, which it manufactured at the behest of hedge fund predator John Paulson. The scam was for Paulson to cobble together a toxic mess of MBS he expected would blow up, find suckers to buy this CDO, and then short it. Goldman’s role was to launder the CDO as having been conscientiously constructed. They used the good name of a vetting firm, ACA. Goldman supposedly told ACA that Paulson was consulting on the MBS selection and would be taking the same side of the bet as the buyers would be.

 

Goldman then cited ACA’s imprimatur in touting this CDO to the suckers – pension funds, other institutional investors, dumber banks, the usual suspects. Meanwhile it helped Paulson really bet against what was really garbage. It collected fat fees every step of the way, including from the investors it defrauded.

 

(Barry Ritholz compares it to The Producers, who try to defraud their investors by putting on a crappy play they expect to quickly close while embezzling much of the loot.)

 

Typical of this feckless government, it’s only a civil and not a criminal indictment. Even if the SEC is serious this time (which I won’t assume until I see it), Goldman would still get off easy for capital fraud.

 

Of course the terrorist stock market struck fast, with the Dow plunging 125.91 points, the most in tow months and ending a week-long surge, to punish this nuisance to the banksters. The MSM rushed to defend the market. The NYT showed great compassion for the victims and fear for the future. “A relatively calm day turned turbulent” as those regulatory barbarians struck out of a beautiful spring sunrise.

 

Expectations are unusually high this quarter: investors are looking for an average of 38 percent growth in profit. Banks have driven much of the strength in the market over the last year, helped by a period of historically low interest rates that have made borrowing cheap.

But analysts worry the golden days for the financial sector may be limited if government investigators intensify their examination of risky trading practices. That may raise new questions about whether the broader momentum in the market can endure.

“What you’re going to go into now is a market that is very skeptical about the outlook,” Mr. Battipaglia said. “Whether this recovery continues or flattens out will be made clear in the weeks ahead.”

 

Even in the first moments of the indictment the first speculation was on how GS probably had a heads up and took positions to capitalize. Zero Hedge was asking how, not if, they must have shorted themselves. Sure enough, a few hours later there were more specific rumors. It’s likely that Goldman has committed every financial crime it was able to conceive every time it could, so it would be extremely out of character for them not to have engaged against insider trading against their own market image. After all, it would only be shareholders who took any hit.

 

If the SEC is serious about this, that’s fine as far as it goes, though we have to assume the least. When everyone parses the technicalities of this or the similar Magnetar trade, or any of an endless list of crimes, we get bogged down in counting how many angels were dancing on the head of a pin. What was technically a violation? What was a “crime” in the legalistic sense.

 

This misses the big picture that the rule of law has already long since been subverted. The law was hijacked to legalize many of the worst crimes. A corrupt Congress led the way, with such abrogations of the rule of law as the CFMA, which unleashed CDS into a lawless free-fire zone. Where it’s technically impossible for “crimes” to be committed, crime can run wild. That’s just one example of how the rule of law has been completely liquidated. Few financial crimes are clearly identifiable as crimes anymore, since the system is set up to allow them to use the very complexity which enables their cons to also legally whitewash them. Meanwhile “regulators” are generally compliant and often accessories.

 

That’s the whole point of rule by administrative decree. You first liquidate the law and replace it by the rule of unaccountable bureaucrats. Then you select the bureaucrats themselves according to their conformity with whatever gangsterism is the regime you really want to impose. Any rogues who actually want to work in the public interest are bullied, marginalized, or purged.

 

So in any particular case like this struggling to figure out the technical extent of the “crimes” is likely to be a fruitless effort. Even if the process goes through the motions of establishing a technical violation, there won’t be any real punishment. It’s political theater. Meanwhile the overall criminal regime continues unabated. It’s misdirection.

 

The reality is always that the finance sector is organized crime, across the board. The government and the MSM want us to think that Goldman may have committed an isolated de jure violation here, an aberration from its general pattern of legality, with technical legality being synonymous with moral legality and with what any human community would treat as legal.

