Leave No Rapacious Twit Behind: Soft Landing for the Elite, Hard Cheese for Everybody Else

Chris Floyd
Tuesday, September 23, 2008

I’ve been intending to write about the astonishingly shameless plan to sell the birthright of our children and grandchildren for a mess of pottage reserved exclusively for the muck-encrusted snouts of today’s brutal and stupid elites. But I find that Arthur Silber, with an assist from Mike Whitney, has already hit every point I wanted to make, and more, in a series of remarkable posts in the past few days.

These points include the overarching fact of the entire crisis — There is No Fix — and something I’d been thinking about a lot in the past couple of days: What if there was somebody in our national political life with the guts to stand up and speak the truth the bipartisan elite’s brazen highway robbery? Silber is already there, too, with A Time Bereft of Heroes.

But he hardly stops there. Get on over there now and read Welcome to the Asylum; Public versus Private Agendas and Goals; and Only One Winner, and Only One Loser. (UPDATE: Wait, something else has come in while I was typing this. Check out Silber’s latest on the growing “bipartisan consensus” on the highway robbery plan: Now Don’t Go Slashing Your Wrists or Nothing.)

(ARTICLE CONTINUES BELOW)

There is almost too much there to excerpt intelligently, so let me just offer up a few particularly choice bits here before you head over to read the full story.

It’s like the lousiest, most moronic sitcom ever made, crossed with the goriest, most nauseating slasher movie ever imagined. A stupidly grinning idiot wielding an axe in one hand and a butcher’s knife in the other, as he dismembers the millions of bodies spread before him.

This is America today, a sickening joke run by people who are incapable of understanding the most rudimentary facts, drunk on power, and who perform only one action in a fully convincing manner: demonstrating their absolute determination to make their ignorance total and irreversible, as the blood of their victims rises around them.

The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That’s an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics.

That’s why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress’ pathetic abdication of responsibility, assures disaster. Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it’s insanity.

The allusion to Rumsfeld is right on the money, if you’ll pardon the pun. In an earlier essay, Silber had made a similar point, likening the elite’s brutal and destructive economic policy to the mass-murdering foreign policy of the Terror Warriors:

What you have seen over the last six months and more, and what you will see in the coming months and years, is the same phenomenon in the realm of economic policy [as has occurred with regard to foreign policy]. All of the solons who led us into this abyss of mounting debt, worthless securities, failing financial institutions, economic contraction and collapse … and all the rest, will now instruct us as to how we should “solve” the crisis that they have created. The crisis may be ameliorated to a degree, and the worst of the consequences may be postponed for a while. But whatever “solutions” are implemented, whatever reorganization and reregulation is imposed, it will all be done in accordance with the ruling class’s desires and goals. It will all be to protect their own wealth and power to whatever extent is possible, and to expand their wealth and power still more…

The “rescue plans” now being bipartisanly bruited in Washington make Silber’s conclusion painfully explicit. For what is that basic plan: taking at least $700 billion of your money and giving it the same rapacious, ignorant twits — the financial terrorists — who have just blown a gargantuan crater in the global economy. What’s more, the disperal of this astronomical largess is to be left solely to the arbitrary will of the “unitary executive,” with no oversight, legislative or judicial, whatsoever.

Don’t you wish someone would give you $700 billion to give away to your pals as you see fit? With no strings attached, no questions asked?

Not a dime of public money is provided for over-extended mortgage-owners trying to stay in their homes. Not one congressman or senator at Thursday’s meeting rejected the bailout plan or called for a criminal investigation to establish whether laws were broken in the sale of fraudulent securities which have clogged the global system; pushed banks, hedge funds, insurance companies and homeowners into default, and precipitated the greatest financial crisis in the nation’s 230 year history.

And here we come to the crux of the matter: “Not one congressman or senator…rejected the bailout” or called for a criminal probe into a scheme in which bad debts and “financial instruments” based on thin air stripped trillions of dollars from ordinary people and law-abiding institutions. Just as with the world-historical war profiteering of the conquest of Iraq, nobody wants to know, no one among the great and good will step up and speak the stark truth.

