If you've been reading this blog for any time at all, you undoubtedly realize the passion I feel when it comes to our disappearing democracy. I've pretty much summed up the fundamental reason for most, if not all, of the problems that paralyze this republic. I've pointed out, adequately I hope, and have inferred that no matter the size of government, the same secretive and underlying manipulators will still control the reins of government.
Two years ago, Bloomberg News dropped a bombshell about how the American taxpayer, through Federal Reserve lending programs and guarantees, was being placed in the unenviable position of being the underwriter for over $9 trillion...yes, that's TRILLION...to the largest banks, investment houses, and multinational corporations in the world. Keep in mind, only the $787 billion stimulus legislation that became law early in 2009, the $700 billion Troubled Asset Relief Program (TARP) signed into law in October of 2008, and the $168 billion in tax cuts and rebates enacted in early 2008 had been voted on by congress to that point.
These trillions of dollars were "off balance sheet" transactions. Where the money went, exactly to whom, for what, and with what assets held as collateral, remains a mystery to this day, at least to the public, and at least to then-U.S. Congressman Allan Grayson. At a hearing early last May, Federal Reserve Inspector General Elizabeth Coleman was questioned during testimony to account for the $9 trillion in off-balance sheet transactions (which comes to approximately $30,000 for each man, woman and child in the U.S.). After a lot of dancing and hemming-and-hawing, she answered that no one at the Federal Reserve knows or is keeping track of where the money has gone.
As Senator Bernie Sanders mentioned in an article early in December, "...the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed."
The great giveaway didn't end there. Prior to January 21, 2009, the day the current administration took over the "official" reigns of government, special loans and dispensation to other non-bank multinational corporations peaked at $348.2 billion. Among the beneficiaries were Toyota Motor Corp. ($4.6 billion), Harley-Davidson Inc. ($2.3 billion) and Verizon Communications Inc. ($1.5 billion). General Electric Company used the Fed as its own revolving charge account, tapping the Fed a dozen times ($16.1 billion). Supposedly, in its scramble to keep the economy from collapsing, the Fed created the Commercial Paper Funding Facility, or CPFF, which tried to ensure that banks and industrial companies had the short-term loans they needed to fund everyday operations. GE was the biggest recipient.
Bloomberg News brought a lawsuit against the Board of Governors of the Federal Reserve System to force the Board to reveal the identities of firms for which it has provided guarantees and won at the trial level. The Fed appealed the decision, and on August 27, 2010, the U.S. Court of Appeals agreed to delay implementation of the ruling until Oct. 19 so that the Fed may appeal to the Supreme Court. Given the composition of the current high court, specifically the Gang of Five right-wing judicial outlaws who gave corporations unlimited influence over our elections just over one year ago, it's almost a sure bet that Bloomberg News will be on the losing end when a decision is handed down. As of today, a court date has not been scheduled.
But the fun didn't end there. Between October 27, 2008 and August 6, 2009 (well into the Obama "watch") the Fed spent $350 billion in taxpayer funds to save thirty-five foreign banks and multinational corporations. The thirty-five were UBS, Dexia SA, BNP Paribas, Barclays PLC, Royal Bank of Scotland Group, Commerzbank AG, Danske Bank A/S, ING Groep NV, WestLB, Handelsbanken, Deutsche Post AG, Erste Group Bank AG, NordLB, Free State of Bavaria, KBC, HSH Nordbank AG, Unicredit, HSBC Holdings PLC, DZ Bank AG, Republic of Korea Rabobank, Sumitomo Mitsui Banking Corporation, Banco Espirito Santo SA, Bank of Nova Scotia, Mizuho Corporate Bank, Ltd., Syngenta AG, Mitsui & Co Ltd., Bank of Montreal, Caixa Geral de Depósitos, Mitsubishi UFJ Financial Group, Shinhan Financial Group Co Ltd., Mitsubishi Corporation, Aegon NV, Royal Bank of Canada, and last, but not least, Sumitomo Corporation. Amazing, huh? Is there something wrong with this picture? The fact that our central bank -- supposedly having the power and chosen role to do so -- doled out billions of dollars to foreign banking institutions, is not only unconstitutional but may also be treasonous.
