domenica 27 giugno 2010

The Shame of the Politicians

The Shame of the Politicians

by Shaykh Dr. Abdalqadir as-Sufi

25/06/2010

The miserable American President stepped bouncing to the microphones with his basketball walk and with his usual staccato delivery perfect for ticking off inmates of a remand home and announced that he had relieved General McChrystal of his command in Afghanistan. In fact the General had resigned. To anyone but an American it was clear that he had meant it to happen. It was no injudicious act but rather a master tactician’s carefully designed plot to disconnect from the failure of the democratic system to wage war not just honourably but rationally.

Think for a moment. The man repeatedly tells us, like poor Sarkozy, that he is President, and as such must act thus. On this occasion he announced, as if to convince not just us but himself, that he was Commander-in-Chief. Democratic politicians suffer from the collective delusion that a war can be conducted at long distance, and cannot face that combat troops and grieving parents look on them as despicable cowards. Such is the political animal whatever his party allegiance. From the middle of the hell of Stalingrad the German General conducting the siege sent a devastating telegram to Hitler, safe in his Berlin bunker: “I am here! Where are you?”

It was, in effect, the message of the brave weather-beaten soldier back from the front as he faced the fade-creamed face of the politician ready not for battle but for the television cameras.

If the political class were not in collapse on a world level, and human tolerance at a terminal phase, one would propose that it should be made mandatory that on a declaration of war the entire cabinet of ministers led by premiers and presidents should proceed to the front-line and face military action. We would enter an age of peace.

They will not fight the enemy. Part of their psychosis is that they have a right to send young men to die while they consider it ‘their war’. The abominable staring-eyed Premier of Britain during Iraq talked of ‘my Army’, and he was not even Head of State.

Internally, the political system is falling apart. Outrageously, the U.S. President said publicly that he thought the remarkable C.E.O. of BP should be sacked. He openly announced that this criminal corporation should pay for every dollar needed to restore order in the Gulf. Really! Well done! So the great Corporations and Consortia are under Presidential command also! Then, will he order the bailed-out banks to pay back to the ruined citizens the ‘vanished’ billions? He is allowed to play Commander-in-Chief – that only costs human lives. He is not allowed to command the banks or to sack the bankers.

With a Vice-President looking every day more like their cortisone-puffed Secretary of State and with an ex-Israeli ballet dancer Chief-of-Staff is it any wonder that they cannot oversee a Himalayan war from Washington?

As a distinguished 4-Star General it should not come as a surprise that he considers his strategy sabotaged by the political class. He is also aware that the reality of the war has been taken out of his hands while the public are kept in the dark.

What is the reality of Afghanistan that has so shaken a brilliant military leader?

The military fact, the hidden fact is that we have entered a phase of capitalist development which now requires Private Military Societies. At the global level they now employ one million personnel. Altogether, they represent the second-largest army in the world. They constitute a market estimated at 170 billion euros per year.

The first military private units appeared in 1989. Made up of former South African commandos they were installed in a disused Soviet base in Angola. ‘Executive Outcomes’ offered beleaguered African states a counter-insurgency force, no questions asked. They actually represented the first privatisation of military operations.

Next, in the U.S.A. came the M.P.R.I., Military Professional Resources Inc. That was 1990. Not unconnected with the U.S. military machine they sold their services to ex-Soviet Bloc countries, offering to tune their forces to be NATO-ready. We had entered the Age of the Contractors. By 1991 during the first Gulf War there was one Contracted civilian to 100 American military. By the Iraqi invasion in 2003 the ratio was 1:10. By 2007, for the first time, there were as many Contractors employed by the military as there were men in uniform.

On the 16th of September of that year one of the largest private military societies, Blackwater, opened fire on a vehicle in the middle of Baghdad. They left 17 dead. Withdrawn from Iraq they re-emerged as ‘Xe Services LLC’ and they now serve America in Afghanistan. Two of its staff were killed in the attack on the American base at Khost on 30 December 2009. From the Contractors’ base on the Pakistan frontier they fire their drones onto the tribal zones of Pakistan. The drones identify the targets which are then, theoretically, fired on by activated missiles of the Army. From 2008-2009 the number of cross-border strikes has increased, going from 36 to 53 in a continually accelerating rhythm.

A Congress report published in 2009 estimated that the Pentagon employed 104,100 civilians in Afghanistan. The military in that period were estimated at 63,950. Thus, 62% of men employed in the war by the American Defence Minister belonged to the private sector. Thus the Presidential increase of forces, 30,000 men, must be increased by 56,000 Contractors, over and above.

The function of the Contractors is to take over the running of the invaded country leaving only the holding of terrain and the military engagement in the hands of the soldiers. It was this purely capitalist programme that so offended the American General’s honour and military tradition.

The Contractors have taken over the whole sphere of human welfare. Housing. Support supplies. Internet connections. Food. The interconnection of Army to town. Aerial surveillance. Anti-drug schemes. Afghan government forces. ‘NATO’ plans – via the Contractors – to bring the Afghan army from 9,000 to 134,000 men by 2010 and to 240,000 by 2013. The Afghan army is being trained by K.B.R., Kellogg Brown and Root, along with the major force in Afghanistan, DynCorp. This latter group controls the Presidential Guard of Hamid Karzai.

The M.P.R.I. group controls the military doctrine of the Afghan Army and forms its leadership – a contract worth 200 million dollars. Paravent, a sister group to Blackwater, controls the Afghan Police which will reach 160,000 men.

According to the expert scholar on the subject, George-Henri Bricet des Vallons, there must also be counted Sherzai Society set up by a former Governor of Kandahar, Gul Agha Sherzai. According to Bricet des Vallons the present internal system saves the U.S. government from including Contractor deaths in official figures. Of course, it follows, since these private para-militaries are above Afghan law and military law, that they are legally speaking outlaws. Their official duties are protected by NATO, an organisation that itself cannot be brought to justice either nationally or internationally according to their self-declared mandate. Today they freely fight the Afghans for control and profits of the drug-trade and adult and child prostitution. This latter is a thriving business since no army in history has been able or required to forego its services.

