Page 9 Angry American FILES

Veteran psychiatrist calls liberals mentally ill

2010-04-29T05:16:00.003-07:00

Publishes extensive study on 'Psychological Causes of Political Madness'

Posted: November 12, 2008
6:33 pm Eastern

© 2010 WorldNetDaily
WASHINGTON – Just when liberals thought it was safe to start identifying themselves as such, an acclaimed, veteran psychiatrist is making the case that the ideology motivating them is actually a mental disorder.

"Based on strikingly irrational beliefs and emotions, modern liberals relentlessly undermine the most important principles on which our freedoms were founded," says Dr. Lyle Rossiter, author of the new book, "The Liberal Mind: The Psychological Causes of Political Madness." "Like spoiled, angry children, they rebel against the normal responsibilities of adulthood and demand that a parental government meet their needs from cradle to grave."
While political activists on the other side of the spectrum have made similar observations, Rossiter boasts professional credentials and a life virtually free of activism and links to "the vast right-wing conspiracy."
For more than 35 years he has diagnosed and treated more than 1,500 patients as a board-certified clinical psychiatrist and examined more than 2,700 civil and criminal cases as a board-certified forensic psychiatrist. He received his medical and psychiatric training at the University of Chicago.
Rossiter says the kind of liberalism being displayed by both Barack Obama and his Democratic primary opponent Hillary Clinton can only be understood as a psychological disorder. "A social scientist who understands human nature will not dismiss the vital roles of free choice, voluntary cooperation and moral integrity – as liberals do," he says. "A political leader who understands human nature will not ignore individual differences in talent, drive, personal appeal and work ethic, and then try to impose economic and social equality on the population – as liberals do. And a legislator who understands human nature will not create an environment of rules which over-regulates and over-taxes the nation's citizens, corrupts their character and reduces them to wards of the state – as liberals do."
Dr. Rossiter says the liberal agenda preys on weakness and feelings of inferiority in the population by:
• creating and reinforcing perceptions of victimization;
• satisfying infantile claims to entitlement, indulgence and compensation;
• augmenting primitive feelings of envy;
• rejecting the sovereignty of the individual, subordinating him to the will of the government.
"The roots of liberalism – and its associated madness – can be clearly identified by understanding how children develop from infancy to adulthood and how distorted development produces the irrational beliefs of the liberal mind," he says. "When the modern liberal mind whines about imaginary victims, rages against imaginary villains and seeks above all else to run the lives of persons competent to run their own lives, the neurosis of the liberal mind becomes painfully obvious."

Feds: Homes with Chinese drywall Must Be Gutted

2010-04-29T05:16:00.001-07:00

Weapons Bible Code New Testament Verses. A War on Islam or terror?

2010-03-30T06:53:00.001-07:00

You Decide

REALITY REPORT #21 - Arrested at the G20

2010-03-28T13:48:00.002-07:00

In this exclusive G20 edition of the Reality Report Gary Franchi brings you Brooke Kelley's exclusive G20 coverage, shares info concerning the arrest and incarceration of Reality Report Cameraman Lee Iovino, and Luke Rudkowski's account of assault at the hands of those sworn to "protect the constitution"... or we should say sworn to aide and abet the criminal enterprise of the Global leaders who are working to sell out America to the New World Order.

Don't tell anyone but the United States Government is not your rightful government.

2010-03-28T13:48:00.000-07:00

From Not my government . us

"During the mid 1800s, the relationship between the American people and their government transformed dramatically. The intervening 150 years radically increased the intrusion of government into the lives and freedoms of all Americans."

This is just the beginning to a shocking revelation about who we really are in this world - please visit this site for more insight on how we transformed from a republic to an empire and lost the freedoms fought for by the founding fathers.

http://www.notmygovernment.us/overview.php

Elected and unelected officials of the United States of American government - you're fired!

2010-03-28T13:47:00.000-07:00

LISTEN UP!

Elected and unelected officials in the United States of America government:

Why is it that you cannot follow orders? Why is it that you cannot listen? Why is it that you do only what you want and not what We The People want? Why do you think you are smarter than we the people that built this country versus you that are tearing it down? Why are you more concerned with protecting some mouse in California than protecting THE PEOPLE of the USA? You should be protecting us from enemies FOREIGN and DOMESTIC. As far as I can see we have plenty of both. America is under attack! The attack is focused on America's:

    * BORDERS
    * CULTURE
    * LANGUAGE
    * SOVEREIGNTY
    * ECONOMY
    * TREASURY
    * DOLLAR
    * CAPITALISM
    * MILITARY
    * INTELLIGENCE
    * CHRISTIANITY
    * CONSTITUTION
    * IT'S VERY EXISTENCE ........................... for starters!

Listen up members of the United States of America Government:
Senators and Congressmen, Czars and appointees, Democrats, Republicans and Independents, all alike. Come next year 95% of you will be fired for your incompetence and insubordination. So keep up the lying and cheating and stealing as much as you can from the American citizenry, because by then we are kicking you out.

America the beautiful is slowly being destroyed, bit by bit, nail by nail. A little twist everyday. Why I can see this and you the Congress CANNOT is unbelievable. The members of Congress focusing on themselves and the special interests that put them into power is what I see.

I just do not have the faith or trust that you can do the job, all I see that you can do, is rob.

Preston Clay Fawcett
August 2009

The Federal Reserve is Engineering the Economic Collapse

2010-03-28T13:43:00.000-07:00

"Give me control of a nations money Supply.....and I care not who makes it's laws."...

http://www.youtube.com/watch?v=dDMvSJiK1I4&annotation_id=annotation_689198&feature=iv

America the Beautiful

2010-03-28T13:42:00.001-07:00

http://www.youtube.com/watch?v=O-E0WWi33L4&eurl=http%3A%2F%2Fwww.glennbeckclips.com%2F&feature=player_embedded

Steve Siu's tribute to America with his unique version of America the Beautiful. America the Beautiful has been sung by many including Frank Sinatra, Elvis Presley, Barbara Streisand, and Willie Nelson but probably most famously by Ray Charles. It's a celebrated song about the United States of America and its beauty. It is often played on July 4th (Independence Day) as a display of patriotism. The words were written by Katharine Lee Bates and the hymm composed by Samuel Augustus Ward.

O beautiful for spacious skies
For amber waves of grain
For purple mountains majesty
Above the fruited plains

America, America
God shed His grace on thee
And crown thy good with brotherhood
From sea to shining sea

O beautiful..for spacious skies
For amber waves of grain
For purple mountains..majesty
Above the fruited plains...
America!...America!...
God shed His grace..on thee..
And crown thy good, with brotherhood
From sea...to shining sea...

America!..America!!
God shed his grace on thee
And crown thy good with brotherhood
From sea...to..shining..sea!!

Dr. Betsey McCaughey: Obamacare denies speciality Care

2010-03-28T13:41:00.003-07:00

Former N.Y. Lieutenant Gov. McCaughey notes an atrocious mandate in the 2009 House healthcare bill requiring counseling for seniors on how to end their lives early. She says the bill is even more punishing to the elderly. Follow the like to see the entire story.

http://video.newsmax.com/?bcpid=20972460001&bclid=22770166001&bctid=30616902001

AIR CON: The Seriously Inconvenient Truth About Global Warming by Ian Wishart

2010-03-28T13:41:00.001-07:00

Part one of the new documentary on global warming based on the #1 bestselling book Air Con by Ian Wishart
http://www.youtube.com/watch?v=90otAJORkK8

Canadian insight into the Obama Thing.

2010-03-28T13:40:00.003-07:00

What is astounding is that it comes from Canada, a farther left Country than the U.S used to be.

http://www.thecanadianpress.com/about_cp.aspx?id=104

Obama’s White House is Falling Down
By Daniel Greenfield Thursday, June 11, 2009

In the sixth month of his presidency, Obama has turned an economic downturn into an economic disaster, taking over and trashing entire companies, and driving the nation deep into deficit spending expected to pass 10 trillion dollars ..

Abroad, Obama seems to have no other mode except to continue on with his endless campaign, confusing speech making with diplomacy. It is natural enough that Obama, who built his entire campaign on high profile public speeches reported on by an adoring press, understands how to do nothing else but that.

Ego driven photo appearances and clueless treatment of foreign dignitaries

While the press is still chewing over Obama’s Cairo speech, this celebrity style coverage ignores the fact that Obama’s endless world tour is not actually accomplishing anything. Instead his combination of ego driven photo op appearances and clueless treatment of foreign dignitaries have alienated many of America ’s traditional allies. Those who aren’t being quietly angry at Obama, like Brown, Merkel or Netanyahu, instead think of him as as absurdly lightweight, as Sarkozy, King Abdullah or Putin do.

While his officials carry out their dirty economic deeds, Obama responds to any and every crisis as if i t were a Mickey Rooney and Judy Garland musical, with a cry of, “Let’s put on a show.” Thus far Obama has put on “shows” across America , Europe and the Middle East . And what the adoring media coverage neglects to cover, is that Obama’s shows have solved absolutely nothing. They have served only as high profile entertainment.

Neither alienating America ’s traditional allies, through a combination of arrogant bullying and ignorance, nor appeasing America ’s enemies, has yielded any actual results. Nor does it seem likely to. Islamic terrorism is not going anywhere, neither are the nuclear threats from North Korea and Iran . While Obama keeps smiling, the global situation keeps growing more grim.

At home, if Obama was elected as depression era entertainment, the charm of his smiles and his constant appearances on magazine covers appear to be wearing thin on the American public. Despite the shrill attacks on Rush Limbaugh or the Republican Enemy of the Weak-- the Democratic party of 2009, is polling a lot like the Republican party of 2008. The Democrats have suddenly become the incumbents, and the only accomplishment they can point to is lavish deficit spending, often on behalf of the very same corporations and causes they once postured against.

The European Union Parliament’s swing to the right cannot be credited to Obama, though doubtlessly some European voters seeing socialist economic crisis management on display in the world’s richest country decided they wanted none of it, but it is part of a general turning against federalism. And Obama’s entire program is dependent on heavily entrenching federalism at the expense of individual and state’s rights. Yet that is precisely his Achilles heel with independent voters who are polling against more taxes and expanded government. And no amount of speeches by Obama can wish away his 18 czars or the national debt he has foisted on generation after generation of the American people.

That leaves Obama with a choice between socialism and the independent voter. And thus far he has chosen socialism.

Obama’s tactic of hijacking Bush Administration era policies on the economy and the War on Terror, and exploiting them as Trojan horses to promote his own agenda, have left him coping with a backlash from his own party, as well as general Republican opposition.

His Czars are meant to function as the bones in an executive infrastructure accountable to no one, but a lack of accountability isn’t just another word for tyranny, but for incompetence. A functional chain of command is accountable at multiple levels if it is to function effectively. Obama’s White House by contrast is in a state of over-organized chaos, the sort of organized disorganization that undisciplined egotistical leftists naturally create for themselves, complete with multiple overlapping levels of authority and no one in charge but the man at the top, who’s too busy doing other things to actually be in charge.

Dennis Blair as National Intelligence, who collaborated with the Muslim genocide of Christians in East Timor , trying to muscle out the CIA to create his own intelligence network, is typical of the kind of chaos being spawned by every chief in an expanding government bureaucracy working to make sure that all the Indians answer to him. Similarly the National Security Council wrestling with the State Department, highlighted by Samantha Power getting her own specially created NSC position to butt heads with Secretary of State Hillary Clinton, illustrates the state of conflict and chaos in American foreign affairs. A state of chaos so pervasive that incompetence has now become commonplace, and no one can even be found to double check the spelling of a Russian word that is meant to be the theme of American’s diplomatic reconstruction with Russia , or to pick out a gift for the visiting British Prime Minister.

The death of Chrysler at the hands of Fiat and the UAW

Meanwhile on the economy, Obama exploited the ongoing bailouts, transforming them from bailouts into takeovers meant to shift the balance of power in what had been a democracy and socially engineer not only corporations, but the lives of ordinary Americans. But the public’s patience with corporate bailouts is at an end, most Americans were never happy with them to begin with, and want them to end. The death of Chrysler at the hands of Fiat and the UAW might look like a victory in the union ranks, but it doesn’t play too well outside Detroit . And tacking on CAFE standards that will kill the pickup truck and the SUV will badly erode Obama in the swing states, if exploited properly in 2010 and 2012. Despite the constant media barrage, orchestrated out of the White House, the public is growing disenchanted with the performance of Obama and the Democrats.

With unemployment booming and the economy dropping, the jobs aren’t there and the spending is out of control. Republicans today are polling better on ethics and the economy, than the Democrats are. That shows a trend which is likely to register in the mid-term elections in 2010, in the same way that the EU parliamentary elections served as a shock to the system.

In the opposition, Republicans ar e free to embrace the rhetoric of change, to champion reform and push libertarian ideas about the size and scope of government. In turn all Obama has is his celebrity fueled media spectacle world tour. A charade now serving as a parallel to the depression era entertainment that functioned as escapism in a dour time. But before long, it may be Obama that the American public will want to escape from.

A shallow, manipulative and egotistical amateur who is in over his head

Obama has tried to play Lincoln, Reagan, JFK and FDR-- but in the end he can only play himself, a shallow, manipulative and egotistical amateur who is in over his head, and trying to drag the country down with him. Obama’s White House is falling down and while the flashbulbs are still glittering and the parties are going on in D.C. and around the world, Obama and the Democratic Congress may be headed for a recession of their own.

Collectivism vs. Individualism

2010-03-28T13:40:00.001-07:00

See links below right for YouTube speech Collectivism vs. Individualism by Jonathan Hoenig of The Capitalist Pig.com, at the Chicago Tea Party 4-15-9

http://www.youtube.com/watch?v=tuUsBfXI6m8&eurl=http%3A%2F%2Fwww.capitalistpig.com%2Fmedia.html&feature=player_embedded

Hands Off Honduras!

