Category Archives: Politics

Who buys US bonds when foreign countries and investors won’t?

Answer: The Federal Reserve

Question: Where does the Fed get the money to buy the bonds?

Answer: It creates it.

That’s right, the Fed has no money, but the Congress long ago empowered the Federal Reserve Bank to create money by buying government (and other) securities. This is known as “monetizing the debt,” which amounts to nothing more than “legalized” counterfeiting of dollars, and it has the same results as the injection of any other form of counterfeit money—the dilution of purchasing power of all the dollars already in circulation and the erosion of the value of all dollar-denominated assets.

Currency inflation must ultimately result in price inflation as those empty dollars (based on empty promises) work their way through the economy. Further, as those Fed-created dollars get deposited in banks, the banks are able to multiply their lending on the basis of these new “reserves.”

In an opinion article that appeared in the Wall Street Journal last Wednesday, a former Treasury official says that:

“The recently released Federal Reserve Flow of Funds report for all of 2011 reveals that Federal Reserve purchases of Treasury debt mask reduced demand for U.S. sovereign obligations. Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis.”

You might consider that to be a stealthy form of “quantitative easing.”

You can find out more about that, along with some pretty good analysis in an article that appears on the Money News website.

European Quality of Life: Is that really Socialism?

Watch this CBS report on the Greanville Post website:

 

The inexorable march toward tyranny and the end of the American Republic

It did not begin with Obama, and it will not end with him, it is a course that has been maintained by all administrations, Democrat and Republican, over many decades, but it is now approaching a climax. It’s all about control—centralized control, which leaves no room for popular participation or democratic government. The oligarchs who control the United States government (along with most of the global power structure) will do whatever it takes to assure “full-spectrum dominance” in their own hands.

Now, as they beat the drums for a war against Iran which they seem determined to have, a war which the majority of Americans are opposed to, they are putting us on notice that everything we think we own belongs to them and will be used to further their agenda. Through a series of legislative acts and executive orders, they have given themselves the “legal” cover for increasingly intrusive and heavy-handed actions to deal with public opposition. The article below from the Washington Times describes the latest of these. Although the author seems confused in his characterization of the kind of government we now have (National Socialism, ala Hitler’s Germany, seems to be most apt), his basic argument is compelling.

I also recommend that everyone read Naomi Klein’s book, The Shock Doctrine: The Rise of Disaster Capitalism.—t.h.g.

Obama’s power grab

Executive order expands presidential prerogative

By Jeffrey T. Kuhner  –  The Washington Times  Thursday, March 22, 2012

President Obama has given himself the powers to declare martial law – especially in the event of a war with Iran. It is a sweeping power grab that should worry every American.

On March 16, the White House released an executive order, “National Defense Resources Preparedness.” The document is stunning in its audacity and a flagrant violation of the Constitution. It states that, in case of a war or national emergency, the federal government has the authority to take over almost every aspect of American society. Food, livestock, farming equipment, manufacturing, industry, energy, transportation, hospitals, health care facilities, water resources, defense and construction – all of it could fall under the full control of Mr. Obama. The order empowers the president to dispense these vast resources as he sees fit during a national crisis.

“The United States must have an industrial and technological base capable of meeting national defense requirements and capable of contributing to the technological superiority of its national defense equipment in peacetime and in times of national emergency,” the order says. “The domestic industrial and technological base is the foundation for national defense preparedness. The authorities provided in the act shall be used to strengthen this base and to ensure it is capable of responding to the national defense needs of the United States.”

In short, the order gives Mr. Obama the ability to impose martial law. He now possesses the potential powers of a dictator. The order is a direct assault on individual liberties, private property rights and the rule of law. It is blatantly unconstitutional. The executive branch is arrogating responsibilities precluded by the Constitution without even asking the permission of Congress. The order gives Mr. Obama a blank check to erect a centralized authoritarian state. This is a law one would expect to find in Hugo Chavez’s Venezuela or Vladimir Putin’s Russia.

