January 3, 2013. That was an act of a statesman.
It appears that he wants the wages and salaries to become part of the Euro equation as the country is bound by it's rules if it does not leave the Euro. Being in Euro Finland like other currently wealthier countries forces them to pay the debts of the poorer countries.
It is obvious that people will reject that as an outragious theft of their money.
There is a need to find a way to devalue or revalue a common currency while inside this currency like Euro. This can only be done by decreasing or increasing all wages and salaries simultaneously inside a country and at the same time shifting this change an equitable way to all products and services sold inside this country. This will adjust the wealth of the people correctly in comparison to the wealth in other countries.
The above will balance it all but how to get people accept is another issue. This can simply never fly if the company management wages, salaries and full compensation is never revealed and their full compensation is too far from the ordinary peoples wages and salaries.
In the current environment where executive salaries everywhere are raising like rockets towards the stratosphere there is no hope that any solidarity can be found to make decisions that would be good for any country at large.
If adjustment of wages and salries are used to adjust the domesticly produced product the same time it all would work. The computers can always calculate the new product prices for all stores even separately.
If done this move would likely reduce the speed of the phenomally rising support to the untranationalists and pirat parties that today seem to be the only entities that think clearly in the whole Europe.
The others behave like sheep on the way to a slaugterhouse and that is literally what is going to happen withiout a change in the needed solidarity between the workers and executices.
Tis is going to become more interesting.
November 15, 2012 by Ron Paul, Dr., and Republican Presidential contestant over the several past decades.
To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is “envy” which leads to hate and class warfare. Number two is “intolerance” which leads to bigoted and judgmental policies. These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.
Watch / read below:
This may well be the last time I speak on the House Floor. At the end of the year I’ll leave Congress after 23 years in office over a 36 year period. My goals in 1976 were the same as they are today: promote peace and prosperity by a strict adherence to the principles of individual liberty.
It was my opinion, that the course the U.S. embarked on in the latter part of the 20th Century would bring us a major financial crisis and engulf us in a foreign policy that would overextend us and undermine our national security.
To achieve the goals I sought, government would have had to shrink in size and scope, reduce spending, change the monetary system, and reject the unsustainable costs of policing the world and expanding the American Empire.
The problems seemed to be overwhelming and impossible to solve, yet from my view point, just following the constraints placed on the federal government by the Constitution would have been a good place to start.
In many ways, according to conventional wisdom, my off-and-on career in Congress, from 1976 to 2012, accomplished very little. No named legislation, no named federal buildings or highways—thank goodness. In spite of my efforts, the government has grown exponentially, taxes remain excessive, and the prolific increase of incomprehensible regulations continues. Wars are constant and pursued without Congressional declaration, deficits rise to the sky, poverty is rampant and dependency on the federal government is now worse than any time in our history.
All this with minimal concerns for the deficits and unfunded liabilities that common sense tells us cannot go on much longer. A grand, but never mentioned, bipartisan agreement allows for the well-kept secret that keeps the spending going. One side doesn’t give up one penny on military spending, the other side doesn’t give up one penny on welfare spending, while both sides support the bailouts and subsidies for the banking and corporate elite. And the spending continues as the economy weakens and the downward spiral continues. As the government continues fiddling around, our liberties and our wealth burn in the flames of a foreign policy that makes us less safe.
The major stumbling block to real change in Washington is the total resistance to admitting that the country is broke. This has made compromising, just to agree to increase spending, inevitable since neither side has any intention of cutting spending.
The country and the Congress will remain divisive since there’s no “loot left to divvy up.”
Without this recognition the spenders in Washington will continue the march toward a fiscal cliff much bigger than the one anticipated this coming January.
I have thought a lot about why those of us who believe in liberty, as a solution, have done so poorly in convincing others of its benefits. If liberty is what we claim it is- the principle that protects all personal, social and economic decisions necessary for maximum prosperity and the best chance for peace- it should be an easy sell. Yet, history has shown that the masses have been quite receptive to the promises of authoritarians which are rarely if ever fulfilled.
If authoritarianism leads to poverty and war and less freedom for all individuals and is controlled by rich special interests, the people should be begging for liberty. There certainly was a strong enough sentiment for more freedom at the time of our founding that motivated those who were willing to fight in the revolution against the powerful British government.
During my time in Congress the appetite for liberty has been quite weak; the understanding of its significance negligible. Yet the good news is that compared to 1976 when I first came to Congress, the desire for more freedom and less government in 2012 is much greater and growing, especially in grassroots America. Tens of thousands of teenagers and college age students are, with great enthusiasm, welcoming the message of liberty.
I have a few thoughts as to why the people of a country like ours, once the freest and most prosperous, allowed the conditions to deteriorate to the degree that they have.
Freedom, private property, and enforceable voluntary contracts, generate wealth. In our early history we were very much aware of this. But in the early part of the 20th century our politicians promoted the notion that the tax and monetary systems had to change if we were to involve ourselves in excessive domestic and military spending. That is why Congress gave us the Federal Reserve and the income tax.
The majority of Americans and many government officials agreed that sacrificing some liberty was necessary to carry out what some claimed to be “progressive” ideas. Pure democracy became acceptable.
They failed to recognized that what they were doing was exactly opposite of what the colonists were seeking when they broke away from the British.
Some complain that my arguments makes no sense, since great wealth and the standard of living improved for many Americans over the last 100 years, even with these new policies.
But the damage to the market economy, and the currency, has been insidious and steady. It took a long time to consume our wealth, destroy the currency and undermine productivity and get our financial obligations to a point of no return. Confidence sometimes lasts longer than deserved. Most of our wealth today depends on debt.
The wealth that we enjoyed and seemed to be endless, allowed concern for the principle of a free society to be neglected. As long as most people believed the material abundance would last forever, worrying about protecting a competitive productive economy and individual liberty seemed unnecessary.
This neglect ushered in an age of redistribution of wealth by government kowtowing to any and all special interests, except for those who just wanted to left alone. That is why today money in politics far surpasses money currently going into research and development and productive entrepreneurial efforts.
The material benefits became more important than the understanding and promoting the principles of liberty and a free market. It is good that material abundance is a result of liberty but if materialism is all that we care about, problems are guaranteed.
The crisis arrived because the illusion that wealth and prosperity would last forever has ended. Since it was based on debt and a pretense that debt can be papered over by an out-of-control fiat monetary system, it was doomed to fail. We have ended up with a system that doesn’t produce enough even to finance the debt and no fundamental understanding of why a free society is crucial to reversing these trends.
If this is not recognized, the recovery will linger for a long time. Bigger government, more spending, more debt, more poverty for the middle class, and a more intense scramble by the elite special interests will continue.
Without an intellectual awakening, the turning point will be driven by economic law. A dollar crisis will bring the current out-of-control system to its knees.
If it’s not accepted that big government, fiat money, ignoring liberty, central economic planning, welfarism, and warfarism caused our crisis we can expect a continuous and dangerous march toward corporatism and even fascism with even more loss of our liberties. Prosperity for a large middle class though will become an abstract dream.
