Some of the nation’s large banks, according to economists and other finance experts, are like dead men walking.
A sober assessment of the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets, they say. The banks, in their view, are insolvent.
None of the experts’ research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are federally insured. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.
Staggering. The bankster gangsters whined and moaned to let them hold less and less reserves than ever. All the while creating loan money out of thin air to collect interest from us. They get kickbacks from the Fed for being in the game. They turned Wall Street into a fraudulent casino. They extorted the TARP from us to keep their lies alive. Every bit of our economy is rigged for their benefit. Now they are demanding more! Once again, these assholes are saying the whole economy will tank if we–you and me–do not buy the worthless junk assets from them. This will be bigger than TARP. And despite all of Obama’s bluster and bull, he will back this–just watch. We, the people are being robbed blind. This system has to end. It is winding down (possibly exploding) already on its own. When the Dollar collapses–REMEMBER WHAT THEY DID!!
Watch to the end. The last bit is important.
President Obama called his $3.8-trillion budget a big step in restoring America’s economic health. Last year he promoted TARP, the Troubled Assets Relief Program to bail out the financial sector at a mere $700 billion. Anyone – even billionaire bankers — can make mistakes that wreak ruin on the rest of us!
Obama also declared as “untouchable” the Pentagon budget of $1.5 trillion (including hidden costs in other government branches), which dwarfs the rescue package for the financial oligarchs. Both payouts, however, used the same logic: Congress taking from the have-nots and giving it to the have-mores. Indeed, the economic, political and military potentates depend on the federal budget to transfer taxpayer resources to them.
This evolving military-industrial complex, a partnership of interlocking government and corporate networks, has used public wealth to enrich itself. The manufacturing part of this complex rarely produces anything people live in, wear, or eat.
It’s remarkable how nervous I get when calling Washington Journal on C-Span. I have no problem getting on a stage and speaking my mind. I make part of my living doing voice-overs –selling people things I don’t necessarily believe in. But get me on the phone talking to the whole country and my voice retreats to near-pubescent form and I can hardly make my thoughts become words. But anyway…..
This last Monday morning C-Span’s Washington Journal featured Don Peck, assistant Editor of The Atlantic, on for his latest article “How a New Jobless Era Will Transform America”. The thrust of his article was really pushed aside as callers to the program kept arguing about Obama’s stimulus package and other attempts to make the economy better. Peck was on the side of the stimulus. This brought a rash of callers against it–usually making the argument that we are placing the burden on future generations. I’m personally not against government stimulus–especially when directed at our infrastructure. But I do have a problem with the unsustainable economic system that restricts the government’s ability to spend money intelligently when necessary. So I called and surprisingly made it in as the last caller of the day:
To be fair–I don’t think Don Peck is qualified to respond to my comment. He probably didn’t even understand what I was saying. To think otherwise would require believing him a shill for the Federal Reserve, and I am not making that accusation. His response is the rote message of those given positions like his with no real understanding of how money is created in this economic system. If he understood what I was saying, he might answer “Yes–this would be the best thing that could happen, but because of (insert excuse) it won’t”.
For those that are ignorant, like Don Peck, I will briefly attempt to fill you in:
The U.S. government has two ways of getting the money it wants to spend: taxes (plus fees and tariffs) and borrowing. Of course, borrowing occurs when the government wants to spend more than it takes in in taxes and fees. To do this the government issues bonds and treasury bills backed by the faith in their ability to extract payments from the public and American businesses in the future. This system has been in place since 1913. At this point, our debt (of over 14 trillion) breaks down like this: About 1/4 is owed to foreign countries. Another 1/4 is owed to mutual funds, private savings bonds, private pension funds, state and local government pension funds, insurance companies, and other investors. And about 1/2 is owed to the Federal Reserve stock-holding member banks. These are basically all of the biggest banks in the country –you know–the ones we recently bailed out. And these member banks don’t just get 1/2 of the interest payments we make every year in the form of taxes, they also get to split up the profit the Fed makes on issuing new loan credits.
Why is it like this? Well, when examining the history one can take either the official government position or the conspiratorial view. The government says that in 1913 we set up The Fed to stop inflationary bubbles and money panics from spiking the American economy. The idea sold to the public was that we needed stable big money entities like Chase and Rockefeller to back up our Dollar. Without them we’d be doomed to continuous cycles of panic. The conspiracy theory is that the big banks engineered the panics to convince the government to let them have their way and set up the Fed for their own benefit.
Does this matter today? Not really. Whether you believe in the honesty of bankers in 1913 or the conspiracy theories surrounding them doesn’t matter today. What matters is that after nearly 100 years, the American Dollar has proven that it doesn’t need private backers to make it work. After all this time it should be apparent that the American people are what backs this currency. We’re all grown up now. We don’t need big banker Daddy’s blessing any more…..In fact, we had to bail Dad out of bankruptcy recently.
