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Sunday, July 8, 2012

Crime of the Century



LOGO: Truthdig: Drilling Beneath the Headlines. A Progressive Journal of News and Opinion. Editor, Robert Scheer. Publisher, Zuade Kaufman.

Crime of the Century






Posted on Jul 6, 2012
AP/Mark Lennihan

Robert E. Diamond Jr., newly resigned as the CEO of Barclays.

Forget Bernie Madoff and Enron’s Ken Lay—they were mere amateurs in financial crime. The current Libor interest rate scandal, involving hundreds of trillions in international derivatives trade, shows how the really big boys play. And these guys will most likely not do the time because their kind rewrites the law before committing the crime.

Modern international bankers form a class of thieves the likes of which the world has never before seen. Or, indeed, imagined. The scandal over Libor—short for London interbank offered rate—has resulted in a huge fine for Barclays Bank and threatens to ensnare some of the world’s top financers. It reveals that behind the world’s financial edifice lies a reeking cesspool of unprecedented corruption. The modern-day robber barons pillage with a destructive abandon totally unfettered by law or conscience and on a scale that is almost impossible to comprehend.

How to explain a $450 million settlement for one bank whose defense, in a plea bargain worked out with regulators in London and Washington, is that every institution in their elite financial circle was doing it? Not just Barclays but JPMorgan Chase, Citigroup and others are now being investigated on suspicion of manipulating the Libor rate, so critical to a $700 trillion derivatives market.

Caught as the proverbial deer in the headlights, Barclays Chairman Robert E. Diamond Jr. resigned this week and offered a plaintive defense to the British Parliament that he learned only recently that his bank was manipulating the index on which so large a part of international trade is based. That is plausible only if we assume he was paid $10 million a year to be deliberately ignorant. The Wall Street Journal had exposed this scandal fully four years ago but his bank continued to participate in it nonetheless.  

“Study Casts Doubt on Key Rate” was the headline on the May 29, 2008, investigative report, which concluded: “Major banks are contributing to the erratic behavior of a crucial global lending benchmark, a Wall Street Journal analysis shows.” Even then, according to the report, it was known that the Libor rate was being manipulated “to act as if the banking system was doing better than it was at critical junctures in the financial crisis.”

Fast-forward four years to Diamond’s testimony before Parliament this week in which the CEO claimed his recent discovery of a pattern of interest manipulation by Barclays had made him “physically sick.” Who was to blame? According to the executive, subordinates acting behind his back.

The American-born banker, who has dual citizenship in the United States and Britain, is well versed in financial chicanery, having started by putting together derivatives packages at Credit Suisse First Boston back in 1996. He was compelled under parliamentary questioning Wednesday to admit that “I can’t sit here and say no one in the industry [knew] about the problems with Libor. There was an issue out there and it should have been dealt with more broadly.” 

He couldn’t deny widespread chicanery within his bank because, as in the collapse of Enron a decade ago, investigators had uncovered an email record of market manipulation so glaring that if the top executives were unaware, it was because they didn’t want to know.  

As The New York Times editorialized: “The evidence, cited by the Justice Department—which Barclays agreed is ‘true and accurate’—is damning. ‘Always happy to help,’ one employee wrote in an email after being asked to submit false information. ‘If you know how to keep a secret, I’ll bring you in on it,’ wrote a Barclays trader to a trader at another bank, referring to their strategies for mutual gain. If that’s not conspiracy and price-fixing, what is?”

The U.S. Justice Department made a deal with Barclays, and although it may prosecute some individuals in the scam, it agreed not to go after the bank itself. “Such an agreement makes sense only if that cooperation will allow prosecutors to nail other banks that have been involved in setting the rates, including potential cases against Citigroup, JPMorgan Chase and HSBC ... ,” the Times editorial said.

Both Citigroup and JPMorgan Chase were reported by The Wall Street Journal years ago to be suspected of rigging the Libor interest rate. The leaders of those banks, despite such media exposure, clearly remained confident enough to continue on their merry way.
The sad reality is that they will probably get away with it. The world of high finance is by design as obscure and opaque as the bankers and their political surrogates can make it, and even this most recent crack in their defense of deception will soon be made to go away.

Click here to check out Robert Scheer’s new book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”


Keep up with Robert Scheer’s latest columns, interviews, tour dates and more at www.truthdig.com/robert_scheer.