Once upon a time, there were such figures in our national leadership, as Silber reminds us, with the story of Senator Robert M. La Follette Sr of Wisconson. La Follette had led Congressional opposition to America’s pointless involvement in the slaughterhouse of World War I, and had been roundly condemned by the political and media establishments of the day for his “treason.” He was written off as a has-been, told by every expert and pundit that he had no political future, should not run for re-election…unless he knuckled under and paid obesiance to the prevailing pieties of the day. Silber takes up the story:

But La Follette…wanted to return to Washington to do battle once more against what he perceived to be the twin evils of the still young century: corporate monopoly at home and imperialism abroad.

The reelection campaign that loomed just a year off would be difficult, he was told, perhaps even impossible. Old alliances had been strained by La Follette’s lonely refusal to join in the war cries of 1917 and 1918. To rebuild them, the Senator’s aides warned, he would have to abandon his continued calls for investigations of war profiteers and his passionate defense of socialist Eugene Victor Debs and others who had been jailed in the postwar Red Scare.

The place to backpedal, La Follette was told, would be in a speech before the crowded Wisconsin Assembly chamber in Madison. Moments before the white-haired Senator climbed to the podium on that cold March day, he was warned one last time by his aides to deliver a moderate address…and, above all, to avoid mention of the war and his opposition to it.

La Follette began his speech with the formalities of the day….then, suddenly, [he] pounded the lectern. “I am going to be a candidate for reelection to the United States Senate,” he declared, as the room shook with the thunder of a mighty orator reaching full force. Stretching a clenched fist into the air, La Follette bellowed: “I do not want the vote of a single citizen under any misapprehension of where I stand: I would not change my record on the war for that of any man, living or dead.”

The crowd sat in stunned silence for a moment before erupting into thunderous applause. Even his critics could not resist the courage of the man; indeed, one of his bitterest foes stood at the back of the hall, with tears running down his cheeks, and told a reporter: “I hate the son of a bitch. But, my God, what guts he’s got.”

Silber notes the consequences of La Follette’s foolish lack of “bipartisan consensus,” his defiance of conventional wisdom and expert campaign strategy: “La Follette won reelection overwhelmingly.” Silber then goes on to draw the inevitable, painful comparison to our day:

There is not a single national leader who possesses even a tenth of the immense courage and bravery demonstrated by La Follette over the course of many years. … Our culture drowns us in the shabby, the cowardly, the pathetic, and the detestable. Men and women of vision and courage need not apply. If they did, they would almost certainly be destroyed. Those dramas that we witness would embarrass the worst of fifth-rate hacks.

I expect the Democrats to extract certain modifications and perhaps make a few additions to the monumentally destructive plan proposed by the Bush Administration. The final plan may be marginally less awful than in its current form — but it will remain entirely awful.

Most Americans would not even recognize a La Follette… if such a person appeared today. And so no such person will appear.

In cultural and political terms, we get what we ask for, and what we deserve. We will get it in spades in the coming week, and in the years to come.

NOTE: For a graphic look at how this latest trough-filler for the rich is nothing new, take a gander at this handy chart and timeline of the “History of U.S. Government Bailouts,” from ProPublica. (via the Angry Arab)

Silber is back on the firing line again, with a few choice words about the Democrats’ chest-thumping calls for more “oversight” over the $700 billion Fat-Cat Subsidy Program. “No blank check!” declares Nancy Pelosi. “No blank check!” declares Barack Obama — when he can tear himself away from praising Henry Paulson’s manly handling of the meltdown, that is. Silber notes:

Make sure you get the message. The Democrats will provide the check, it just won’t be a blank check. The Democrats want “independent oversight.” But the money will flow — to insolvent financial institutions, precisely those institutions responsible for this debacle, and to buy up bad debts which will thus not be allowed to wash out of the system…

At this point, does anyone believe “strings” or “oversight” are worth a goddamned thing? Let me remind you of something that no Democrats and none of their defenders wants to be reminded of: the Iraq catastrophe. The Democrats have had the biggest “oversight” mechanism in the world — or to be precise, in the Constitution — since early 2007. The Democrats could have cut off all funding for this criminal war and occupation. They will not do it.