The economic logic of the situation necessitates the Contractors to continue over a long term to provide a return on their investment. This, in turn, gives the lie to the pretended NATO exit strategy. Now, the wobbly Nike-shod President who trembles in front of professional soldiers has been told he must sack his brilliant military commander to avert the political accusations of wimpery over the BP crisis. Had he sacked him over military philosophy there might remain the echo of a chance for political democracy. Hitler destroyed Rommel because of his political insecurity. Churchill destroyed the greatest soldier of World War II, Earl Wavell, because of political weakness at home. Truman destroyed MacArthur because of trouble at home, and gave the world Communist North Korea and the nuclear bomb instead of a military victory.

Bush destroyed Powell by forcing him to lie in the political arena. Now the utterly inadequate, uneducated and unformed politico-President has sacked his most brilliant General. From thousands of miles away this distant ‘Commander’ has got rid of the man who had realised that America had failed, and who deliberately let the people understand that the war was not a war of any kind, but an adventure in Corporation capitalism – America’s last chance to have a toe-hold in an Asia that no longer needed it.

The great General withdrew from the battlefield.

The war is now over. Only the useless slaughter will continue, for a time.

Monete complementari, un convegno a Genova

Il Secolo XIX, 25 giugno 2010

Monete complementari,
un convegno a Genova

Mercoledì prossimo, 30 giugno, si terrà a Genova una conferenza pubblica sul tema delle monete complementari. L’appuntamento è alle ore 17, in via Venezia 3 (1° piano).

La conferenza è organizzata dall’associazione “La Palanca”, presieduta da Alvise Manicardi. “Invitiamo tutti i cittadini - si legge in una nota - a partecipare alla conferenza sull’utilità delle monete complementari all’euro, usate in quasi tutto il mondo”. Nell’occasione si parlerà anche della possibilità di un’uscita anticipata dall’eurozona e del ritorno alla lira.

9^ COMUNICATO - 25^ settimana del 2010

www.orsiniemidio.it

Ascoli Piceno 27 Giugno 2010

Visita il nostro Forum www.forumantiusura.org

9^ COMUNICATO

25^ settimana del 2010 (clicca qui per scaricare in formato PDF)

*** *** *** *** ***

Il 25 Giugno rimarrà una data storica nella vita del Forum Antiusura Bancaria (clicca qui)

Pubblichiamo il solo intervento del Presidente nazionale, On.le Scilipoti (clicca qui), e riproponiamo il comunicato stampa (clicca qui) . Oltre 600 i partecipanti, venuti da ogni parte d’Italia. Mandateci le vostre foto che pubblicheremo nel prossimo comunicato.

UNITI POSSIAMO VINCERE – questo il motto che ha caratterizzato gli interventi dei referenti regionali, ai quali chiediamo di trasmetterci la sintesi dei propri discorsi, che pubblicheremo .

Per brevità riportiamo solo la sintesi degli interventi dell’Avv. Roberto Di Napoli (clicca qui) che ha approfondito la proposta di legge di modifica dell’art. 50 TUB, depositata nei giorni scorsi (clicca qui) e del Prof. Petrino, sulle cartolarizzazioni assassine (clicca qui) .

Vi sono stati interventi forti, come quello del referente della Campania, Domenico Longo, editore(clicca qui) , tecnici come quello del Dott. Baccile della SOS Utenti (clicca qui) ed interventi emozionanti che hanno strappato lacrime vere e sincere a tutti i presenti .

Il Forum, però, non è il muro del pianto, ma un momento di aggregazione e di lotta . Dobbiamo unirci, diventare numerosi, per manifestare con una sola voce il disagio di milioni di italiani vessati dalle Banche : il Forum sarà il loro MEGAFOFONO che dovrà squassare le aule parlamentari e del governo.

L’obiettivo del Forum è quello di abolire i tanti privilegi normativi di cui godono oggi le Banche (clicca qui) e costringerle a deporre gli strumenti dell’estorsione, per aprire tavoli di confronto, nei quali trovare soluzioni transattive immediate e risolutive .

La prossima manifestazione è stata fissata per Dicembre ‘10. Da 600 a 6.000, questo è il numero dei manifestanti che aspettiamo. Sarà firmata una petizione che il Presidente del Forum, On.le Scilipoti, consegnerà personalmente al Presidente della Repubblica .

Altre iniziative, di cui vi faremo partecipi, sono previste nelle prossime settimane . Sparate questi comunicati su Facebook e sui vostri blog.

Questa settimana proponiamo :

- Il Governatore Draghi ha attaccato gli evasori fiscali – sono responsabili di una vera e propria macelleria sociale (clicca qui) - Questa volta gli diamo perfettamente ragione (clicca qui) .

- La ricordate quella di Sua Eccellenza il Prefetto Pasquale Minunni (vedi foto) che ha ostentato doti di preveggenza? Sta rimbalzando in ogni Blog (clicca qui). E se le Sue premonizioni fossero vere?? Vi terremo comunque informati .

Notizia dell'ultimo minuto, ricevuta dall'Avv. Di Napoli : "Tagleggiati ed abbandonati" (clicca qui)

Saluti,

EMIDIO e lo staff

Sardegna: Circuito SARDEX

Sardegna: Circuito SARDEX
http://www.sardex.net/

Anche in Sardegna è nato un circuito di imprese che utilizza la propria valuta complementare locale, il Sardex.

La valuta, spendibile solo all'interno del circuito, nasce dall'incontro di domanda ed offerta ed è sempre commisurata ai beni e servizi disponibili.

Sardex.net è perciò un circuito di aziende che, attraverso una valuta elettronica e delle bilancie di debito e credito costruite sul modello del Wir degli albori, contribuisce, tramite la collaborazione dei vari attori economici, non solo al rilancio dell'economia locale ma anche alla rinascita di valori quali la condivisione, la solidarietà, la fiducia e la reciprocità all'interno delle comunità in cui opera.

