Calvin Coolidge got it right back in the 1920’s when he said:“ The business of America is business.” And Angela Davis was right on the mark when in a speech last year she stated: “When Bush uses the words ‘freedom’ and ‘liberty’, you must always remember to substitute the word ‘Capitalism’.” Once you examine and absorb those two statements and understand them in your very bones, you are privy to the essential equation of the United States of America.
Although it may exist in the hypothetical and in the world of fantasy, it is time to vanquish any and all illusions of free enterprise as an actual functioning financial system here in USA and throughout the global economy.
True free enterprise was engaged on a level playing field by two powerful teams with opposite goals that were supported by two distinct and well defined political parties. On the right side of the field were Management and the Republican party, and on the left side of the same field of play were Labor and the Democratic party. It was a tug of war, a stalemate, and at the line of scrimmage was something called “Collective Bargaining.” The result was more often than not a good kind of tie score where, because both teams felt generally unhappy with the outcome, what they negotiated was probably a fair deal. What matters, of course, is that it worked. The old free enterprise was what made America the inspiration for the rest of the world.
But to have a game you need two teams. And while Labor won many battles, Management has won the war. Already playing defense when Ronald Reagan assumed power, Labor all but vanished from the playing field by the end of his Presidency. Although the second-rate actor was a labor union leader in Hollywood during his B movie days, his association with Patty Davis’ father turned his basic bedrock philosophy 180 degrees into a union busting Conservative. (Such transformations of one’s fundamental political beliefs are highly suspicious). The “Great Communicator,” who I always felt was basically inarticulate, got credit for a lot of things that were either accomplished or scripted by others. For example, it was Paul Volcker’s raising of interest rates to double digit levels that bankrupted the Soviet Union which led to its ultimate collapse. “Mr. Gorbachev, tear down this wall,” sounded good, but was nothing more than scripted macho cowboy rhetoric that was read from a piece of paper after the deed had already been done by Volcker. By the end of his second term Reagan’s basic message was “well……” and his favorite gesture was to turn his ear with his finger to indicate that he could not hear a reporter’s question. Not only didn’t he have the answers, many suspected he didn’t even know what the questions were. But I digress.
Labor continued its long term bear market through “Read my lips: no new taxes” Bush the First, the Patrician President, whose contacts throughout the highest echelons of Corporate power are legendary. Bill Clinton, whose strategy for problem solving was to throw some grass up into the air and see which way the wind was blowing, did little to halt Labor’s disappearance off the radar screen. Clinton could go to his right or to his left with the dexterity of a Michael Jordan. It was only through his extraordinary compartmentalized intellect and his undeniable charisma that he got away with being a remarkable broken field runner who was in retrospect what I consider to have been a good Republican. Under his schizophrenic leadership, top Management grew ever stronger at Labor’s expense. Clinton was good for Coolidge’s definition of America.
But even Coolidge could not have envisioned the one-sided approach, the shut out, the no hitter, the perfect game pitched by the nation’s top corporate executives and their pals in the current administration. And if Coolidge would have been stunned, the framers of the Constitution, who did not even know the word “corporation,” must be spinning at high speed in their respective graves. The teamwork between the Neocon ideologues and the power elite of the corporate world constitutes one of the dreaded “C” words called “collusion.” When the top oil execs meet in secret with Dick Cheney (not George W., who was hand picked by the creators of the grand agenda solely for his name), they do so at the exclusion of all other interested parties: consumers, environmentalists, the American people. And, as always, they get away with their secret deception on the familiar grounds of “national security.” If pressed, they can always appeal to the Supreme Court which appointed them into their positions of power in the first place. For the most part Cheney, whose snarling expression is best served by staying away from the cameras as much as possible, remains hunkered down in his bunker. A genuine bunker hunker. While W. utilizes a script and a smirk to make public appearances in front of sanitized audiences friendly to the colluders’ point of view. So they’re coming at us with a snarl and a smirk.