Thursday, July 5, 2012

The Elite Coup is Complete (Part 2)

Dissident Voice: a radical newsletter in the struggle for peace and social justice

The Elite Coup is Complete (Part 2)

The thirty-year bloodless coup, taking over America, conducted by the political, academic, and financial elite is a fait accompli as evidenced by the failure to charge anybody for the horrendous, and well documented, criminality behind America’s housing/financial bust of 2008 as described in “The Elite Coup is Complete,”  June 27th, 2012.

Now, for the next step, a leader is needed to implement the final stages of the coup, and all signs point directly at the U.S. presidential election scheduled for November 6th.  This election will likely be the crowning stroke for plutocratic America.

Aside from known political leaders, like President Reagan and Majority Leader Tom “The Hammer” DeLay, for over three decades now, the elites have been led by shadowy, amorphous figureheads that are as perplexing to understand as the Smoking Man in The X-Files TV series, meaning: Things happen to advance the elite’s interests, but, often times, nobody knows how, or by whom. However, now that the elites have completed their coup, they need to elect a leader who understands the business culture of High Net Worth Individuals, which is defined by Forbes Magazine as somebody worth over $30 million, and Mitt Romney qualifies eight times over. This article intends to explore the workings behind the scenes to assure his victory.

There are approximately 300 million television sets in U.S. households and, on average, people watch TV four hours per day; it is a way of life in America, and repetitively, it reinforces messages with images and sound bites. In that regard, and with unlimited amounts of money for political advertising now available, America is about to experience its first-ever presidential election competing for airtime with televangelists.

The question is: Will the political tide turn to a new presidency in 2012 based upon television ads? If the recent Wisconsin recall vote is a prognosticator, which vote included a flawed candidate (Republican Gov. Scott Walker) who overcame a 10-point deficit in the polls as the first governor in U.S. history to withstand a recall vote, the answer is a resounding yes, without a doubt. The Wisconsin experience is proof positive.

Henceforward, ever since the Citizens United decision, the august Supreme Court justices have done more than toss a bone (a very big bone indeed) to wealthy political interests; they have ‘branded’ media as the Tammany Hall of America’s political future. No doubt, Charles Lewis, founder of the Center for Public Integrity and author, or co-author, of 11 books, including The Buying of the President series, will now write a new book, but his research efforts will be a real pain in the gluteus maximus because the Citizens United decision forces him to wear a miner’s hard hat with an attached lamp now that politics have gone deep underground within labyrinthine tunnels that are almost impossible to navigate, thus, bringing forth a new democracy for a new age, redefining democracy, the institution, as purely a tool of ‘who has the most money’ like never before. Henceforth, elections are won as reliably as “throwing a fight” in Las Vegas, circa the1950s.

To understand the challenge for Lewis’ new book, consider the struggle as described by OpenSecrets,  which is the database for the pre-eminent investigative body, Center for Responsive Politics, Washington, D.C., that follows money in politics. They have an on-going strategy; i.e., “Shadow Money Trail,” to locate and catalog contributions to politically active nonprofit organizations that are not required to disclose their donors to the public. Since the Citizens United ruling, OpenSecrets’ experience in discovering information has been similar to traveling in a maze that leads from one dead end to another.

Nevertheless, the Shadow Money Trail has already unearthed some juicy information, but trying to understand the serpentine flow of the various relationships they uncovered gives rise to a migraine headache because: One 501(c)(4) gives funds to another 501(c)(4) and, in turn, to others, and others, and to others to the point where the layers make it nearly impossible to connect the dots {501(c)(4)s are tax-exempt “social welfare” organizations that must operate exclusively to promote social welfare in order to retain their special IRS status and not violate the law.}* An example of a registered 501(c)(4) is Center to Protect Patient’s Rights (“CPPR”) out of Arizona, a secretive well-funded group that masquerades as an organization concerned about health care but which, in reality, funnels money to other secretive groups that spend millions on TV adds attacking Democrats running for the House and Senate. It is entirely possible, and probable, the only patients they protect are right-wing-leaning politicians.

* In 2010, Senate Republicans filibustered, and prevented, a vote on a bill, the DISCLOSE ACT, passed by the House that addressed identification of donors of 501(c) (4) s.