Tramite sardex.net inoltre le aziende iscritte riducono la propria esposizione bancaria accettando di farsi credito reciproco a tasso 0.

Il proprio lavoro, la fiducia reciproca ed il rispetto delle regole sono l'unica garanzia richiesta per ottenere un affidamento.

Dopo appena 6 mesi di attività il circuito Sardex.net conta già oltre 120 aziende di ogni settore operanti nei più svariati settori dell'economia.

Questo progetto è solo un primo passo verso la costituzione di un'economia più equa, solidale e sostenibile; un'economia che possa liberarsi dal giogo del debito e di un regime monetario che favorisce solo una minima parte della popolazione a discapito del mondo intero.

Un'economia che persegua la realizzazione di un benessere consapevole e diffuso, rispettoso del valore inestimabile che la vita di ognuno di noi rappresenta.

Un'economia sana che sostituisca all'insostenibile efficienza capitalista e neo liberista caratterizzata dalla competizione e dalla rigità di una monocultura, la resilienza di un nuovo paradigma locale fondato sulla collaborazione e sulla creazione di nuovi modelli di sviluppo.

Nuovi modelli economici locali che, soppiantando il modello distruttivo imposto dalla globalizzazione, possano imporre nuovi modelli locali capaci, nella loro diversità, di meglio adattarsi alle realtà socio-economiche delle comunità in cui operano dimostrando la loro maggiore efficacia nel perseguimento di un benessere duraturo e condiviso.

Vorrei chiudere con una citazione dell’economista Thomas Greco autore di un saggio dal titolo a dir poco evocativo: The end of money and the future of civilizzation (la fine del denaro ed il futuro della civiltà).

“I circuiti di scambio e le monete comunitarie regionali possono rappresentare i più importanti strumenti di liberazione dell’uomo fin dai tempi dalla Magna Carta. Essi infatti evidenziano una mossa verso la libertà economica, che è non è meno importante di quella politica o di quella religiosa”.

YOU SAY “SOVEREIGN,” I SAY “MAYBE NOT”

YOU SAY “SOVEREIGN,” I SAY “MAYBE NOT”

http://www.newswithviews.com/Barnewall/Images/Marilyn_Barnewall_com_hdr.gif

By Marilyn M. Barnewall
June 27, 2010
NewsWithViews.com


Because my career was banking, I have written much about the attack on America’s independent banks by a federal regime that apparently seeks global governance.

Attacks? How else do you explain that as of June 30, 2009, the Federal Reserve Bank of St. Louis said there were 6,898 commercial banks in the United States – but as of June 30, 1984, there were 14,369 commercial banks? In 1994, that number was pared down to 10,623. Now we have less than 6,898.

How do we stop the ever-growing power of the Federal Reserve System? Why are financial experts talking about a world run by central banks? There are answers but they must be implemented before the power to make changes at the State level is removed.

The capacity to control monetary policy at the State rather than federal level and a State currency distribution system are powerful tools.

When people hear the words “State Bank,” they may think it means “State-chartered bank.” A State Bank is quite different from a State-chartered bank. The 90-year old Bank of North Dakota is the only State-owned bank in America.

Think of a State Bank as a mini-Federal Reserve – only it’s State-owned rather than a Federal Reserve Bank. The Federal Reserve System, a privately-owned corporation that is not part of the federal government, has Member Banks – nationally-chartered (they usually have the word “national” in their name). The Bank of North Dakota has “Member Banks” – State-chartered banks. The Bank of North Dakota, for example, provides its own State deposit insurance coverage – like a mini-FDIC (call it NDDIC).

Nationally-chartered banks (those licensed by the federal rather than State government) can do business in states that have a State Banking system, but cannot be members because of their national Charters. The authority that Charters a bank determines whether it will be a Member of the Federal Reserve System or of a State Bank.

The Federal Reserve System clears checks and performs other monetary functions for its members. It establishes monetary policy for the nation. Why? Because the Fed is the only alternative available in the 50 states to perform these functions – except in North Dakota. State Banks can, if they choose, replace Federal Reserve System functions and clear checks and set monetary policy for Member Banks.

A State Bank (exemplified by Bank of North Dakota) is the official depository institution for all State collections and fees. It’s very beneficial to local economies. Such a controlled source of funds is called a ‘captive deposit base’. The State Bank pays the State Treasurer a competitive rate of deposit interest that can be used to reduce local tax burdens. In states that are part of the federal system, funds collected by the State leave the State. When a State owns a State Bank, loan policies are determined by the State, not the federal government or the banking cartel known as the Federal Reserve System.

State Banks determine loan policies that can support State assets. In North Dakota, loan policy supports agriculture and energy. In Alaska, Texas and Oklahoma, it can support oil. In Colorado, loan policy can support uranium, natural gas, or oil shale production; in Utah, it can support coal. States rich in other things can create loan policies supportive of them.

Another thing State Banks make possible is getting away from a fiat currency system (paper money with nothing backing it) dependent upon consumer and business indebtedness to survive. That system has bankrupted our nation. A Sovereign State needs its own currency. The currency must be backed by something other than a Governor’s signature. And, without something (like gold, silver, oil, uranium, etc.) backing a State currency, the citizens have the same problem that caused the federal system to fail: a worthless fiat currency.

When a State legislatively declares the right to create its own currency, it needs a State banking system or there is no way to exercise power – a required element of “sovereignty.” A State may print as much of its own money as it chooses, but without a distribution system and without a State-owned asset of value backing it, it’s worthless. You thought your State could declare its sovereignty and still trade in the U.S. dollar? You might want to re-think that. Federal governments whose power bases are threatened by State governments declaring sovereignty usually don’t view the State fondly. They usually don’t offer the use of their currency.

A State that declares itself sovereign must function independently of the federal government – or it is not sovereign. States that have declared (or will declare) State Sovereignty need to fulfill international standards of sovereignty. A State Bank helps achieve that objective. In other words, legislation declaring a State to be “Sovereign” doesn’t make sovereignty a reality.