They could have impeached Bush, Cheney and several more of the leading criminals. They will not do it.

Add in the pattern the Democrats followed in the FISA debacle, with regard to the Military Commissions Act, and on a host of other questions, and you see what the Democratic opposition is worth. In a word: nothing.

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6 Responses to “Leave No Rapacious Twit Behind: Soft Landing for the Elite, Hard Cheese for Everybody Else”

1. reptile Says:
   September 23rd, 2008 at 11:11 am

   If the fed wanted to end this crisis it would just pay off the peoples mortiges.

   Its that simple why bail out the company and not the people?

   Because it would work.

   Will the people be homeless while houses stand empty?

   Cops enforce sqatters rights. Serve and protect.

2. Todd Says:
   September 23rd, 2008 at 5:12 pm

   Chris Floyd asserts in the above article that: “There is No Fix.”

   BULLSH*T!

   The “fix,” quite simply, is to replace the fraudulent, parasitic, debt-based money system we have now — whereby private banks loan all new money into circulation at interest (without ever creating the money needed to PAY that interest!) — with a debt-free money system — whereby Congress spends all new money into circulation interest-free to fund the production of public goods everyone can see and benefit from, such as roads, bridges, wind and solar power plants, etc.

   In other words, stop monetizing DEBT and start monetizing WEALTH!

   As to the question of how we get from here to there without causing either inflation or deflation in the process, that was answered many years ago by author Robert De Fremery:

   ———————————————

   “There are those who believe that once bank credit has been allowed to expand, nothing can be done to prevent a collapse (that is, nothing economically sound and consistent with a free economic system). The Austrian school — best represented by the writings of Ludwig von Mises — takes this stand as evidenced in the following statement: ‘There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.’ (Human Action, p. 570).

   “Dr. von Mises believes that the expansion of bank credit causes malinvestment and squandering of scarce factors of production that will inevitably lead to a crash and ensuing depression. But a more plausible theory is that all economic activity is continually reaching a new equilibrium between the total circulating medium of exchange and the goods and services being offered for it. In other words, an expansion of bank credit leads to a collapse not because of mis-directions in production but rather because of the operation of Gresham’s Law. The use of bank credit as a medium of exchange gives us what Bishop Berkeley called a ‘double money. Even though bank credit is supposedly convertible into money on demand, nevertheless it is not as good as money. It is a short sale of money. And as the volume of these shortsales increases it is inevitable that Gresham’s Law will eventually operate, i.e., the undervalued money (gold or legal tender ‘fiat’ money) will be exported or hoarded — thus causing a collapse of bank credit.

   “According to this theory, it is possible to avoid a collapse following a period of credit expansion simply by converting the existing volume of bank credit into actual money having an existence independent of debt, and at the same time take away the banking system’s privilege of creating any more credit, i.e., force banks to confine their lending operations to the lending of existing funds.” — Robert De Fremery, Rights vs. Privileges, pp. 49-50

   “There are some people who look with distrust upon ‘printing press’ or ‘fiat’ money. But they overlook one of the basic facts about money. It is true that we need a ‘hard’ money. But we should not make the mistake of associating ‘hardness’ with convertibility into gold. The essence of a hard money is not determined by the material of which it is composed — or the material into which it is convertible. The essence of a hard money is that its supply is fairly stable and there are precise limits to it. In other words, gold itself is a comparatively hard money because the supply of gold is inelastic. Bank credit convertible into gold is a very soft money because it is elastic and there are no precise limits to its supply, i.e., it expands and contracts. And a purely paper or ‘fiat’ money can be hard money if we set precise limits to its supply, or it can be a soft money if we set no limits to its supply.” — Robert De Fremery, Rights vs. Privileges, pp. 54-5

   “Soothing words about the effectiveness of ‘government mechanisms’ to deal with a liquidity crisis will not allay the fears of those who know its cause. There is only one thing that will allay those fears and that is to put our depository intermediaries on a sound basis. To do this we must convert the existing volume of bank credit into actual money and require banks to stop the unsound practice of borrowing short to lend long.