If a government can issue bonds, treasury bills and other I.O.U’s, why can it not simply create money? The answer is it can. And it can do it without creating debt. In this modern age, there is no reason (other than the greed of some elites) for a prosperous country to have any National Debt at all.
There is a lot more to this idea of making money work for The People instead of enslaving them. I encourage you learn about it. I also encourage you and everyone call shows like Washington Journal, radio shows, etc. and make this idea heard far and wide.
….Even if it makes you feel nervous.
While bank bailouts fatten Wall Street, states continue to battle the credit crisis. In the search for innovative solutions, some political candidates are proposing that states generate their own credit by setting up their own banks.
If you’re reading this, you’re no doubt asking yourself, “Why did this have to happen?” The simple truth is that it is complicated and has been coming for a long time. The writing process, started many months ago, was intended to be therapy in the face of the looming realization that there isn’t enough therapy in the world that can fix what is really broken. Needless to say, this rant could fill volumes with example after example if I would let it. I find the process of writing it frustrating, tedious, and probably pointless… especially given my gross inability to gracefully articulate my thoughts in light of the storm raging in my head. Exactly what is therapeutic about that I’m not sure, but desperate times call for desperate measures.
We are all taught as children that without laws there would be no society, only anarchy. Sadly, starting at early ages we in this country have been brainwashed to believe that, in return for our dedication and service, our government stands for justice for all. We are further brainwashed to believe that there is freedom in this place, and that we should be ready to lay our lives down for the noble principals represented by its founding fathers. Remember? One of these was “no taxation without representation”. I have spent the total years of my adulthood unlearning that crap from only a few years of my childhood. These days anyone who really stands up for that principal is promptly labeled a “crackpot”, traitor and worse.
While very few working people would say they haven’t had their fair share of taxes (as can I), in my lifetime I can say with a great degree of certainty that there has never been a politician cast a vote on any matter with the likes of me or my interests in mind. Nor, for that matter, are they the least bit interested in me or anything I have to say.
Why is it that a handful of thugs and plunderers can commit unthinkable atrocities (and in the case of the GM executives, for scores of years) and when it’s time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours? Yet at the same time, the joke we call the American medical system, including the drug and insurance companies, are murdering tens of thousands of people a year and stealing from the corpses and victims they cripple, and this country’s leaders don’t see this as important as bailing out a few of their vile, rich cronies. Yet, the political “representatives” (thieves, liars, and self-serving scumbags is far more accurate) have endless time to sit around for year after year and debate the state of the “terrible health care problem”. It’s clear they see no crisis as long as the dead people don’t get in the way of their corporate profits rolling in.
And justice? You’ve got to be kidding!
How can any rational individual explain that white elephant conundrum in the middle of our tax system and, indeed, our entire legal system? Here we have a system that is, by far, too complicated for the brightest of the master scholars to understand. Yet, it mercilessly “holds accountable” its victims, claiming that they’re responsible for fully complying with laws not even the experts understand. The law “requires” a signature on the bottom of a tax filing; yet no one can say truthfully that they understand what they are signing; if that’s not “duress” than what is. If this is not the measure of a totalitarian regime, nothing is.
How did I get here?
My introduction to the real American nightmare starts back in the early ‘80s. Unfortunately after more than 16 years of school, somewhere along the line I picked up the absurd, pompous notion that I could read and understand plain English. Some friends introduced me to a group of people who were having ‘tax code’ readings and discussions. In particular, zeroed in on a section relating to the wonderful “exemptions” that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy. We carefully studied the law (with the help of some of the “best”, high-paid, experienced tax lawyers in the business), and then began to do exactly what the “big boys” were doing (except that we weren’t steeling from our congregation or lying to the government about our massive profits in the name of God). We took a great deal of care to make it all visible, following all of the rules, exactly the way the law said it was to be done.
The intent of this exercise and our efforts was to bring about a much-needed re-evaluation of the laws that allow the monsters of organized religion to make such a mockery of people who earn an honest living. However, this is where I learned that there are two “interpretations” for every law; one for the very rich, and one for the rest of us… Oh, and the monsters are the very ones making and enforcing the laws; the inquisition is still alive and well today in this country.
That little lesson in patriotism cost me $40,000+, 10 years of my life, and set my retirement plans back to 0. It made me realize for the first time that I live in a country with an ideology that is based on a total and complete lie. It also made me realize, not only how naive I had been, but also the incredible stupidity of the American public; that they buy, hook, line, and sinker, the crap about their “freedom”… and that they continue to do so with eyes closed in the face of overwhelming evidence and all that keeps happening in front of them.