 

But the truth is the opposite. Goldman Sachs and all of Wall Street is a criminal enterprise. All of its major actions are crimes according to any common sense measure of morality and rationality. These crimes have simply been illegitimately legalized by a hijacked system of law. Goldman’s crimes are not the aberrations, but rather the criminal trend itself, while its truly legal actions are there only for money laundering and political cover, just like with similar criminal syndicates like the Mafia.

 

Since we live in a kleptocracy, this government will never actually restore the rule of law and bring justice to these rackets. Even what shreds of legality still remain will only be rarely, meagerly enforced. That this anodyne indictment (not even criminal) has been greeted with such a bustle is a testament to what a vacuum justice has become. We shouldn’t lose sight of the big picture – the entire finance sector is criminal, and this legal system has been hijacked and will never be sufficient to solve the problem. If we sit around and wait for the likes of the SEC to set things right, let them set the pace and dictate the scope of what can be done, we’ll definitely remain serfs and eventually become slaves.

 

In the meantime, what’s the real purpose of this lawsuit? The immediate consensus is probably correct. It’s meant to put on a big political show, to make the Obama administration look good as part of the rollout for his finance “reform” bill. In the end Goldman will at worst get a slap on the wrist. (But maybe not even that -there’s always Obama’s cowardice, his propensity to cave in under the slightest pressure even the rare times he ever tries to do something supposedly in the public interest. It wouldn’t surprise me if he fails to follow through on even this paltry little traffic ticket. Look at what happened to his bogus “Volcker rule”.) Meanwhile they seem to be setting up the standard “bad apple”, in this case one Fabrice Tourre, the Goldman cadre who ran the ABACUS operation. Presumably Blankfein and the rest of the brass have plausible deniability. Ah, there’s that “rule of law” again….

So the administration is inviting Goldman to make the bad apple defense. They can get together to make a deal. They can scapegoat this bad apple, implicitly exonerating the Goldman brass. Goldman gets a slap on the wrist, Obama claims a big phony victory. That looks like the plan. (But like I said, watch for Obama to instead cave in.)  

 

(Meanwhile we can see another example of the government’s bad faith in that phony finance bill. They’re sure in need of propaganda help for it. Its centerpiece is looking to be the “resolution authority” scam. We can see the scam when we look at how this vaunted, robust “authority” would actually require court approval to be exercised. The Federal Bankruptcy Court would have to sign off on any resolution. That’s absurd on its face.

 

Even assuming the government ever actually wanted to “resolve” a collapsing big bank instead of bailing it out, which we should never assume, how are you supposed to do this when you’re melting down so fast that “by Monday we won’t have an economy”? All a bankrupt bank has to do is stall, fight the action in court, and the government will feel it has no choice but to cave in and bail them out.

 

That’s the intended outcome of the “resolution authority” scam. It’s designed to fail even in the unlikely contingency that the government really tried to use it.)

 

These are history’s worst robbers. We need to stop obsessing on the scam ”legalities” and develop a fully political consciousness and attack. Sure, when there’s a particular example like this, we can have fun with parsing it – but only and always within the broader context that this is part of a political war. Don’t let the government, the banksters, or myopic commentators frame it as: “Let’s see if they got caught in a technical violation. That’s the extent of culpability here. The burden of proof is on the accuser to prove his case according to the technicalities. If this fails, that signifies innocence.”

 

That would be the equivalent of a Russian in WWII having to prove in any particular case that German invaders were committing a technical crime.

 

The right way to look at this case, or any case like it, is “So for once you’re claiming you’re going to apply your law to one of these crimes? Refreshing. But we’re not going to let you fool us. We’ll believe you’re serious about justice when you restore real laws which criminalize all finance crimes. Until then this is all a scam. We’re not going to wait for a day that will never come. We’ll seek to redeem the law on our own.”

The Joke’s On…..