CPPR provides grants to clusters of well-known conservative groups that also operate under 501(c)(4)s classified as “social welfare” groups like American Future Fund, which is based in Iowa. They run hard-hitting ads against Democrats across the country. In turn, American Future Fund funds other hard-hitting 501(c)(4)s, and those recipients fund other funds. You get the picture; however, organizations that have nothing to hide do not need to funnel money from one shadowy group to another to another, leaving “social welfare” in the dust and creating a daisy chain whereby it is impossible to connect the dots. Somehow, this interminable Alice in Wonderland fable never reveals who’s behind the curtain. On the surface, the whole affaire appears so blatantly contrived it stinks like putrid fish in the hot sun! These are grownups playing Ring Around the Rosie.

The executive director of CPPR is Sean Noble of Arizona, a PR/Political consultant and former GOP chief of staff to former Republican Rep. John Shadegg (AR). Noble takes no salary from CPPR, but his firm, Noble Associates, is paid $340,000 for management services. Wow! These people cannot get past the concept of shuffling money from one fund to another fund; everything is shifty!  Sean is also director of a robo-calling service (talk about symbiotic businesses!) called DC London Inc., probably referencing a direct connection to Rebekah Brooks. According to Politico, Noble is a Koch operative. CPPR’s stated mandate is: “…educating the public on issues related to health care with an emphasis on patient’s rights.” Ahem!

This is where the IRS enters the picture because, according to Reuters as of June 29, 2012, the IRS is investigating such groups to determine whether their fundraising or advertising runs afoul of tax law. Here’s the issue in a nutshell: Super PACs, which must disclose their donors, operate independently from campaigns but may release ads that boost or attack specific candidates. Whereas tax-exempt groups qualifying under the U.S. tax code as, for example, “social welfare” groups, which are 501(c)(4)s, are allowed to keep their donors private (secretive) as long as most of their money is spent on so-called “issue ads.” Unlike regular political ads, such ads cannot use a candidate’s name or likeness and are supposed to be used to educate the public on broad issues or positions. There’s a lot of gray area within that mandate, and here’s guessing the law may be violated via convoluted relationships! But, nobody will know for sure until the IRS investigations are completed after the upcoming elections.

Grover Norquist’s Americans for Tax Reform (America’s most powerful Republican political force) is another beneficiary of CPPR.  The names of these groups that play Ring Around the Rosie are always couched in patriotism or social welfare; e.g., 60 Plus Association, Americans for Job Security, US Health Freedom Coalition, Americans United for Life Action (who came up with this one?), Freedom Vote, and Concerned Women 4 America (honestly, these are not fictitious names). The list goes on, and on, with rah-rah all-American-sounding names for organizations that, in reality, conduct operations like 1930s Brown Shirt cells opaquely operating in dark shadows. One has to wonder who they think they are fooling (hopefully, not the IRS), but yet, this is the problem; they are fooling a lot of people! The entire affaire has the odor of impish pranksters, and oh, please… the names of the groups are so embarrassingly phony, trite, spurious, and juvenile, but regardless, and herein lay the ugly truth: Their efforts do influence voters in a very profound way. Just ask Governor Scott Walker of Wisconsin, whose transparent (“legal”) funding groups outspent his Democratic challenger 2-to-1. But, the tentacled non-reporting groups attached to CPPR spent who knows how much? Nobody will ever know, but according to Mike McCabe of Wisconsin Democracy Campaign, “We have a level of outside interference in this election that the state has never seen before.” (Sources claim Walker outspent his opponent 7-to-1.)

This type of stealthy underground, behind-the-curtain politicking carries a particular stench unique to weak-kneed minions that grovel at the feet of insipid moguls. Herein one sees the unseemly underbelly of this upcoming political campaign. One would think the disgust amongst voters would register a strong backlash, but then again, the voters do not know who is behind which curtain… connecting the dots is such a problem. Governor Scott Walker’s victory in Wisconsin proves this in spades.

According to the Center for Media and Democracy: One year ago, 54% of Wisconsinites disapproved of Walker’s job performance. Over the following months, “Walker spent unprecedented sums on a seamless eight-month public relations campaign that dwarfed the television expenditures of his opponent.”