2010-03-28T13:39:00.002-07:00

by Patrick J. Buchanan
07/03/2009
Last Saturday, Honduran soldiers marched into the presidential palace, bundled up President Manuel Zelaya and put him on a plane for Costa Rica.
The ouster had been ordered by the Supreme Court and approved by the Congress, as Zelaya was attempting an illegal referendum to change the Honduran constitution so he could run for another term.

Will someone please explain why this bloodless transfer of power to the civilian legislator first in line for the presidency, in a sovereign nation, is any business of the United Nations, the Organization of American States, Hugo Chavez, the Castro brothers or Barack Obama? For all have denounced the "coup" and demanded Zelaya's immediate return.

The hypocrisy here is astounding.
Chavez was imprisoned for his bloody coup attempt in Venezuela in 1992. And to have Fidel Castro's dictatorship of half a century denouncing a glitch in the democratic process of a Western Hemisphere republic is beyond parody.
What percentage of the 200 member nations of that septic tank of anti-Americanism, the United Nations, are democracies? How many leaders of its member states came to power through free and fair elections?

And what happened to the idea of non-intervention in the internal affairs of Western Hemisphere republics? At this writing, Honduras is not buckling.
"We have established a democratic government, and we will not cede to pressure from anyone. We are a sovereign country," said Roberto Micheletti, who was named caretaker president to serve out Zelaya's term, which ends this year.
Unlike Tehran, where hundreds of thousands protested the election, the streets of Tegucigalpa have remained calm. No one has been shot, beaten with clubs or run down by thugs on motorcycles.

Just whose side is Barack on in Latin America?
Though elected as a center-right candidate, Zelaya has moved into the orbit of Chavez, whose idea it was to change the Honduran constitution to get Zelaya another term. Hugo even provided the ballots. In Latin America, term limits have been written into constitutions to prevent a return to the time of the dictators and presidents-for-life. The folks who put Zelaya aboard that plane are friends of the United States.

Why are Obama and Hillary Clinton meddling in the affairs of a friendly country, to dump over a friendly government, to reinstate a friend of Hugo's, whose goal is to bring Honduras into his anti-American "Bolivarian Revolution"?
Like Barack's strange behavior in Trinidad, where he grinned away as Chavez handed him an anti-American tract, then listened for an hour to Daniel Ortega berate us for cruelty to Castro's Cuba, without protest or retort, Obama is coming off as one who shares the international left's view of the United States.
There is another issue raised by Obama's denunciation of our friends in Honduras. Does he put ideology ahead of U.S. national interests? Does he prefer hostile democracies to friendly autocrats?

What comes first with Obama?
"He may be an SOB, but he's our SOB," FDR said of one Latin dictator. What FDR meant was that, in those grave times when Adolf Hitler, Benito Mussolini, Joseph Stalin and Japanese militarists ruled most of Eurasia, America must take her friends where she could find them.

In World War II, we welcomed the alliance with Generalissimo Chiang Kai-shek, and the neutrality of the autocrats of Madrid and Lisbon. We partnered with Stalin. Gen. Eisenhower cut a deal with Vichy's Adm. Darlan to get GIs safely ashore in North Africa.

From 1961 to 1979, Park Chung-hee was an authoritarian ruler of South Korea who sent 50,000 troops to fight beside ours in Vietnam. Was he not a better friend than Olof Palme of Sweden, Pierre Trudeau of Canada and Willy Brandt of Germany, who burnished their democratic credentials by scoring points off the United States?
For most Cold War presidents, U.S. national interests always trumped democratist ideology. Ike preferred the Shah to the democratically elected Mohammad Mossadegh. Richard Nixon preferred Gen. Pinochet to the elected Salvador Allende.
Even George Bush, who had pushed for Palestinian elections and insisted on Hamas' inclusion, perhaps because he thought they would lose, did a somersault when Hamas won.

How to explain the universality of the attacks on Honduras -- when few United Nations members outside the West condemned Tehran and Hugo Chavez rushed to congratulate Mahmoud Ahmadinejad -- other than the fact that this "coup" removed an adversary of the United States?
Anti-Americans stand by their own, no matter how they came to power, or retain power. Only in the West do we seem always prepared to abandon our flawed friends who do not measure up.

This is a formula for eventually not having any friends.
That Obama finds himself in camp with Castro's Cuba, Ortega's Nicaragua and Chavez, who is openly threatening Honduras, should tell him something about where his ideology is taking him, and us.

One day, Obama is going to have to decide whether he wishes to be the darling of the international left or the unapologetic leader of the nation that is most resented and reviled by the international left.

Are climate-change deniers guilty of treason?

2010-03-28T13:39:00.000-07:00

By Eoin O'Carroll | 07.03.09

www.csmonitor.com | Copyright © 2008 The Christian Science Monitor. All rights reserved.

It seems as though the so-called skeptics have really gotten under Paul Krugman’s skin this time. Writing in his New York Times column Sunday, the Nobel Prize-winning liberal economist expressed outrage at the representatives who voted against the Waxman-Markey climate-change bill because they doubted the scientific basis of global warming. He writes:

And as I watched the deniers make their arguments, I couldn’t help thinking that I was watching a form of treason — treason against the planet.

Mr. Krugman then gives a rundown of the latest climate research, whose predictions are far worse than previously thought. He describes climate change as a “clear and present danger” – borrowing a phrase first deployed in 1919 by Supreme Court Justice Oliver Wendell Holmes, Jr. to imprison a man for opposing the draft – and concludes:

Still, is it fair to call climate denial a form of treason? Isn’t it politics as usual?

Yes, it is — and that’s why it’s unforgivable.

Do you remember the days when Bush administration officials claimed that terrorism posed an “existential threat” to America, a threat in whose face normal rules no longer applied? That was hyperbole — but the existential threat from climate change is all too real.

Yet the deniers are choosing, willfully, to ignore that threat, placing future generations of Americans in grave danger, simply because it’s in their political interest to pretend that there’s nothing to worry about. If that’s not betrayal, I don’t know what is.

As Krugman suggests, recent years have seen the bar set pretty low for what can get a person branded as a traitor. In a February 2003 editorial, the now-defunct New York Sun called for police to monitor protesters opposing the invasion of Iraq “with an eye toward preserving at least the possibility of an eventual treason prosecution,” for giving “aid and comfort to the enemy,” a crime that in the United States carries the death penalty.

A few months later saw the release of a bestselling book by conservative commentator Ann Coulter (who, incidentally, holds a law degree), that insisted that all American liberals – that is, about one fifth of the US population – are guilty of treason. Those who peacefully opposed the war were similarly maligned throughout the burgeoning right-wing wilds of the blogosphere, and were, it should be noted, extensively spied on by the US government.

So now a few environmentalists have envisioned the state wielding its coercive power against those who doubt that humans activity is destabilizing the Earth’s climate.

James Hansen, who heads NASA’s Goddard Institute for Space Studies and is regarded as one of the world’s leading climate scientists, last year called for CEOs of oil companies to be put on trial for crimes against humanity for their well-documented efforts to spread doubt about global warming.

In a similar vein, in 2006 British journalist and environmental activist Mark Lynas, whose book, Six Degrees: Our Future on a Hotter Planet, plausibly details how climate change could unleash a major extinction event, imagined a future climate court putting the deniers on trial. He writes:

I wonder what sentences judges might hand down at future international criminal tribunals on those who will be partially but directly responsible for millions of deaths from starvation, famine and disease in decades ahead. I put this in a similar moral category to Holocaust denial – except that this time the Holocaust is yet to come, and we still have time to avoid it. Those who try to ensure we don’t will one day have to answer for their crimes.

His equation of climate change doubters to Nazi apologists was echoed that year by Grist’s David Roberts, who called for “some sort of climate Nuremberg” to hold the deniers accountable.

According to Guardian environmental columnist Leo Hickman, climate-change deniers love this kind of rhetoric, because it portrays them as “brave, ‘truth’-wielding Galileos standing up against a wave of pseudo-scientific indoctrination.” Writing in response to Krugman’s column, Mr. Hickman says that deniers faced with accusations of treaon will inevitably “trot out the predictable comparisons to the Salem witch trials and McCarthyism.”

Of course, it’s only a small fraction of environmentalists who have openly called for jail time – or worse – for climate-change deniers. After all, the environmental movement has benefited tremendously from laws that protect freedom of expression. Far more importantly, refraining from “hanging” people for what they say – even if you believe that what they say amounts to a destructive campaign of disinformation – is a hallmark of civilized society.

http://features.csmonitor.com/environment/2009/07/03/are-climate-change-deniers-guilty-of-treason/

2010-03-28T13:38:00.000-07:00

Perpetrators, collaborators, bystanders, victims: we can be clear about three of these categories. The bystander, however, is the fulcrum. If there are enough notable exceptions, then protest reaches a critical mass. We don’t usually think of history as being shaped by silence,and the only thing necessary for the triumph of evil is for good men to do nothing.

Jewish Leader: Obama May Be 'Most Hostile President to Israel’

2010-03-28T13:37:00.002-07:00

Monday, June 22, 20

By: Ronald Kessler

President Barack Obama’s refusal to take a stand on protests in Iran stands in sharp contrast to demands he has made on Israel, Morton Klein, president of the Zionist Organization of America, says in a Newsmax interview.

“I think he should take a strong stand to support the protesters in Iran who want to transform that society into one that promotes democracy and human rights,” Klein says. ”But while meddling in Israel’s affairs and making specific demands, he explicitly states he refuses to meddle in Iran’s policies and has said almost nothing.”

Klein says leaders of Jewish organizations are rethinking their support of Obama in light of his attitude toward Israel.

“There are many leaders in the organized Jewish world who have privately discussed this issue with me, and say they are deeply concerned about Obama’s actions and policies toward Israel, and now they’re rethinking their support for Obama during the campaign and the election,” says Klein, whose organization of 30,000 members is the oldest pro-Israel group in the country.

Based on the president’s speech in Cairo on June 4 and many of his foreign policy appointments, Klein thinks Obama “may become the most hostile president to Israel ever.”

Obama’s speech was “inimical to Israel and supportive of the stream of false Palestinian Arab claims concerning Israel,” Klein says. “He is relentlessly pressuring Israel while applying virtually almost no pressure on the Palestinian Authority to fulfill its written obligations.”

As a child of survivors of the Holocaust, Klein says he was particularly offended by Obama’s comparison of the suffering of Palestinians with the Nazis’ murder of 6 million Jews during the Holocaust.

“I found this to be an abominable, odious, and ridiculously false analogy,” he says.

While Klein’s parents’ survived, his father lost his eight brothers and sisters and all his aunts and uncles in Nazi concentration camps. Klein’s mother lost half her family.

In his speech, Klein says, Obama said that “the treatment of Palestinian Arabs by Israel is equivalent to the treatment of South African blacks during apartheid and of enslaved blacks before the Civil War, more than implying that Israel is an oppressor. He falsely claimed that Palestinian Arabs were displaced by Israel in 1948, when in fact, if six Arab nations hadn’t invaded Israel to destroy it, there wouldn’t be a single Palestinian Arab who left that area.”

Klein disputes Obama’s reference to Palestinian Arabs trying to establish a state for 60 years.

“They could have had a state in 1937,” he says. “They turned it down. They could have had a state in 1948. From 1948 to 1967, when they controlled all of Gaza, the West Bank, and East Jerusalem, they never attempted to establish a state. In 2000, they were offered a state on almost all the disputed territories. They turned it down. So this is a completely false claim that they’ve been trying to establish a state for 60 years.”

By claiming that America has 7 million Muslims, Obama showed a willingness to use phony figures to support a tilt toward Muslims, Klein says.

“Every major survey shows there’s between 1.5 million and 2.5 million Muslims in America,” Klein says. “Where does he get the number 7 million? This is the number that the Arab propagandists promote. There’s no legitimate survey that shows a number of that nature.”

Klein says it is premature to focus on the establishment of a Palestinian state as long as Palestinians promote violence and hatred against Israel.

“To promote a Palestinian state at a time when Hamas, the terrorist group, controls Gaza, and Fatah, which also promotes terror, controls the West Bank, is absurd,” Klein observes. The Palestinians “continue to promote hatred and violence against Jews and Americans in their schools, media and speeches,” Klein notes. “They refuse to arrest a single anti-Israel terrorist, zero. They refuse to outlaw terrorist groups, which is required under the agreements they’ve signed. They continue to name schools, streets, and sports teams after terrorists, glorifying murder.”

Moreover, Klein says, “control of the Palestinian territories is split between Hamas and Fatah, so there is no one regime to negotiate with.”

If the Palestinians “fulfilled all their written obligations for a significant period of time, clearly an overwhelming majority of Israelis, Americans, and the world would support a Palestinian state,” Klein says.

As Klein sees it, while Obama is “ignoring the anti-peace, pro-terror actions of the Hamas-Fatah regime,” he is “rushing headlong into establishing yet another terrorist state in the Middle East, as opposed to working to ensure that we end the existence of terrorist states in general,” Klein says.

Some of the views of the Rev. Jeremiah Wright, Jr., Obama’s minister, friend, and mentor, are apparent in Obama’s remarks, Klein says.

“If you look at Rev. Wright’s speeches and sermons as I have, many of the themes, like comparing the Palestinian Arabs to the South Africans and the illegality of the Jewish communities in Judea and Samaria, show up in Obama’s talks and actions,” he says.