 

So I took a break for a few days, and came back today, on April Fools’, to check out a joke newspaper’s headlines for the day. They actually didn’t look all that different from the normal headlines.

 

“Uncle Sam’s Citi exit partly vindicates Bailout” 

 

“Hedge Fund Managers’ Pay Roared Back Last Year”

 

“Risk Is Clear In Drilling; Payoff Isn’t”

 

“Pfizer Chief Says Growth Is Imminent” (I don’t doubt “growth” in extortion is expected; but that’s not what the NYT wants you to read from that.)

 

“Deadlock Is Ending On Labor Board” (Here the blurb contains the punchline: “The National Labor Relations Board will soon have three Democrats and one Republican, and businesses are bracing for a wave of pro-union rulings.”) 

 

But here’s my favorite joke piece, though the headline’s flatly descriptive enough: “Fed Ends Its Purchasing of Mortgage Securities”.

 

The Federal Reserve’s single largest intervention to prop up the American economy, its $1.25 trillion program to buy mortgage-backed securities, came to a long-anticipated end on Wednesday.
The program has been credited with holding mortgage interest rates at near-record lows and slowing the nationwide decline in home prices that threatened to send the economy into an extended slump.

 

In other words, as a key part of history’s greatest robbery, it helped prevent to restoration of economic reality, so that when reality inevitably does impose itself, the result will be experienced by most people as far more disastrous.

 

The government sentenced the people to this fate in order that the banks could steal yet further trillions. It’s part of the official establishment of Bailout Nation, Bailout America.

 

The academic prostitutes are out shilling:

 

Demand for mortgage bonds had been frozen since the federal takeover of Fannie Mae and Freddie Mac, the giant mortgage-finance companies, in September 2008. “We were in a deflationary spiral, causing mortgages to go underwater, more foreclosures and a further decline in housing prices,” said Susan M. Wachter, professor of real estate and finance at the Wharton School of the University of Pennsylvania. “The potential maelstrom of destruction was out there, bringing down not only the housing market but the overall economy. That’s what was stopped.”

She called the Fed’s mortgage purchases “the single most important move to stabilize the economy and to prevent a debacle.”

 

(That’s a joke in itself, that we now have such a thing as a “FIRE sector professor”.  Of course all such quotes have to be read in Orwellian code. “The maelstrom of destruction, currently decimating the jobs of the real economy and sending it into the Second Great Depression, had to be segregated from the housing market in order to enable further FIRE sector looting. That’s what we accomplished. It was the single most important move to temporarily stabilize the financial (as opposed to real) indicators and prevent a debacle for Wall Street. Thus we’ve been trying and so far succeeding in shifting the entire bankster-created debacle from Wall Street onto the people. We’ll now attempt to make the people of America sustain the entire maelstrom of destruction, while the banksters and government criminals abscond with the loot. Hopefully they’ll still need a few whores and take me along.”)

 

The Fed is leading this propaganda offensive:

 

“Financial markets have improved considerably over the last year, and I am hopeful that mortgages will remain highly affordable even after our purchases cease,” Janet L. Yellen, the president of the Federal Reserve Bank of San Francisco, said in a speech on March 23. “Any significant run-up in mortgage rates would create risks for a housing recovery.”

Ms. Yellen is President Obama’s choice to be the next vice chairwoman of the Fed, after Donald L. Kohn retires in June, but she has not been formally nominated.

 

What’s left out of this quote from “Obama’s choice”, i.e. from Obama himself? As with everything else these criminals say, it has zero to do with the real economy, with economic, energy, or resource fundamentals, with anything which has anything at all to do with the lives of actual Americans or of actual people anywhere.

 

That’s because to a sociopath like Obama, and to a gangster like anyone at the fed, real people simply don’t exist other than as a cash cow to be milked and then bloodlet and then skinned and then roasted.

 

The whole MBS conveyor is simply the ongoing main vehicle of the Bailout:

 

A major factor in that recovery was the government’s announcement last December that it would guarantee debts owed by and securities issued by Fannie and Freddie, according to David Crowe, chief economist at the National Association of Home Builders.