   “Under this stabalized system banks would have two sections: a deposit or checking-account system and a savings-and-loan section. The deposit section would merely be a warehouse for money. All demand deposits would be backed dollar for dollar by actual currency in the vaults of the bank. The savings-and-loan section would sell Certificates of Deposit (CDs) of varying maturities—from 30 days to 20 years—to obtain funds that could be safely loaned for comparable periods of time. Thus money obtained by the sale of 30-day, one-year and five-year CDs, etc., could be loaned for 30 days, one year and five years respectively—not longer. Banks would then be fully liquid at all times and never again need fear a liquidity crisis.” — Robert De Fremery, Rights vs. Privileges, pp. 84-5

   “Since the objective is to have a 100% cash reserve (legal tender) behind all demand deposits, the U.S. Treasury would be ordered by Congress to have printed and then loaned to the banks sufficient new currency to fulfill that objective. In determining the amount to be borrowed, banks would treat their legal reserves at their local Federal Reserve Bank as cash. Those reserves will become actual cash as explained later.

   “The debt incurred by each commercial bank to the Treasury could be immediately reduced by the amount of U.S. securities each bank held—simply a cancellation of mutual indebtedness. Henceforth the commercial banks would be prohibited from using the cash reserves behind their demand deposits for their own interest and profit. Those cash reserves belong to the depositors. They are funds against which the depositors wish to draw checks.

   “On the day the cash reserves of banks are brought up to 100% of their demand liabilities, they would have outstanding loans which I shall call ‘old loans’ as distinguished from the new loans that will be made in the future. As these old loans are paid off, each bank would be required to use these funds to pay off their savings and time depositors, and offer them, as an alternative, negotiable CDs. There would be no restriction of any sort on the issuance of such CDs. The maturity dates, the amounts, and the rate of interest would be set by each bank. But banks would not be allowed to lend the funds so obtained for a longer period of time than those funds were available to them; i.e., they would be required to maintain the back-to-back relation suggested by George Moore.

   “After each bank had paid off its time depositors, it would still have a sizable amount of ‘old’ loans outstanding. As the rest of these old loans were paid off, these funds would be used to further reduce the banks’ indebtedness to the Treasury. The treasury, in turn, would be required to use these funds to retire U.S. obligations held by investors outside the banking system. And as the Treasury did this, these investors would presumably buy negotiable CDs offered by the banks.

   “Any remaining indebtedness of the banks to the Treasury could be paid off with funds derived from the sale of their ‘Other Securities.’ Indeed, a good argument can be made for having the Treasury figure in advance how much of each bank’s securities are going to have to be sold and require them to start selling those securities gradually, the day the changeover is made.

   “As for the Federal Reserve Banks, they too should borrow from the Treasury sufficient new currency to bring their cash reserves up to 100% of their demand deposits (funds deposited by their member banks for safekeeping plus all government funds against which checks are being drawn by the government). The indebtedness of the Federal Reserve Banks to the Treasury could immediately be canceled by a mutual cancellation of indebtedness as was done by the commercial banks, i.e. by canceling an equivalent amount of U.S. obligations held by the Federal Reserve Banks. The remaining U.S. obligations held by the Federal Reserve Banks should also be canceled in view of the fact that they had originally been bought by the mere creation of bookkeeping entries. That practice would be abolished.

   “The supply of money would now consist of the total coin and currency in existence, i.e., the amount previously existing plus the amount newly printed and loaned to the commercial banks and the Federal Reserve Banks. There would no longer be any confusion about what was meant by the supply of money. And the money supply would no longer be altered by such things as the lending activities of banks, or the decisions of individuals to switch funds from a checking account to CDs, or the payment of taxes to the U.S. Treasury, or the disbursement of funds by the Treasury, etc. Whenever an increase in the money supply was needed according to whatever rule of law was adopted (a strong case can be made for a ‘population dollar’, i.e., a constant per capita supply of dollars), the increase could be made with absolute precision by simply retiring that much of the remaining National Debt with the new money.