During the 2008 election campaign, “I would give speeches and write articles expressing concern about his close friendship with Rev. Wright,” Klein says. “I was repeatedly told that’s not fair; those are Wright’s views, not necessarily his, and that it’s guilt by association.”

In response, Klein would say, “If a Jew was a member of a synagogue where the rabbi preached hatred of blacks, it would be clear that that Jew would be comfortable with anti-black racism. I couldn’t remain for a week at a synagogue where a rabbi made a hateful speech toward blacks. I’d quit immediately.”

Yet, he says, Jews “didn’t apply that normal, appropriate standard to Barack Obama,” Klein says. “Obama gave $27,500 in 2005 and 2006 to Rev. Wright’s church. He called Rev. Wright a great man and his mentor. You can’t be so close to someone you call a great man and a mentor if you don’t agree with what he has to say.”

[Editor's Note: Also See "Jews Very Concerned about Israel, Jewish Leader Says" - Go Here Now]

[Ronald Kessler is chief Washington correspondent of Newsmax.com. View his previous reports and get his dispatches sent to you free via
e-mail. Go here now.]

© 2009 Newsmax. All rights reserved.

Hitler's Bank Goes Global May 2009 - The Purpose of the Financial Crisis

2010-03-28T13:37:00.000-07:00

Last Updated (Wednesday, 20 May 2009 01:12) Written by Bruce Wiseman Sunday, 10 May 2009 16:00
Bruce Wiseman Online
© 2009 Bruce Wiseman Online

A towering citadel housing what is essentially a sovereign state known as the Bank for International Settlements is located in Basel, Switzerland. The bank now controls the financial affairs of planet Earth.
If you think this is an exaggeration or the conspiratorial ramblings of the author . . . or not, I invite you to read on.
I wrote the first installment of this article—“The Financial Crisis: A Look Behind the Wizard’s Curtain”—in mid-March of this year.
The article included the following statement:
"The purpose of this financial crisis is to take down the United States and the U.S. dollar as the stable datum of planetary finance and, in the midst of the resulting confusion, put in its place a Global Monetary Authority—a planetary financial control organization 'to ensure this never happens again.'"
This purpose has now been accomplished.
The dollar, the former king of currencies, now goes begging in the pant-suited persona of Hillary Clinton to our creditors at the Chinese Communist Party.
Almost unthinkable a few short years ago, the U.S. dollar is fast losing its status as the world reserve currency, and any thought of saving it is being nuked by the Larry, Moe and Curly of U.S. economic policy - Bernanke, Geithner and Summers - and their Alice in Wonderland trillion-dollar budget deficits.
I would not be surprised to see central banks start using the renminbi (the currency of the newly awakened People’s Republic of China—also called the yuan) for international trade and reserves in the not too distant future. This prediction will likely be scoffed at by global economists, but then they have about as much credibility as pharmaceutical salesmen these days.

A more generally discussed alternative is the International Monetary Fund’s SDR (which stands for Special Drawing Rights). There is no production or property behind the SDR. It is one of those clown currencies that are made up out of thin air—a magic trick central bankers like to do. Intoxicated by the power of the purse, they think of themselves as fiscal alchemists.

But the dollar has seen its glory. It can return one day, if Washington ever finds its financial backbone. But let’s be real, with the exception of a very few, like Ron Paul in the House and Tom Coburn in the Senate, these folks are addicted to spending like junkies on horse.
More importantly, the other shoe has dropped. Like some ghoulish predator from another Alien sequel, a Global Monetary Authority has been born.
It lives.

THE FINANCIAL STABILITY BOARD
On April 2, 2009, the members of the G-20 (a loose-knit organization of the central bankers and finance ministers of the 20 major industrialized nations) issued a communiqué that gave birth to what is no less than Big Brother in a three-piece suit.

Which means? . . .

The communiqué announced the creation of the all too Soviet sounding Financial Stability Board (FSB)—and no, I’m not going to make a crack about the fact that this acronym is the same as that of the Russian intelligence service that replaced the KGB.

The Financial Stability Board. Remember that name well, because they now have control of the planet’s finances . . . and, when one peels the onion of the communiqué, control of much, much more.

The FSB morphed into existence from an earlier incarnation called the Financial Stability Forum. The Financial Stability Forum (FSF) was established in 1999 to promote international financial stability through co-operation in financial supervision and surveillance. Since it had done such a wonderful job, the central bankers decided to expand its powers and give it a new name.

A board sounds like it has more authority than a forum. But the name change isn’t the problem. The FSB’s broadened mandate includes under point 5, “As obligations of membership, member countries and territories commit to pursue the maintenance of financial stability, maintain the openness and transparency of the financial sector, implement international financial standards (including the 12 key International Standards and Codes), and agree to undergo periodic peer reviews, using among other evidence IMF/World Bank public Financial Sector Assessment Program reports.”
Rather a mouthful of elitist banker-speak. But, as a friend of mine is fond of saying, “The Devil is in the details.”

THE 12 INTERNATIONAL STANDARDS AND CODES
While several press releases from the G-20’s London conclave reference these codes as though they were handed down from a fiscal Mount Sinai, finding the specifics takes some digging.

But then the Bank for International Settlements (BIS), out of which the FSB operates, has never seen transparency as one of its core values. In fact, given its fascist pedigree, transparency hasn’t been a value at all. Known as Hitler’s bank, the Bank for International Settlements worked arm in arm with the Nazis, facilitating the transfer of gold from Nazi-occupied countries to the Reichsbank, and kept their lines open to the international financial community during the Second World War.

As noted in the first article, the BIS is completely above the law.

It is like a sovereign state. Its personnel have diplomatic immunity for their persons and papers. No taxes are levied on the bank or the personnel’s salaries. The grounds are sovereign, as are the buildings and offices. The Swiss government has no legal jurisdiction over the bank and no government agency or authority has oversight over its operations.

In a 2003 article titled “Controlling the World’s Monetary System the Bank for International Settlements,” Joan Veon wrote:
“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them. . . .

“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”

And if you don’t find that troubling, a close reading of the new powers of the FSB are chilling.

The 12 key International Standards and Codes, which are minimum requirements, contain such things as
• clear specification of the structure and functions of government;
• statistical and data gathering from ministries of education, health, finance and other agencies;
• corporate governance principles;
• shareholder rights;
• personal savings;
• secure retirement incomes;
• international accounting standards to be observed in the preparation of financial statements;
• international standards of auditing;
• securities settlement;
• foreign exchange settlement;
• minimal capital adequacy for banks;
• risk management;
• ratification and implementation of UN instruments; and
• criminalizing the financing of terrorism

“Sounds oppressive,” you say; “but I don’t really care what a bunch of bankers do in Basel, Switzerland. It’s got nothing to do with me.” But I am writing this to tell you that it has everything to do with you, your family, your business, your country, and—if you’re up to it—your planet.

Because as currently structured, the dictates of the Financial Stability Board will impact your life without any say-so on your part whatsoever. Here’s one example from an article written by former Clinton advisor and political strategist Dick Morris in an article for The Bulletin on April 6, 2009.

“The FSB is also charged with ‘implementing . . . tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms.’

“That means that the FSB will regulate how much executives are to be paid and will enforce its idea of corporate social responsibility at ‘all firms.’”
You begin to see what’s involved here.

You see, these standards and codes are commitments, obligations and requirements, not merely advice. The strategy, policies and regulations of the FSB are worked out at the senior levels of the bank. They are approved by the plenary and implemented through the national representatives.

THE STRUCTURE
The plenary, in this sense, is the complete membership body of the FSB. And the membership, my friends—the national representatives who implement these policies—just happen to be the heads of the planet’s more powerful central banks. And in case it slipped your mind, most central banks are private institutions and answerable to no one.

Take our central bank, the Federal Reserve Bank. Yes, the chairman is appointed by the President and often testifies before Congress, but there is virtually no public control over the institution. It can’t be audited nor can Congress tell it what to do. It is not really accountable to anyone. The idea that the Fed is a government agency subject to the control of Congress is a PR line. It is simply not true.

Among other things, central banks govern a country’s monetary policy and create (print) the country’s money.

They make income by charging interest on the money they loan to the government.
Watch this, because if you blink, you’ll miss it.
Governments are perpetually in debt. They are always borrowing money. They have a mental disorder that prevents them from spending less than they collect in taxes—BDD, Budget Deficit Disorder. And if it looks like they might balance the books some year, why, someone can always start a war.
Here’s an example.
Let’s say the annual budget calls for the U.S. government to spend $2.5 trillion. But the income will only be $2 trillion. They’re going to be a little short. But no worries, they have the ultimate credit card—a debt limit that they themselves control. If they borrow up to the established limit, they can just vote it higher—which they have done to the tune of a cool $11.2 trillion dollars.
The Fed loves this.
Listen as the Secretary of the Treasury calls the Chairman of the Fed.
“Ben. It’s Tim.”
“Dude. What’s happening?”
“I need a little bread. Friggin’ Taliban again.”
“No problem, Timbo. How much you looking for?”
“Five hundred big ones.”
Ben licks his lips. “Anything for you, big guy. Send me the notes and I’m down with the five hundred. Five percent work for you?”
“Whatever.”
So the Treasury prints up $500 billion dollars’ worth of IOUs—they are called Treasury bills (short term), notes (medium term) or bonds (long term)—and sends them over to the Fed with a fifth of Chivas.
In the old days, the Fed would print the cash. These days, they click a mouse.
Now here’s the part where you aren’t allowed to blink.
When the Fed prints the money or clicks the mouse, they have no money themselves. They are just creating it out of thin air. They just print it, or send it digitally. And then they charge interest on the money they lent to the Treasury. A hundred-dollar bill costs $0.04 to print. But the interest is charged on the $100. Go ahead: read it again; the words won’t change.
The interest on the national debt last year was $451,154,049,950.63. That’s $1.23 billion a day. These are the same people that are now running our banks, insurance companies and automobile manufacturers.
Reason weeps.
Sure, I oversimplified it. The Fed doesn’t own all the debt and they do some other things. But these are the basics. That is how a central bank works.
It is the heads of the planet’s central banks and some finance ministers that make up the membership of the FSB.
In brief, here’s how it works: the Board’s leadership provides strategies, policies and regulations to the membership. The members vote on the matters and then see to their implementation in their respective countries.
FSB leadership is in the hands of the chairman, Mario Draghi. Mr. Draghi is also the governor of Italy’s central bank. He is a former executive director of the World Bank and like his comrade in international finance Henry Paulson—the former U.S. Secretary of the Treasury who bludgeoned Congress out of the first $700 billion bailout package—Draghi was a managing director of Goldman Sachs until 2006. Like Paulson, he left Goldman in 2006, a year before the financial crisis exploded: Paulson went to Washington to run the U.S. Treasury; Draghi went to Rome to run Italy’s financial system as well as the Financial Stability Forum (forerunner to the Financial Stability Board).
Let’s call it government by Goldman, shall we?

THE REAL SITUATION
More to the point, you may have noticed that you weren’t consulted on this setup. Neither was Congress. In other words, the command channel for implementing global financial strategies goes from the FSB leadership to its central banker members and from them to the world’s financial institutions. You don’t get a peek, neither does Congress, nor, for that matter, does the White House.
And while there may be some accountability in some of the member countries, by and large these central bankers have the authority to implement these regulations and strategies. And they are held responsible by the FSB to do so.

In short, on April 2, 2009, the President signed a communiqué that essentially turns over financial control of the country, and the planet, to a handful of central bankers, who, besides dictating policy covering everything from your retirement income to shareholder rights, will additionally have access to your health and education records.

There is also this troubling little line about “clear specification of the structure and functions of government.” What the hell is that suppose to mean?

There is no oversight here. Not by you, not by Congress, not by anybody. No oversight over a handful of central bankers who operate out of a clandestine organization that is above the law and is responsible for having implemented and enforced the “standards” that froze world credit markets and precipitated the worst financial crisis in the planet’s history (see “The Financial Crisis: A Look Behind the Wizard’s Curtain”).

I haven’t heard word one out of Congress about this, but I’m afraid they are a few clowns short of a circus up there.

Which begs the question, what do we do about this?

THE SOLUTION
There are two critical things that need to be done.

The first lies in the fact that the communiqué signed by the President is an agreement that is binding on the United States and, as such, requires approval by Congress. If classed as a Treaty, it requires approval by two-thirds of the Senate. At the very least, approval should be by Congressional Executive Agreement, which requires a majority of both houses of Congress.

The agreement signed in London on April 2 has been called a New Bretton Woods (Bretton Woods being the location of a meeting of world leaders toward the end of the Second World War, which gave birth to the international financial organizations the World Bank and the International Monetary Fund). The original Bretton Woods agreement was put in place as a Congressional Executive Agreement. So this “new Bretton Woods” should at least do the same.

But this step is just to get Congress to recognize their responsibility here. The Federal Reserve Act, the bill that established the Federal Reserve System, was passed in 1913 two nights before Christmas by a sparsely attended Congress.

People have been complaining about this ever since.

What do you say we don’t let this happen again? Not on our watch. Congress needs to understand that it has a responsibility to approve any agreement signed by the President that is binding on this nation.

But the point is not to get Congress to approve what has been done. It is to first get them to recognize that agreements have been made that affect our entire financial system and that it is their responsibility to shape these agreements in a way that is beneficial to our Republic AND to provide a mechanism for real oversight of this international body.

Central bankers should not be making decisions about international finance without oversight and a system of checks and balances that are reflective of those provided by a republican form of government.

I am, of course, not talking about a political party here. No, no. I’m talking about the American form of government where citizens elect others to represent them.

A republican form of government is one that is operated by representatives chosen by the people.

Congress must step up to the plate. They must insist that the Financial Stability Board be ratified either by Treaty or Congressional Executive Agreement. And that ratification must include the creation of a body with oversight and corrective powers that is comprised of representatives of all the nations involved who are chosen from each country’s elected officials.