Here’s how Walker did it, as one example: Walker went on air in November 2011 (seven months before the June 2012 recall) with an ad featuring “Kristi,” a high school teacher who effectively frames the issue. “In my opinion, it feels a little bit like sour grapes,” says Kristi with a killer Wisconsin accent, “It feels like — we didn’t get our way, we want to change the outcome.” This message was hammered, and hammered, again, and again, with dark money ads in the final weeks of the election by an unknown group with unknown donors called Coalition for American Values (here we go again with another immature name), featuring actors who “did not vote for Walker,” but brought the message that recalls “are not the Wisconsin way.” Since Coalition for American Values files as a 501(c)(4), the question for the IRS is: Does Kristi’s ad represent money spent for “social welfare” purposes and/or was spending for her ad disproportionate to spending on actual “social welfare” campaigns conducted by Coalition for American Values?

The Koch-funded Americans for Prosperity (here’s another one of those infantile-sounding organizational names, transparently phony and stupid… oh please!) also spent serious money with an intensive ad campaign attempting to convince Wisconsinites that Walker’s budget cuts were working…not! (See: “Will Gov. Scott Walker Ever Come Clean on Wisconsin’s Budget Deficit?”) Eventually, the Koch’s alone would outspend the democratic candidate $10 million to $3.9 million, or over 2:1.

Well… now that the Walker test case was so unbelievably successful, there’s no guessing what happens in the general election coming up in four short months, but the writing is on the wall. If a flawed candidate like Walker can win by coming back from 10 points down in seven months, then just imagine what the underground propagandists can do for Governor Romney, whose race against President Obama is already looking like a photo finish!

With Romney in control, one day it’ll be repeal of Obama’s health care plan, the next day putting people to work on the Keystone XL Pipeline (to read about America’s most under-reported oil spill, Google: “Observer Michigan oil spill”), and followed the next day with carte blanche fracking all across the land to achieve energy independence by forcing/blasting carcinogens deep underground to pressure the release of oil or gas from centuries-old tight formations in the general vicinity of America’s underground fresh water aquifers.

All of this begs the question: What safeguards will be exercised or will the Romney team follow the path of least resistance so characteristic of the Right, eliminating federal governmental regulations, a 100% laissez faire economy with self-regulating private enterprise. This is the mantra of all of the above-mentioned funding groups, but look at what happens when they are regulated…   BP/Gulf of Mexico!

• Read Part 1 here.

Robert Hunziker, a former hedge fund manager, is a professional independent negotiator for worldwide commodity actual transactions and a freelance writer for progressive publications as well as business journals. Mr. Hunziker earned an MA degree in economic history at DePaul University/Chicago, and he resides in Los Angeles. He can be contacted at: rlhunziker@gmail.com. Read other articles by Robert.

The Elite Coup is Complete


Dissident Voice: a radical newsletter in the struggle for peace and social justice



The Elite Coup is Complete

The American plutocratic revolution is now complete. The proof is: There are no criminal charges for the housing bust and financial meltdown of 2008. Starting with Reagan in the 1980s, as of today the Right has won their decades-long overthrow for complete control of America. An elite corps of wealthy now run the country. Their bloodless rebellion, a coup d’etat whereby the Left was nullified by a tripartite (bankers, academia, and politicians) cabal’s tour de force, is a sharp contrast to the old-fashioned traditional bloody coup d’etats we’re accustomed to in South America; e.g., the Chilean September 1973 military coup against President Allende conducted by ultra right wing General Pinochet, who, after bombing the presidential palace, massacred the Left (See the film Missing, by Costa-Gavras, Universal Pictures, 1982.). Of course, Pinochet’s old-fashioned coup had the advantage of speed and efficiency, completed within hours, whereas America’s bloodless coup took decades to accomplish, but on the other hand, America has not yet condoned military occupation on domestic soil.

The proof of a successful coup by the plutocratic elite is everywhere on display because it is absolutely remarkable how much we know about their unethical and/or criminal behavior behind America’s 2007-08 financial meltdown without knowing what to do about it!

As Charles H. Ferguson, winner of the 2010 Academy Award for Best Documentary Feature, Inside Job, says, “There is overwhelming evidence of massive criminal behavior” in the 2007-08 real estate bust and financial meltdown, but nobody has been charged with a crime. This, in part, is why his recently published Predator Nation, Corporate Criminals, Political Corruption, and the Hijacking of America (Random House, 2012) footnotes/documents the virulent combination of unchecked greed and criminal behavior behind the financial collapse of 2008. Ferguson identifies leading bankers, academics, and politicians who collaborated to pillage the American public. The book has been called a “roadmap for prosecution,” naming the culpable, stating the crimes, referencing laws that were broken.