But this is all just the tip of the iceberg. Enter into the equation Government agencies, which were created to regulate their respective industries in order to protect the public. But notice how they do the exact opposite; they protect the industries they were supposed to regulate at the expense of the American people. Without getting into all the specifics of how each agency i.e. FDA, FTC, SEC etc. etc. abuses its oversight function to the detriment of the public, the mere fact that they are in bed with the industry they’re supposed to regulate brings us to the mother of all “C” words, “Conspiracy.”
We must not forget that the only reason to even have a government is for the protection of the citizenry. If that Government, which is elected by the People to represent the People’s interests, protects, instead, the interests of Corporate America to the detriment of the People, then that constitutes a bone fide conspiracy. So yes, Virginia, there is a vast right-wing conspiracy, and they have a far-reaching agenda.
They are driven purely by what is best for Big Business. If that means going to war to establish a military presence in the Middle East in order to protect our oil supply, then so be it. Now that weapons of mass destruction and the Iraq — Al Queda connection has been debunked, don’t get hood-winked by such self righteous terms as “regime change” or “democratization.” Our Government has a long and sordid history of backing right wing dictators including Saddam himself. After all, you can do business with a Nazi. But let that dictator be of Communist origin, possessed of nothing we sorely need, then he becomes the embodiment of all evil. That Castro guy really poses an imminent threat to our survival, doesn’t he. If we could just bring back the brutally repressive right wing dictator who went by the name of Batista, then all would be right in our neck of the woods.
Ok, then, the short term agenda has been as follows: fight two wars while cutting taxes for the rich. Transform a nation with a surplus into the greatest debtor country in absolute terms in the history of the world, and do it in only 5 years. Preside over the greatest transfer of wealth from the many to the few. Issue monthly economic reports that are an ingenious blend of spinsmanship, pure fantasy and outright lies. Leak propaganda to the Press who can be counted on to act as a public relations conduit to the people while at the same time protecting its “sources.” Work with that bastion of independence, the Federal Reserve, to inflate the supply of dollars in new and ingenious ways in order to create a giant pool of liquidity that goes in search of the latest asset bubble. Stand by as American jobs are outsourced to China and India while illegal immigrants are “insourced” into the U.S. across porous borders to take more American jobs at lower wages—–all in order to vastly improve the bottom line of corporations. Look the other way as corporate profits go through the roof while employee wages do not even keep up with inflation. Give corporations moved offshore to avoid paying 35% taxes on their profits, a year to repatriate the money back into this country and pay only 5% in taxes. Enact an energy bill that benefits oil companies and does nothing to protect the environment, help the consumer or solve the ongoing energy crisis. Encourage the American people to take on ever more debt in order to buy things that they don’t need with money they obviously do not have. We could go on, but you know most of this. It’s the part of the Neocon strategy that has already been played out. But there’s more going on behind the scenes where journalists fear to tread.
Fighting two wars while cutting taxes is a recipe for fiscal disaster. Monetary disaster comes in the shape of a printing press. But it is not the old fashioned mechanical press of the 1970’s. Rather, it is the creative brainstorm of our next Federal Reserve Chairman who has been going through the revolving door between the Central Bank and the White House. When he was a Federal Reserve Governor Ben Bernanke decided to take his new up-to-date electronic printing press to Japan where he found a very receptive government. He encouraged the Japanese Central Bank to sell yen, convert the yen to dollars and electronically wire the dollars to the Federal Reserve which would buy U.S. Treasury Bonds which they would sell to the Japanese. The Imperial Nation got two things out of this complex transaction: 1- instead of holding yen, which paid no interest, they now were the proud owners of U.S. dollars (Treasury Bonds) that paid 4-5% interest; 2– by selling yen and buying dollars, the value of the Japanese yen was artificially held down against the U.S. dollar which kept Japanese exports to the insatiable American consumer nice and cheap. The U.S. got its dollar and its bond market supported which in turn kept the housing bubble inflated. It also was able to issue more debt as needed to a willing buyer of that debt.