There is the issue of de jure versus de facto sovereignty. The experts say neither declaring nor being proclaimed sovereign or exercising sovereignty is sufficient. To be sovereign requires both de jure (proclaiming) and de facto (being proclaimed). Proclaiming sovereignty (“I’m sovereign”) doesn’t get the job done. Being proclaimed sovereign (by a legislature or by citizen vote or by another State) doesn’t either. It is generally accepted that both de jure and de facto are required. The ability to exercise sovereign power is also required. That’s a major part of how international law defines “sovereignty.”

State sovereignty, then, must be based on de jure and de facto proclamations. It must exhibit evidence of exercised power. The most recognized exercise of power in the world is monetary. As long as states are tied to the Federal Reserve System, monetary power is vested in the federal, not the State, government.

To be recognized as sovereign, international law says the State, as a person, must have:

1- A permanent population;
2- A defined territory;
3- Government; and,
4- The capacity to enter into relations with other states.

It is also held that sovereignty requires not only the legal standing to exercise power, but also an actual exercise of that power. International law says sovereignty exists only when the State declaring sovereignty is recognized as sovereign by other states (and/or nations).

Why is it important to comply with international laws when declaring State sovereignty? If citizens take a prescription drug for a serious disease made by a German pharmaceutical company, access to international trade must exist. If citizens drive a foreign-made car, they need parts available. If the State wants to provide access to coffee and bananas for citizens, it will have to comply with the international trade laws of Brazil. When a State declares sovereignty, international (as well as interstate) commerce laws become important. Many questions arise. How will highway systems be maintained? Who pays for public schools and police protection – and which currency is used to pay for State government?

The solutions to State Sovereignty: Currency, monetary policy (coordinated with other states) and a State Bank that provides a distribution system for both.

A State structure supporting America’s Constitutional Rule of Law and the Bill of Rights must be in place. State Constitutions generally fulfill that requirement, but may need to be more legislatively clear. Why? After the Federal Reserve System and Wall Street cause economic collapse, the states will be able to reorganize around the Constitution and the Bill of Rights, as written by our founders, and do so quickly to once again become the United States of America.

Can a State declare itself sovereign if it does not have sufficient power to determine its own currency and monetary policy? That is the key question to the core problem.

State Banks give credible stability to State Governments and their business sectors. They provide a distribution source to those states with the lawful authority to create their own currency. This one concept makes possible a logical alternative to the failing federal monetary distribution system – the failed fiat currency and the failed fractional-reserve means of creating currency that results in perpetual debt.

Numerous projects must (and can) be quickly coordinated among sovereign states if interstate commerce is to continue. States must plan ahead and work together to create a workable system. Compatible computer systems able to exchange information so proper check clearing can occur are needed. How does a company in a Sovereign State pay for goods purchased in another State that has not declared sovereignty and still uses the U.S. dollar? State Banks must be able to pay and accept the federal government’s currency via the same settlement process used all over the world.

There is one flashing red light regarding State Banks. It can be solved by how the State Bank Charter is written.

Unless constraints are firmly in place, there is little doubt power abuse will occur. Money draws crooks like honey draws bees. While the above information focuses on the positive aspects of implementing a State Bank, legislators need to be aware that unless prohibited from doing so, a State Bank can become a tool used to redistribute wealth – just as the current system is used nationally. Each State Bank Charter must contain prohibitions against the politicization of State Bank funds and investments, or all that will result is a State Bank that does the same economic harm currently done by the Federal Reserve System.

How does your State fund a State-owned bank? Have your State legislators check the amount of U.S. dollars available in existing State Comprehensive Annual Financial Reports (CAFRs). Most states have billions of CAFR dollars that cannot, by law, be used to pay down State debt but can be used to invest in a State Bank on behalf of citizens.

This is a great (and critically needed) project for State Tea Party groups. You really could save your State from an economic apocalypse if you get this job done in time.

© 2010 Marilyn M. Barnewall - All Rights Reserved

Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, and other major industry publications. The American Bankers Association published Barnewall’s Profitable Private Banking, the first book written about private banks, in 1987. She taught private banking at Colorado University for the American Bankers Association and trained private bankers in Singapore in 1991. She has authored seven banking books, one dog book, and one work of fiction (about banking, of course). She has served on numerous Boards in her community.

Barnewall received her degree in Banking from the University of Colorado Graduate School of Business in 1978 and was named one of America's top 100 businesswomen. She was a founding member of the Committee of 200, the official organization of America's top businesswomen. She can be found in Who's:Who in America (2005-08), Who's Who of American Women (2006-08), Who's Who in Finance and Business (2006-08), and Who's Who in the World (2008).

sabato 26 giugno 2010

Who Will Prevent `Apocalypse' In Bankrupt Europe?

This article appears in the June 25, 2010 issue of Executive Intelligence Review.
Who Will Prevent `Apocalypse' In Bankrupt Europe?

by Helga Zepp-LaRouche

[PDF version of this article]

June 18—According to EU Commission President José Manuel Barroso—who is known for spending his holidays aboard the yacht of the wealthiest man in Greece, Spiro Latsis, and who organized a bailout package for the latter's bankrupt bank—the European nations are threatened with an Apocalypse, civil wars, and military coups in several states, if the funds available for further bailout packages are not increased, and if citizens keep on demanding the social benefits they are used to. Barroso issued this outrageous provocation at a meeting with trade union leaders in Brussels a week ago.

The truth is exactly the opposite: If the European governments continue to submit to the dictates of the EU, and keep increasing their sovereign debts with inflationary methods, just to save the gambling banks, and, at the same time, brutally cut the living standards of the poor and near-poor portions of the population, then an "Apocalypse" will threaten us very soon, even as early as July 1, when the European banks, among others, will have to refinance €442 billion, or Greece will demand a new bailout and Spain its first one.