How this tragedy occurred right under the country’s collective noses is a lengthy and nefarious story. Charles Ferguson’s new book covers this story with remarkable detail. Ferguson’s diatribe is laced by a book cover depicting a one hundred dollar bill folded into the image of a hand, flipping the bird, an obvious reference to the perpetrating financial, political, and academic elite’s haughty attitude towards the general public, emphasizing the dauntless, depraved lawlessness behind their theft committed in broad daylight. And, part of Ferguson’s thesis is exactly that; i.e., criminal acts led to, and were the cause of, one of history’s worst financial meltdowns. He also paints the picture of how America has been hijacked by a financial elite, an oligarchy that operates at the expense of the entire American population: “The financial sector is the core of a new oligarchy that has risen to power over the past thirty years, and that has profoundly changed American life.”

Ferguson’s ingenious work is, without a doubt, on target because we, as a nation, know it is true. Not only have oodles of articles and books already flushed out this repugnant story but intuitively, the citizens of the country know it is true because of how the disaster came down; namely, governmental policy and Wall Street chicanery turned the housing industry into a gigantic Las Vegas craps table and dispensed free playing chips to beginners. Millions of unsuspecting Americans bought into this deal-of-a-lifetime, and when the house of cards tumbled, unsuspecting American taxpayers rescued the culprits, but the bankers already tucked away gargantuan fees.

We also know it is true because it happened in broad daylight, right before our eyes, caught on camera was the U.S. Treasury Secretary Henry Paulson, former CEO of Goldman Sachs, on one knee before a stern-faced, but dismayed, House Speaker Nancy Pelosi, pleading congressional approval for $700 billion (taxpayer funds) to bail out his buddies (so sorry Richard S. Fuld, Jr., CEO, Lehman Brothers, no jerks allowed.) Meanwhile, the Federal Reserve turned the SWIFT international wire system white hot, spreading trillions of US Dollars around the globe to foreign banks and multinational corporate interests in order to keep the worldwide ship of state afloat, and surrounding these horrifying events, the housing market crumbled apart like broken tinker toys, credit dissipated, and Wall Street crashed with the durable S& P Index registering a nasty, and ominously devilish, 666 low print early in March 2009.

As of today, people who are not normally schooled in the language of the Wall Street know names of people and of programs, like Goldman Sachs, Bear Stearns, Lehman, Freddie Mac, credit default swaps, and derivatives. Wall Street and big banks are the butt ends of crass jokes on late night TV, and inequality of income/wealth has never been so obvious. According to a recent Survey of Consumer Finance by the Federal Reserve, median family net worth fell 40% from 2007 to 2010. Meanwhile, according to Forbes Magazine, billionaires and multi-millionaires set all-time records. The discrepancy between Middle America and Wall Street has never been so radiantly exposed, and the general public has finally learned how Wall Street makes a killing off their backs. Most likely, Goldman Sachs’ CEO Lloyd Blankfein, whose firm bet against (short sales) toxic securities they sold to other institutions, would not survive a stroll down Main Street in certain parts of the country.

The American public is overly informed about how and why one of the most corrupt and stupidest-ever financial schemes body-slammed the world economy, but as Charles Ferguson astutely declares, “Nobody has gone to jail” (poor ole Bernie Madoff must feel like he’s carrying the burden for everybody.)  Mortgage brokers, Wall Street investment bankers, commercial bankers, credit rating agencies, accountants, and politicians are complicit in the world’s biggest-ever ponzi scheme, taking advantage of the entire population of the country and sticking it to foreign banks/institutions by selling them toxic housing securities. The pure ugliness, brazenness, and gall of the perpetrators is enough to turn one’s stomach. As for CEO Fuld, he was attacked shortly after it was announced Lehman was bankrupt: “He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold.” (The Telegraph, October 7, 2008.)