This continuous move is no different than what we have seen in how our financial crisis of 2008 was handled. Congress first directed, with bipartisan support, bailouts for the wealthy. Then it was the Federal Reserve with its endless quantitative easing. If at first it doesn’t succeed try again; QE1, QE2, and QE3 and with no results we try QE indefinitely—that is until it too fails. There’s a cost to all of this and let me assure you delaying the payment is no longer an option. The rules of the market will extract its pound of flesh and it won’t be pretty.
The current crisis elicits a lot of pessimism. And the pessimism adds to less confidence in the future. The two feed on themselves, making our situation worse.
If the underlying cause of the crisis is not understood we cannot solve our problems. The issues of warfare, welfare, deficits, inflationism, corporatism, bailouts and authoritarianism cannot be ignored. By only expanding these policies we cannot expect good results.
Everyone claims support for freedom. But too often it’s for one’s own freedom and not for others. Too many believe that there must be limits on freedom. They argue that freedom must be directed and managed to achieve fairness and equality thus making it acceptable to curtail, through force, certain liberties.
Some decide what and whose freedoms are to be limited. These are the politicians whose goal in life is power. Their success depends on gaining support from special interests.
The great news is the answer is not to be found in more “isms.” The answers are to be found in more liberty which cost so much less. Under these circumstances spending goes down, wealth production goes up, and the quality of life improves.
Just this recognition—especially if we move in this direction—increases optimism which in itself is beneficial. The follow through with sound policies are required which must be understood and supported by the people.
But there is good evidence that the generation coming of age at the present time is supportive of moving in the direction of more liberty and self-reliance. The more this change in direction and the solutions become known, the quicker will be the return of optimism.
Our job, for those of us who believe that a different system than the one that we have had for the last 100 years, has driven us to this unsustainable crisis, is to be more convincing that there is a wonderful, uncomplicated, and moral system that provides the answers. We had a taste of it in our early history. We need not give up on the notion of advancing this cause.
It worked, but we allowed our leaders to concentrate on the material abundance that freedom generates, while ignoring freedom itself. Now we have neither, but the door is open, out of necessity, for an answer. The answer available is based on the Constitution, individual liberty and prohibiting the use of government force to provide privileges and benefits to all special interests.
After over 100 years we face a society quite different from the one that was intended by the Founders. In many ways their efforts to protect future generations with the Constitution from this danger has failed. Skeptics, at the time the Constitution was written in 1787, warned us of today’s possible outcome. The insidious nature of the erosion of our liberties and the reassurance our great abundance gave us, allowed the process to evolve into the dangerous period in which we now live.
Today we face a dependency on government largesse for almost every need. Our liberties are restricted and government operates outside the rule of law, protecting and rewarding those who buy or coerce government into satisfying their demands. Here are a few examples:
• Undeclared wars are commonplace.
• Welfare for the rich and poor is considered an entitlement.
• The economy is overregulated, overtaxed and grossly distorted by a deeply flawed monetary system.
• Debt is growing exponentially.
• The Patriot Act and FISA legislation passed without much debate have resulted in a steady erosion of our 4th Amendment rights.
• Tragically our government engages in preemptive war, otherwise known as aggression, with no complaints from the American people.
• The drone warfare we are pursuing worldwide is destined to end badly for us as the hatred builds for innocent lives lost and the international laws flaunted. Once we are financially weakened and militarily challenged, there will be a lot resentment thrown our way.
• It’s now the law of the land that the military can arrest American citizens, hold them indefinitely, without charges or a trial.
• Rampant hostility toward free trade is supported by a large number in Washington.
• Supporters of sanctions, currency manipulation and WTO trade retaliation, call the true free traders “isolationists.”
• Sanctions are used to punish countries that don’t follow our orders.
• Bailouts and guarantees for all kinds of misbehavior are routine.
• Central economic planning through monetary policy, regulations and legislative mandates has been an acceptable policy.
Excessive government has created such a mess it prompts many questions:
• Why are sick people who use medical marijuana put in prison?
• Why does the federal government restrict the drinking of raw milk?
• Why can’t Americans manufacturer rope and other products from hemp?
• Why are Americans not allowed to use gold and silver as legal tender as mandated by the Constitution?
• Why is Germany concerned enough to consider repatriating their gold held by the FED for her in New York? Is it that the trust in the U.S. and dollar supremacy beginning to wane?
• Why do our political leaders believe it’s unnecessary to thoroughly audit our own gold?
• Why can’t Americans decide which type of light bulbs they can buy?
• Why is the TSA permitted to abuse the rights of any American traveling by air?
• Why should there be mandatory sentences—even up to life for crimes without victims—as our drug laws require?
• Why have we allowed the federal government to regulate commodes in our homes?
• Why is it political suicide for anyone to criticize AIPAC ?
• Why haven’t we given up on the drug war since it’s an obvious failure and violates the people’s rights? Has nobody noticed that the authorities can’t even keep drugs out of the prisons? How can making our entire society a prison solve the problem?
• Why do we sacrifice so much getting needlessly involved in border disputes and civil strife around the world and ignore the root cause of the most deadly border in the world-the one between Mexico and the US?
• Why does Congress willingly give up its prerogatives to the Executive Branch?
• Why does changing the party in power never change policy? Could it be that the views of both parties are essentially the same?
• Why did the big banks, the large corporations, and foreign banks and foreign central banks get bailed out in 2008 and the middle class lost their jobs and their homes?
• Why do so many in the government and the federal officials believe that creating money out of thin air creates wealth?
• Why do so many accept the deeply flawed principle that government bureaucrats and politicians can protect us from ourselves without totally destroying the principle of liberty?
• Why can’t people understand that war always destroys wealth and liberty?
• Why is there so little concern for the Executive Order that gives the President authority to establish a “kill list,” including American citizens, of those targeted for assassination?
• Why is patriotism thought to be blind loyalty to the government and the politicians who run it, rather than loyalty to the principles of liberty and support for the people? Real patriotism is a willingness to challenge the government when it’s wrong.
• Why is it is claimed that if people won’t or can’t take care of their own needs, that people in government can do it for them?
• Why did we ever give the government a safe haven for initiating violence against the people?
• Why do some members defend free markets, but not civil liberties?
• Why do some members defend civil liberties but not free markets? Aren’t they the same?
• Why don’t more defend both economic liberty and personal liberty?
• Why are there not more individuals who seek to intellectually influence others to bring about positive changes than those who seek power to force others to obey their commands?
• Why does the use of religion to support a social gospel and preemptive wars, both of which requires authoritarians to use violence, or the threat of violence, go unchallenged? Aggression and forced redistribution of wealth has nothing to do with the teachings of the world great religions.
• Why do we allow the government and the Federal Reserve to disseminate false information dealing with both economic and foreign policy?
• Why is democracy held in such high esteem when it’s the enemy of the minority and makes all rights relative to the dictates of the majority?
• Why should anyone be surprised that Congress has no credibility, since there’s such a disconnect between what politicians say and what they do?