It is obvious that Europe's governments have learned nothing whatsoever from history, which they demonstrated once again at the EU summit meeting in Brussels June 17-18. In the tradition of Chancellor Brüning's austerity policy of the 1930s, which led to fascism and military dictatorship, they decided on virtually nothing except "more austerity," which was perceived as "Germanization"—since nobody keeps as close watch over its budget as does the German government. In other words: Brüning for everybody!
Impotent Summitry

Far from going after the problem at the root, and either deciding in favor of strict re-regulation of the banks, as existed in Germany before 1992, or in favor of a two-tier banking system (like the Glass-Steagall system that formerly existed in the United States), the completely unworkable demands for a banking fee and a financial transaction tax collapsed, as expected, because of resistance from Great Britain, the Czech Republic, and Sweden. The final document said that a financial transaction tax should be "investigated and developed." Chancellor Merkel's answer to the question of who should look into the adoption of such a tax: "The G20 or the IMF, of course; I don't know."

It doesn't take much boldness to venture the prediction that nothing will come of the G20 Summit in Toronto at the end of June either. As long as Obama, a loyal servant of Wall Street, remains in office, and as long as the governments of continental Europe stick to their blindness with respect to the role of Great Britain, an early collapse is certain. It seems inconceivable, but Canada intends to spend $1.1 billion on the summit, including for an artificial lake, $4 million for a security fence, and $993 million overall for security measures at this "gold-plated summit," according to the Toronto Star.

The monthly report of the European Central Bank (ECB), released on June 17, underscores once again the absolute irresponsibility of the failure to act—whether out of cowardice, incompetence, or corruption, or a combination of all three. At the beginning of May, there was a threat of a total breakdown crisis that would have overshadowed the bankruptcy of the U.S. investment bank Lehman Brothers on Sept. 15, 2008. The reaction to this threatened tsunami was the €750 billion bailout, which took the German government by surprise, and the subsequent ECB buy-up of toxic state debts.
Sitting on a Volcano

The EU Commissioner for Competition, Joaquín Alumnia, now warns, in an interview with the Frankfurter Allgemeine Zeitung, that governments are going to be confronted with new banking turbulence, led by the cases of Greece and Spain, and that the ECB will have to buy up a couple of hundred billion euros more in the sovereign debts of the southern states. The European banks will have to refinance about €2 trillion by 2012, he says. As enormous as these admissions are, the truth is even more dramatic: We are sitting on top of a volcano just before it erupts.

Some brave individuals—too few—are speaking out against the disastrous trend, such as the former chair of the Council of the Evangelical Church, Margot Kässman, who called on the churches to resist cuts in benefits to parents who are recipients of the Hartz 4 welfare funds for their children. Social Democratic political figure Gesine Schwan was very much in tune with the popular mood, when, at a memorial in honor of the June 17, 1953 uprising in East Germany (which was crushed by the Soviet Union), she drew a parallel to the situation today, indicating that the population is gripped by feelings of impotence and injustice. The criticism of Schwan's speech by Arnold Vaatz, deputy chair of the Christian Democratic parliamentary caucus—in which he brandished the club of political correctness, saying that such a comparison is absolutely unacceptable—is unfortunately typical of the callousness in Germany today. Our country is going to Hell, and all those who are politically correct are complicit.

Is this comparison really so far-fetched, when Barroso is talking about Apocalypse and civil war? When the third European Police Forces Training exercises took place in Lehnin, in which 320 policemen from 16 EU countries trained in "counterinsurgency" at one level below open warfare? And when there is an attempt to sneak in a hybrid form between military and police forces, violating Germany's constitutionally mandated separation of the military and police, by the creation of a German Gendarmerie? Furthermore, the EU has long had maps identifying the regions and city neighborhoods throughout Europe where social problems are expected.

Merkel complained recently that the job of an honest advisor on the financial system was still available. That should be taken care of.
War with the British Empire

The main problem is a relentless war which the modern form of the British Empire, now represented by the financial interests of the City of London and its subdivision, Wall Street, are waging against sovereign nation-states, as the only entities that can defend the common good, especially in times of crisis.

In 1984, the investment bank JP Morgan, which is definitely part of this empire, and whose director at that time was Alan Greenspan, prepared a pamphlet attacking the Glass-Steagall law (see article, p. 4); at about the same time, the Briton Baron Cockfield was getting ready to bring the European continent under subjugation by the supranational and ultimately British-controlled European Monetary Union. In his "White Paper" entitled "1992," Cockfield outlined the plan for the process that led to the EU treaties from Maastricht to Lisbon, as well as the repeal, after 1992, of 80 laws and regulations that had governed German banking, which then allowed the unregulated operations of the financial locusts and mega-speculators.

The euro was not invented by someone from continental Europe, but by that same Baron Cockfield, who from 1979-82 was Minister of State at the Treasury in the Thatcher government, and later vice president of the European Commission under Jacques Delors. Cockfield is actually considered the "father of Maastricht."

"Kohl's girl" [Angela Merkel] should someday ask Helmut Kohl whether he still remembers Thatcher's "Fourth Reich" campaign against him and German reunification, and the threats by François Mitterrand against Germany at that time. Kohl has often said that he knew that the European Monetary Union could not function without political union; Germany was simply blackmailed and overwhelmed, forced to give up the Deutschemark and accept the hated euro. The promise that the euro would be as stable as the D-mark was a joke. And the fact that Germany would become the paymaster for all of Europe, was not in the instruction manual for this sham.

Margaret Thatcher is also the origin of today's cliché that there is "no alternative" to such-and-such a policy, as Merkel says, and the four advisors, including Oxford professor Clemens Fuest, chief of the Scientific Advisory Board at the Finance Ministry, and Professor Unsinn[1] from the IFO Institute, with their "Ten Rules for the Rescue of the Euro," a hodge-podge from the monetarist chamber of horrors.

There is a very simple alternative: We must stop using taxpayers' money to refinance the banks' completely worthless toxic waste. Since it is not realistic to reintroduce the 80 laws and regulations that have been abolished since 1992, given the dramatic shortage of time, we need the immediate establishment of a two-tier banking system. The state must provide the commercial banks with credit lines, so that loans can be extended to industry, agriculture, trade, and other areas that serve the common good. If the investment banks want to gamble, it is they themselves that should pay for the damage, not the taxpayers.