According to Ferguson, there is overwhelming public evidence in (1) lawsuits, (2) depositions, (3) government investigations, and (4) whistleblowers of highly illegal conduct in the housing bubble and financial crisis. There is a staggering amount of evidence that CEOs of Wall Street firms, like Lehman Brothers, were warned that their financial controls were inadequate and their accounting was wrong, or to put in it in plain English: ‘their books were cooked’. A prime example is a memo warning to top Lehman executives by Senior Vice President Matthew Lee, “I feel it is my ethical and legal responsibility to point out to you that there are billions of dollars of unjustified assets on our balance sheet.” (To see the memo, Google: “Matthew Lee and Lehman.”) A month later Lee was dismissed from the firm and the CEO of Lehman continued to stand by the firm’s financial statements even though warned of extreme problems, inaccuracies, and overstatements; e.g., ‘Repo 105’ transactions artificially boosted the firm’s balance sheet by $50 billion! This is illegal corporate behavior of the first order, but where are the criminal charges?

Furthermore, according to Ferguson, “Over the last thirty years, in parallel with deregulation and the rising power of money in American politics, significant portions of American academia have deteriorated into ‘pay to play’ activities. The sale of academic expertise for the purpose of influencing government policy, the courts, and public opinion is now a multibillion-dollar business,” academia has become embedded within the finance industry and its greatest apologist, Exhibit A, is Lawrence Summers, former Treasury Secretary, former President of Harvard, former Head of the Council of Economic Advisors, former Mister Everything Economics, a proponent of the deregulation of financial services; i.e., elimination of the Glass-Steagall Act, which kept commercial bankers out of the risky securities business ever since 1933, stating, when significant parts of Glass-Steagall were overturned: “With this bill, the American financial system takes a major step forward towards the 21stCentury.”  Thus, Summers was directly behind the entire meltdown, but as a highly endorsed hedge fund/banking consultant raking in millions, before and after his stint with Clinton, he had to follow his true conscience; i.e., benefactors, and push to kill the 1933 Act, which successfully, and responsively, protected bank depositors from risky commercial bank shenanigans for over 60 years.

Summers is the one who dressed down Raghuram Rajan (Finance Professor, University of Chicago; Chief Economist IMF), who presented a paper about credit default swaps at the Federal Reserve Jackson Hole 2005 Conference, Has Financial Development Made the World Riskier? accusing firms of “goosing up returns” with latent risk, which proved to be precisely what cratered A.I.G., asking the prescient question: “If firms today implicitly are selling various kinds of default insurance to goose up returns, what happens if catastrophe strikes?” Rajan’s critique was thoughtful, balanced, and very obviously on point; it is indeed a sad commentary that Summers immediately stood up, lambasting Rajan and calling him a “Luddite,” but on the other hand, since Summers planned to be or was/is in the pockets of hedge funds and Wall Street, he flippantly overlooked the most obvious of dangers to the entire financial system in concert with the “profits now” mentality that bends to Wall Street’s every wish.

The real mystery is how and why they get away with it when their crimes and/or despicable ethical behavior prove so hideous… and so obvious, and thus, many astute progressive mouths dropped wide open with dismay when President Obama insanely appointed Summers as the Director of the National Economic Council, which only goes to prove what a tight clique exist amongst academia, politicians, and Wall Street whereby bad judgment and/or unethical practices are overlooked in favor of companionship-to-profits.

Nobody has gone to jail and as Ferguson explained in an interview with Amy Goodman on Democracy Now, “There is overwhelming evidence of massive criminal behavior.” Ferguson says: “the American people need to take their country back.” He suggests some kind of nationwide movement but without stating specifics. Indeed, the stench of the entire cabal, including academia, politicians, Wall Street, and rating agencies is so loathsomely squalid, and rotten to the core, it would not surprise if perpetrators are dragged into the streets in the middle of the night, stripped naked, tarred, feathered and run out of town on a rail, assuming some daring citizens become so fed up with the ‘system’ they take matters into their own hands.

Otherwise, and because nobody has been criminally charged, one can bitterly assume the country is now firmly in the hands of a wealthy elite, including academicians who, similar to guns for hire, will say or publish anything for a buck. With 20/20 hindsight, it is now clear the citizenry of the country cannot trust, but also cannot do anything about (other than revolt in the streets), the tripartite cabal that stole their country in broad daylight right under their noses. And, really…  isn’t it a crying shame the intelligentsia, who we trust to educate our society, is so deeply involved… but… come to think about it, they probably saw what happened to their colleagues in Chile under Pinochet, concluding life is much better, and easier, when one is part of the Inside Job.