• Is there any explanation for all the deception, the unhappiness, the fear of the future, the loss of confidence in our leaders, the distrust, the anger and frustration? Yes there is, and there’s a way to reverse these attitudes. The negative perceptions are logical and a consequence of bad policies bringing about our problems. Identification of the problems and recognizing the cause allow the proper changes to come easy.
Too many people have for too long placed too much confidence and trust in government and not enough in themselves. Fortunately, many are now becoming aware of the seriousness of the gross mistakes of the past several decades. The blame is shared by both political parties. Many Americans now are demanding to hear the plain truth of things and want the demagoguing to stop. Without this first step, solutions are impossible.
Seeking the truth and finding the answers in liberty and self-reliance promotes the optimism necessary for restoring prosperity. The task is not that difficult if politics doesn’t get in the way.
Politicians deceive themselves as to how wealth is produced. Excessive confidence is placed in the judgment of politicians and bureaucrats. This replaces the confidence in a free society. Too many in high places of authority became convinced that only they, armed with arbitrary government power, can bring about fairness, while facilitating wealth production. This always proves to be a utopian dream and destroys wealth and liberty. It impoverishes the people and rewards the special interests who end up controlling both political parties.
It’s no surprise then that much of what goes on in Washington is driven by aggressive partisanship and power seeking, with philosophic differences being minor.
Economic ignorance is commonplace. Keynesianism continues to thrive, although today it is facing healthy and enthusiastic rebuttals. Believers in military Keynesianism and domestic Keynesianism continue to desperately promote their failed policies, as the economy languishes in a deep slumber.
Humanitarian arguments are always used to justify government mandates related to the economy, monetary policy, foreign policy, and personal liberty. This is on purpose to make it more difficult to challenge. But, initiating violence for humanitarian reasons is still violence. Good intentions are no excuse and are just as harmful as when people use force with bad intentions. The results are always negative.
The immoral use of force is the source of man’s political problems. Sadly, many religious groups, secular organizations, and psychopathic authoritarians endorse government initiated force to change the world.
Even when the desired goals are well-intentioned—or especially when well-intentioned—the results are dismal. The good results sought never materialize. The new problems created require even more government force as a solution. The net result is institutionalizing government initiated violence and morally justifying it on humanitarian grounds.
This is the same fundamental reason our government uses force for invading other countries at will, central economic planning at home, and the regulation of personal liberty and habits of our citizens.
It is rather strange, that unless one has a criminal mind and no respect for other people and their property, no one claims it’s permissible to go into one’s neighbor’s house and tell them how to behave, what they can eat, smoke and drink or how to spend their money.
Yet, rarely is it asked why it is morally acceptable that a stranger with a badge and a gun can do the same thing in the name of law and order. Any resistance is met with brute force, fines, taxes, arrests, and even imprisonment. This is done more frequently every day without a proper search warrant.
Restraining aggressive behavior is one thing, but legalizing a government monopoly for initiating aggression can only lead to exhausting liberty associated with chaos, anger and the breakdown of civil society. Permitting such authority and expecting saintly behavior from the bureaucrats and the politicians is a pipe dream. We now have a standing army of armed bureaucrats in the TSA, CIA, FBI, Fish and Wildlife, FEMA, IRS, Corp of Engineers, etc. numbering over 100,000. Citizens are guilty until proven innocent in the unconstitutional administrative courts.
Government in a free society should have no authority to meddle in social activities or the economic transactions of individuals. Nor should government meddle in the affairs of other nations. All things peaceful, even when controversial, should be permitted.
We must reject the notion of prior restraint in economic activity just we do in the area of free speech and religious liberty. But even in these areas government is starting to use a backdoor approach of political correctness to regulate speech-a dangerous trend. Since 9/11 monitoring speech on the internet is now a problem since warrants are no longer required.
The Constitution established four federal crimes. Today the experts can’t even agree on how many federal crimes are now on the books—they number into the thousands. No one person can comprehend the enormity of the legal system—especially the tax code. Due to the ill-advised drug war and the endless federal expansion of the criminal code we have over 6 million people under correctional suspension, more than the Soviets ever had, and more than any other nation today, including China. I don’t understand the complacency of the Congress and the willingness to continue their obsession with passing more Federal laws. Mandatory sentencing laws associated with drug laws have compounded our prison problems.
The federal register is now 75,000 pages long and the tax code has 72,000 pages, and expands every year. When will the people start shouting, “enough is enough,” and demand Congress cease and desist.
Liberty can only be achieved when government is denied the aggressive use of force. If one seeks liberty, a precise type of government is needed. To achieve it, more than lip service is required.
Two choices are available.
1. A government designed to protect liberty—a natural right—as its sole objective. The people are expected to care for themselves and reject the use of any force for interfering with another person’s liberty. Government is given a strictly limited authority to enforce contracts, property ownership, settle disputes, and defend against foreign aggression.
2. A government that pretends to protect liberty but is granted power to arbitrarily use force over the people and foreign nations. Though the grant of power many times is meant to be small and limited, it inevitably metastasizes into an omnipotent political cancer. This is the problem for which the world has suffered throughout the ages. Though meant to be limited it nevertheless is a 100% sacrifice of a principle that would-be-tyrants find irresistible. It is used vigorously—though incrementally and insidiously. Granting power to government officials always proves the adage that: “power corrupts.”
Once government gets a limited concession for the use of force to mold people habits and plan the economy, it causes a steady move toward tyrannical government. Only a revolutionary spirit can reverse the process and deny to the government this arbitrary use of aggression. There’s no in-between. Sacrificing a little liberty for imaginary safety always ends badly.
Today’s mess is a result of Americans accepting option #2, even though the Founders attempted to give us
The results are not good. As our liberties have been eroded our wealth has been consumed. The wealth we see today is based on debt and a foolish willingness on the part of foreigners to take our dollars for goods and services. They then loan them back to us to perpetuate our debt system. It’s amazing that it has worked for this long but the impasse in Washington, in solving our problems indicate that many are starting to understand the seriousness of the world -wide debt crisis and the dangers we face. The longer this process continues the harsher the outcome will be.
Many are now acknowledging that a financial crisis looms but few understand it’s, in reality, a moral crisis. It’s the moral crisis that has allowed our liberties to be undermined and permits the exponential growth of illegal government power. Without a clear understanding of the nature of the crisis it will be difficult to prevent a steady march toward tyranny and the poverty that will accompany it.
Ultimately, the people have to decide which form of government they want; option #1 or option #2. There is no other choice. Claiming there is a choice of a “little” tyranny is like describing pregnancy as a “touch of pregnancy.” It is a myth to believe that a mixture of free markets and government central economic planning is a worthy compromise. What we see today is a result of that type of thinking. And the results speak for themselves.
American now suffers from a culture of violence. It’s easy to reject the initiation of violence against one’s neighbor but it’s ironic that the people arbitrarily and freely anoint government officials with monopoly power to initiate violence against the American people—practically at will.