   “S&Ls and MSBs [money services businesses] should be made to operate as they were originally intended, i.e., those who place their funds in such institutions must be reminded that they are shareholders and that they can draw their funds out only when those funds are available for withdrawal. A run on such institutions would no longer be a threat to the banking world. Nor would the failure of bankruptcy of any large bank, corporation, or municipality be the threat to the banking world that it is today. Any such poorly managed entity could, and should, be allowed to go through bankruptcy. There would be no danger of precipitating the type of financial stringency or credit crisis that is feared so much under our present financial system, and justifiably so.

   “The multitude of governmental lending agencies that have arisen since the early ‘30s should be dismantled. The lending of money is not a proper function of government. It has been sanctioned so far because banks operated in such a way as to imperil a continuous flow of funds to areas that needed it. With banks now operating on a sound basis, free market forces should be relied upon to keep money flowing in the most healthful manner for all.

   “Having corrected the destabilizing element of our monetary system, we should reject the concept of deficit financing and a compensatory budget. Those concepts arose under the old system because when the business and investment world lost confidence—thus leading to a contraction in the supply and/or velocity of money—the government was forced to indulge in deficit financing to try to keep the supply and/or velocity of money from contracting too far. Under the new system the supply of money is non-collapsible and therefore changes in the velocity of money (caused by changes in liquidity preference) would be minimal and self-regulating.

   “Government supervision or regulation of banks would now be greatly simplified. In place of all the governmental agencies with overlapping functions that are busily engaged in regulating various activities of banks, we need have only one agency. Its sole function would be to make certain each bank is keeping its cash reserves at 100% of its demand deposits, and that the maturity profile of its outstanding CDs meshes with the maturity profile of its loan portfolio. Except for these restrictions, banks would be free to set the amounts, the maturity dates, and the rates of interest on the CDs they issued. They would also be free to make loans for any purpose they pleased, secured by any collateral they deemed adequate.” — – Robert De Fremery, Rights vs. Privileges, pp. 117-121

   ———————————————

   http://members.aol.com/_ht_a/tma68/de-fremery.htm

   http://www.webofdebt.com

3. Matt Says:
   September 23rd, 2008 at 5:56 pm

   It’s sad that people just can’t see reality. The “financial industry” is a scam. It is NOW a scam, it always WAS a scam, and it always WILL BE a scam. We don’t need it and never did. Let it COLLAPSE! It will be forced to reform into something more viable. This industry is in the state it’s in because it’s been robbing the American people blind since its inception, all so that wealthy businessmen who essentially perform no useful function can send their kids to a school that charges an exorbitant amount of money (which they made doing nothing) so that their kids can live in luxury and continue the great con. QUIT BUYING IT. Don’t trust anyone whose expertise is finance… THAT SHOULDN’T BE AN EXPERTISE. Maybe once all these wealthy goons lose their money, they’ll no longer be expected to sit behind a desk and make 700 billion a day to twiddle their thumbs and make bad bets. Dismantle the Federal Reserve, repeal the income tax, then these “business” men can get busy doing real work along with the rest of us, and actually doing something to help restore the damage they’ve done.

4. liam Says:
   September 24th, 2008 at 2:10 am

   THE GOVERNMENT ARE COMING TO GET YOU YOUR MONEY, YOUR WIFE, YOUR CHILDREN AND THEN YOUR SOUL ONE BY ONE YOU WILL BE STRIPPED BARE THE EYE OF SAURON IS ON AMERICA USING HIS PUPPET SAURUMAN(MASONRY/ILLUMINATE) BANKING ELITES TO DO HIS DIRTY WORK BEFORE HE TURNS THE FULL POWER OF NATO AND THE UN TERRORISTS ON US ALL

5. rich Says:
   September 24th, 2008 at 5:34 am

   it’s a congressional debt, not national !!!!!!!!!!!!!!!!

   http://www.youtube.com/watch?v=P8fgAS0w9Q8

6. blindboy Says:
   September 24th, 2008 at 6:22 am

   I have a question for anyone who can answer it: How in the fuck do at least 50 members of congress get to be multi-millionaires on their congressional salary?

   Duh?

   Am I missing something here?