So the question, the "$9 trillion dollar question" to be exact, remains: Where did the money go, and why? What power, instilled by We the people, gave the Federal Reserve the right to loan and guarantee loans to...well, most of the largest banking institutions worldwide? And finally, the question needs to be asked: Who benefited? It certainly wasn't Main Street, U.S.A., was it? We, the People, ultimately came up the biggest loser.
Why do the American people, time and time again, allow themselves to be taken for the collective fool? Why is it, while tens-of-thousands have taken to the streets of major cities of Greece and France to protest government-imposed austerity programs, the real looters steal away virtually in the daylight, and while the cauldrons of revolution boil over in places such as Tunisia and Egypt, the American people continue to sit on their hands and hope...and pray...that a better day will be just down the road? Is our mindset so colonized, so propagandized, that we can't discern what is happening right in front of us?
Matt Taibbi explained it best in a piece about our peasant mentality: "You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger. And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish . . . can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters!" Mr. Taibbi's right.
Today, during the 202nd birthday celebration of probably this country's finest president, we're reminded of just how great a leader Abraham Lincoln was. He warned us about the reign of corporate power and the corruption in high places that would follow, and he correctly saw that the moneyed interests would perpetuate its reign by working upon the prejudices of the people, fleecing our treasure and stealing our republic. Chris Hedges, in last Sunday's column articulating the way empire thrives and prospers, said "All centralized power, once restraints and regulations are abolished, once it is no longer accountable to citizens, knows no limit to internal and external plunder. The corporate state, which has emasculated our government, is creating a new form of feudalism, a world of masters and serfs. It speaks to those who remain in a state of self-delusion in the comforting and familiar language of liberty, freedom, prosperity and electoral democracy."
Mr. Lincoln foretold all this, and it's my opinion that's the true reason he lost his life to a "lone assassin's" bullet. Those in position, who stand for We the People, who speak out against corporate power and domination, all too frequently do.
14 comments:
What a deal. We seen the global monstrosity form in the 90's and this Tea party dances around like its taking on the beast. One of the problems with reducing the effects of globalism is: Evangelicals. The Evangelicals: that see it as a sign of the end-times--along with Israel rallying - we seen this used successfully by the neoconservatives against us paleos in the 90's... When there was still an actual culture war.
Whitey, I'll agree with you -- the Tea Party certainly dances, and they dance with conviction, but they're sorely out of step and stepping on a lot of toes. Unfortunately, they're challenging the orchestra and demanding chamber music, while the conductor is in the coat closet stealing their valuables.
In other words, they're barking up the wrong tree. It's not "big government, per se, that is the problem; it's our government's close partnership with big business, to the exclusion of We the People, that's robbing us of our democratic processes and destroying our middle and working classes. We're being robbed, in broad daylight, and nobody is stopping it from happening.
Thanks for your comment.
The American people don't stand up or revolt because the government has given us enough rope to hang ourselves. Who wants to stand outside in the cold on the hard ground when you can eat at McDonalds for a buck, buy a Lazy Boy recliner on credit and get you some mindless cable television shows...
So true, Salsa, so true. But one has to wonder what's going to happen when those Big Mac's suddenly jump to $6, the credit dries up, and the grid goes down and takes everyone's "bread & circuses" along with it.
Revolutions tend to occur at the most inopportune and unexpected time. Certainly nobody saw the events in Wisconsin coming. If the current trends continue, and there's no reason to believe they won't, we'll have a large and permanent unemployed underclass that I'm guessing will not want to stay that way very long.
Thanks for visiting No Corporate Rule, and a very special thanks for offering your thoughts. It's much appreciated!
Hello JG, Didn't know you had a blog until I read mention of it in The Rant. I’m with you, I think, on CP. I believe corporations are important but rights should be limited. A constitutional amendment would be great. Unfortunately, given the make up of Congress I shudder to think what it would look like, sort of a damned if you do and damned if you don’t situation. Specifically, what would you propose?