Because it’s the government that initiates force, most people accept it as being legitimate. Those who exert the force have no sense of guilt. It is believed by too many that governments are morally justified in initiating force supposedly to “do good.” They incorrectly believe that this authority has come from the “consent of the people.” The minority, or victims of government violence never consented to suffer the abuse of government mandates, even when dictated by the majority. Victims of TSA excesses never consented to this abuse.
This attitude has given us a policy of initiating war to “do good,” as well. It is claimed that war, to prevent war for noble purposes, is justified. This is similar to what we were once told that: “destroying a village to save a village” was justified. It was said by a US Secretary of State that the loss of 500,000 Iraqis, mostly children, in the 1990s, as a result of American bombs and sanctions, was “worth it” to achieve the “good” we brought to the Iraqi people. And look at the mess that Iraq is in today.
Government use of force to mold social and economic behavior at home and abroad has justified individuals using force on their own terms. The fact that violence by government is seen as morally justified, is the reason why violence will increase when the big financial crisis hits and becomes a political crisis as well.
First, we recognize that individuals shouldn’t initiate violence, then we give the authority to government. Eventually, the immoral use of government violence, when things goes badly, will be used to justify an individual’s “right” to do the same thing. Neither the government nor individuals have the moral right to initiate violence against another yet we are moving toward the day when both will claim this authority. If this cycle is not reversed society will break down.
When needs are pressing, conditions deteriorate and rights become relative to the demands and the whims of the majority. It’s then not a great leap for individuals to take it upon themselves to use violence to get what they claim is theirs. As the economy deteriorates and the wealth discrepancies increase—as are already occurring— violence increases as those in need take it in their own hands to get what they believe is theirs. They will not wait for a government rescue program.
When government officials wield power over others to bail out the special interests, even with disastrous results to the average citizen, they feel no guilt for the harm they do. Those who take us into undeclared wars with many casualties resulting, never lose sleep over the death and destruction their bad decisions caused. They are convinced that what they do is morally justified, and the fact that many suffer just can’t be helped.
When the street criminals do the same thing, they too have no remorse, believing they are only taking what is rightfully theirs. All moral standards become relative. Whether it’s bailouts, privileges, government subsidies or benefits for some from inflating a currency, it’s all part of a process justified by a philosophy of forced redistribution of wealth. Violence, or a threat of such, is the instrument required and unfortunately is of little concern of most members of Congress.
Some argue it’s only a matter of “fairness” that those in need are cared for. There are two problems with this. First, the principle is used to provide a greater amount of benefits to the rich than the poor. Second, no one seems to be concerned about whether or not it’s fair to those who end up paying for the benefits. The costs are usually placed on the backs of the middle class and are hidden from the public eye. Too many people believe government handouts are free, like printing money out of thin air, and there is no cost. That deception is coming to an end. The bills are coming due and that’s what the economic slowdown is all about.
Sadly, we have become accustomed to living with the illegitimate use of force by government. It is the tool for telling the people how to live, what to eat and drink, what to read and how to spend their money.
To develop a truly free society, the issue of initiating force must be understood and rejected. Granting to government even a small amount of force is a dangerous concession.
Our Constitution, which was intended to limit government power and abuse, has failed. The Founders warned that a free society depends on a virtuous and moral people. The current crisis reflects that their concerns were justified.
Most politicians and pundits are aware of the problems we face but spend all their time in trying to reform government. The sad part is that the suggested reforms almost always lead to less freedom and the importance of a virtuous and moral people is either ignored, or not understood. The new reforms serve only to further undermine liberty. The compounding effect has given us this steady erosion of liberty and the massive expansion of debt. The real question is: if it is liberty we seek, should most of the emphasis be placed on government reform or trying to understand what “a virtuous and moral people” means and how to promote it. The Constitution has not prevented the people from demanding handouts for both rich and poor in their efforts to reform the government, while ignoring the principles of a free society. All branches of our government today are controlled by individuals who use their power to undermine liberty and enhance the welfare/warfare state-and frequently their own wealth and power.
If the people are unhappy with the government performance it must be recognized that government is merely a reflection of an immoral society that rejected a moral government of constitutional limitations of power and love of freedom.
If this is the problem all the tinkering with thousands of pages of new laws and regulations will do nothing to solve the problem.
It is self-evident that our freedoms have been severely limited and the apparent prosperity we still have, is nothing more than leftover wealth from a previous time. This fictitious wealth based on debt and benefits from a false trust in our currency and credit, will play havoc with our society when the bills come due. This means that the full consequence of our lost liberties is yet to be felt.
But that illusion is now ending. Reversing a downward spiral depends on accepting a new approach.
Expect the rapidly expanding homeschooling movement to play a significant role in the revolutionary reforms needed to build a free society with Constitutional protections. We cannot expect a Federal government controlled school system to provide the intellectual ammunition to combat the dangerous growth of government that threatens our liberties.
The internet will provide the alternative to the government/media complex that controls the news and most political propaganda. This is why it’s essential that the internet remains free of government regulation.
Many of our religious institutions and secular organizations support greater dependency on the state by supporting war, welfare and corporatism and ignore the need for a virtuous people.
I never believed that the world or our country could be made more free by politicians, if the people had no desire for freedom.
Under the current circumstances the most we can hope to achieve in the political process is to use it as a podium to reach the people to alert them of the nature of the crisis and the importance of their need to assume responsibility for themselves, if it is liberty that they truly seek. Without this, a constitutionally protected free society is impossible.
If this is true, our individual goal in life ought to be for us to seek virtue and excellence and recognize that self-esteem and happiness only comes from using one’s natural ability, in the most productive manner possible, according to one’s own talents.
Productivity and creativity are the true source of personal satisfaction. Freedom, and not dependency, provides the environment needed to achieve these goals. Government cannot do this for us; it only gets in the way. When the government gets involved, the goal becomes a bailout or a subsidy and these cannot provide a sense of personal achievement.
Achieving legislative power and political influence should not be our goal. Most of the change, if it is to come, will not come from the politicians, but rather from individuals, family, friends, intellectual leaders and our religious institutions. The solution can only come from rejecting the use of coercion, compulsion, government commands, and aggressive force, to mold social and economic behavior. Without accepting these restraints, inevitably the consensus will be to allow the government to mandate economic equality and obedience to the politicians who gain power and promote an environment that smothers the freedoms of everyone. It is then that the responsible individuals who seek excellence and self-esteem by being self-reliance and productive, become the true victims.
What are the greatest dangers that the American people face today and impede the goal of a free society? There are five.
1. The continuous attack on our civil liberties which threatens the rule of law and our ability to resist the onrush of tyranny.
2. Violent anti-Americanism that has engulfed the world. Because the phenomenon of “blow-back” is not understood or denied, our foreign policy is destined to keep us involved in many wars that we have no business being in. National bankruptcy and a greater threat to our national security will result.
3. The ease in which we go to war, without a declaration by Congress, but accepting international authority from the UN or NATO even for preemptive wars, otherwise known as aggression.
4. A financial political crisis as a consequence of excessive debt, unfunded liabilities, spending, bailouts, and gross discrepancy in wealth distribution going from the middle class to the rich. The danger of central economic planning, by the Federal Reserve must be understood.