The backdrop to the executive order is the looming showdown with Iran. The administration says the “window for diplomacy is closing.” Defense Secretary Leon E. Panetta warned Tehran’s mullahs that “all options are on the table” – including military intervention. Mr. Obama stresses that his patience is running out. He vows that Iran will not acquire the bomb. Mr. Obama wants several more months for sanctions and international isolation to bring the ayatollahs to heel. Yet the signals are clear: Mr. Obama may be ready to launch devastating airstrikes on Iranian nuclear facilities.

If that should happen, Iranian President Mahmoud Ahmadinejad has promised massive retaliation. American troops will be targeted by Iranian proxies in Iraq and Afghanistan. American embassies will be struck across the Middle East and North Africa. Most ominously, Iranian-backed Hezbollah cells could launch devastating terrorist attacks in major U.S. cities, killing numerous citizens. The war may well come home, triggering domestic chaos. These are the very real risks of a major conflict with Iran.

Which begs the question: Would that tempt Mr. Obama to claim a state of emergency and thereby implement his executive order? No one knows the answer. And we shouldn’t have to find out. The president does not – and should not – have the authority to subordinate the entire private economy to the government, especially without the consent of Congress and the American people. It is national socialism masquerading as military security.

This is why conservatives – those who are serious about defending our constitutional republic – should demand that the executive order be repealed immediately. Liberals argue that President Clinton issued a nearly identical mandate. President Franklin D. Roosevelt signed the first national defense resources preparedness order, which has been amended by successive presidents, including George W. Bush. Hence, according to the progressive left, if it was good enough for FDR, Mr. Clinton and Mr. Bush, why not Mr. Obama?

The answer is simple: Because the Constitution matters – or at least it should. For more than 70 years, liberal Democrats and corporatist Republicans have been slowly dismantling the old republic, imposing a creeping social democracy. The Founding Fathers’ vision of limited government and federalism has been replaced by a new ruling class. FDR, Mr. Clinton, Mr. Bush – all of them were militarists expanding the size and scope of government. They were Wilsonian globalists, and they shamelessly violated civil liberties. FDR was the worst, by forcing Japanese-Americans into internment camps.

Mr. Obama’s executive order represents the culmination of the welfare-warfare state. He is walking in the footsteps of his predecessors, those who enabled the rise of the imperial presidency. And it leads to only one tragic end: the gradual deterioration of our democracy.

Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute.

Small entrepreneurs differ from Big Business

We should not confuse capitalism and corporatism with “free markets,” which I hope will always be with us, nor should we believe that mega-corporations are the same as “Mom and Pop” enterprises. The corporate “wolves” that are intent on centralizing power like to masquerade as entrepreneurial “sheep” so that they can dominate markets and eliminate competition. We must not be deceived by that, nor should we perpetuate that illusion. A recent poll shows that small business owners do not have the same attitudes toward regulation and taxation as big business executives. Here is a report from the Greenville News.–t.h.g.

Poll: Small business owners’ opinions differ from big business concerns

By Jenny Munro
Greenville News (SC), February 9, 2012

Columbia, SC—A national poll shows the opinions of small business owners differ dramatically from the advocacy of big businesses and multinational corporations.  The results of the national scientific poll were released over the past four weeks by the American Sustainable Business Council, Main Street Alliance and Small Business Majority.  The poll was conducted by Lake Research Partners between December 8, 2011 and January 4, 2012.

”Many of the real opinions of small business owners are far different than what are portrayed by big business interests,” said Frank Knapp, Jr., Vice Chair of the American Sustainable Business Council and President/CEO of the South Carolina Small Business Chamber of Commerce.

“There are some real ‘man-bites-dog’ stories here that are particularly amazing since half of the respondents self-identified as either Republican or leaning Republican,” said Knapp.

“Small business owners do not hate regulations,” said Knapp.  “They support regulations ensuring clean air and water and those moving the country toward energy efficiency and clean energy.  And regulations are not stopping hiring as we’ve been hearing—lack of consumer demand is doing that.  In fact, small business owners view regulations as protecting them from big business.”