On the surface this symbiotic relationship looks like a pragmatic success. The only problem is that Japan has managed to accumulate a trillion U.S. dollars in its foreign reserves. And China, the supreme engine of growth in the world today, is sitting on 300 billion of these paper dollars. Suppose these two nations along with South Korea and especially Russia come to the conclusion that the currency of the greatest debtor country in the world has been artificially supported and could seek its appropriate level at any time. Can you imagine what the nasty rush to the dollar exit would look like. Everyone going out of the same door at the same time would not be a pretty sight. The U.S. dollar would plunge as if in a vacuum. Our long term interest rates would rise like a rocket ship escaping the earth’s atmosphere. Down would go the bond market, the housing market, the stock market, the American consumer, the Japanese export economy, our economy, the global economy.
Welcome to deflation, recession and maybe worse. But not to worry because Big Ben, having served as Chief Economic Advisor to Bush, will return to head the Fed as a genuine Bush crony who will implement his now famous speech in which he said: “to those worried about deflation: the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation." He even indicated that, if necessary, unlimited quantities of dollars could be dropped from helicopters.
The crucial message here is that Helicopter Ben has already created, with his Japanese co-conspirators, the greatest liquidity bubble the world has ever seen. And since all those dollars cannot be withdrawn from the global financial system (other than by the wholesale selling of U.S. Treasury bonds which would be fatal), it will come at us in the form of a stunning inflation for which no one in this country is prepared.
It will be a total surprise because the Government through its PR firm, the financial press, has told us that the “Core Consumer Price Index” (which excludes food and energy) is only up a meager 2.1% year over year. Yet, anyone with a pulse and a hint of respiration knows that whatever you really need in this world, be it food, energy, education, housing, healthcare etc., has gone through the roof. So unless you are one of our species who doesn’t need to eat or drive your car or heat your home, you should wake up and realize that the CPI is a big lie, designed to placate the bond market and deprive senior citizens of their rightful cost of living increase in their social security checks.
Gold, the ultimate barometer of future inflation, is sounding the alarm loud and clear. If anyone is likely to adhere to the old dictum: “inflate or die,” it is Helicopter Ben who becomes Chairman of the Federal Reserve on February 1st. So you’d better take measures to protect yourself from what’s coming down the road.
Finally, it is imperative for the American people to be aware of the long term goals of Conspiratorial Free Enterprise. When the dislocations and imbalances become so great, when our triple deficits: fiscal, trade and current account approach critical mass, those individuals in high places of corporate and government power will throw up their hands and claim that there is no other choice but to cut back drastically on entitlement programs wherever they may exist. Although it was their joint economic decisions that got us to this point, they will, nevertheless, look us right in the eye and insist that there is no other alternative now but to systematically do away with entitlement programs that we can no longer afford.
Corporations will default on pensions, health care benefits and 401k matching funds etc. Indeed, the process has already begun with certain notable companies seeking the protection of bankruptcy with all of its implications for employees losing their jobs and their pensions while high level executives walk away with obscene financial packages.
The Federal Government will do whatever it can to get out of the “Entitlement Business.” It will decimate Social Security, Medicare and Medicaid. It will be done in the name of necessity. And here, too, the process has already begun. George W. wasn’t out on the stump with his scripted privatization of Social Security speeches for nothing. What appeared to most people as an odd priority for a president to be pushing when there were so many more pressing issues that begged for attention and debate, W. was embarking on round one of a carefully planned and orchestrated stripping of entitlement benefits from the American people. And although you and I might know that social security was created as an insurance program where we pay our premiums out of each paycheck in order to be paid back the benefits of the “policy” later in our retirement years, the Power Elite would have you trade some of your guaranteed income for speculation in that casino called the stock market. Although you might as well be going to Las Vegas with a portion of your safety net, by doing so you will be taking the Government off the hook by lowering its Social Security costs. Once again the public’s interest is being sacrificed on behalf of the conspirators.
In my opinion We the People are locked into an adversarial relationship with the highest echelons of the corporate world and the elected leaders of our own Government. What that means is we are about to witness the acceleration of the transfer of money from the many to the few. And Conspiratorial Free Enterprise is the carefully planned system through which the power elite will solidify their dictatorial hold on the American financial system.
01/07/2007