5. World government taking over local and US sovereignty by getting involved in the issues of war, welfare, trade, banking, a world currency, taxes, property ownership, and private ownership of guns.
Happily, there is an answer for these very dangerous trends.
What a wonderful world it would be if everyone accepted the simple moral premise of rejecting all acts of aggression. The retort to such a suggestion is always: it’s too simplistic, too idealistic, impractical, naïve, utopian, dangerous, and unrealistic to strive for such an ideal.
The answer to that is that for thousands of years the acceptance of government force, to rule over the people, at the sacrifice of liberty, was considered moral and the only available option for achieving peace and prosperity.
What could be more utopian than that myth—considering the results especially looking at the state sponsored killing, by nearly every government during the 20th Century, estimated to be in the hundreds of millions. It’s time to reconsider this grant of authority to the state.
No good has ever come from granting monopoly power to the state to use aggression against the people to arbitrarily mold human behavior. Such power, when left unchecked, becomes the seed of an ugly tyranny. This method of governance has been adequately tested, and the results are in: reality dictates we try liberty.
The idealism of non-aggression and rejecting all offensive use of force should be tried. The idealism of government sanctioned violence has been abused throughout history and is the primary source of poverty and war. The theory of a society being based on individual freedom has been around for a long time. It’s time to take a bold step and actually permit it by advancing this cause, rather than taking a step backwards as some would like us to do.
Today the principle of habeas corpus, established when King John signed the Magna Carta in 1215, is under attack. There’s every reason to believe that a renewed effort with the use of the internet that we can instead advance the cause of liberty by spreading an uncensored message that will serve to rein in government authority and challenge the obsession with war and welfare.
What I’m talking about is a system of government guided by the moral principles of peace and tolerance.
The Founders were convinced that a free society could not exist without a moral people. Just writing rules won’t work if the people choose to ignore them. Today the rule of law written in the Constitution has little meaning for most Americans, especially those who work in Washington DC.
Benjamin Franklin claimed “only a virtuous people are capable of freedom.” John Adams concurred: “Our Constitution was made for a moral and religious people. It is wholly inadequate to the government of any other.”
A moral people must reject all violence in an effort to mold people’s beliefs or habits.
A society that boos or ridicules the Golden Rule is not a moral society. All great religions endorse the Golden Rule. The same moral standards that individuals are required to follow should apply to all government officials. They cannot be exempt.
The solution falls on each and every individual, with guidance from family, friends and community.
The #1 responsibility for each of us is to change ourselves with hope that others will follow. This is of greater importance than working on changing the government; that is secondary to promoting a virtuous society. If we can achieve this, then the government will change.
It doesn’t mean that political action or holding office has no value. At times it does nudge policy in the right direction. But what is true is that when seeking office is done for personal aggrandizement, money or power, it becomes useless if not harmful. When political action is taken for the right reasons it’s easy to understand why compromise should be avoided. It also becomes clear why progress is best achieved by working with coalitions, which bring people together, without anyone sacrificing his principles.
Political action, to be truly beneficial, must be directed toward changing the hearts and minds of the people, recognizing that it’s the virtue and morality of the people that allow liberty to flourish.
To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is “envy” which leads to hate and class warfare. Number two is “intolerance” which leads to bigoted and judgmental policies. These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.
The problem we have faced over the years has been that economic interventionists are swayed by envy, whereas social interventionists are swayed by intolerance of habits and lifestyles. The misunderstanding that tolerance is an endorsement of certain activities, motivates many to legislate moral standards which should only be set by individuals making their own choices. Both sides use force to deal with these misplaced emotions. Both are authoritarians. Neither endorses voluntarism. Both views ought to be rejected.
I have come to one firm conviction after these many years of trying to figure out “the plain truth of things.” The best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of LIBERTY.
If you find this to be a worthwhile message, spread it throughout the land.
November 10, 2012 - Ellen Brown revealed a shocking story that we have been paying 35%...40% interest to the banksters even when we have no personal debt at all. This is separate on top of the massive scale of the value loss in our retirement investments:
Income growth of the top 1% of the US population outperformed the rest a major way, while the income for the 80% of the population hardly grew at all (Original article is here).
Henry Ford stated: “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”.
After their Enron experiment on multitude commodity spreads and their pairing the Banksters entered in force to derivatives market and it grew in a decade ten fold to its current US$ 700 trillion monster that is still growing. This monster is controlled and with about US$ 20 trillion margin money. A handful of worlds largest Banks own and control this unregulated monster. They determine who must pay margin calls here on time and who is "trusted" to have access to enough billions or trillions anyhow and can be trusted.
These Banksters use this derivatives market to manipulate prices of everything from raw materials to currencies including all major stock markets. Note, that combined global GDP is around US$ 50 trillion with US GDP "only' US$ 15 trillion.
The US claim of China manipulating their currency value is a joke in this context.
The first cornering of derivatives markets was reported from Greece on olive presses where one "gentleman" had rented all of them for the same time period. This gave a big problem to olive growers and this "gentleman" got his name into history books. The modern derivatives markets were established with the industrialization to stabilize the price of food for the factory workers in rapidly expanding industrial centers.
They Banksters have an uneasy partner in the wealthiest Oligarch's of the world. The 20 wealthiest of them have already combined net worth of US$ 700 Billion. Eleven of these are from the USA, two from Sweden, two from France, one from Hong Kong, India, Mexico, Saudi Arabia and Spain. Note, that this list does not contain the names of the wealthiest Royal families of Europe nor the Vatican and here the wealth cannot be measured the ordinary way.
The loyal servants of the above three groups direct everything in our daily lives and keep us "correctly" informed through our lives.
For the information distribution in the USA they use the six largest news works that control 90% of everything the people read from papers, hear from Radio, and see in TV or Movies. Be assured the people in the USA are not the only ones that are led this way. These six networks in the USA are: GE, NewsCorp, Disney, CBS, Viacom, and Time Warner.
The full Ron Paul 'Farewell to Congress' speech and transcript:
...To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is 'envy' which leads to hate and class warfare. Number two is 'intolerance' which leads to bigoted and judgmental policies. These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular (Full Speech).
The political debate in the Western Capitals is on ways how to force austerity on those countries that can no more deliver their "service fee" that mounts to 35%...40% from their GDP to the Banksters and their allies.
Those with real personal wealth understand perfectly well that if the plebs are taken too far to the austerity the streets will become too dangerous for them. Before that the real rulers will order their servants, the elected officials, to change the course to prevent the situation from descending into chaos.
If nont, and chaos has time to evolve those in charge of security services and armies will start evaluating carefully what to do If mood of the nations grows too angry their commanders know that they have lost the control and the front lines are suddenly in charge of it all. If the past is of any guidance they can easily switch their side and join the masses and that means end for the ruling elite. The soldiers will not kill their own sons, daughters, brothers, sisters, fathers and mothers.