“Small business owners also don’t agree with the big business mantra on taxation,” said Knapp.  “They say that big businesses and multinational corporations use loopholes to avoid paying their fair share of taxes which harms small businesses.  A majority of these owners also support higher tax rates on individual income over $1 million, even $250,000.”

“These opinions fly in the face of the rhetoric about not raising taxes on the wealthiest because they are the ‘job creators’”, said Knapp.  “Small businesses are leading the job recovery in this country and they believe the wealthiest corporations and individuals are not paying their fair share of taxes.”

“On other issues small business owners share the public’s disgust with money in politics and disapprove of the Supreme Court’s Citizens United decision,” said Knapp. “Citizens United has unleashed massive amount of money from big corporations and millionaires and billionaires into political campaigns.  Small businesses believed they have been harmed because of this.”

Below are details of the poll results:

  • Small business owners see their top problem as weak customer demand, not regulations: 34 percent cited weak customer demand as the most important problem for their business, while only 14 percent named government regulations.
  • On the question of what would do the most to create jobs, cutting regulations came in low on the list: the top response was eliminating incentives to move jobs overseas at 24 percent; reducing regulation was fifth at 10 percent.
  • Small business owners see an important role for standards and safeguards: 78 percent believe some standards are important to protect small businesses from unfair competition, and 76 percent believe regulations on the books should be enforced.
  • Small business owners see regulations as necessary for a modern economy: 93 percent agree their business can live with some regulation if it is fair, manageable and reasonable.
  • Small business owners express strong support for specific rules and standards: 78 percent support rules to prevent health insurance companies from increasing rates excessively, 84 percent support food safety standards, 80 percent support product safety standards and 80 percent support disclosure and regulation of toxic materials.
  • Small business owners support clean energy policies: 79 percent support ensuring clean air and water, and 61 percent support moving the country towards energy efficiency and clean energy.
  • Small businesses believe in streamlining government processes: 73 percent of respondents believe we should allow for one-stop electronic filing of government paperwork.
  • Nine out of ten small business owners say big corporations use loopholes to avoid taxes that small businesses have to pay: 92 percent say big corporations’ use of such loopholes is a problem. Three-quarters of owners say their small business is harmed when loopholes allow big corporations to avoid taxes.
  • Nine out of ten small business owners say that U.S. multinational corporations’ use of accounting loopholes to shift their U.S. profits to their offshore subsidiaries to avoid taxes is a problem: 91 percent agree it is a problem, with 55 percent saying it’s a very serious problem. When asked what would do the most to create jobs, small business owners chose eliminating incentives to move jobs overseas.
  • Small business owners say big corporations are not paying their fair share of taxes: 67 percent believe big corporations pay less than their fair share. An even bigger majority, 73 percent, says multinational corporations pay less than their fair share.
  • Small business owners say millionaires pay less than their fair share in taxes: 58 percent say households whose annual income exceeds $1 million pay less than their fair share.
  • Small business owners support a higher tax rate for individuals earning more than $1 million: 57 percent agree that individuals earning more than $1 million a year should pay a higher tax rate on the income over $1 million.
  • Small business owners want to eliminate the “carried interest” loophole that gives hedge fund managers a big break on their taxes: 81 percent favor hedge fund managers paying taxes at the ordinary income tax rate, which currently tops out at 35 percent, rather than the 15 percent capital gains rate they pay now.
  • Small business owners support ending upper-income tax cuts: 51 percent say Congress should let tax cuts on taxable household income over $250,000 a year expire (only 40 percent believe they should be extended).
  • Respondents in this scientific national survey were politically diverse, with a majority Republican or independent-leaning Republican: 50 percent identified as Republican (27 percent) or independent-leaning Republican (23 percent); 32 percent as Democrat (14 percent) or independent-leaning Democratic (18 percent); and 15 percent as independent.
  • Small business owners say Citizens United decision hurts small businesses:  66 percent of small business owners view Citizens United v. FEC decision as bad for small businesses; 88 percent hold negative view of money in politics overall.