You might want to check out the Feds website. They make a valiant effort of justifying their activities. http://www.federalreserve.gov/newsevents/reform_transaction.htm I understand why they did what they did and don’t necessarily agree, that most of the money has been returned, and most loans were supposedly collateralized, some probably toxic. I don’t know about “off the balance sheet transactions”, or even how you can do such a thing. Perhaps that was what the CPFF was for. It all sounds rather fishy, but then I’m not an economist.
I read through most of your pieces and found them informative. I am looking forward to the outcome of the United Citizens case. I was sick when I heard the decision last January.
Keep writing!
Joel
I'm not sure, totally, what the answer is, but the first order of business should be a constitutional amendment to eliminate corporate personhood. And I agree, what form that would take is anybody's guess. I'll be offering other ideas and suggestions in future posts.
As a side note, the 14th Amendment, which as you know was added to give full citizenship and personhood status to African Americans, was instead hijacked and used exponentially more to grant personhood status to corporations. Also, during the framing of the Constitution, Thomas Jefferson wanted language inserted into the Bill of Rights that would have restricted corporations being added to the document. Unfortunately, his ideas didn't make the final cut.
Whatever form, or how ever this goes, we certainly have our work cut out for us.
Thanks for commenting, Joel! It's been a long time since I've seen you on The Rant (as Joel).
This has been buried by the MSM, and no politician ever refers to it (other than Grayson and Sanders). We're told that we have to sacrifice and "tighten our belts", but that never applies to the financial elite, corporate "persons", or our illustrious millionaire legislators.
And most citizens seemed to have stopped asking tough questions and demanding actual answers - gawd knows the press gave up doing so long ago.
Anna, every point you make is, unfortunately, true. With what's happening in the economy, austerity programs looming on the the horizon, and a congress that's hell-bent on cutting spending during a time when stimulus spending is really what's needed, one thing's very apparent to me concerning the coming year; December will look very different than this past January.
(I know, I know, I've said this before. My timing was just off.)
JG, I’ve been reading The Rant but don’t generally comment. I always sign my name when I do. It’s just easier to click Anonymous, although I did leave a quote once as John Adams. Comments left on Tom’s blog are too combative for me and while I have on occasion, it’s hard to get into. People always gravitate to extremes and fail to realize that everything is like a bell curve, real good and real bad, and then the middle. His latest post is a perfect example. Not to spill over his to your space, but unions do have bad points. Anonymous 2:12 said “The people in the private sector, whose income and benefits go up and down with the economy, are SICK AND TIRED of seeing their tax money go to the government unions who expect lifetime jobs, top notch benefits, and NO ACCOUNTABLITY FOR WHAT THEY PRODUCE!” This is a valid statement and feeling a result of private sector benefits not keeping pace with government, and driven by companies being able to compete in a global economy and improving the bottom line (some would say greed, which is partly true). Both of my parents were in unions and more than most, I recognize the importance of them. But I think people may be missing the bigger picture. It is the loss of jobs to China and other developing countries that is killing the middle class. We practice our free market with unions and the developing countries don’t. We don’t get fair treatment in China, they steal intellectual property, and their people are exploited. Until they start treating us fairly, and the Chinese people wake up and demand better treatment (a Chinese middle class), it is going to be a tough road for the middle class here. The loss of union strength is troubling but in the long run isn’t the main issue.
Joel
Joel, I'm a great believer in the bell curve myself, and agree that a normal distribution is most observable in nature, natural events, and essentially any large populations, and is "normal" (expected). But when a normal distribution is heavily skewed toward one end or the other (i.e. more than a few standard deviations) from the mean, than something is inherently wrong with the data, or, there are very exceptional circumstances.
Check out these data from various sources regarding income distribution in America today, as compared to just a few decades ago. The skewed tail of the upper income levels tell me there's something definitely wrong in America today!
Concerning unions, yes, there are some "bad points" as you say. Nothing's perfect in this physical world, either, and unions are no exception. They do have their faults, and they do invite corruption. But, and I know you'll agree, modern unions would never have evolved were it not for the power and domination of capital and corporate power. Unions were (and are) a reaction to an oppressive economic system that looked upon workers...human beings...as nothing but another factor in the production of goods and/or services. Certainly what we're going through today isn't the result of only recent developments, understandably, but is rather the unfortunate consequence of the systematic dismantling of our manufacturing base over the last thirty or thirty-five years. It took us this long to get to this point. Regrettably, it may take just as long to climb out of this hole we've collectively dug for ourselves.