The Internet has changed the game as we can see from today's (11/14/2012) ongoing protests and destruction in Greece, Spain and Portugal is still minor compared to what will come when people get desperate after it sinks in what is really done to them. d can do whatever they please. They don't understand that With this they turn around and shoot everyone they can see and find and connect to the orders they were given.
Recently Nato's member Turkey has started exchanging Iranian Oil to gold. This must irritate the Western powers who want Iran to suffer from their alleged (Israel) Nuclear weapons program. The same time West wants to return their own control over the Iran and its oil fields that was lost when Iranian people revolted against the openly West favoring Shah. Iran is now under a multitude of sanctions including all bank transactions to force it to its knees. The only real result so far has been the rapidly improving relationship between Egypt and Turkey that is hardly the desired outcome in the West.
In case of Oil the ancient truth was again proven to hold: "A gold carrying donkey will walk through every closed gate!" Now the physical gold ends up to neighboring countries on Arabian peninsula where it is exchanged even to the US dollars .
Further away China is building trade based on Yuan with Her neighbors and She has just signed an agreement with Russia that all trade between these two sovereigns is from now conducted using their own currencies instead of dollars.
This agreement is a major blow to dollar's position as the world's only reserve currency. By 2016 China will surpass the USA as the world's largest economy.
The Banksters in turn have manipulated interest rates and every commodity and stock price by using their own US$ 700 trillion derivatives market. They have bankrupt Ireland and Greece and Spain, Portugal and Italy will soon follow. They tried to practice the process with Iceland but the people there understood early enough what was in making and the "Troika" lost the game, even when they were able inflict a serious blow to the economy of the tiny Iceland. Troika had simply abandon the plan and heal the bruises they got from Odin's Hammer.
Nobody, not even China, wants communism regardless that 99% of the educated people disagree with the direction the world is going. Our politicians think they can stay in power but it is too late for them.
The ancient Greece enjoyed the mixture of capitalism and real democracy as the leaders understood the need to balance the rights of all citizens in their own sphere of power.
We have lost their way to accept facts during the dark ages, and the banksters, financiers and the bond holders have conspired and with help of that have little by little garnered seemingly forever increasing slice of the pie to themselves.
After ancient Greece only Vikings a millennium ago and the people in today's Switzerland have been smart enough to keep an universally accepted balance in their societies.
As an example Switzerland today has no prime minister and nor head of state to corrupt. There are no full-time members of Parliament either. Citizens store their personal military weapons at their homes. The budget has to be balanced over the cycle. Taxes cannot be raised without the people's direct consent (the ballot papers, accompanied by return envelopes, are posted to the voter's home). While individuals everywhere are suspect to corruption nothing can be corrupted on National level in Switzerland.
July 31,2012 - by Dr. Paul Craig Roberts
The bumper sticker on the beat-up pickup truck read: “Friends don’t let friends vote Democrat."
The driver was obviously not affluent. Yet, despite all the news about mega-trillion dollar bankster bailouts, mega-million dollar bonuses for financial crooks, and unimaginable compensation packages for corporate CEOs who have moved middle class jobs out of America, something made the down-and-out pickup truck driver associate with the political party of the super-rich.
As I wondered at this strange alliance of the dirt poor with the mega-rich, I remembered that in 2004 Thomas Frank wondered about how the Republicans had managed to convince the poor to vote against their best interests. Frank’s answer, or part of his answer, is that the Republicans use “social issues,” such as gay marriage and Janet Jackson’s exposed nipple to work up indignation over the threat to moral values posed by liberal Democrats.
The working poor have been convinced by Republican propaganda that voting Democrat means giving the working poor’s tax dollars to the non-working poor, to providing medical care and schooling for illegal aliens, and being soft on terrorism.
To the pick-up truck driver, standing up for America means standing up for bankster bailouts and the military/security complex’s multi-trillion dollar wars.
The Karl Rove Dirty Tricks Team has honed the Republican propaganda. Republicans send each other via email an endless number of nonsense stories about Obama being a Muslim, about Obama being a Marxist, about Obama being a Manchurian Candidate turning America over to the New World Order or the United Nations, or to some other dastardly plotting organization. But never is Obama accused of turning the US over to Wall Street, the military/security complex, or Israel.
There is never any citation or source for the accusations in the emails. None are needed, because the words are what the Republicans want to hear. Ask them why Obama would be killing Muslims in seven countries if he was a Muslim, or why Wall Street and the military/security complex would put a Marxist in the White House, and they turn purple with rage. Just by asking the obvious questions instead of joining in the denunciations, a person confirms the propaganda that America is threatened by Obama dupes who won’t stand up for the country.
The non-affluent who rage about welfare, medicaid, Obamacare, and public schools can’t seem to put two and two together. The $750 billion TARP bankster bailout, a small part of the total and ongoing bailout, would have sufficed to cover any holes in these budgets for a long time. Instead, the money went to reward those who caused the financial crisis and threw millions of Americans out of their homes. As far as I know, the pickup truck driver is one of the dispossessed.
The same brainwashed Americans who rage against Obamacare and are lined up to vote for Romney are oblivious to the fact that Romney, while governor of the eastern liberal Democratic state of Massachusetts, had his version of Obamacare enacted at the state level.
The greatest irony about Obamacare is that it was written by the private insurance companies and diverts Medicaid and Medicare funds to their profits. It is socialized medicine alright, but it is socialism for the private insurance companies.
All it took to convince Red staters to go along with the military/security complex squandering $6 trillion on the Iraq and Afghan wars was yellow ribbon decals and a slogan, “support the troops.”
Obama, Republicans claim, won’t stand up to Syria, or against Iran, or for Israel. But Republicans are proud when Romney goes to Israel to slither on his belly pandering to the crazed, blood-thirsty Israeli prime minister Netanyahu, who called Israeli top generals “pussies” for warning against attacking Iran. Romney told Netanyahu, just tell me what to do, and I’ll do it; I am loyal to Israel. Apparently, flag-waving Republican patriots are not bothered when their presidential candidate announces that as soon as he is in office he will turn over US foreign policy to Netanyahu and send more americans to death and bankruptcy for Netanyahu.
Karl Rove didn’t have any trouble at all in brainwashing red staters to support their own demise. The pickup truck driver could just as well have sported a bumper sticker that read: “Don’t support a Democrat. He might do something for you.”
Yes, I know. It is almost as easy to beat up on Democrats. Bush and Cheney and their neocon hoodlums destroyed the Constitution and, thereby, America. But the Democrats let them. It was Nancy Pelosi, who as Speaker of the House stridently declared Bush’s impeachment to be “off the table.”
Bush and Cheney unquestionably violated both US and international laws and the Constitution. Nancy Pelosi’s refusal to hold them accountable established the precedent that the executive branch is no longer accountable to law or to the Constitution. In effect, the executive branch now comprises a dictatorship. It acts outside of law and constitutional restraints. On some issues it still has to consult with Congress or the courts, but as the executive branch’s power and audacity grows, consultation will become a formality and then drop away. Congress will have no more influence than the Roman senate under the empire, and courts will become stages for show trials.