Before even having to make a shaky recovery from the sting of the first lesson on what justice really means in this country (around 1984 after making my way through engineering school and still another five years of “paying my dues”), I felt I finally had to take a chance of launching my dream of becoming an independent engineer.
On the subjects of engineers and dreams of independence, I should digress somewhat to say that I’m sure that I inherited the fascination for creative problem solving from my father. I realized this at a very young age.
The significance of independence, however, came much later during my early years of college; at the age of 18 or 19 when I was living on my own as student in an apartment in Harrisburg, Pennsylvania. My neighbor was an elderly retired woman (80+ seemed ancient to me at that age) who was the widowed wife of a retired steel worker. Her husband had worked all his life in the steel mills of central Pennsylvania with promises from big business and the union that, for his 30 years of service, he would have a pension and medical care to look forward to in his retirement. Instead he was one of the thousands who got nothing because the incompetent mill management and corrupt union (not to mention the government) raided their pension funds and stole their retirement. All she had was social security to live on.
In retrospect, the situation was laughable because here I was living on peanut butter and bread (or Ritz crackers when I could afford to splurge) for months at a time. When I got to know this poor figure and heard her story I felt worse for her plight than for my own (I, after all, I thought I had everything to in front of me). I was genuinely appalled at one point, as we exchanged stories and commiserated with each other over our situations, when she in her grandmotherly fashion tried to convince me that I would be “healthier” eating cat food (like her) rather than trying to get all my substance from peanut butter and bread. I couldn’t quite go there, but the impression was made. I decided that I didn’t trust big business to take care of me, and that I would take responsibility for my own future and myself.
Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-the-ears’ contract software engineer… and two years later, thanks to the fine backroom, midnight effort by the sleazy executives of Arthur Andersen (the very same folks who later brought us Enron and other such calamities) and an equally sleazy New York Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its section 1706.
For you who are unfamiliar, here is the core text of the IRS Section 1706, defining the treatment of workers (such as contract engineers) for tax purposes. Visit this link for a conference committee report (http://www.synergistech.com/1706.shtml#ConferenceCommitteeReport) regarding the intended interpretation of Section 1706 and the relevant parts of Section 530, as amended. For information on how these laws affect technical services workers and their clients, read our discussion here (http://www.synergistech.com/ic-taxlaw.shtml).
SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.
(a) IN GENERAL – Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:
(d) EXCEPTION. – This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.
(b) EFFECTIVE DATE. – The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.
· “another person” is the client in the traditional job-shop relationship.
· “taxpayer” is the recruiter, broker, agency, or job shop.
· “individual”, “employee”, or “worker” is you.
Admittedly, you need to read the treatment to understand what it is saying but it’s not very complicated. The bottom line is that they may as well have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.
During 1987, I spent close to $5000 of my ‘pocket change’, and at least 1000 hours of my time writing, printing, and mailing to any senator, congressman, governor, or slug that might listen; none did, and they universally treated me as if I was wasting their time. I spent countless hours on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this atrocity. This, only to discover that our efforts were being easily derailed by a few moles from the brokers who were just beginning to enjoy the windfall from the new declaration of their “freedom”. Oh, and don’t forget, for all of the time I was spending on this, I was loosing income that I couldn’t bill clients.
After months of struggling it had clearly gotten to be a futile exercise. The best we could get for all of our trouble is a pronouncement from an IRS mouthpiece that they weren’t going to enforce that provision (read harass engineers and scientists). This immediately proved to be a lie, and the mere existence of the regulation began to have its impact on my bottom line; this, of course, was the intended effect.
Again, rewind my retirement plans back to 0 and shift them into idle. If I had any sense, I clearly should have left abandoned engineering and never looked back.
Instead I got busy working 100-hour workweeks. Then came the L.A. depression of the early 1990s. Our leaders decided that they didn’t need the all of those extra Air Force bases they had in Southern California, so they were closed; just like that. The result was economic devastation in the region that rivaled the widely publicized Texas S&L fiasco. However, because the government caused it, no one gave a shit about all of the young families who lost their homes or street after street of boarded up houses abandoned to the wealthy loan companies who received government funds to “shore up” their windfall. Again, I lost my retirement.
Years later, after weathering a divorce and the constant struggle trying to build some momentum with my business, I find myself once again beginning to finally pick up some speed. Then came the .COM bust and the 911 nightmare. Our leaders decided that all aircraft were grounded for what seemed like an eternity; and long after that, ‘special’ facilities like San Francisco were on security alert for months. This made access to my customers prohibitively expensive. Ironically, after what they had done the Government came to the aid of the airlines with billions of our tax dollars … as usual they left me to rot and die while they bailed out their rich, incompetent cronies WITH MY MONEY! After these events, there went my business but not quite yet all of my retirement and savings.