If we want to prevent this crisis from quickly developing into the worst crisis in the history of mankind, we now need a radical change. We have to stop allowing British law firms and consulting companies to make our laws for us. We must return to the principles that formed the foundation for Germany as an industrial nation and social community. We need a policy of growth, investment in infrastructure, and scientific and technological progress at the highest level.

Therefore, it is time to vote out the parties whose political leaders are in a revolving-door with the financial sector, serving in high office and then being transferred back again.

And we don't want Frau Schwan to be right with her comparison to 1953, because that date stands for a tragedy in German history.

Let's bring to life a different date: 1989! We are the people!

The financial institutions are the Honeckers [2] of that time.

We are the people!

[1] Hans-Werner Sinn is the head of the Institute for Economic Research at Munich University; the pun on his name could be translated as "Professor Poppycock."

[2] Erich Honecker was the ruler of communist East Germany, famous for his claim—shortly before his ouster in 1989—that the Berlin Wall would last for a thousand years.

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"New Austerity" Threatening Global Recovery?

"New Austerity" Threatening Global Recovery?

Leo Kolivakis's picture


Via Pension Pulse.

Earlier this week, George Soros said German fiscal policy endangers the European currency union:

“The German policy is a danger for Europe, it could destroy the European project,” Soros was quoted as saying. “If the Germans do not change their policy, their exit from the currency union would be helpful for the rest of Europe,” he added, according to the report.

Soros also said that one “can’t rule out a collapse of the euro,” Die Zeit said.

Collapse of the euro? Obviously Soros is short euros, but he's not the only one concerned about Europe's fiscal policies. In counterpunch's weekend edition, Michael Hudson writes, Europe's Fiscal Dystopia: the "New Austerity" Road:

Europe is committing fiscal suicide – and will have little trouble finding allies at this weekend’s G-20 meetings in Toronto. Despite the deepening Great Recession threatening to bring on outright depression, European Central Bank (ECB) president Jean-Claude Trichet and prime ministers from Britain’s David Cameron to Greece’s George Papandreou (president of the Socialist International) and Canada’s host, Conservative Premier Stephen Harper, are calling for cutbacks in public spending.

The United States is playing an ambiguous role. The Obama Administration is all for slashing Social Security and pensions, euphemized as “balancing the budget.” Wall Street is demanding “realistic” write-downs of state and local pensions in keeping with the “ability to pay” (that is, to pay without taxing real estate, finance or the upper income brackets). These local pensions have been left unfunded so that communities can cut real estate taxes, enabling site-rental values to be pledged to the banks of interest. Without a debt write-down (by mortgage bankers or bondholders), there is no way that any mathematical model can come up with a means of paying these pensions. To enable workers to live “freely” after their working days are over would require either (1) that bondholders not be paid (“unthinkable”) or (2) that property taxes be raised, forcing even more homes into negative equity and leading to even more walkaways and bank losses on their junk mortgages. Given the fact that the banks are writing national economic policy these days, it doesn’t look good for people expecting a leisure society to materialize any time soon.

The problem for U.S. officials is that Europe’s sudden passion for slashing public pensions and other social spending will shrink European economies, slowing U.S. export growth. U.S. officials are urging Europe not to wage its fiscal war against labor quite yet. Best to coordinate with the United States after a modicum of recovery.

Saturday and Sunday will see the six-month mark in a carefully orchestrated financial war against the “real” economy. The buildup began here in the United States. On February 18, President Obama stacked his White House Deficit Commission (formally the National Commission on Fiscal Responsibility and Reform) with the same brand of neoliberal ideologues who comprised the notorious 1982 Greenspan Commission on Social Security “reform.”

The pro-financial, anti-labor and anti-government restructurings since 1980 have given the word “reform” a bad name. The commission is headed by former Republican Wyoming Senator Alan Simpson (who explained derisively that Social Security is for the “lesser people”) and Clinton neoliberal Erskine Bowles, who led the fight for the Balanced Budget Act of 1997. Also on the committee are bluedog Democrat Max Baucus of Montana (the pro-Wall Street Finance Committee chairman). The result is an Obama anti-change dream: bipartisan advocacy for balanced budgets, which means in practice to stop running budget deficits – the deficits that Keynes explained were necessary to fuel economic recovery by providing liquidity and purchasing power.

A balanced budget in an economic downturn means shrinkage for the private sector. Coming as the Western economies move into a debt deflation, the policy means shrinking markets for goods and services – all to support banking claims on the “real” economy.

The exercise in managing public perceptions to imagine that all this is a good thing was escalated in April with the manufactured Greek crisis. Newspapers throughout the world breathlessly discovered that Greece was not taxing the wealthy classes. They joined in a chorus to demand that workers be taxed more to make up for the tax shift off wealth. It was their version of the Obama Plan (that is, old-time Rubinomics).

On June 3, the World Bank reiterated the New Austerity doctrine, as if it were a new discovery: The way to prosperity is via austerity. “Rich counties can help developing economies grow faster by rapidly cutting government spending or raising taxes.” The New Fiscal Conservatism aims to corral all countries to scale back social spending in order to “stabilize” economies by a balanced budget. This is to be achieved by impoverishing labor, slashing wages, reducing social spending and rolling back the clock to the good old class war as it flourished before the Progressive Era.

The rationale is the discredited “crowding out” theory:

Budget deficits mean more borrowing, which bids up interest rates. Lower interest rates are supposed to help countries – or would, if borrowing was for productive capital formation. But this is not how financial markets operate in today’s world. Lower interest rates simply make it cheaper and easier for corporate raiders or speculators to capitalize a given flow of earnings at a higher multiple, loading the economy down with even more debt!