Read the full poll reports at these links:

http://www.asbcouncil.org/poll_regulations.html

http://www.asbcouncil.org/uploads/Taxes_Poll_Report_FINAL.pdf

http://www.asbcouncil.org/poll_money_in_politics.html

http://www.asbcouncil.org/poll_access_to_credit.html

Copyright 2012 Greenville News and Poll Reports

Toward a sane economics

This TEDx video by Peter Joseph, creator of the Zeitgeist movies series, contrasts two opposing economic frameworks that need to be considered in transcending our present global predicament. He shows that the entire incentive structure of the dominant paradigm of political economy is all wrong, and outlines some of the necessary attributes of a sustainable earth-friendly economy.

The presentation does not get into the how-to-do-it, but provides a good starting point for working out the necessary transition to what I’ve been calling “The Butterfly Economy. My basic prescription for that involves radical sharing, collaboration, restructuring, and rebuilding our society from the bottom, on up, household to neighborhood, to community, to bioregion, including all of our non-geographic affinity groups. Begin with the people and businesses you already know and trust.

Please take ten minutes to view the video.

History, people power, and practical education

The late progressive historian Howard Zinn is best known for his landmark book, A People’s History of the United States, which has been widely acclaimed and exposes to the light the “ceaseless conflict between elites and the masses whom they oppress and exploit.” Here’s an official description:

A classic since its original landmark publication in 1980, Howard Zinn’s A People’s History of the United States is the first scholarly work to tell America’s story from the bottom up—from the point of view of, and in the words of, America’s women, factory workers, African Americans, Native Americans, working poor, and immigrant laborers. From Columbus to the Revolution to slavery and the Civil War—from World War II to the election of George W. Bush and the “War on Terror”—A People’s History of the United States is an important and necessary contribution to a complete and balanced understanding of American history.

Reviews can be found at Amazon.com. The book is widely available and can now be viewed online at http://www.historyisaweapon.com/zinnapeopleshistory.html.

A few days ago, someone sent me a link to a TED talk in which Sanjit “Bunker” Roy describes the “Barefoot College, which is he founded. He tells a story that is both inspiring and informative, a model of what can be achieved when ordinary people share what they know and how communities can become more self-sufficient. You can view it here.

Treasury Secretary Geithner facing possible indictment

Here is a rather astonishing report from Fox news about the possible indictment of Treasury Secretary Tim Geithner. Is this an indication that the oligarchy is beginning to crumble, or will the powers that be simply make him the sacrificial lamb so they can continue their fraud and  tighten their grip on power?

The Occupy Movement Needs a Grand Strategy

As the Occupy movement matures, it will need to clarify its overall objectives and develop a grand strategy for achieving them. It will perhaps find guidance in the work of Dr. Gene Sharp.

Gene Sharp is widely regard as “the world’s foremost expert on non-violent revolution,” but few people have ever heard of him. His book, From Dictatorship to Democracy: A Conceptual Framework for Liberation (1993), has reportedly been translated into more than 30 languages, and can be freely downloaded from the web. He has recently been written up by Thom Hartman (Gene Sharp’s Peaceful Revolution Techniques) and the BBC (Gene Sharp: Author of the nonviolent revolution rulebook).

Sharp’s book provides a large arsenal of “non-violent weapons.” Here is some of his advice:

  • Develop a strategy for winning freedom and a vision of the society you want
  • Overcome fear by small acts of resistance
  • Use colours and symbols to demonstrate unity of resistance
  • Learn from historical examples of the successes of non-violent movements
  • Use non-violent “weapons”
  • Identify the dictatorship’s pillars of support and develop a strategy for undermining each
  • Use oppressive or brutal acts by the regime as a recruiting tool for your movement
  • Isolate or remove from the movement people who use or advocate violence

 

No more Freedom Watch on Fox News-Judge Napolitano fired

Judge Andrew Napolitano has been a champion for freedom and the Constitution, and an outspoken critic of the government which has far overstepped its bounds. That seems to have been too much for the oligarchs and their corporate minions at Fox News. Watch this video.

