Volatility

November 5, 2009

The Banks vs. Democracy (1 of 3)

America was founded in revolution, seeking freedom. The vehicle was supposed to be democracy.
 

The organizer, the revolutionist, the activist or call him what you will, who is committed to a free and open society is in that commitment anchored to a complex of high values. These values include the basic morals of all organized religions; their base is the preciousness of human life. These values include freedom, equality, justice, peace, the right to dissent; the values that were the banners of hope and yearning of all revolutions of men, whether the French Revolution’s “Liberty, Fraternity, Equality”, the Russians’ “Bread and Peace”, the brave Spanish people’s “Better to die on your feet than live on your knees”, or our Revolution’s “No Taxation Without Representation”. They include the values in our own Bill of Rights. If a state voted for school segregation or a community organization voted to keep blacks out, and claimed justification by virtue of the “democratic process”, then this violation of the value of equality would have converted democracy into a prostitute. Democracy is not an end; it is the best political means available toward the achievement of these values.

-Saul Alinsky, Rules For Radicals

 
There are many reasons we’ve lost democracy, but lately they all involve entrenched money, and especially that wielded by the banks.
 
The banks are directly anti-democratic in the way they use money to buy politicians, corrupt and capture regulators, weaken pending legislation and twist it to their own ends, and secure the nonenforcement of existing legislation.
 
What has this bought them? First a Hobbesian free-fire business zone where there are almost no limitations on the finance sector’s activities. Speculation, manipulation, predatory lending, blowing up asset bubbles, con-job complexity, fraudulent “innovation”, enabling and extracting fees from the self-reinforcing calcification of every sector towards monopoly, mining productive economies for ever more extortionate rents, converting this to personal loot via the “bonus” scam, looting their own companies to enhance this personal embezzlement, are all fair in hate and war.
 
Second, when it all blew up, they bought the direct shredding of the Constitution by their Washington brothel. Taxation without representation, to the tune of twenty four trillion dollars in welfare handouts and free risk exposure.
 
A large part of these trillions has come in the form of Federal Reserve largesse. The Fed’s quantitative easing is the favorite mode of loot conveyance because the Fed is completely unaccountable to democracy. One of the few bipartisan initiatives of our time, the bill to establish democracy’s right to audit the Fed, has been quashed by one hired thug, Mel Watt of BofAland North Carolina.
 
Meanwhile the Fed continues to stonewall all demands that it make public the names of the banks who have received all this easing, and how much they got.
 
In itself lack of transparency is the death of democracy. Everywhere we are losing the simple right to demand that sunlight be shone upon all government actions. The natural tendency toward secrecy by presidential administrations was radically escalated and systematized into a core principle by Bush and Cheney. Now Obama has taken full ownership of this autocratic secrecy ideology and sought to extend it.
 
(Where it comes to the banks we talk a lot about zombies, but in its aversion to sunlight and ardent embrace of the darkness, our government appears in the semblance of a vampire. Of course, the bloodsucking goes with this too. And, if government is supposed to be a faithful watchdog, but has instead turned into a predatory wolf, we can also call it a werewolf. I should have written this on Halloween.)
 
And now this lawless, autocratic, irresponsible, unaccountable Fed, which has always refused on principle to perform the regulatory functions it already possesses (it instead claims it’s only supposed to come in afterward to clean up the mess), is seeking to extend its purview over all aspects of resolution authority and other things too.
 
This dovetails nicely with the collective will of the administration and the Congressional establishment to use the call for finance reform as a mere propaganda exercise, just going through the motions of reform, while they increase autocratic bank and government power. Thus even as the already dictatorial Fed is set to enclose even more terrain once trodden by the people and the people’s interest, so Tim Geithner is trying to rectify the errors of last year by making good on Paulson’s attempt to have himself anointed as Treasury Dictator. Under administration proposals Treasury’s powers would become just as unaccountable and unbounded, just as aggressive and beyond the law, as those of the Fed.
 
And that “oversight council” which was supposed to share resolution authority with the Fed, in order to counterbalance the Fed’s anti-democracy, pro-bank agenda? Whether it has any real power in theory or not, it’s going to be chaired by: the Treasury secretary, who is himself in the process of being removed from the oversight of the law.
 
So who is supposed to oversee the overseers? Nobody, apparently. Another phony non-regulatory scam, and another brick in the wall of totalitarianism.
 
This is what bank wealth has bought, this is what bank power has wrought. The lobbyists now work around the clock in a factory producing bad legislation, bad execution, bad jurisprudence. This factory is really a crematoria – for the public good, for democracy, for humanity, for freedom.
 
All of this is done in the interest of class war. We are saddled with a parasitic, bloodsucking oligarchy.
 
That’s the direct bank attack on our democratic existence. Meanwhile the banks have led the way along the more ponderous curve of expropriating America through insidious wealth concentration.
 