Alan Greenspan parroted the World Bank announcement almost word for word in a June 18 Wall Street Journal op-ed. Running deficits is supposed to increase interest rates. It looks like the stage is being set for a big interest-rate jump – and corresponding stock and bond market crash as the “suckers’ rally” comes to an abrupt end in months to come.

The idea is to create an artificial financial crisis, to come in and “save” it by imposing on Europe and North America a “Greek-style” cutbacks in social security and pensions. For the United States, state and local pensions in particular are to be cut back by “emergency” measures to “free” government budgets.

All this is an inversion of the social philosophy that most voters hold. This is the political problem inherent in the neoliberal worldview. It is diametrically opposed to the original liberalism of Adam Smith and his successors. The idea of a free market in the 19th century was one free from predatory rentier financial and property claims. Today, an Ayn-Rand-style “free market” is a market free for predators. The world is being treated to a travesty of liberalism and free markets.

This shows the usual ignorance of how interest rates are really set – a blind spot which is a precondition for being approved for the post of central banker these days. Ignored is the fact that central banks determine interest rates by creating credit. Under the ECB rules, central banks cannot do this. Yet that is precisely what central banks were created to do. European governments are obliged to borrow from commercial banks.

This financial stranglehold threatens either to break up Europe or to plunge it into the same kind of poverty that the EU is imposing on the Baltics. Latvia is the prime example. Despite a plunge of over 20 per cent in its GDP, its central bankers are running a budget surplus, in the hope of lowering wage rates. Public-sector wages have been driven down by over 30 per cent, and the government expresses the hope for yet further cuts – spreading to the private sector. Spending on hospitals, ambulance care and schooling has been drastically cut back.

What is missing from this argument? The cost of labor can be lowered by a classical restoration of progressive taxes and a tax shift back onto property – land and rentier income. Instead, the cost of living is to be raised, by shifting the tax burden further onto labor and off real estate and finance. The idea is for the economic surplus to be pledged for debt service.

In England, Ambrose Evans-Pritchard has described a “euro mutiny” against regressive fiscal policy. But it is more than that. Beyond merely shrinking the economy, the neoliberal aim is to change the shape of the trajectory along which Western civilization has been moving for the past two centuries. It is nothing less than to roll back Social Security and pensions for labor, health care, education and other public spending, to dismantle the social welfare state, the Progressive Era and even classical liberalism.

So we are witnessing a policy long in the planning, now being unleashed in a full-court press. The rentier interests, the vested interests that a century of Progressive Era, New Deal and kindred reforms sought to subordinate to the economy at large, are fighting back. And they are in control, with their own representatives in power – ironically, as Social Democrats and Labor party leaders, from President Obama here to President Papandreou in Greece and President Jose Luis Rodriguez Zapatero in Spain.

Having bided their time for the past few years the global predatory class is now making its move to “free” economies from the social philosophy long thought to have been irreversibly built into the economic system: Social Security and old-age pensions so that labor didn’t have to be paid higher wages to save for its own retirement; public education and health care to raise labor productivity; basic infrastructure spending to lower the costs of doing business; anti-monopoly price regulation to prevent prices from rising above the necessary costs of production; and central banking to stabilize economies by monetizing government deficits rather than forcing the economy to rely on commercial bank credit under conditions where property and income are collateralized to pay the interest-bearing debts, culminating in forfeitures as the logical culmination of the Miracle of Compound Interest.

This is the Junk Economics that financial lobbyists are trying to sell to voters: “Prosperity requires austerity.” “An independent central bank is the hallmark of democracy.” “Governments are just like families: they have to balance the budget.” “It is all the result of aging populations, not debt overload.” These are the oxymorons to which the world will be treated during the coming week in Toronto.

It is the rhetoric of fiscal and financial class war. The problem is that there is not enough economic surplus available to pay the financial sector on its bad loans while also paying pensions and social security. Something has to give. The commission is to provide a cover story for a revived Rubinomics, this time aimed not at the former Soviet Union but here at home. Its aim is to scale back Social Security while reviving George Bush’s aborted privatization plan to send FICA paycheck withholding into the stock market – that is, into the hands of money managers to stick into an array of junk financial packages designed to skim off labor’s savings.

So Obama is hypocritical in warning Europe not to go too far too fast to shrink its economy and squeeze out a rising army of the unemployed. His idea at home is to do the same thing. The strategy is to panic voters about the federal debt – panic them enough to oppose spending on the social programs designed to help them. The fiscal crisis is being blamed on demographic mathematics of an aging population – not on the exponentially soaring debt overhead, junk loans and massive financial fraud that the government is bailing out.

What really is causing the financial and fiscal squeeze, of course, is the fact that that government funding is now needed to compensate the financial sector for what promises to be year after year of losses as loans go bad in economies that are all loaned up and sinking into negative equity.

When politicians let the financial sector run the show, their natural preference is to turn the economy into a grab bag. And they usually come out ahead. That’s what the words “foreclosure,” “forfeiture” and “liquidate” mean – along with “sound money,” “business confidence” and the usual consequences, “debt deflation” and “debt peonage.”

Somebody must take a loss on the economy’s bad loans – and bankers want the economy to take the loss, to “save the financial system.” From the financial sector’s vantage point, the economy is to be managed to preserve bank liquidity, rather than the financial system run to serve the economy. Government social spending (on everything apart from bank bailouts and financial subsidies), disposable personal income are to be cut back to keep the debt overhead from being written down. Corporate cash flow is to be used to pay creditors, not employ more labor and make long-term capital investment.

The economy is to be sacrificed to subsidize the fantasy that debts can be paid, if only banks can be “made whole” to begin lending again – that is, to resume loading the economy down with even more debt, causing yet more intrusive debt deflation.

This is not the familiar old 19th-century class war of industrial employers against labor, although that is part of what is happening. It is above all a war of the financial sector against the “real” economy: industry as well as labor.