By definition … if no criminal charges are filed, the coup is complete.
Robert Hunziker, a former hedge fund manager, is a professional independent negotiator for worldwide commodity actual transactions and a freelance writer for progressive publications as well as business journals. Mr. Hunziker earned an MA degree in economic history at DePaul University/Chicago, and he resides in Los Angeles. He can be contacted at: rlhunziker@gmail.com. Read other articles by Robert.

Tuesday, July 3, 2012

8 Ways America's Headed Back to the Robber-Baron Era

AlterNet.org


We are recreating the Gilded Age, a period when corporations ruled this nation, buying politicians, using violence against unions and engaging in open corruption.

 
 
 
Over the past 40 years, corporations and politicians have rolled back many of the gains made by working and middle-class people over the previous century. We have the highest level of income inequality in 90 years, both private and public sector unions are under a concerted attack, and federal and state governments intend to cut deficits by slashing services to the poor.

We are recreating the Gilded Age, the period of the late 19th and early 20th centuries when corporations ruled this nation, buying politicians, using violence against unions, and engaging in open corruption. During the Gilded Age, many Americans lived in stark poverty, in crowded tenement housing, without safe workplaces, and lacked any safety net to help lift them out of hard times.

With Republicans more committed than ever to repealing every economic gain the working-class has achieved in the last century and the Democrats seemingly unable to resist, we need to understand the Gilded Age to see what conservatives are trying to do to this nation. Here are 8 ways our corporations, politicians and courts are trying to recreate the Gilded Age.

1. Unregulated Corporate Capitalism Creates Economic Collapse

In the late 19th century, corrupt railroad capitalists created the Panic of 1873 and Panic of 1893 through lying about their business activities, buying off politicians and siphoning off capital into their own pockets. Railroad corporations set up phony corporations that allowed them to embezzle money from the railroad into their bank accounts. When exposed, the entire economy collapsed as banks failed around the country. The Panic of 1893 lasted five years, created 25% unemployment, and was the worst economic crisis in American history before the Great Depression.

In the early 21st century, the poorly regulated financial industry plunged the nation into the longest economic downturn since the Depression. Like in the Gilded Age, none of the culprits have served a day in prison.

2. Union Busting

In the Gilded Age, business used the power of the state to crush labor unions. President Hayes called in the Army to break the Great Railroad Strike of 1877; President Cleveland did the same against the Pullman strikers in 1894.
Today’s corporations don’t have to use such blunt force to destroy unions, but like in the past, they convince the government to do their bidding. Whether it is holding up FAA renewal in order to make it harder for airline employees to unionize, Republican members of the National Labor Relations Board leaking material on cases to Republican insiders, or governors Scott Walker and John Kasich seeking to bust their states’ public sector unions, not since before the Great Depression has the government attacked unions with such force.

3. Income Inequality

Today, we have the highest levels of income inequality since the 1920s and the gap is widening to late 19th century levels with great speed. In those days, individuals like John D. Rockefeller had more money than the federal government, while the majority of Americans lived in squalor, poverty and disease.

In the Progressive Era, we started creating laws like the federal income tax, child labor laws and workers’ compensation to begin giving workers a fair share of the pie. For decades, labor fought to increase their share and by the 1970s, had turned much of the working class into the middle class. Today, that middle class is under attack by a new generation of plutocrats who wish to recreate the massive fortunes of the Gilded Age.

4. Open Purchase of Elections

In 1890, copper magnate William Clark paid Montana lawmakers $140,000 to elect him to the U.S. Senate. While most plutocrats did not share Clark’s interest in being politicians, they ensured their lackeys would serve in office, often by offering corporate stock to politicians. Disgusted by this corruption, America in the Progressive Era of the early 20th century created a number of reforms, including the 17th Amendment that created direct elections of senators, as well as a 1912 Montana state law limiting corporate expenditures in politics.
Beginning with the Citizens United decision and continuing with the recent overturning of that 1912 law, the Supreme Court has allowed corporations and wealthy plutocrats to buy elections openly once again.