 

The Occupy movement at risk from violent protesters

In a previous post (Who Will occupy Whom? A Warning for OWS) I warned about threats to the occupy movement and suggested a general strategy for achieving popular empowerment, peace, justice, and personal freedom. That post was prompted by, and included, an insightful article by Richard K. Moore. This one is stimulated by an article by Chris Hedges that highlights a more immediate threat that has recently developed in Oakland and elsewhere. That threat appears in the form of violent mob action that goes under the rubric of The Black Bloc. According to Wikipedia, “The Black Bloc is sometimes incorrectly reported as being the name of a specific anarchist group. It is, rather, a tactic that may be adopted by groups of various motivations and methods.” Those methods include violent confrontation with authority and destruction of property, tactics that play right into the hands of domineering oligarchs intent of preserving their privilege and hold on power. No doubt, the actions of many Black Bloc protesters are motivated by their ardently held, though misguided, ideology, but it seems likely that there are among their leadership agents provocateur who are intent on helping to maintain the present power structure by discrediting any opposition to it.

The media have generally characterized these anarchist actions as being part of the Occupy movement, but as Chris Hedges points out in his article, The Cancer in Occupy, The Black Bloc is no friend to the Occupy movement which began as peaceful expressions of discontent with the status quo, and is hopefully maturing into a progressive movement toward popular empowerment. Hedges calls the Black Bloc anarchists “the cancer of the Occupy movement,” and I’m inclined to agree. One feature of the Black Bloc protesters, and the basis for the name, is that they dress in black clothing and use ski masks, scarves, sun glasses, and other means to obscure their faces. But anonymity and concealment are antithetical to civil society and are more likely to enable criminal and anti-social activity rather than protection for the legitimate assertion of people’s rights.

Any movement will eventually develop factions that diverge on the basis of philosophy, goals, strategies and tactics. The mainstream of the Occupy movement must find ways to distance itself from such groups and tactics because, as Hedges points out, “Once the Occupy movement is painted as a flag-burning, rock-throwing, angry mob we are finished. If we become isolated we can be crushed.” One way to preserve the legitimacy of the movement is to insist on openness and transparency. If that can be expressed strongly enough, it might preserve in the public mind the identity of Occupy as a benign and creative force.

I believe that the ends are inherent in the means and that, “we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.” (Ephesians 6:12, KJV). The Occupy movement must move toward disciplined organization and employ tactics that are at once compassionate and effective, tactics that even progressives who work within the establishment can embrace. It must be a form of organization that relies not on power hierarchies, but on solidarity and consensus within small communities of peers organized into large networks than can enable concerted action.

The real threat to the powers that be, (and the most promising path toward our goals) is intelligent, non-violent, empowering actions that make them and their systems irrelevant.

The way forward, as I see it, is to assert our fundamental rights and to organize better ways of providing for our basic needs. Yes, there will be adverse consequences, but ultimately right will prevail. I am reminded of a scene from the film Gandhi, in which the mahatma leads a large number of people on a march to the sea—to make salt. Why was that a revolutionary act? Because the British government had a “legal” monopoly that forced people in India to buy their salt from that single source. What a patent absurdity, to tell people that they are prohibited from making their own salt. What a gross infringement of basic human rights!

But people everywhere today suffer under equally absurd “laws” that force people to rely upon banking cartels to provide government-approved forms of money to enable the exchange of the goods and services we all need. In some places, competing forms of currency and financing alternatives are prohibited outright, in others they are impeded by onerous taxation and reporting requirements. But ultimately, the people will reclaim the credit commons and free themselves from oppressive systems of money and finance. I urge you again to heed the prescriptions outlined in my book, The End of Money and the Future of Civilization.

Viva la revolución pacífica!

–t.h.g.