There is nothing inherently evil about an international financial organization. As much as we might protest it, it is a global world today, and a body that oversees the smooth flow and interchange of currencies and other financial instruments is needed in today’s world.

But the organization cannot be controlled by international bankers who are not answerable to the citizens of the countries in which they operate. It should be overseen by a senior level group which itself is organized as a liberal republic, following the original model of the United States.

Why? Because the system of government originally created by the United States has been the most successful form of government in man’s history. Any problems with the system have come about as a result of deviations from the original structure—a representative form of government with adequate checks and balances.
Such a body could help create an international economic system in which those that want to be successful can be so. It would also allow them to take an active role in controlling their futures by effectively participating in the legislative process.

ACT!

Let your Representatives and Senators know: the Financial Stability Board must be approved by Congress and must be subject to oversight by elected officials of the countries involved.

Personal visits, followed by calls and faxes to both Washington and local offices, are the most effective. Don’t be surprised if they don’t know what you’re talking about. Politely insist they find out and take action. And understand this when dealing with legislators or their staffs: they are focused almost exclusively on legislation that has already been introduced—a bill with a number on it.

That is not the case here. You want them to take action on this matter by introducing legislation that brings the approval and structure of the Financial Stability Board under congressional control.

This can be accomplished.

“All tyranny needs to gain a foothold is for people of good conscience to remain silent.” —Thomas Jefferson

Find your elected officials here:

A Look Behind the Wizard's Curtain

2010-03-28T13:36:00.002-07:00

Bruce Wiseman Online
© 2009 Bruce Wiseman Online
Wednesday, 01 April 2009 03:21

I’m tired of hearing about subprime mortgages.

It’s as if these things were living entities that had spawned an epidemic of economic pornography.

Subprime mortgages are as much a cause of the current financial chaos as bullets were for the death of JFK.

Someone planned the assassination and someone pulled the trigger.

The media, J. Edgar Hoover and the Warren Commission tried to push Lee Harvey Oswald off on the American public. They didn’t buy it.

They shouldn’t buy subprime mortgages either.

Someone planned the assassination and someone pulled the trigger.

Only this time the target is the international financial structure and the bullets are still being fired.

Oh yes, people took out adjustable-rate mortgages they could ill afford, that were then sold to Wall Street bankers. The bankers bundled them up like gift wrappers at Nordstrom’s during the Holidays and sold them to other banks after raking off billions in fees. The fees? They were for…well…they were for wrapping the mortgages in the haute couture of Wall Street.

But it didn’t start there. No, no, not by a long shot.

And as the late, great Paul Harvey would say, “And now you’re going to hear the Rest of the Story.”

Are subprime mortgages part of some larger agenda?

And if so, what is it?

Stay with me here, because Alice is about to slide down the rabbit hole into the looking-glass world of international finance.

EASY MONEY ALAN

There are various places we could start this story, but we will begin with the 1987 ascendancy of Rockefeller/Rothschild homeboy Alan Greenspan from the Board of Directors of J.P. Morgan to the throne of Chairman of the Federal Reserve Bank (a position he was to hold for twenty years).

From the beginning of his term, Greenspan was a strong advocate for deregulating the financial services industry: letting the cowboys of Wall Street sow their wild financial oats, so to speak.

He also kept interest rates artificially low as if he had sprayed the boardroom of the Federal Reserve Bank with some kind of fiscal aspartame.

While aspartame (an artificial sweetener branded as “Equal” and “NutraSweet”) keeps the calories down, it has this itty-bitty side effect of converting to formaldehyde in the human body and creating brain lesions.

As we are dealing here with a gruesomely tortured metaphor, let me explain: I am not suggesting that Chairman Greenspan put Equal in his morning coffee, but rather that by his direct influence, interest rates were forced artificially low resulting in an orgy of borrowing and toxic side effects for the entire economy.

THE COMMUNITY REINVESTMENT ACT

Greenspan had been the Fed Chairman for seven years when, in 1994, a bill called the Community Reinvestment Act (CRA) was rewritten by Congress. The new version had the purpose of providing loans to help deserving minorities afford homes. Nice thought, but the new legislation opened the door to loans that set aside certain lending criteria: little things like a down payment, enough income to service the mortgage and a good credit record.

With CRA’s facelift, we have in place two of the five elements of the perfect financial storm: Alan (Easy Money) Greenspan at the helm of the Fed and a piece of legislation that turned mortgage lenders into a division of the Salvation Army.

Perhaps you can see the pot beginning to boil here. But the real fuel to the fire was yet to come.

GLASS-STEAGALL

To understand the third element of the storm, we travel back in time to the Great Depression and the 1933 passage of a federal law called the Glass-Steagall Act. As excess speculation by banks was one of the key factors of the banking collapse of 1929, this law forbade commercial banks from underwriting (promoting and selling) stocks and bonds.

That activity was left to the purview of “Investment Banks” (names of major investment banks you might recognize include Goldman Sachs, Morgan Stanley and the recently deceased Lehman Brothers).

Commercial banks could take deposits and make loans to people.

Investment banks underwrote (facilitated the issuing of) stocks and bonds.

To repeat, this law was put in place to prevent the banking speculation that caused the Great Depression. Among other regulations, Glass-Steagall kept commercial banks out of the securities.

Greenspan’s role in our not-so-little drama is made clear in one of his first speeches before Congress in 1987 in which he calls for the repeal of the Glass-Steagall Act. In other words, he’s trying to get rid of the legislation that kept a lid on banks speculating in financial markets with securities.

He continued to push for the repeal until 1999 when New York banks successfully lobbied Congress to repeal the Glass-Steagall Act. Easy-Money Alan hailed the repeal as a revolution in finance.

Yeah, Baby!

A revolution was coming.

With Glass-Steagall gone, and the permissible mergers of commercial banks with investment banks, there was nothing to prevent these combined financial institutions from packaging up the subprime CRA mortgages with normal prime loans and selling them off as mortgage-backed securities through a different arm of the same financial institution. No external due diligence required.

You now have three of the five Horsemen of the Fiscal Apocalypse: Greenspan, CRA mortgages and repeal of Glass-Steagall.

WAIVER OF CAPITAL REQUIREMENTS

Enter Hammering Hank Paulson.

In April of 2004, a group of five investment banks met with the regulators at the Securities and Exchange Commission (SEC) and convinced them to waive a rule that required the banks to maintain a certain level of reserves.

This freed up an enormous reservoir of capital, which the investment banks were able to use to purchase oceans of Mortgage-Backed Securities (cleverly spiked with the subprime CRA loans like a martini in a Bond movie). The banks kept some of these packages for their own portfolios but also sold them by the bucketload to willing buyers from every corner of the globe.

The investment bank that took the lead in getting the SEC to waive the regulation was Goldman Sachs. The person responsible for securing the waiver was Goldman’s Chairman, a man named Henry Paulson.

With the reserve rule now removed, Paulson became Wall Street’s most aggressive player, leveraging the relaxed regulatory environment into a sales and marketing jihad of mortgage-backed securities and similar instruments.

Goldman made billions. And Hammering Hank? According to Forbes magazine, his partnership interest in Goldman in 2006 was worth $632 million. This on top of his $15 million per year in annual compensation. Despite his glistening dome, let’s say Hank was having a good hair day.

In case this isn’t clear, it was Paulson who, more than anyone else on Wall Street, was responsible for the boom in selling the toxic mortgage-backed securities to anyone who could write a check.

Many of you may recognize the name Hank Paulson. It was Paulson who left the Goldman Sachs’ chairmanship and came to Washington in mid-2006 as George Bush’s Secretary of the Treasury.

And it was Paulson who bludgeoned Congress out of $700 billion of so-called stimulus money with threats of public riots and financial Armageddon if they did not cough up the dough. He then used $300 billion to “bail out” his Wall Street homeboys to whom he had sold the toxic paper in the first place. All at taxpayer expense.

Makes you feel warm all over, doesn’t it?

Congress has its own responsibility for this fiscal madness, but that’s another story.

This one still has one more piece—the pièce de résistance.

BASEL II

Greenspan, the Community Reinvestment Act, the repeal of Glass- Steagall, and Paulson getting the SEC to waive the capital rule for investment banks have all set the stage: the economy is screaming along, real estate is in a decade-long boom and the stock market is reaching new highs. Paychecks are fat.

But by the first quarter of 2007, the first nigglings that all was not well in the land of the mortgage-backed securities began to filter into the press. And like a chilled whisper rustling through the forest, mentions of rising delinquencies and foreclosures began to be heard.

Still, the stock market continued to rise, with the Dow Jones reaching a high of 14,164 on October 9, 2007. It stayed in the 13,000 range through the month, but in November, a major stock market crash commenced from which we have yet to recover.

It’s not just the U.S. stock market that has crashed, however. Stock exchanges around the world have fallen like a rock off a tall building. Most have lost half their value, wiping out countless trillions.

If it were just stock markets, that would be bad enough; but, let’s be frank, the entire financial structure of the planet has gone into a tailspin and it has yet to hit ground zero.

While there surely would have been losses, truth be told, the U.S. banking system would likely have gotten through this, as would have the rest of the world, had it not been for an accounting rule called Basel II promulgated by the Bank for International Settlements.

Who? What?

That’s right, I said an accounting rule.

The final nail in the coffin—and this was really the wooden spike through the heart of the financial markets—was delivered in Basel, Switzerland, at the Bank for International Settlements (BIS).

Never heard of it? Neither have most people; so, let me pull back the wizard’s curtain.

Central banks are privately owned financial institutions that govern a country’s monetary policy and create the country’s money.

The Bank for International Settlements (BIS), located in Basel, Switzerland, is the central banker’s bank. There are 55 central banks around the planet that are members, but the bank is controlled by a board of directors, which is comprised of the elite central bankers of 11 different countries (U.S., UK, Belgium, Canada, France, Germany, Italy, Japan, Switzerland, the Netherlands and Sweden).

Created in 1930, the BIS is owned by its member central banks, which, again, are private entities. The buildings and surroundings that are used for the purpose of the bank are inviolable. No agent of the Swiss public authorities may enter the premises without the express consent of the bank. The bank exercises supervision and police power over its premises. The bank enjoys immunity from criminal and administrative jurisdiction.

In short, they are above the law.

This is the ultra-secret world of the planet’s central bankers and the top of the food chain in international finance. The board members fly into Switzerland for once-a-month meetings, which they hold in secret.

In 1988 the BIS issued a set of recommendations on how much capital commercial banks should have. This standard, referred to as Basel I, was adopted worldwide.

In January of 2004 our boys got together again and issued new rules about the capitalization of banks (for those that are not fluent in bank-speak, this is essentially what the bank has in reserves to protect itself and its depositors).

This was called Basel II.

Within Basel II was an accounting rule that required banks to adjust the value of their marketable securities (such as mortgage-backed securities) to the “market price” of the security. This is called mark to the market. There can be some rationality to this in certain circumstances, but here’s what happened.

THE MEDIA AND MARK TO THE MARKET

As news and rumors began to circulate about some of the subprime CRA loans in the packages of mortgage-backed securities, the press, always at the ready to forward the most salacious and destructive information available, started promoting these problems.

As a result, the value of these securities fell. And when one particular bank did seek to sell some of these securities, they got bargain basement prices.

Instantly, per Basel II, that meant that the hundreds of billions of dollars of these securities being held by banks around the world had to be marked down—marked to the market.

It didn’t matter that the vast majority of the loans (90% +) in these portfolios were paying on time. If, say, Lehman Brothers had gotten fire-sale prices for their mortgage-backed securities, the other banks, which held these assets on their books, now had to mark to the market, driving their financial statements into the toilet.

Again, it didn’t matter that the banks were receiving payments (cash flow) from their loan portfolios; the value of the package of loans had to be written down.

A rough example would be if the houses on your street were all worth about $400,000. You owe $300,000 on your place and so have $100,000 in equity. Your neighbor, Bill, in selling his house, uncovered a massive invasion of termites. He had to sell the house in a hurry and wound up with $200,000, half the real value.

Shortly thereafter, you get a demand letter from your bank for $100,000 because your house is only worth $200,000 according to “the market.” Your house doesn’t have termites, or perhaps just a few. Doesn’t matter.

Of course, if the value of your home goes below the loan value, banks can’t make you cough up the difference.

But if you are a bank, Basel II says you must adjust the value of your mortgage-backed securities if another bank sold for less—termites or no.

When the value of their assets were marked down, it dramatically reduced their capital (reserves), and this—their capital—determined the amount of loans they could make.

The result? Banks couldn’t lend. The credit markets froze.

Someone recently said that credit was the life blood of the economy.

This happens to be a lie. Hard work, production, and the creation of products that are needed and wanted by others—these are the true life blood of an economy.

But, let’s be honest, credit does drive much of the current U.S. economy: home mortgages, auto loans and Visas in more flavors than a Baskin-Robbins store.

That is, until the banks had to mark to the market and turn the IV off.

THE CRISIS

Mortgage lending slammed to a halt as if it had run headlong into a cement wall, credit lines were cancelled and credit card limits were reduced and in some cases eliminated altogether. In short, with their balance sheets butchered by Basel II, banks were themselves going under and those that weren’t simply stopped lending. The results were like something from a financial horror film—if there were such a thing.

Prof. Peter Spencer, one of Britain’s leading economists, makes it very clear that the Basel II regulations “…are at the root cause of the crunch…” and that “…if the authorities retain the strict Basel regulations, the full scale of the eventual credit crunch and economic slump could be disastrous.”

“The consequences for the macro-economy,” he says “of not relaxing [the Basel regulations] are unthinkable.”