5. Supreme Court Partisanship

In the Gilded Age, the Supreme Court interpreted laws not as to the intent of the lawmakers, but to promote business interests. It refused to enforce the 14th Amendment to stop segregation, but it did create the idea that a corporation was a person with rights. The Sherman Anti-Trust Act of 1890 was intended to moderate monopolies; the Supreme Court only enforced it against unions since organized labor “unfairly restrained trade.”

Today’s Supreme Court has resorted to this aggressively partisan stance. The Court is fine with the open flouting of the 4th Amendment, allowing strip searches of middle-school girls if they’re suspected to be carrying drugs, but creates a grotesque expansion of the 14th Amendment in the Citizens United decision. Meanwhile, Antonin Scalia just took the opportunity in a Supreme Court dissent to lambast his colleagues for striking down much of the Arizona anti-immigration law by approvingly citing 19th-century laws in the South that limited the movement of African Americans.

6. Violations of Civil Liberties

In the late 19th century, civil and military authorities looked down upon protesting citizens. Widespread violations of civil liberties took place when Americans protested for almost any reasons, whether it was labor unions, political gatherings in Washington, D.C., or African Americans organizing to protect themselves from white supremacists. Police shot strikers and thugs and mobs murdered organizers.

Today we are seeing a growing recreation of this society with no respect for civil liberties. The use of police violence against Occupy protesters, like the pepper-spraying of nonviolent activists at the University of California-Davis did spawn some outrage. But in the aftermath of the PATRIOT Act, the authorities have tremendous power to suppress protest and are not afraid to use it against peaceful citizens.

7. Voter Repression

The Gilded Age saw the rolling back of Reconstruction, with black people unable to vote in the South due to the grandfather clause, poll taxes, literacy tests, and threat of violence. Conservative extremists have chafed at black people voting ever since the civil rights movement ended segregation.

Today, voter ID laws and voter roll-purging seek to limit black voting again. Florida Governor Rick Scott hopes to purge enough black people from the voting rolls to swing the Sunshine State to Mitt Romney this fall, while a lawmaker in Pennsylvania openly said the Keystone State’s recently passed voter ID law would do the same. Even more shocking, the recently released Texas Republican Party platform has a plank calling for the repeal of the Voting Rights Act of 1965, passed in the wake of police beatings of civil rights protestors in Selma, Alabama.

8. Anti-Immigration Fervor

In the Gilded Age, Americans feared the millions of people coming from eastern and southern Europe, the Middle East and Asia to work in the nation’s growing economy. Fearing these immigrants would never assimilate, Americans looked to bar their entry. Beginning with the Chinese Exclusion Act in 1882 and continuing through the Immigration Act of 1924, the country slowly closed its doors to the world’s tired and hungry.

Today’s immigrants face an increasingly militarized border, states like Arizona trying to usurp federal immigration policy, and increased numbers of deportations. Conservatives fear the changes Latinos could bring to the United States and talk about English-only laws and the evils of bilingual education. They also recognize the likelihood of Latinos voting for the Democratic Party in coming decades and thus use the same kind of voter repression strategies that target black voters.

The Gilded Age was a horrible time and I fear the nation slipping back into this hell of poverty, violence and hate. I believe that young people largely reject the extremist agenda that is hurtling us through a time machine to the bad old days of the 1890s, but they don’t have the power right now. Republicans know the demographics do not favor them and are trying to fix the game through voter suppression, packing the courts with extremists, and concentrating wealth and power so they can control politicians and the media.

During the Gilded Age, people throughout society began organizing for reform: labor unions, farmers, middle-class reformers. After 1900, this organizing paid off as government began passing reforms to alleviate the most extreme problems of the Gilded Age. Child labor laws, worker compensation for injuries at work, government regulation of the railroads, and the direct election of senators all took power away from corporations and put it back in the hands of the people. It wasn’t perfect, but it started the social reforms that created the American middle-class.

Like in the late 19th century, we need to take back our country from corporate control. We need to create well-paid jobs in the United States, revitalize the labor movement, and pass legislation to respect civil liberties, give undocumented immigrants legal status, and ensure that voting rights laws are enforced. Like our ancestors, we can fix these problems. First we need to recognize that the 1% has declared war upon the middle class and then we can start organizing to create the better tomorrow we crave.  

Erik Loomis is a professor of labor and environmental history and a blogger at Lawyers, Guns and Money.