The underlying reality is indeed that pensions cannot be paid – at least, not paid out of financial gains. For the past fifty years the Western economies have indulged the fantasy of paying retirees out of purely financial gains (M-M’ as Marxists would put it), not out of an expanding economy (M-C-M’, employing labor to produce more output). The myth was that finance would take the form of productive loans to increase capital formation and hiring. The reality is that finance takes the form of debt – and gambling. Its gains were therefore made from the economy at large. They were extractive, not productive. Wealth at the rentier top of the economic pyramid shrank the base below. So something has to give. The question is, what form will the “give” take? And who will do the giving – and be the recipients?

The Greek government has been unwilling to tax the rich. So labor must make up the fiscal gap, by permitting its socialist government to cut back pensions, health care, education and other social spending – all to bail out the financial sector from an exponential growth that is impossible to realize in practice. The economy is being sacrificed to an impossible dream. Yet instead of blaming the problem on the exponential growth in bank claims that cannot be paid, bank lobbyists – and the G-20 politicians dependent on their campaign funding – are promoting the myth that the problem is demographic: an aging population expecting Social Security and employer pensions. Instead of paying these, governments are being told to use their taxing and credit-creating power to bail out the financial sector’s claims for payment.

Latvia has been held out as the poster child for what the EU is recommending for Greece and the other southern EU countries in trouble: Slashing public spending on education and health has reduced public-sector wages by 30 per cent, and they are still falling. Property prices have fallen by 70 percent – and homeowners and their extended family of co-signers are liable for the negative equity, plunging them into a life of debt peonage if they do not take the hint and emigrate.

The bizarre pretense for government budget cutbacks in the face of a post-bubble economic downturn is that the supposed aim is to rebuild “confidence.” It is as if fiscal self-destruction can instill confidence rather than prompting investors to flee the euro. The logic seems to be the familiar old class war, rolling back the clock to the hard-line tax philosophy of a bygone era – rolling back Social Security and public pensions, rolling back public spending on education and other basic needs, and above all, increasing unemployment to drive down wage levels. This was made explicit by Latvia’s central bank – which EU central bankers hold up as a “model” of economic shrinkage for other countries to follow.

It is a self-destructive logic. Exacerbating the economic downturn will reduce tax revenues, making budget deficits even worse in a declining spiral. Latvia’s experience shows that the response to economic shrinkage is emigration of skilled labor and capital flight. Europe’s policy of planned economic shrinkage in fact controverts the prime assumption of political and economic textbooks: the axiom that voters act in their self-interest, and that economies choose to grow, not to destroy themselves. Today, European democracies – and even the Social Democratic, Socialist and labour Parties – are running for office on a fiscal and financial policy platform that opposes the interests of most voters, and even industry.

The explanation, of course, is that today’s economic planning is not being done by elected representatives. Planning authority has been relinquished to the hands of “independent” central banks, which in turn act as the lobbyists for commercial banks selling their product – debt. From the central bank’s vantage point, the “economic problem” is how to keep commercial banks and other financial institutions solvent in a post-bubble economy. How can they get paid for debts that are beyond the ability of many people to pay, in an environment of rising defaults?

The answer is that creditors can get paid only at the economy’s expense. The remaining economic surplus must go to them, not to capital investment, employment or social spending.

This is the problem with the financial view. It is short-term – and predatory. Given a choice between operating the banks to promote the economy, or running the economy to benefit the banks, bankers always will choose the latter alternative. And so will the politicians they support.

Governments need huge sums to bail out the banks from their bad loans. But they cannot borrow more, because of the debt squeeze. So the bad-debt loss must be passed onto labor and industry. The cover story is that government bailouts will permit the banks to start lending again, to reflate the Bubble Economy’s Ponzi-borrowing. But there is already too much negative equity and there is no leeway left to restart the bubble. Economies are all “loaned up.” Real estate rents, corporate cash flow and public taxing power cannot support further borrowing – no matter how wealth the government gives to banks. Asset prices have plunged into negative equity territory. Debt deflation is shrinking markets, corporate profits and cash flow. The Miracle of Compound Interest dynamic has culminated in defaults, reflecting the inability of debtors to sustain the exponential rise in carrying charges that “financial solvency” requires.

If the financial sector can be rescued only by cutting back social spending on Social Security, health care and education, bolstered by more privatization sell-offs, is it worth the price? To sacrifice the economy in this way would violate most peoples’ social values of equity and fairness rooted deep in Enlightenment philosophy.

That is the political problem: How can bankers persuade voters to approve this under a democratic system? It is necessary to orchestrate and manage their perceptions. Their poverty must be portrayed as desirable – as a step toward future prosperity. ( In Italy they call it 'DECRESCITA FELICE'. Morons.)

A half-century of failed IMF austerity plans imposed on hapless Third World debtors should have dispelled forever the idea that the way to prosperity is via austerity. The ground has been paved for this attitude by a generation of purging the academic curriculum of knowledge that there ever was an alternative economic philosophy to that sponsored by the rentier Counter-Enlightenment. Classical value and price theory reflected John Locke’s labor theory of property: A person’s wealth should be what he or she creates with their own labor and enterprise, not by insider dealing or special privilege.

This is why I say that Europe is dying. If its trajectory is not changed, the EU must succumb to a financial coup d’êtat rolling back the past three centuries of Enlightenment social philosophy. The question is whether a break-up is now the only way to recover its social democratic ideals from the banks that have taken over its central planning organs.

I am more optimistic than Michael on Europe. There will be short-term pain, workers will be squeezed, but longer-term, if Europe survives this crisis, these reforms will put it back on solid footing for many years to come. This doesn't mean the Euro can't go lower (I think it will), but I feel that doomsayers are premature pronouncing Europe's death.

Of course, if the G20 only focuses on austerity measures and ignores growth and how to tackle long-term structural problems like high unemployment, then the world economy will slip into a protracted deflationary death spiral.

Finally, take the time to watch Bloomberg's interview with Rod Smyth, chief investment strategist at Riverfront Investment Group and Richard Regan of Protradingcourse.com (click here to watch). Below, RT's Anissa Naouai interviews Ella Kokotsis to get her take on what we can expect from this weekend's meeting.