This is very informative. I'm working on a small economics project that's due next week and some of this info has been helpful. We're supposed to form our own opinions about some scenarios based on what we have learned so far this semester. I know that you mentioned learning Paul Krugman's philosophy on economics on "The Rant" and that's actually who wrote the book we are using in my class.
I certainly agree with you regarding the evolution of unions and our manufacturing base.
I took a look at the provided link. What is particularly telling is the graph showing share of federal tax revenue. The payroll tax and individual income tax lines come together. This means that the overall average individual income tax rate is about 15%. If you take a look at the statutory rates vs effective rates you’ll notice that there is really little difference in the marginal rates once social security and Medicare taxes are factored in. Assuming a married filing joint with a family of four, the effective rates are actually between 26 and 32% at the high end. Once you factor in property taxes and the other taxes most people don’t think about, and the tax advantages that seem to apply only to the wealthy, the real effective rate for the middle and lower end of the income spectrum is much higher than for the wealthy wage earner. This doesn’t even factor in the low investment tax rate. So, how is it that the average individual tax rate is only 15%?; probably due to the ridiculously low investment tax of 15% among other tax advantages the wealthy enjoy, and not so much the statutory rates that everyone focuses on from the Bush tax cuts. The investment rate approached 40% in the early 80’s.
The loss of wealth in the bottom 90% is, in small part, due to their own greed and trying to keep up with the Jones’s. Rather than living modestly, and investing the modest tax savings in bonds or dividend paying stocks received as part of Reaganomics, they spent it on crap from China, buying larger homes than necessary and foolish investments trying to make it “big”. Granted, real income for the middle and lower ends has dropped, and Reaganomics was a shame, but this is still a factor.
The biggest factor is the drastic reduction in the investment tax to 15%. The idea was to spur investment, and it did just that. The people with more wealth than they needed had no other place than large corporations to park their money, whether in the form of bonds or stocks. It’s easy to see if you look at a graph of the S&P500 which took off in the 80’s, as did the price to book ratios. The price of stock in S&P500 companies is running around 2.4 x book value, some would say overvalued and headed for a fall. At the beginning of the 80’s it was roughly half of that. The worst part is that our beloved corporations are in most cases paying pitiful dividends, if any at all. So, even if you invest in these companies, the only return you may get is in the form of capital gains, which is what too many people are counting on. So, the mega-investor class is sort of in a spot as well, albeit not like the average guy.
Once our esteemed legislators come to grip with the fact they have to raise the investment tax, the market is going to drop and there goes whatever gains people were expecting to make it big. I don’t pretend to understand corporate taxes, but rather than always reinvesting and avoiding taxes, corporations either have to return a certain percentage of earnings to shareholders, and taxed, or be taxed on them as corporate profit.
It does seem to always circle back to corporations, doesn’t it?
I don’t have a take from the rich and redistribute wealth philosophy. I believe everyone should pay their fair share. But the current tax structure and tax treatment of corporations is insane.
Joel
Jefferson's Guardian,
Keep up the good work. When I see your posts showing material from Bernie Sanders and Allan Grayson, I know I am amongst kindred spirits.
It won't be long till No Corporate Rule gets more hits and comments than The Rant. Your blog layout is much better and there is less hostility here.
We must fight the good fight in Wisconsin and not backdown from our collective bargaining rights!
Saul, you're very kind. Thank you for the compliment. It's much appreciated. Really.
To be honest, I'm not looking for "hits" and popularity. I just look at this blog as a means to convey how I see things in this crazy country, and maybe, just maybe, others will sense that "ah-ha!" moment like I did a few years ago. I'm searching for truth and understanding, and hoping others who come to this blog are in a quest to do the same.
We have a long and uphill fight ahead of us, 'cause as you know, right now "truth", and doing the right thing, is all we can stand by. Hopefully they'll run out of money, and truth will be left standing.
Thanks, again, Saul. Please come back and visit any time!
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