From 1945 to 1973 all economic cohorts in America were doing better. Since 1973, the year of peak real wages, this social plenitude has been reversed. The bottom 90% have lost, badly. The 90-99% cohort has still gained but at a decreasing rate. Only the top 1% has increased its rate of accumulation.
 
From the 70s through 1983, the top 1% took in no more than 10% of income, while the bottom 90% earned around 67%. By 2007, the earnings of the bottom 90% had been degraded to 50% of income while the top 1% were extracting 24%.
 
It was the financialization of the real economy which played the pivotal role in this campaign of expropriation, along with globalism, technologization, union-busting, and other attacks, all financed by the banks.
 
(If you’re wondering how under these circumstances the American “consumer” can be revived, fear not. According to Bank of America fantasyland, the endlessly debunked trickle-down lie is finally going to come true.
 

The well-heeled might be able to save the U.S. economy from a long period of dismally weak consumer spending — if only we don’t jack up their taxes.

That’s one conclusion to draw from a new Bank of America Merrill Lynch report this week, “The Myth of the Overlevered Consumer.”

The report hammers home what you might already suspect: The consumer debt problem in the economy really is a debt problem for the middle class. The need to work off a chunk of that debt will sap middle-class families’ spending power for perhaps years to come.

By contrast, the upper 10% of income earners face a much smaller debt burden relative to income and net worth. Those people should have ample spending power to help fuel an economic recovery.

 
That’s what the banks say justifies the wealth monopoly they’ve wrought.
 
Well, that and God being on their side.) 
 
Extreme wealth concentration, just like psychotic government and corporate secrecy, is the death of democracy. It distorts all institutions. The economy sees its finance sector bloated, asset bubbles blown. This in turn destabilizes the entire economy, so that everyone not rich is left insecure, his position deteriorating.
 
All politics becomes corrupted – representatives, agencies, elections. The rich buy the media, which is why the news is no longer reality based but corporatist. Concentrated wealth seeks by its nature to destroy wages, work conditions, the social safety net, the environment, all community life. It forces the monetization of everything, the destruction of all public amenities, spaces, prerogatives.
 
It enforces the complete dispossession and disenfranchisement of anyone who cannot conform to its rat race totalitarianism, and the steady depletion of everyone who can stay on that treadmill, as they have to run faster and faster, with ever more weight piled upon their backs, in order to stay in place.
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2 Comments

  1. Hi Russ,

    My background (biochemist, retired) is such that I have enjoyed using the past few years to search the internet for explanations of current events which are easily understandable and direct; such efforts have allowed me to get some insights into ideas and approaches which various sorts of knowledgible people are thinking about. Your blog is one of my favorites; I have learned a lot about governmental misbehavior, economics, and sociological/ philosophical confusion, misdirection, and/or obfuscation.
    I wonder what your opinion might be with regard to the proposals which Ellen Brown’s (author, Web of Debt) blogs have recently mentioned concerning money creation by governments at either the state or national level. In reading the writings of Dr Brown, Stephen Zarlenga, Michael Hudson, Richard Cook, Ron Paul and a variety of others, it seems clear that although the banksters are/have been running the ‘show’, it might be possible to effect a paradigm shift (fight back) by following the recent recommendations of Dr Brown and/or those of Mr Zarlenga (The history of money; AMI). While I suspect that such a paradigm shift would be difficult to effect/sell for any of a variety of obvious reasons, I would be interested in reading your views as to whether government printing of credit/money rather than buying of debt might prove feasible and/or improve the economy. If so, can you imagine conditions under which such an approach might ever become politically acceptable.

    Comment by William Wilson — November 30, 2009 @ 1:40 pm

  2. Hi William, thanks for the good words.
    I haven’t read Ellen Brown, so I’m not versed in her ideas. If the idea is for the government to directly print and spend rather than have Treasury sell bonds to the quasi-“private” Fed, who prints the cash, I haven’t really thought about it.

    I guess the first question that comes to mind is, how do you get parties to invest in dollars if there are no bonds to buy?

    Since this government is absolutely committed to borrow-and-spend, that would be the insurmountable political hurdle within the parameters of the existing system: the whole debt economy would unwind if it wasn’t based upon an ever-expanding public debt. So short of some radical takeover, they’d never submit to just printing replacement dollars and whatever money supply expansion was justified by real growth. (Especially since America has had no real growth in over ten years; all the “growth” has been debt-based.)

    Well, that’s just a few musings. Like I said I haven’t thought alot about it. I tend to assume the debt dollar is doomed, with not many years of integrity left, so I don’t think much about trying to reform it. Especially given how the system is completely committed to it for its very existence.

    But I suppose I should think more about such things.

    Comment by Russ — November 30, 2009 @ 2:59 pm


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