Spencer isn’t the only one who sees this. There have been calls in both the U.S. and abroad to, at least, relax Basel II until the crisis is over. But the Boys from Basel haven’t budged an inch. The U.S did modify these rules somewhat a year after the devastation had taken place here, but the rules are still fully in place in the rest of the world and the results are appalling.

The credit crisis that started in the U.S. has spread around the globe with the speed that only the digital universe could make possible. You’d think Mr. Freeze from the 2004 Batman movie was at work.

We have already noted that stock markets around the world have lost half of their value, erasing trillions. Some selected planet-wide stats make it clear that it is not just stock values that have crashed.

China’s industrial production fell 12% last year, while Japan’s exports to China fell 45% and Taiwan’s were off 55%. South Korea’s overseas shipments decreased 17%, while their economy shrank 5.6%.

Singapore’s exports were off the most in 33 years and Hong Kong’s exports plunged the most in 50 years.

Germany had a 7.3% decline in exports in the fourth quarter of last year, while Great Britain’s real estate market declined 18% in the last quarter compared to a year earlier.

Australia’s manufacturing contracted at a record pace last month bringing the index to the lowest level on record.

There’s much more, but I think it is obvious that credit pipe can no longer be smoked.

Welcome to planetary cold turkey.

ODDITIES

It is fascinating to look at the date coincidence of the crash in the U.S. Earlier I noted that the stock market continued to rise throughout 2007, peaking in October of 2007. The dip in October turned to a rout in November.

The Basel II standards were implemented here by the U.S. Financial Accounting Standards on November 15, 2007.

There are more oddities.

Despite the fact that Hammering Hank dished out hundreds of billions to his banker buddies to “stimulate” the economy and defrost the credit markets, the recipients of these taxpayer bailout billions have made it clear that they will be reducing the amount of money they will be lending over the next 18 months by as much as $2 trillion to conform to Basel II.

What do you think—Hank, with his Harvard MBA, didn’t know? The former chairman of the most successful investment bank in the world didn’t know that the Basel II regulations would inhibit his homies from turning the lending back on?

Maybe it slipped his mind.

Like the provision he put into his magnum opus, the $700 billion bailout called TARP. It carried a provision for the Federal Reserve to start paying interest on money banks deposited with it.

Think this through for a minute. The apparent problem is that the credit markets are frozen. Banks aren’t lending. They can’t use the money from TARP to lend because Basel II says they can’t. On top of this, Paulson’s bailout lets the Fed pay interest on funds they deposit there.

If I am the president of a bank, and let’s say that I’m not Basel II impaired, why in the world am I going to lend to customers in the midst of the worst financial crisis in human history when I can click a mouse and deposit my funds with the Fed and sit back and earn interest from them until the chaos subsides?

But, hey, maybe Hank’s been putting aspartame in his coffee.

No, this stuff is as obvious as the neon signs on Broadway to the folks who play this game. This is banking 101.

So, given the provisions of Basel II and the refusal of the BIS to lift or suspend the regulations when they are clearly the driving force behind the planet-wide credit crisis, and considering the lack of provisions in Paulson’s bailout bill to mandate that taxpayer funds given to banks must actually be lent, and given the added incentive in the bill for banks to deposit their bread with the Fed, one gets the idea that maybe, just maybe, these programs weren’t designed to cure this crisis; maybe they were designed to create it.

Indeed, my friends, this is crisis by design.

Someone planned the assassination and someone pulled the trigger.

THE RUBBER MEETS THE ROAD

All of which begs the question, How come?

Why drive the planet into the throws of fiscal withdraw—of job losses, vaporized home equity, and pillaged 401ks and IRAs?

Because when the pain is bad enough, when the stock markets are in shambles, when the cities are teaming with the unemployed, when the streets are awash with riots, when governments are drenched in the sweat of eviction and overthrow, then the doctor will come with the needle of International Financial Control.

This string of ineffective solutions put forth by people who know better are convincing bankers, investors, corporations and governments of one thing: the system failed and even the U.S. government—the anchor of international finance (which is blamed for causing the disaster)—has lost its credibility.

The purpose of this financial crisis is to take down the United States and the U.S. dollar as the stable datum of planetary finance and, in the midst of the resulting confusion, put in its place a Global Monetary Authority—a planetary financial control organization to “ensure this never happens again.”

Sound Orwellian? Sound conspiratorial? Sound too evil or too vast to be real?

This entity is being moved forward by world leaders “as we speak.” It is coming and the pace is quickening.

A year ago, I saw an article in which the president of the New York Federal Reserve bank was calling for a “Global Monetary Authority” or GMA to deal with the world’s financial crisis. While I have been following international banking institutions for some time, this was the clue that they were making their move. I wrote an article on it at the time.

By the way, as some may recall, the president of the New York Fed last year was a man named Timothy Geithner. Geithner was very involved in structuring the booby-trapped TARP bailout with Paulson and Bernanke.

Of course, now, he is the Secretary of the Treasury of the United States.

Change we can believe in.

Once Geithner started to push a global financial authority as the solution to the world’s financial troubles, other world leaders and opinion-leading voices in international finance began to forward this message. It has been a PR campaign of growing intensity. Meanwhile, behind the scenes, the international bankers are keeping their hands on the throat of the credit markets choking off lending while the planet’s financial markets asphyxiate and become more and more desperate for a solution.

British Prime Minister Gordon Brown, who has taken the point on this, has said that the world needs a “new Bretton Woods.” This is the positioning. (Bretton Woods, New Hampshire, was the location where world leaders met after the Second World War and established the international financial organizations called the International Monetary Fund (IMF) and the World Bank to help provide lending to countries in need after the war.)

Sir Evelyn de Rothschild called for improved (international) regulations, while the Managing Director of the IMF suggested a “high level of ministers capable of reaching agreements and implementing them.”

The former director of the IMF, Michael Camdessus, called on “the global village” to “urgently and radically” implement international regulations.

As the crisis has intensified, so too have calls for a global financial policeman, and of late, the PR has been directed in favor of—surprise—the Bank of International Settlements.

The person at the BIS who was primarily responsible for the creation of Basle II is Jaime Caruana. The BIS Board has now appointed him as the General Manager, the bank’s chief executive position, where he will be in charge of dealing with the current financial crisis which he had no small part in creating.

A few well-chosen sound bites tell the story.

Following a recent IMF function, discussion centered on the fact that the BIS could provide effective market regulation, while the Global Investor magazine opined that “…perhaps the Bank of International Settlements in Basel...” could undertake the task of best dealing with the crisis in the financial markets.

The UK Telegraph is right out front with it.

“A new global solution is needed because the machinery of global economic governance barely exists…it’s time for a Bretton Woods for this century.

“The big question is whether it is time to establish a global economic ‘policeman’ to ensure the crash of 2008 can never be repeated.”

….

“The answer might be staring us in the face in the form of the Bank of International Settlements (BIS). The BIS has been spot on throughout this.”

And so you see, this was a drill. This was a strategy: bring in Easy Money Alan to loosen the credit screws; open the floodgates to mortgage loans to the seriously unqualified with the CRA, bundle these as securities, repeal Glass-Steagall and waive capital requirements for investment banks so the mortgage-backed securities could be sold far and wide, wait until the loans matured a bit and some became delinquent and ensure the media spread this news as if Heidi Fleiss had had a sex-change operation, then slam in an international accounting rule that was guaranteed to choke off all credit and crash the leading economies of the world.

Ensure the right people were in the key places at the right time—Greenspan, Paulson, Geithner and Caruana.

When the economic pain was bad enough, promote the theory that the existing financial structures did not work and that a Global Monetary Authority—a Bretton Woods for the 21st century—was needed to solve the crisis and ensure this does not happen again.

Which is exactly where we are right now.

WHAT DO YOU DO?

First of all, while not likely, but just in case Timothy Geithner is shocked into some New Age epiphany and Ben Bernanke grows some real wisdom in his polished dome, this is what the government should do:

1) Cancel any aspects of Basel II that are causing banks to misevaluate their assets.

2) Remove the provision of TARP that permits the Fed to pay interest on deposits.

3) Mandate that any funds given under the TARP bailout or that are to be given to banks in the future must be used to lend to deserving borrowers.

4) Repeal the Community Reinvestment Act.

5) Reinstate Glass-Steagall.

6) Restore mandated capital requirements to investment banks.

7) And in case Congress decides to cease being a flock of frightened sheep and take responsibility for the country’s monetary policy, they should get rid of the privately owned Federal Reserve Bank and establish a monetary system based on production and property.

8) But if a global monetary authority is put in place, it should not be controlled by central bankers. It should be fully controlled directly by governments with real oversight over it and with a system of checks and balances. This you can communicate when this matter hits Congress or the White House or both (which it almost certainly will).

And what do you do with your reserves in this Brave New World of international finance?

Modesty aside, please do what I have been recommending for a few years now: get liquid (out of the stock and bond markets) and put some of your assets into precious metals, gold and silver, but more heavily into silver.

Keep the rest in cash (CDs and T-bills) and perhaps a small bit in some stronger foreign currencies like the Chinese yuan (also referred to as the RMB, which is short for renminbi)

And remember that my recommendations are based on my 30 years of experience in banking, finance and investments but I have no crystal ball and make no guarantees regarding my recommendations.

We are living in the most challenging economic times this planet has ever seen. I hope this article has helped shed some light on what is currently happening on the international financial scene. I didn’t cover everything or everyone involved, but these are the broad strokes.

If you want to follow these shenanigans, log on to The Road to London Summit (http://www.londonsummit.gov.uk/en/). It will all look and sound very reasonable—all about saving jobs and homes—but you have seen behind the wizard’s curtain and the above is what is really going on.

Keep your powder dry.

The Financial Crisis: The Hidden Beginning

2010-03-28T13:36:00.000-07:00

By Bruce Wiseman Tuesday, June 9, 2009

On April 2, 2009, control of the planet’s banks was turned over to the secret decisions of eleven men--board members of a Swiss organization with a troubling Nazi past.

Banking wasn’t always that way. . . .

My secretary would come into my office every morning at 9:00 a.m. with a room-service smile and an armload of computer printouts.

She would place the reports on my desk as if she were serving a fine meal and arrange them just so, with the overdraft report on top, and then slip out of the office as if she were trying not to wake anyone.

The customer’s name was on the left side of the page followed by the date the account was opened, the six-month average balance, and a listing of the offending checks that had sentenced the account to the OD report. The amount of the checks and the total overdraft were featured prominently on the right-hand side of the page like perps in a police lineup.

The decisions were twofold: do I pay the checks and, whether paid or not, do I assess overdraft charges? Overdraft charges have gotten rapacious in recent years, but they were $4.00 an item back then, and believe it or not, it takes time, money and effort for bank personnel to track down the impostor and send it home branded with banking’s scarlet letter--insufficient funds.

I would usually let the charges stand, but I was not a tough close if someone called in with a plausible story on why the check beat the deposit to their account. This was usually good for one round of reversed OD charges, but rarely repeated despite screenplay-quality presentations.

A friend of mine had a leather shop down the street where he handcrafted sandals, belts and wallets adorned with peace symbols, which, in those days, were found on everything from condoms to dog collars. He was of the genus Hippy, drove a ratty VW van covered in flowery orange and yellows, and wore iconic bell-bottomed Levi’s. There was great profit in leather goods, but Jimmy paid no attention to his bank balance and overdrew the account with such regularity I sometimes wondered if he was trying to ensure the branch remained profitable.

Banking was more personal then:

“Jimmy, you’re OD again.”

“That’s bullshit, man.”

“No, Jimmy. It’s not bullshit. You’re overdrawn $312.”

“I can’t be overdrawn. I just gave you guys a bunch of bread. You probably held it so some checks would come in first and you could hit me with a bunch of overdraft charges.”

“Lay off the weed, Jimmy. When did you make the deposit?”

“Yesterday. Seven hundred bones. Gave it to that foxy black chick with the Afro.”

“Yes. I see it. But you’re still OD.”

“You’re bummin’ me out, man, really bummin’ me out.”

“When was the last time you reconciled your account, Jimmy?”

“Don’t put that on me, man. That form is a bad trip. Gives me a migraine.”

“Bring your last three statements down to the branch and I’ll have bookkeeping reconcile the account for you.”

“Groovy. You gonna reverse the OD charges?”

“Not a prayer. Bring $312 with you.”

“Fascist.”

Your local bank was also where you went to get a loan to buy your new home. And there it stayed until it was paid off.

A customer would come into the branch, fill out an application and, if approved, we would finance 75%‚Äì80% of the purchase. The borrower would come up with the balance. When the loan was approved, we would issue the funds to escrow at the appropriate time and put the loan on our books, where it would stay, earning the bank the going rate of interest for home loans.

I’m sure there are still some community banks that offer personal service instead of having you talk to someone in the Philippines about your credit card, but I wrote this to make the point that banking--and mortgage banking in particular--had changed.

Banks started selling loans to investors while keeping the servicing. In other words, the borrower would keep making his mortgage payments to the bank that made the loan but the payment would be sent on to the investor who had purchased the loan from the bank. The investors were usually pension plans or large investment funds.

But this change in mortgage lending was just beginning.

A group of leading bankers would soon turn mortgage banking into a cancer that would eat the industry alive. What follows is the earlier beginning to our story ”The Financial Crisis: A Look Behind the Wizard’s Curtain”--a chronicle of the men and institutions who designed the current crisis: a crisis by design.

The purpose of this financial crisis is to take down the United States and the U.S. dollar as the stable datum of planetary finance and, in the midst of the resulting confusion, put in its place a Global Monetary Authority--a planetary financial control organization to “ensure this never happens again.”