Americans elected Obama president expecting that he would restore the rule of law. Instead, he codified the Bush regime’s transgressions and added some of his own. No one of my generation could have imagined the president of the US sitting in the Oval Office signing off on lists of American citizens to be murdered without evidence or due process of law.
So which do you want? The Republican panderer to the rich and Israel whose foreign policy is war or the Democrat panderer to the rich and Israel whose foreign policy is war? As Gerald Celente wrote in the July issue of the Trends Journal, americans “argue among themselves why their freak is better than the other freak. They will get angry with you if you call their freak a freak. They will actually fight and die to defend their freaks.”
It is extraordinary that millions of americans actually believe fervently that it matters whether Romney freak or Obama freak gets elected. If americans had any sense, they would stay home and not vote. The 1% control the country, and the 99% had just as well own up to it and stay at home. Nothing is going to change because of the ballot box.
What do you suppose the Ron Paul supporters will do? Will they see Romney as the less socialist of the two and vote for the Republicans who stole the nomination from Ron Paul? (Jaret Glenn, “How the GOP Establishment Stole the Nomination from Ron Paul,” published on August 6 on the OpEdNews website.
The US is ruled by a private oligarchy. The government is merely their front. The country’s resources are diverted to the pockets of Wall Street, the military/security complex, and to the service of greater Israel. The oil, mining, timber, and agribusiness companies control the Environmental Protection Agency and the Forestry Service, which is why regulation only pertains to the small individual, while fracking, mountaintop removal mining, and pollution of air, water, and soil run wild.
The oligarchs have succeeded in making Americans a dispossessed majority in their own country. In November Americans will again give their approval to one of the oligarchy’s two candidates.Paul Craig Roberts is a frequent contributor to Global Research. Global Research Articles by Paul Craig Roberts
The video depicting the apparent massacre below has not been verified, though the UK-based Syrian Observatory for Human Rights said such vengeance was a crime as Islamic law does not authorize the execution of prisoners.
Rebel Free Syrian Army (FSA) fighters capture a policeman who the FSA allege is a “Shabiha” or pro-regime militiaman, on July 31, 2012, as the rebels overran a police station in Aleppo (AFP Photo / Emin Ozmen)
A horrifying amateur video from Syria emerged online, showing an apparent mass execution of Assad supporters in Aleppo at the hands of rebels from the Free Syria Army.
The footage shows several bloodied men stripped down to their underwear being forced to kneel by a wall amidst a throng of excited, machine gun-touting men.
Once their captors open fire, the camera jerks away as the crowd momentarily disperses, seemingly unprepared for the nearly 40 seconds of uninterrupted shooting that follows. As the gunfire dies down, shouts of “Allahu Akbar!” resound as the once skittish onlookers victoriously raise their guns in the air, approaching what appears to be a pile of stripped-down corpses.
One of the victims has been identified as Ali Zein Al-Abidin Al-barri; the rebels accused him and his family of killing 15 FSA soldiers during a truce in Aleppo on Tuesday.
The video depicting the apparent massacre has not been verified, though the UK-based Syrian Observatory for Human Rights said such vengeance was a crime as Islamic law does not authorize the execution of prisoners.
Clive Baldwin, a senior legal adviser for Human Rights Watch (HRW), told BBC News: "What it looks like is execution of detainees and if that is the case, that would be a war crime."
Russia’s Deputy Minister of Foreign Affairs Gennady Gatilov condemned the shooting. "The brutal massacre of government supporters by the opposition in the city of Aleppo shows that human rights violations are being committed by both sides,” he wrote on Twitter.
It is not the first time that reports have emerged of rebels carrying out executions against pro-Assad forces without trial.
Ahmed, a rebel fighter from the Amr bin al-Aas brigade which operates in the Syrian town of Azaz, recounted the execution of a Syrian army sniper named Rami who was shot dead after a graveside “trial,” Reuters reports.
Ahmed says Rami was firing from the top of a high minaret at a local mosque before he was captured.
"We took him right to his grave and, after hearing the witnesses' statements, we shot him dead," the agency sites Ahmed as saying.
Ahmed made it clear that his forces often capture “handfuls of soldiers” in battle, saying that his men would create courts for the captured men and execute them.
However, when pressed on the specifics of creating makeshift courts to justify killing those captured in battle, Ahmed remained stoic.
"The culture of lawyers has long passed. I mean a guy like that," Ahmed said, referring to the slain sniper Rami, “what do you think his fate should be?"
Such extra-judicial killings might be a sign of things to come if the 17-month uprising against President Bashar al-Assad spins further out of control.
Asia Times Online correspondent Pepe Escobar told RT that such massacres occur “all the time” in today's Syria. He believes, however, that summary executions of this nature will push minorities to fight against the rebels.
“I received this video from a source in Arabic, and then I asked for a translation. This is a very important clan in Northern Aleppo. Some of them were executed in cold blood, this is what this two and a half minute video shows. This is an extended clan. They have like 20,000 brothers, sisters and extended family in this tribal clan,” Escobar said.
“So this means that all of these people, instead of being recruited to the opposition, now they will fight the opposition because they are being executed in cold blood. This explains, among other things, why Christians all over Syria are taking up arms to defend themselves. Because they know if there is a post-Assad controlled [government] by Sunni hardcore elements, including Salafi jihadists, they are going to be unprotected minorities. At the moment they are protected minorities under the Assad regime," he continued.
At one time, calling the large multinational banks a “cartel” branded you as a conspiracy theorist. Today the banking giants are being called that and worse, not just in the major media but in court documents intended to prove the allegations as facts. Charges include racketeering (organized crime under the U.S. Racketeer Influenced and Corrupt Organizations Act or RICO), antitrust violations, wire fraud, bid-rigging, and price-fixing. Damning charges have already been proven, and major damages and penalties assessed. Conspiracy theory has become established fact.
In an article in the July 3rd Guardian titled “Private Banks Have Failed – We Need a Public Solution”, Seumas Milne writes of the LIBOR rate-rigging scandal admitted to by Barclays Bank:
It's already clear that the rate rigging, which depends on collusion, goes far beyond Barclays, and indeed the City of London. This is one of multiple scams that have become endemic in a disastrously deregulated system with inbuilt incentives for cartels to manipulate the core price of finance.
. . . It could of course have happened only in a private-dominated financial sector, and makes a nonsense of the bankrupt free-market ideology that still holds sway in public life.
. . . A crucial part of the explanation is the unmuzzled political and economic power of the City. . . . Finance has usurped democracy.
Bid-rigging was the subject of U.S. v. Carollo, Goldberg and Grimm, a ten-year suit in which the U.S. Department of Justice obtained a judgment on May 11 against three GE Capital employees. Billions of dollars were skimmed from cities all across America by colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. Other banks involved in the bidding scheme included Bank of America, JPMorgan Chase, Wells Fargo and UBS. These banks have already paid a total of $673 million in restitution after agreeing to cooperate in the government’s case.