While the future of the two mortgage-finance entities remains uncertain, the government backing has been particularly reassuring for foreign investors, including the Chinese and Japanese central banks, that hold securities based on mortgages originated in the United States, Mr. Crowe said.

 

It’s been particularly reassuring for the attempt to prop up the insolvent debt zombie of America as a whole, as well as its insolvent zombie banks.

 

These are the same Fannie and Freddie who keep hemorrhaging taxpayer money, intentionally buying MBS from sleazy lenders at far-above-market rates. This is simple embezzlement, simple theft, and simple money-laundering, being committed by what is simply a criminal government, orchestrator of a criminal system.

 

Bailout America is a de jure kleptocracy. Neither the government, nor the political nor media nor academic class, nor the top-down economy in general, any longer even pretend to have any rationale other than to loot the productive activity of society. Since people still work in order to eat and shelter themselves and raise their children, as well as because they labor under the brainwashing of consumerism, once a gangster parasite has successfully planted itself on the people’s backs, it can suck their blood for as long as the sucking’s good. Only two things can put an end to it: When and if the people fight back to kill the parasite; or once the blood has all been sucked.

 

Meanwhile the parasite may reach the point where it becomes so drunk on the blood of its host, and so incapable of even pretending to generate any value whatsoever, that it goes insane in its psychopathy. No longer content to just extract at a constant rate, it must rend and flay, beat the people, burn the crops, salt the land. We’ve been seeing this saturnalia set in with the rush to resume bankster bonuses, the more brazen and obscene the better (that it’s as open and obnoxious as possible is clearly a value to them), and the health racketeering bill. And right in the middle of it, the massive escalation of the already unsustainable, losing imperial war.

 

Between these there can no longer be any doubt whatsoever about this government and the so-called “two” party system which is really as calcified a one-party system as the decrepit stage of the Soviet Union was. There can be no doubt that this is not just a criminal finance sector and a criminal government but that it has gone insane in its orgy of looting. This is a whole globalized finance economy now dancing its Dance of Death.

 

Nor can there be any doubt about the unspeakable vile MSM, the corruption of the universities, the prostitution of “culture”, or the treason of almost all existing political activist leadership. The end result on the extension of the Bailout to the insurance rackets is the final, irrevocable divide. Kucinich’s treason made it literally unanimous among existing politicians. The same treason was almost unanimous among existing “progressive” groups of almost every stripe and alleged focus. We now know they’re all sellouts, all Astroturfs, all corporatized traitors.

 

The defining abyss which slashes its bloody gouge across every arena of our lives is corporate tyranny vs. freedom and humanity itself. The great virtue of the Bailout and its health racket microcosm is the cosmic lucidity with which it has cleared the air and defined the positions. The clarity through which it has rendered the great fault line.

 

The definition of economic Fascism is a command economy based upon private profits and socialized costs. While there can be debate on when exactly America became this fascist country, there can be no debate whatsoever on the fact that the Bailout enshrined it once and for all. That the Fed has today temporarily ended its trillions in MBS buys (though it ostentatiously reserves the right to resume at any time, and with infinite boundaries), even as Fannie and Freddie continue with their infinite guarantees of this worthless paper, doesn’t change anything at all. On the contrary it simply highlights how, as with every other totalitarian system, the tactics are flexible even as the nefarious goal is always one and the same.

 

So we know what America has become, and we know that all existing leadership has declared for crime, for tyranny, for the great enemies of the people, for treason.

 

Meanwhile, the people…this bent-backed peasant with the bloodsucker on its back….all this peasant need do is shrug to rid itself of this parasite. Is the people’s refusal to do so our own Dance of Death? Are we really no longer citizens, no longer human, but just the husks of “consumers”, and soon no longer even able to pretend any longer at being that?

 

Only we can answer that for ourselves. Our actions shall be our testimony before history, before the universe itself……