But I am getting ahead of myself.

THE JAPANESE

It is 1985 and the Land of the Rising Sun has become the planet’s largest creditor nation. Words like Toyota, Panasonic and Yamaha have become part of the lexicon in places such as Omaha, Cleveland and Des Moines. In 1970, the ten largest banks in the world were American. By the end of the eighties, six of the ten largest banks in the world are Japanese.

What happened?

The Japanese banks were pampered and protected by their government like corporate rock stars. They were permitted to operate with small amounts of reserve capital, which gave them an advantage over other banks and enabled them to expand their market share at the expense of their competition--the major money-center banks in New York and London represented by the dual-headed Darth Vaders of international finance, the U.S. Federal Reserve Bank and the Bank of England.

The Gunfight at the O.K. Corral had nothing on what was about to occur to the banking samurai of Tokyo.

In the eighties, governments had varying regulations about how much capital their banks had to maintain. These standards were supposed to ensure that banks had enough in reserves to protect themselves and their depositors against bad loans.

These “capital adequacy standards” were set as a percentage of the bank’s assets. In other words, if the capital requirements were 8% and a bank had $8,000,000 in capital, they could expand their balance sheet to $100,000,000 in assets (loans and other investments).

But let’s say the capital requirements were 4%. Taking the same bank with the same $8,000,000 in capital, they could carry $200,000,000 in loans and other assets, generating a great deal more income and profit for the bank.

If the capital requirements were 10%, that same bank could have assets of $80,000,000--fewer loans, less income.

You get the picture: the capital requirements dictated what amount of assets the bank could carry. And the amount of assets determined how much income the bank could generate.

The Japanese banks had low capital requirements--one central banker reported them to be as low as 3%. Others claimed 6%. But in either case, they were low. The low capital requirements enabled them to hold more assets, which in turn spun off more income. The elevated income enabled them to offer lower interest rates on loans than the competition could. Their market share grew.

In time, Japanese banking became the Godzilla of international finance--a condition that did not sit well with Alan Greenspan, the recently appointed Chairman of the Federal Reserve Bank, who dealt with the matter like a Mafia chieftain whose turf had been violated by the yakuza.

As soon as he assumed the throne at the Fed, Greenspan, complaining about advantage enjoyed by the Japanese banks, went to his comrades in coin at the Bank of England and executed a two-party agreement establishing capital adequacy standards for U.S. and UK banks. The two of them then turned on their pinstriped Nipponese brothers and told them that they were going to be excluded from Western markets unless they agreed to an international standard of capital adequacy.

The Japanese, dragged to the agreement like a dog to a bath, signed the agreement on July 15, 1988, along with the central bankers of nine other industrialized nations, setting forth “international . . . regulations governing the capital adequacy of international banks.”

The agreement was signed at the secretive Bank for International Settlements in Basel, Switzerland, and is referred to as the Basel Accord. However, since a second accord was signed in 2004 (which we deal with in ”Behind the Wizard’s Curtain”), this agreement is now referred to as Basel I and the 2004 agreement as Basel II.

THE BANK FOR INTERNATIONAL SETTLEMENTS

I have dealt with the Bank for International Settlements in the two previous articles on the financial crisis and am going to take the liberty of quoting from them here. First, ”A Look Behind the Wizard’s Curtain”:

Central banks . . . govern a country’s monetary policy and create the country’s money.

The Bank for International Settlements (BIS), located in Basel, Switzerland, is the central bankers’ bank. There are 55 central banks around the planet that are members, but the BIS is controlled by a board of directors, which is comprised of the elite central bankers of 11 different countries (U.S., UK, Belgium, Canada, France, Germany, Italy, Japan, Switzerland, the Netherlands and Sweden).

Created in 1930, the BIS is owned by its member central banks, which, again, are private entities. The buildings and surroundings that are used for the purpose of the bank are inviolable. No agent of the Swiss public authorities may enter the premises without the express consent of the bank. The bank exercises supervision and police power over its premises. The bank enjoys immunity from criminal and administrative jurisdiction.

In short, they are above the law.

And from the second article, “Hitler’s Bank Goes Global”:

But then the Bank for International Settlements (BIS) . . . has never seen transparency as one of its core values. In fact, given its fascist pedigree, transparency hasn’t been a value at all. Known as Hitler’s bank, the Bank for International Settlements worked arm in arm with the Nazis, facilitating the transfer of gold from Nazi-occupied countries to the Reichsbank, and kept their lines open to the international financial community during the Second World War. . . .

It is like a sovereign state. Its personnel have diplomatic immunity for their persons and papers. No taxes are levied on the bank or the personnel’s salaries. The grounds are sovereign, as are the buildings and offices. The Swiss government has no legal jurisdiction over the bank and no government agency or authority has oversight over its operations.

BASEL I

Basel I established the terms for the minimum capital requirements for the ten central banks that signed the accord: Belgium, Canada, France, Italy, Japan, the Netherlands, the UK, the U.S., Germany and Sweden (Switzerland signed later).

A standard had been set: banks had to maintain capital of 8% of their assets. But according to the agreement, all assets were not the same. Basel I introduced a special system of weighing the risk of different kinds of assets and loans--they referred to it as risk-weighted assets. For example, corporate loans to businesses called for a higher percentage capital than mortgage loans. As a consequence, banks started cutting back on corporate loans and seeking ways to expand their mortgage portfolios.

As for the Japanese banks, they had to adjust. But the Nikkei Index (the Japanese stock market) was booming at the time, so they didn’t consider it a big problem. Between 1984 and 1989 the Nikkei had risen from 11,500 to 38,900. As stocks increased in value, the capital base of the Japanese banks (made up largely of stock) increased as well.

Things were cool. Sake flowed, geishas danced and banker-san was happy. But the good times were short lived. Less than a year later, in May of 1989, the Nikkei began a decline that eventually brought the index down to below 8,000.

As went the Nikkei, so went the capital structure of the banks. Down they went, slashing their ability to lend and sending the entire Japanese economy into a recession that has been called the “Lost Decade.”

You don’t cross the Fed and the Bank of England and get away with it. Not on this planet.

It was a different story for the U.S. banks. The new capital adequacy standards laid down as Basel I had loopholes through which the American bankers were able to drive their Porsches to bonuses larger than the budgets of several third-world countries.

THE INTENTIONS OF BASEL I

Writers have referred to the consequences of Basel I as unintended.

Were they really?

Greenspan not only sat on the board of directors of the Bank for International Settlements, he was also of course the Chairman of the Federal Reserve Bank. From this position he kept interest rates suppressed at abnormally low levels, ushering in a lethal binge of credit excess in America; advanced the Community Reinvestment Act, which mandated mortgage lending to anyone who drew breath (and some who didn’t); and, along with Robert Rubin and Larry Summers, actively fought efforts to regulate the exploding market in toxic financial instruments called derivatives.

This included using his influence to help eliminate laws that had been on the books for decades protecting people from speculative excess and abuse in financial markets (see “The Financial Crisis: A Look Behind the Wizard’s Curtain”).

DERIVATIVES

Derivatives are what Warren Buffet has called “financial weapons of mass destruction"--financial products that seem to have been imported from a galaxy far, far away.

Derivatives are financial instruments that derive their value from some underlying asset. An example of a derivative is one you have heard a lot of lately: mortgage-backed securities.

Here’s how this works. Mortgage loans are packaged up and legally pooled into a financial document called a security. This simply means that there is a formal certificate that represents a group of loans. The investor buys the security. The security pays interest to the investor, which is based on the interest rates of the underlying mortgages.

You can see where the name comes from: the financial instrument, the mortgaged-backed security, is backed by the mortgages.

It is a derivative because the financial instrument, the security, derives its value from the underlying assets (the mortgage loans).

So what were the intentions of the central bankers when they crafted Basel I? One was to take out the Japanese banks. Mission accomplished.

The other was obvious: to curtail lending to corporations while focusing the attention and appetites of those same lenders on the increased income and bonuses available by investing in mortgage-backed securities.

Under Basel I, banks only had to have half as much capital to invest in mortgages as was required for corporate loans. Or put another way, they could invest twice as much in mortgages as they could in corporate loans with the same amount of capital. The more loans, the more income.

What else did the bankers of Basel think was going to happen other than an explosion in mortgage lending? Nothing of course. And later, when the lenders bought credit insurance for the securities, the capital requirements were reduced even further, pouring gas on what had by then become a raging inferno of credit speculation.

CREDIT DEFAULT SWAPS

It wasn’t actually called credit insurance, though. It had another one of those off-planet names: credit default swaps, but in essence that’s what it was. Here’s how this piece of the puzzle fit.

The bank would buy a contract from an insurer that covered the credit risk of the derivative. In other words, the bank would pay a fee to the insuring company--just like an insurance premium--and if the security turned bad, if the loans failed to pay, the insurance company was obligated to cover the bank’s loss.

When banks bought credit default swaps for their derivatives from an AAA-rated insurance company, the derivative itself took on an AAA rating.

When the derivative received an AAA rating, the bank’s capital requirements--already reduced because the derivatives were made up of mortgages--were reduced even more, freeing up more capital, which enabled them to buy more derivatives, which . . .

There were just a couple of small problems. The credit default swaps--not technically being insurance--were entirely unregulated. This meant that the insurance companies that issued these--think American Insurance Group (AIG), which was the world’s largest insurance company and rated AAA, but which is now owned by thee and me--did not have to carry reserves to cover the loss if the trillions of dollars of derivatives they insured went bad.

The other was the fact that with the passage of the Community Reinvestment Act, the mortgage market was awash in subprime loans (borrowers with poor credit, low income, and no or low down payments). And it was these loans that were packaged into mortgage- backed securities by the trillions and sold to virtually every major bank on the planet, making the international financial structure pregnant with disaster.

It was at this point, having originally set the stage with Basel I, that the world’s central bankers returned to the Bank for International Settlements in Basel, Switzerland, and issued a second set of rules referred to as Basel II. Included in the Basel II Accord was an accounting rule called mark to market, which brought the planet’s entire financial system to its knees. Mark to market was like pulling the pin on an enormous hand grenade made up of trillions of dollars of toxic derivatives.

THE FINANCIAL STABILITY BOARD

On April 2, 2009, at a meeting of world leaders in London, the final card was played: terrified about the potential consequences of a planetary meltdown, they agreed to a plan that established a global financial dictatorship at the Bank for International Settlements called the Financial Stability Board. And this, dear friends, was the goal from the beginning.

If we are going to be realists, we must acknowledge that Greenspan--along with a few fellow monetary jihadists like Paulson, Rubin, Summers and Geithner--planted the bomb in Basel I, lit the fuse by ensuring any meaningful protection against it was removed, and then detonated it with Basel II. What followed the explosion was a global financial coup, which was executed in April.

It took a while for the fuse to burn and the bomb to detonate, but when viewed as a well-constructed plan, the intentions seem inescapable: this financial crisis was and is a Crisis by Design.

The story of how Basel II created the worldwide financial crisis and how the Financial Stability Board was created is covered in detail in my earlier articles on this subject: “The Financial Crisis: A Look Behind the Wizard’s Curtain” and “Hitler’s Bank Goes Global.”

It is the second article that spells out what action to take, and what can and should be done.

The articles can be found at www.brucewiseman.net.

A documentary film based on the articles is in pre-production. If you would like more information about the film, contact me at the email address below.

Keep your powder dry.

Bruce Wiseman Most recent columns

Bruce Wiseman is the co-founder of a company that oversees the business and financial affairs of some of the biggest names in Hollywood. He writes and speaks on matters of international finance and banking with particular attention to the oppressive activities of the International Monetary Fund and the World Bank. Bruce has also been an advisor and consultant on the subject of market research, branding and positioning.

He writes a market research newsletter on market research and positioning for such publications as Government Technology and Hotel and Motel Management.

He is also a published fiction author under the pen name, John Truman Wolfe . Bruce holds a Masters Degree with Honors from the California State University at San Jose and is the former Chairman of the Department of History at John F. Kennedy

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Truth and Reality Exiting Stage Left

2010-03-28T13:35:00.002-07:00

By Dr. Tim Ball Monday, February 23, 2009

“When we remember that we are all mad, the mysteries disappear and life stands explained.” Mark Twain’s comment helps me understand the absolute contradictions presented as truth, sense and reality. Consider just a short list.

* Warming is causing global cooling.
* The sun has virtually nothing to do with global temperature change.
* Carbon dioxide, a harmless gas essential to life on Earth is labeled a toxic substance and a pollutant and must be reduced.
* Rewarding failures will reduce the number of failures.
* Punishing success will encourage more success.
* You can have more freedom by letting the government control more of your life.
* You get out of debt by going further into debt.
* The best people to get you out of trouble are the ones who got you there.

The list of absolute contradictions about environment and economies gets longer every day as we drift further from logic and reason.

The frustration and madness is that many of the contradictions only apply to government thinking and worse their actions. These are far removed from reality and all infused with the hypocrisy of, “Do as I say not as I do”. Consider the concept that you can get out of debt by going further in debt. How are ordinary people advised to resolve the problems of indebtedness caused by bad money management?

Reality TV shows are generally anything but reality. However, there is one that appears to be real because it is based on logic and common sense. It is a Canadian program called “Till Debt do us Part”.

The fundamental premise is that “Money is the number one cause of failed marriages.” As a result it uses real people and takes them through the steps necessary to balance their budget, get out of debt and secure their financial future. This is achieved by first sorting out the mess with draconian actions, then ensuring that expenditures do not exceed income. There is a reward for achieving the goals but only given for success.