Hot on the heels of the Carollo decision came the LIBOR scandal, involving collusion to rig the inter-bank interest rate that affects $500 trillion worth of contracts, financial instruments, mortgages and loans. Barclays Bank admitted to regulators in June that it tried to manipulate LIBOR before and during the financial crisis in 2008. It said that other banks were doing the same. Barclays paid $450 million to settle the charges.
The U. S. Commodities Futures Trading Commission said in a press release that Barclays Bank “pervasively” reported fictitious rates rather than actual rates; that it asked other big banks to assist, and helped them to assist; and that Barclays did so “to benefit the Bank’s derivatives trading positions” and “to protect Barclays’ reputation from negative market and media perceptions concerning Barclays’ financial condition.”
After resigning, top executives at Barclays promptly implicated both the Bank of England and the Federal Reserve. The upshot is that the biggest banks and their protector central banks engaged in conspiracies to manipulate the most important market interest rates globally, along with the exchange rates propping up the U.S. dollar.
CFTC did not charge Barclays with a crime or require restitution to victims. But Barclays’ activities with the other banks appear to be criminal racketeering under federal RICO statutes, which authorize victims to recover treble damages; and class action RICO suits by victims are expected.
The blow to the banking defendants could be crippling. RICO laws, which carry treble damages, have taken down the Gambino crime family, the Genovese crime family, Hell’s Angels, and the Latin Kings.
Bank defenders say no one was hurt. Banks make their money from interest on loans, and the rigged rates were actually LOWER than the real rates, REDUCING bank profits.
That may be true for smaller local banks, which do make most of their money from local lending; but these local banks were not among the 16 mega-banks setting LIBOR rates. Only three of the rate-setting banks were U.S.banks—JPMorgan, Citibank and Bank of America—and they slashed their local lending after the 2008 crisis. In the following three years, the four largest U.S. banks—BOA, Citi, JPM and Wells Fargo—cut back on small business lending by a full 53 percent. The two largest—BOA and Citi—cut back on local lending by 94 percent and 64 percent, respectively.
Their profits now come largely from derivatives. Today, 96% of derivatives are held by just four banks—JPM, Citi, BOA and Goldman Sachs—and the LIBOR scam significantly boosted their profits on these bets. Interest-rate swaps compose fully 82 percent of the derivatives trade. The Bank for International Settlements reports a notional amount outstanding as of June 2009 of $342 trillion. JPM—the king of the derivatives game—revealed in February 2012 that it had cleared $1.4 billion in revenue trading interest-rate swaps in 2011, making them one of the bank's biggest sources of profit.
The losers have been local governments, hospitals, universities and other nonprofits. For more than a decade, banks and insurance companies convinced them that interest-rate swaps would lower interest rates on bonds sold for public projects such as roads, bridges and schools.
The swaps are complicated and come in various forms; but in the most common form, counterparty A (a city, hospital, etc.) pays a fixed interest rate to counterparty B (the bank), while receiving a floating rate indexed to LIBOR or another reference rate. The swaps were entered into to insure against a rise in interest rates; but instead, interest rates fell to historically low levels.
Defenders say “a deal is a deal;” the victims are just suffering from buyer’s remorse. But while that might be a good defense if interest rates had risen or fallen naturally in response to demand, this was a deliberate, manipulated move by the Fed acting to save the banks from their own folly; and the rate-setting banks colluded in that move. The victims bet against the house, and the house rigged the game.
State and local officials across the country are now meeting to determine their damages from interest rate swaps, which are held by about three-fourths of America’s major cities. Damages from LIBOR rate-rigging are being investigated by Massachusetts Attorney General Martha Coakley, New York Attorney General Eric Schneiderman, officers at CalPERS (California’s public pension fund, the nation’s largest), and hundreds of hospitals.
One victim that is fighting back is the city of Oakland, California. On July 3, the Oakland City Council unanimously passed a motion to negotiate a termination without fees or penalties of its interest rate swap with Goldman Sachs. If Goldman refuses, Oakland will boycott doing future business with the investment bank. Jane Brunner, who introduced the motion, says ending the agreement could save Oakland $4 million a year, up to a total of $15.57 million—money that could be used for additional city services and school programs. Thousands of cities and other public agencies hold similar toxic interest rate swaps, so following Oakland’s lead could save taxpayers billions of dollars.
What about suing Goldman directly for damages? One problem is that Goldman was not one of the 16 banks setting LIBOR rates. But victims could have a claim for unjust enrichment and restitution, even without proving specific intent:
Unjust enrichmentis a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing. . . . [It is a] general equitable principle that a person should not profit at another's expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained.
Goldman was clearly unjustly enriched by the collusion of its banking colleagues and the Fed, and restitution is equitable and proper.
Not just local governments but local banks are seeking to recover damages for the LIBOR scam. In May 2012, the Community Bank & Trust of Sheboygan, Wisconsin, filed a RICO lawsuit involving mega-bank manipulation of interest rates, naming Bank of America, JPMorgan Chase, Citigroup, and others. The suit was filed as a class action to encourage other local, independent banks to join in. On July 12, the suit was consolidated with three other LIBOR class action suits charging violation of the anti-trust laws.
The Sheboygan bank claims that the LIBOR rigging cost the bank $64,000 in interest income on $8 million in floating-rate loans in 2008. Multiplied by 7,000 U.S. community banks over 4 years, the damages could be nearly $2 billion just for the community banks. Trebling that under RICO would be $6 billion.
Then there are the MERS lawsuits. In the State of Louisiana, 30 judges representing 30 parishes are suing 17 colluding banks under RICO, stating that the Mortgage Electronic Registration System (MERS) is a scheme set up to illegally defraud the government of transfer fees, and that mortgages transferred through MERS are illegal. A number of courts have held that separating the promissory note from the mortgage—which the MERS scheme does—breaks the chain of title and voids the transfer.
Several states have already sued MERS and their bank partners, claiming millions of dollars in unpaid recording fees and other damages. These claims have been supported by numerous studies, including one asserting that MERS has irreparably damaged title records nationwide and is at the core of the housing crisis. What distinguishes Louisiana’s lawsuit is that it is being brought under RICO, alleging wire and mail fraud and a scheme to defraud the parishes of their recording fees.
Trebling the damages in all these suits could sink the banking Titanic. As Seumas Milne notes in The Guardian:
Tougher regulation or even a full separation of retail from investment banking will not be enough to shift the City into productive investment, or even prevent the kind of corrupt collusion that has now been exposed between Barclays and other banks. . . .
Only if the largest banks are broken up, the part-nationalised outfits turned into genuine public investment banks, and new socially owned and regional banks encouraged can finance be made to work for society, rather than the other way round. Private sector banking has spectacularly failed – and we need a democratic public solution.
If the last quarter century of U.S. banking history proves anything, it is that our private banking system turns malignant and feeds off the public when it is deregulated. It also shows that a parasitic private banking system will NOT be tamed by regulation, as the banks’ control over the money power always allows them to circumvent the rules. We the People must transparently own and run the nation’s central and regional banks for the good of the nation, or the system will be abused and run for private power and profit as it so clearly is today, bringing our nation to crisis again and again while enriching the few.
Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com and http://EllenBrown.com.