By this time, I’m thinking that it might be good for a change. Bye to California, I’ll try Austin for a while. So I moved, only to find out that this is a place with a highly inflated sense of self-importance and where damn little real engineering work is done. I’ve never experienced such a hard time finding work. The rates are 1/3 of what I was earning before the crash, because pay rates here are fixed by the three or four large companies in the area who are in collusion to drive down prices and wages… and this happens because the justice department is all on the take and doesn’t give a fuck about serving anyone or anything but themselves and their rich buddies.
To survive, I was forced to cannibalize my savings and retirement, the last of which was a small IRA. This came in a year with mammoth expenses and not a single dollar of income. I filed no return that year thinking that because I didn’t have any income there was no need. The sleazy government decided that they disagreed. But they didn’t notify me in time for me to launch a legal objection so when I attempted to get a protest filed with the court I was told I was no longer entitled to due process because the time to file ran out. Bend over for another $10,000 helping of justice.
So now we come to the present. After my experience with the CPA world, following the business crash I swore that I’d never enter another accountant’s office again. But here I am with a new marriage and a boatload of undocumented income, not to mention an expensive new business asset, a piano, which I had no idea how to handle. After considerable thought I decided that it would be irresponsible NOT to get professional help; a very big mistake.
When we received the forms back I was very optimistic that they were in order. I had taken all of the years information to Bill Ross, and he came back with results very similar to what I was expecting. Except that he had neglected to include the contents of Sheryl’s unreported income; $12,700 worth of it. To make matters worse, Ross knew all along this was missing and I didn’t have a clue until he pointed it out in the middle of the audit. By that time it had become brutally evident that he was representing himself and not me.
This left me stuck in the middle of this disaster trying to defend transactions that have no relationship to anything tax-related (at least the tax-related transactions were poorly documented). Things I never knew anything about and things my wife had no clue would ever matter to anyone. The end result is… well, just look around.
I remember reading about the stock market crash before the “great” depression and how there were wealthy bankers and businessmen jumping out of windows when they realized they screwed up and lost everything. Isn’t it ironic how far we’ve come in 60 years in this country that they now know how to fix that little economic problem; they just steal from the middle class (who doesn’t have any say in it, elections are a joke) to cover their asses and it’s “business-as-usual”. Now when the wealthy fuck up, the poor get to die for the mistakes… isn’t that a clever, tidy solution.
As government agencies go, the FAA is often justifiably referred to as a tombstone agency, though they are hardly alone. The recent presidential puppet GW Bush and his cronies in their eight years certainly reinforced for all of us that this criticism rings equally true for all of the government. Nothing changes unless there is a body count (unless it is in the interest of the wealthy sows at the government trough). In a government full of hypocrites from top to bottom, life is as cheap as their lies and their self-serving laws.
I know I’m hardly the first one to decide I have had all I can stand. It has always been a myth that people have stopped dying for their freedom in this country, and it isn’t limited to the blacks, and poor immigrants. I know there have been countless before me and there are sure to be as many after. But I also know that by not adding my body to the count, I insure nothing will change. I choose to not keep looking over my shoulder at “big brother” while he strips my carcass, I choose not to ignore what is going on all around me, I choose not to pretend that business as usual won’t continue; I have just had enough.
I can only hope that the numbers quickly get too big to be white washed and ignored that the American zombies wake up and revolt; it will take nothing less. I would only hope that by striking a nerve that stimulates the inevitable double standard, knee-jerk government reaction that results in more stupid draconian restrictions people wake up and begin to see the pompous political thugs and their mindless minions for what they are. Sadly, though I spent my entire life trying to believe it wasn’t so, but violence not only is the answer, it is the only answer. The cruel joke is that the really big chunks of shit at the top have known this all along and have been laughing, at and using this awareness against, fools like me all along.
I saw it written once that the definition of insanity is repeating the same process over and over and expecting the outcome to suddenly be different. I am finally ready to stop this insanity. Well, Mr. Big Brother IRS man, let’s try something different; take my pound of flesh and sleep well.
The communist creed: From each according to his ability, to each according to his need.
The capitalist creed: From each according to his gullibility, to each according to his greed.
Joe Stack (1956-2010)
Here is the elegantly simple and obvious solution: because a nation’s government has the power to create money, do so. Instead of rolling-over the national debt as its individual securities come due and are redeemed (paying them by additional borrowing), just pay them with government created money. To avoid inflation, concurrently restrict the banking industry’s fractional reserve power to inflate this money through lending by increasing their reserve requirement proportionally. The reserve requirement is the percentage of deposits they cannot create credit from when someone asks for a loan. This ends the debt while maintaining the money supply.
Without knowing how money is created and managed, all other topics concerning money are out of context.