All these are solid, sensible, ideas, but why do they only apply to ordinary people? Why can’t they go into more debt to get out of debt like the government? The closest they are allowed to come to this notion in the TV program is a debt consolidation loan. But this is only so they can get some breathing space. It allows a reduction of interest rates and though it may extend the repayment time it precludes default and prevents increase in the debt. The debt is not increased because there is no additional money advanced, but as with all personal debt collateral is required.

Why can’t we apply the same rules to the financial mess the corporations and the government have created? A major point that illustrates the difference is collateral. What is the collateral on government loans? I recall asking my students about a $2 billion loan Citibank made to Zaire. What was the collateral? Would Citibank repossess Zaire? Will China repossess the US if it defaults? Who wants to own a bankrupt General Motors? Canadian banks were given high ratings for their operations and ability to avoid some of the financial credit crisis. The joke about Canadian banks is that to get a loan you have to prove you don’t need one.

In the TV program, the credit and debit cards are confiscated. The couple has to detail their expenditures to determine how their profligacy created the debt. They are forced to live within their means. They are forced to live on cash. They must establish a schedule to reduce and eliminate the debt.

The recent massive US Stimulus package is not a debt consolidation. The only collateral is the indebtedness of future generations. (Environmentalists call this an inter-generational when talking about the environment; see the UN quote below.) The Stimulus is a massive loan that will require many years to repay; certainly beyond the tenure of a one-term President. Most of the programs don’t come into effect until the latter half of his first term. By that time the economy will have partially or fully recovered as the market recovers. They will claim it is due to the Stimulus package. Meanwhile government departments will expand and evolve to perpetuate themselves, the debt and the tax burden.

Some madness results in positive effects through unintended consequences. A recent poll of public concerns by The Pew Center shows the economy is the top concern. However, it also shows the environment way down the list as the 16th concern.

imageBetween January 2008 and January 2009 “environment” fell the most of any on the list.

It is reasonable to assume ‘environment’ includes climate change. If Obama continues his opportunistic populist approach, he will set aside any policy that does more harm to the economy. Attempts to limit carbon is unnecessary by any means whether it is a tax, punitive controls through the EPA, or a cap and trade scheme that will have negative economic impact. Shortly negotiations on the next phase of climate change will begin through the UN meeting in Copenhagen. Propaganda to prevent any use of the economy to ignore climate change has already appeared. As Achim Steiner, Executive Director of the UN Environment Program (UNEP) says, With unemployment soaring, bankruptcies climbing, and stock markets in free-fall, it may at first glance seem sensible to ditch the fight against climate change and put environmental investments on hold. But this would be a devastating mistake of immediate, as well as inter-generational, proportions.

However, China among others has already given notice that reduction quotas proposed for the Copenhagen talks won’t work because of their stage of economic development.

Ignoring the environment, especially climate change, is not only sensible at first glance, it is completely sensible because CO2 is not a problem. Obama must know if he doesn’t fix the economy anything else he does becomes madness. So hopefully he will have sanity about climate change forced upon him.

Dr. Tim Ball Most recent columns

Copyright © 2009 CFP
“Dr. Tim Ball is a renowned environmental consultant and former climatology professor at the University of Winnipeg. Dr. Ball employs his extensive background in climatology and other fields as an advisor to the International Climate Science Coalition, Friends of Science and the Frontier Centre for Public Policy.”

Dr. Ball can be reached at: Letters@canadafreepress.com

Congress Donates Your Money To Themselves!

2010-03-28T13:35:00.000-07:00

Monday, June 8, 2009 12:19 PM

By: Fredreka Schouten and Paul Overberg, USA TODAY

WASHINGTON — On a mild evening last September, Citigroup lobbyists mingled with South Carolina Rep. James Clyburn at a rooftop reception — complete with miniature putting greens — as the company hosted a party to honor the third most powerful Democrat in the House and raise money for one of his favorite golf charities.

Health insurers and hospitals, meanwhile, are donating millions to help build an institute in Boston to celebrate the career of Sen. Edward Kennedy, D-Mass., who is attempting to overhaul the nation's health care system.

Despite a ban on gifts to lawmakers and limits on campaign contributions, lobbyists and groups that employ them can spend unlimited money to honor members of Congress or donate to non-profits connected to them or their relatives. The public — until now — had little insight into the scope of this largely hidden world of special-interest influence.

Under ethics rules passed in 2007, lobbyists for the first time last year had to report any payment made for an event or to a group connected to a lawmaker and other top federal officials.

USA TODAY undertook the first comprehensive analysis of the lobbying reports and found 2,759 payments, totaling $35.8 million, were made in 2008. The money went to honor 534 current and former lawmakers, almost 250 other federal officials and more than 100 groups, many of which count lawmakers among their members.

The total cost is roughly equivalent to what the U.S. government spends to operate Yellowstone National Park each year.

Most of the money — about $28 million — went to non-profit groups, some with direct ties to members of Congress. In two cases, USA TODAY found, the donations to non-profits associated with a member of Congress came in response to a personal appeal for funds from the lawmaker.

"It's another example of the many pockets of a politician's coat," says Ellen Miller of the Sunlight Foundation, a watchdog group. The spending amounts to an "end-run" around campaign-finance laws "that are designed to limit the appearance of undue influence," she says.

The money came from companies, trade associations and labor groups that lobby Congress and the government on a range of issues, from seeking a share of last year's $700 billion financial bailout package to trying to shape the debate on climate change.

The donations cover various activities — from a golf tournament that raises money for a lawmaker's non-profit to gifts to the alma mater of a powerful House committee chairman.

"You can still have a gala or something or the other for a charity and earn some favor with members of Congress, which is what the gift ban was put in place to avoid," says Dan Danner, CEO of the National Federation of Independent Business and a veteran Washington lobbyist.

The spending demonstrates the subtle ways that special-interest groups try to sway lawmakers, without making "something as crass as a payoff," says Kenneth Gross, a former Federal Election Commission official.

He credits Congress for mandating the disclosure of the gifts and giving the public another view of the relationships between lobbyists and lawmakers.

Invitation to access

The lobbying reports were required by Congress after former lobbyist Jack Abramoff admitted in 2006 that he provided gifts, including a luxury golf trip to Scotland, to then-representative Bob Ney and others in exchange for favors. It is illegal to provide gifts to federal authorities in exchange for official actions, and both Abramoff and Ney, an Ohio Republican, went to prison.

What is more common — and legal — are donations such as the $40,000 AT&T gave in December to the Blanchette Rockefeller Neurosciences Institute, which researches Alzheimer's. Sen. Jay Rockefeller, D-W.Va., founded the non-profit, which is named for his late mother, and he is the honorary chairman of its board.

These are "not run-of-the-mill charities," says Steve Ellis, vice president of Taxpayers for Common Sense, a watchdog group. "These gifts are another way to gain influence with lawmakers."

Last year, the telecommunication industry gave more than $72,000 to non-profits and charities in honor of Rockefeller, who advocated legislation to provide legal immunity to phone companies that participated in the government's anti-terrorism eavesdropping program. The largest donation came from AT&T. At the time, Rockefeller chaired the Senate Intelligence Committee and helped broker a deal on the bill, which passed last year.

Rockefeller oversees the telecom industry as chairman of the Commerce, Science and Transportation Committee.

Claudia Jones, an AT&T spokeswoman, declined comment.

Interviews show the West Virginia Democrat made a direct appeal to another company for a donation to the institute. Consol Energy gave $25,000 to the institute in October after Rockefeller sent a fundraising letter to CEO J. Brett Harvey, says Thomas Hoffman, Consol's senior vice president. The company operates coal mines in West Virginia.

"It would be foolish to think we don't take note of the fact when a member of Congress says, 'Hey, I think this is something you ought to support,' " Hoffman says.

Rockefeller spokeswoman Jamie Smith declines to discuss the solicitation but says there is no connection between the gifts and the senator's official actions.

"If some in Washington think giving to a cause Jay Rockefeller cares about will affect his policy views, they surely don't know him," she said in an e-mail. "His policies are based on the merits of an issue and on what's good for West Virginia and the country — period."

Rep. Joe Barton of Texas, the top Republican on the House energy committee, asked an energy company to donate to a foundation that bears his name. His daughter-in-law, Amy Barton, is the unpaid director.

Utility giant Exelon gave $25,000 to the non-profit last June and $50,000 in 2006, according to federal records and interviews with company officials.

Barton wrote to Exelon CEO John Rowe, seeking the money, says David Brown, Exelon's top lobbyist. The company is one of the nation's largest producers of nuclear energy. Barton has long advocated on the industry's behalf, pushing for the opening of a nuclear-waste repository at Yucca Mountain, outside Las Vegas.

Barton said he did nothing inappropriate. "There's no personal benefit," he said in an interview. "The money doesn't go to me."

He said he was "very proud" of the foundation's work. The foundation, which funds non-profit groups in his congressional district, donated $375,000 for a $1.2 million Boys & Girls Club in Corsicana, Texas, says Sylvia Waters, a club director. "The bottom line is that there wouldn't be a Boys & Girls Club in Corsicana today if it wasn't for the Joe Barton Family Foundation," Barton said.

Lobbyist ties remain

Despite a pledge by congressional leaders to sever ties between lawmakers and special interests, the reports show lobbyists often give to non-profits associated with the lawmakers who regulate their industries.

Health care groups, for instance, give millions to the planned Edward M. Kennedy Institute for the United States Senate in Boston. Pharmaceutical giant Amgen wrote the biggest check — $5 million in December — to the institute, which will honor Kennedy's more than four decades in Congress and promote the study of the U.S. Senate.

Aetna insurance company donated $50,000.

Kennedy, who is battling brain cancer, chairs the Senate's health and education committee and is at work on comprehensive health care legislation. Aetna has engaged in private talks with Kennedy aides on the bill, Aetna spokesman Mohit Ghose says.

Ghose says the donation was unrelated to those negotiations and instead "advances our goal of continuing to take a leadership role in public policy."

Kelley Davenport, a spokeswoman for Amgen, says the donation reflected the company's interest in lauding Kennedy's long career and in helping "young people to become engaged in public service and public policy."

Kennedy, the records show, was the most honored member of Congress, with a total of nearly $6 million. Most of the money went to the Kennedy institute.

Kennedy spokeswoman Melissa Wagoner and institute trustee Paul Kirk say the Democratic senator has steered clear of potential conflicts of interest with his official duties by not soliciting donations. In total, the organization has collected more than $20 million, according to a January institute news release.

"The principal reason fundraising is going so well is that there is an enormous outpouring of appreciation for Sen. Kennedy's public service," Kirk says.

Amgen spent the most in honor of members of Congress last year, the analysis found. It was among 20 corporations and unions responsible for $17.6 million — or nearly half — of the spending in honor of lawmakers and federal officials last year, the USA TODAY analysis shows. Those groups spent a total of $137.5 million to lobby Congress and federal agencies last year.

Amgen also donated to the Frontier Foundation in honor of Rep. Steve Buyer, R-Ind., who is on the House panel that regulates the drug industry.

The foundation, which provides college scholarships and once was headed by Buyer's daughter, received $385,000 in donations from pharmaceutical companies from 2005 through 2007, according to its IRS filings.

Buyer, who has worked on health policy in Congress for years, helped kill a provision in 2007 opposed by drug companies and broadcasters that would have imposed a three-year ban on advertising new drugs, congressional records show. Consumer advocates, including the Consumers Union, pushed the measure, arguing that aggressive drug pitches unduly sway patients to seek treatment from drugs before their safety records have been established.

During debate by a Commerce subcommittee, Buyer co-sponsored an amendment that stripped the advertising ban from a larger bill overhauling the Food and Drug Administration.

In an interview, Buyer said "there is no connection" between his legislative actions and donations to the foundation. "I'm not an officer. I'm not a board director," he said of his role in the non-profit. "Do I help the foundation? Yes, I do. Do I help other charity groups? Yes, I do."

He referred other questions to foundation officials.

The charity's IRS filing covering the year 2007, the most recent available, listed Buyer's daughter, Colleen, as its unpaid president. Stephanie Mattix, listed as the group's paid secretary/treasurer, is executive director of Buyer's political action committee, Storm Chasers, according to Federal Election Commission filings.

Mattix and Buyer told USA TODAY that Colleen Buyer had left the group and referred questions to its president, Brenda Olthoff. Olthoff did not respond to e-mails and calls. Colleen Buyer did not return telephone calls.

The National Association of Broadcasters contributed $25,000 in honor of Buyer to the foundation last year. Amgen donated $15,000.

"I don't think there is a link between a specific vote on drug legislation and contributing to kids going to college in Indiana," says Dennis Wharton, the broadcasters' executive vice president. "We look at where we think it's a worthy cause."

Davenport, Amgen's spokeswoman, says the gift matched the company's "philanthropic mission to improve education."

'Putting and politics'

The donations are a path for lobbyists and company executives to mingle in more intimate surroundings with lawmakers during weekend golf outings and invitation-only dinners.

Last year, lobbyists and the companies that employ them gave more than $802,000 to non-profit groups in honor of Rep. Clyburn, the USA TODAY analysis shows. Those non-profits included the James E. Clyburn Research and Scholarship Foundation and the First Tee of Washington, D.C., which introduces minority and low-income children to golf.

It was First Tee that benefited from a "Putting and Politics" reception for Clyburn and Sen. Saxby Chambliss, R-Ga., on the rooftop of Citigroup's Washington offices in September. The company has received $45 billion in federal bailout money.

Nick Calio, Citigroup's top lobbyist, attended the reception but declined to comment. Gretchen Hamm, the non-profit's executive director, says Citigroup has donated $75,000 over the past three years.

Clyburn, an avid golfer, is a longtime supporter of First Tee. Two years ago, he inserted $3 million into a spending bill to expand the national program at Defense Department facilities. "Why shouldn't children of military families have access to this program as well?" Clyburn spokeswoman Kristie Greco asks.

Each year, Clyburn presides over a golf tournament that raises money for the scholarship program that bears his name. The former schoolteacher created the charity more than 20 years ago to "help deserving students afford a college education" Greco says. It is managed by an independent board and "Congressman Clyburn does not solicit donations," she adds.

But top executives and lobbyists from companies that contribute to the charity can join Clyburn for two days of golfing in South Carolina. Participants have included executives from Duke Energy and Dell, which donated more than $115,000 worth of computer equipment to students in Clyburn's program last year.

"It's not unusual that our folks in government affairs would play golf with members of Congress and support these causes," says Tom Williams, a spokesman for Duke Energy, which gave $5,000 to Clyburn's foundation last year. "It's part of the political process, and it's well within the law."

Lawmakers' favorite causes

Some organizations closely associated with Congress members and how much they got last year in contributions from lobbyists and groups that hire them:

Sen. Edward Kennedy, D-Mass.
Organization: Edward M. Kennedy Institute for the United States Senate
Connection: Named for Kennedy, wife on board.
Received: $5,050,000

Rep. James Clyburn, D-S.C.
Organization: James E. Clyburn Research and Scholarship Foundation
Connection: Foundation named for congressman.
Received: $326,224
Financial documents: IRS Form 990

Rep. John Lewis, D-Ga.
Organization: The Faith and Politics Institute
Connection: The congressman is co-chair emeritus of the institute.
Received: $206,000
Financial documents: IRS Form 990

Sen. Richard Lugar, R-Ind.
Organization: Richard G. Lugar Center for Renewable Energy
Connection: Center named for the senator.
Received: $140,000
Financial documents: Unavailable

Sen. Jay Rockefeller, D-W.Va.
Organization: Blanchette Rockefeller Neurosciences Institute
Connection: Alzheimer's research institute named for senator's late mother.
Received: $65,000
Financial documents: IRS Form 990

Sen. Susan CollinsR-Maine
Organization: Alliance for Health Reform
Connection: Senator is co-chair of Alliance for Health Reform, along with Sen. Jay Rockefeller, D-W.Va.
Received: $45,000
Financial documents: IRS Form 990

Rep. Steve Buyer, R-Ind.
Organization: Frontier Foundation
Connection: Rep. Buyer's daughter was president of the group, and its treasurer is the executive director of his PAC.
Received: $40,000
Financial documents: IRS Form 990

Rep. Joe Barton, R-Texas
Organization: Joe Barton Family Foundation
Connection: Foundation founded by Rep. Barton. His daughter-in-law, Amy Barton, is the executive director.
Received: $35,000
Financial documents: IRS Form 990

Rep. Alan Mollohan, D-W.Va.
Organization: Robert H. Mollohan Family Charitable Foundation
Connection: Mollohan is on the executive committee; named for his father.
Received: $25,000
Financial documents: IRS Form 990

Rep. Joe Baca, D-Calif.
Organization: Joe Baca Foundation
Connection: Congressman is president of the foundation named for him.
Received: $19,163
Financial documents: IRS Form 990

© 2009 USA Today. All rights reserved. Reprinted Via Rightslink.

Pravda blog

2010-03-28T13:34:00.002-07:00

Yea, I saw that Pravda blog last week and Glenn Beck mentioned it in his show Thursday night (Common Sense Tour). Apparently the people of this nation want everything given to them without having to work for it. They will be sadly awoken to the rest of the country has left for another country and no one will be left to work to pay for their laziness. Only then to find out that 75% of their wages will go to taxes. Microsoft announced that they are considering moving the entire operation off shore to another country because it is too expensive to operate in this country.

AGAINST SCHOOL

2010-03-28T13:34:00.000-07:00

Against School, How public education cripples our kids and why
John Taylor Gatto
Harper's Magazine, September 2003 [not available online]

We live in tumultous times. The citizenry is not in open revolt, and we don't have guillotines in the streets, but take it from me, there's a revolution going on.

Consider: Intellectual capital is now worth more than plant and equipment. Industrial-age management no longer works. Networks are replacing hierarchy. Cycles are more frequent and more volatile. Cooperation edges out competition. Innovation trumps efficiency. Flexibility beats might. Everything's global.

The past no longer illuminates the future. Yesterday's solutions won't solve tomorrow's problems. We need fresh thinking. Zero-based philosophy. A new page. And that's why it is sensible to listen to dissidents.

John Taylor Gatto is an award-winning school teacher who decided that compulsory schooling is what's wrong with our nation's educational system. Tom Jefferson and Abe Lincoln did okay without it, as do millions of home-schoolers today.

Gatto has a marvellous, rabble-rousing website. Read his five-page lead essay in Harper's. You won't be able to resist going to his site for more.

"Boredom was everywhere in my world, and if you asked the kids, as I often did, why they felt so bored, they always gave the same answers: They said the work was stupid, that it made no sense, that they already knew it. They said they wanted to be doing something real, not just sitting around. They said teachers didn't seem to know much about their subjects and clearly weren?t interested in learning more. And the kids were right: their teachers were every bit as bored as they were."

"...the Prussian system was useful in creating not only a harmless electorate and a servile labor force but also a virtual herd of mindless consumers."

Woodrow Wilson, in 1909, said, "We want one class of persons to have a liberal education, and we want another class of persons, a very much larger class, of necessity, in every society, to forgo the privileges of a liberal education and fit themselves to perform specific difficult manual tasks."

Cloister the children, strip them of responsibility and independence, and they will never grow up.
Use this failed model as the blueprint for training adults, and they will never learn.

The Makers of Modern Schooling

The real makers of modern schooling weren't at all who we think.

Not Cotton Mather

or Horace Mann

or John Dewey.

The Makers of Modern Schooling

The real makers of modern schooling were leaders of the new American industrialist class, men like:

	Andrew Carnegie, the steel baron...
John D. Rockefeller, the duke of oil...
	Henry Ford, master of the assembly line which compounded steel and oil into a vehicular dynasty...

and J.P. Morgan, the king of capitalist finance...

The Makers of Modern Schooling

Men like these, and the brilliant efficiency expert Frederick W. Taylor, who inspired the entire "social efficiency" movement of the early twentieth century, along with providing the new Soviet Union its operating philosophy and doing the same job for Fascist Italy and Nazi Germany; men who dreamed bigger dreams than any had dreamed since Napoleon or Charlemagne, these were the makers of modern schooling.

The Business of Schooling

If modern schooling has a “Fourth Purpose,” there must be an earlier three.

Traditional forms of instruction in America, even before the Revolution, had three specific purposes:

To make good people
To make good citizens
And to make each student find some particular talents to develop to the maximum.

The new mass schooling which came about slowly but continuously after 1890, had a different purpose, a "fourth" purpose.

THE
FOURTH
PURPOSE

The fourth purpose steadily squeezed the traditional three to the margins of schooling; in the fourth purpose, school in America became like school in Germany, a servant of corporate and political management.

We should reveal the mechanism of mind control training, habits, and attitudes.

Children were literally trained in bad habits and bad attitudes!

Teachers and principals, “scientifically”certified in teachers college practices, were made unaware of the invisible curriculum they really taught.

The secret of commerce, that kids drive purchases, meant that schools had to become psychological laboratories where training in consumerism was the central pursuit.

The Business of Schooling

Since bored people are the best consumers, school had to be a boring place, and since childish people are the easiest customers to convince, the manufacture of childishness, extended into adulthood, had to be the first priority of factory schools. Naturally, teachers and administrators weren't let in on this plan; they didn't need to be. If they didn't conform to instructions passed down from increasingly centralized school offices, they didn't last long.

In the new system, schools were gradually re-formed to meet the pressing need of big businesses to have standardized customers and employees, standardized because such people are predictable in certain crucial ways by mathematical formulae. Business (and government) can only be efficient if human beings are redesigned to meet simplified specifications. As the century wore on, school spaces themselves were opened bit by bit to commercialization.

These processes didn't advance evenly. Some localities resisted more than others, some decades were more propitious for the plan than others. Especially during and just after national emergencies like WWI, the Depression, WWII, and the Sputnik crisis, the scheme rocketed forward; in quieter moments it was becalmed or even forced to give up some ground.

But even in moments of greatest resistance, the institutions controlling the fourth purpose—great corporations, great universities, government bureaus with vast powers to reward or punish, and corporate journalism—increasingly centralized in fewer and fewer hands throughout the twentieth century, kept a steady hand on the tiller. They had ample resources to wear down and outwait the competition.

The prize was of inestimable value--control of the minds of the young.

School Becomes a Dangerous Place

After 1900 the new mass schooling arenas slowly became impersonal places where children were viewed as HUMAN RESOURCES. Whenever you hear this term, you are certain to be in the presence of employees of the fourth purpose, however unwitting. Human resource children are to be molded and shaped for something called "The Workplace," even though for most of American history American children were reared to expect to create their own workplaces.

In the new workplace, most Americans were slated to work for large corporations or large government agencies, if they worked at all.

This revolution in the composition of the American dream produced some unpleasant byproducts. Since systematic forms of employment demand that employees specialize their efforts in one or another function of systematic production, then clear thinking warns us that incomplete people make the best corporate and government employees.

Earlier Americans like Madison and Jefferson were well aware of this paradox, which our own time has forgotten. And if that is so, mutilation in the interests of later social efficiency has to be one of the biggest tasks assigned to forced schooling.

School Becomes a Dangerous Place

	Not only was the new form of institution spiritually dangerous as a matter of course, but school became a physically dangerous place as well.
What better way to habituate kids to abandoning trust in their peers (and themselves) than to create an atmosphere of constant low-level stress and danger, relief from which is only available by appeal to authority? And many times not even then!
.	Horace Mann had sold forced schooling to industrialists of the mid-nineteenth century as the best "police" to create moral children, but ironically, as it turned out in the twentieth century, big business and big government were best served by making schoolrooms antechambers to Hell.

School Becomes An Arena of Meaningless Pressure

As the twentieth century progressed, and particularly after WWII, schools evolved into behavioral training centers, laboratories of experimentation in the interests of corporations and the government. The original model for this development had been Prussian Germany, but few remembered.

School became jail-time to escape if you could, arenas of meaningless pressure as with the omnipresent "standardized" exams, which study after study concluded were measuring nothing real.

For instance, take the case of Bill Bradley. . .

and George W. Bush,

two of the four finalists in the 2000 presidential race. Bradley had a horrifying 480 on the verbal part of his own SATs, yet graduated from Princeton, won a Rhodes Scholarship, and became a senator; Bush graduated from Yale, became governor of Texas, and president of the United States—with a mediocre 550.

If you can become governor, senator, and president with mediocre SAT scores, what exactly do the tests measure?

Perhaps they sort out good scientists from bad? If so, how is it that both the scientists principally involved in the Human Genome Project have strange scholarly backgrounds to say the least!

Francis S. Collins, the head of the public portion, was homeschooled, never followed any type of formal curriculum, and is a born-again Christian.

Craig Venter was a very bad boy in high school, a surfing bum who nearly flunked out, and he didn't go to college after graduation, but into the U.S. Army as an enlisted man before being shipped off to Vietnam!

School As a Place of Bewilderment and Boredom

	As you'll learn when you read The Underground History of American Education the new purpose of schooling—to serve business and government—could only be achieved efficiently by isolating children from the real world, with adults who themselves were isolated from the real world, and everyone in the confinement isolated from one another.
Only then could the necessary training in boredom and bewilderment begin. Such training is necessary to produce dependable consumers and dependent citizens who would always look for a teacher to tell them what to do in later life, even if that teacher was an ad man or television anchor.
	The rationale, history, and dynamics of Fourth Purpose school procedure are carefully examined in The Underground History of American Education.

A free cassette recording ($8.00 value) of one of John Gatto's famous speeches attacking the sinister structure of modern forced government schooling and a free original autograph plate are yours when you order a copy of his new book, The Underground History of American Education! On this Web site only.

All profits from book sales go toward one of the three major projects of The Odysseus Group, a tax-exempt, nonprofit organization dedicated to school reform.

We call ourselves “Odysseus” because of the central lesson taught more than 2,700 years ago in Homer’s Odyssey, an epic poem and the first form of the novel in a European language. Odysseus was already strong, brilliant, and famous, and he had a chance to be rich, immortal, and adored by ladies and demigodesses. But he chucked it all to go home to his wife and kid!

Odysseus knew something our modern form of schooling has forgotten, he knew what really matters. The Odysseus Group hopes to return schooling to the service of what really matters. This Web site is a work in progress toward that end. Eventually it will include a newsletter of interesting school developments, but that will take some time; right now Odysseus is concentrating on three major projects: publishing and disseminating Underground History, raising money to make a film, The Fourth Purpose, based on the insights of the book, and building a library and retreat center in rural Chenango County (upstate New York) to which people who want to create their own kind of school reform plans can repair to talk to one another, read, and think.

American capitalism gone with a whimper

Front page / Opinion / Columnists

27.04.2009

Source: Pravda.Ru

Pages: 12

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.

Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.

First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their "right" to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our "democracy". Pride blind the foolish.

Then their faith in God was destroyed, until their churches, all tens of thousands of different "branches and denominations" were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the "winning" side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the "winning" side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America's short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.

Then came Barack Obama's command that GM's (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of "pure" free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.

So it should be no surprise, that the American president has followed this up with a "bold" move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK's Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our "wise" Anglo-Saxon fools find out the folly of their own pride.

Again, the American public has taken this with barely a whimper...but a "freeman" whimper.

So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set "fair" maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.

The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.

The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

Stanislav Mishin

The article has been reprinted with the kind permission from the author and originally appears on his blog, Mat Rodina

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