rigorousintuition.ca

[Jeff]

No bailout can stop the sinking

Chris Hedges

From Saturday's Globe and Mail Last updated on Friday, Jul. 31, 2009 07:44PM EDT

In his seventh book, Empire of Illusion: The End of Literacy and the Triumph of Spectacle, veteran U.S. war correspondent and Pulitzer Prize winner Chris Hedges systematically attacks what he sees as the self-deluding and corrupt character of American society, economics and global influence today.

In this excerpt from the final chapter, he ties his analysis to the recent bailouts of banks and other corporations.

Democracy is not an outgrowth of free markets. Democracy and capitalism are antagonistic entities. Democracy, like individualism, is based not on personal gain but on self-sacrifice. A functioning democracy must often defy the economic interests of elites on behalf of citizens, but this is not happening.

The corporate managers and government officials trying to fix the economic meltdown are pouring money and resources into the financial sector because they are trained only to manage and sustain the established system, not change it.

John Ralston Saul writes that the first three aims of the corporatist movement in Germany, Italy, and France during the 1920s, those that went on to become part of the fascist experience, were “to shift power directly to economic and social interest groups, to push entrepreneurial initiative in areas normally reserved for public bodies” and to “obliterate the boundaries between public and private interest – that is, challenge the idea of the public interest.”

It sounds depressingly familiar.

The working class, which has desperately borrowed money to stay afloat as real wages have dropped, now faces years, maybe decades, of stagnant or declining incomes without access to new credit. The national treasury, meanwhile, is being drained on behalf of speculative commercial interests.

The government – the only institution citizens have that is big enough and powerful enough to protect their rights – is becoming weaker, more anemic, and increasingly unable to help the mass of Americans who are embarking on a period of deprivation and suffering unseen in this country since the 1930s. Creative destruction, as the economist Joseph Schumpeter understood, is the essential fact about unfettered capitalism.

“You are going to see the biggest waste, fraud, and abuse in American history,” Ralph Nader told me when I asked him about the bailout. “Not only is it wrongly directed, not only does it deal with the perpetrators instead of the people who were victimized, but they don't have a delivery system of any honesty and efficiency.

“The Justice Department is overwhelmed. It doesn't have a tenth of the prosecutors, the investigators, the auditors, the attorneys needed to deal with the previous corporate crime wave before the bailout started last September. It is especially unable to deal with the rapacious ravaging of this new money by these corporate recipients,” Nader said.

“You can see it already. The corporations haven't lent [out the bailout money]. They have used some of it for acquisitions or to preserve their bonuses or their dividends. As long as they know they are not going to jail, and they don't see many newspaper reports about their colleagues going to jail, they don't care. It is total impunity. If they quit, they quit with a golden parachute. Even [General Motors CEO Rick] Wagoner is taking away $21-million.”

There are a handful of former executives who have conceded that the bailouts are a waste. The former chairman of American International Group Inc. (AIG), Maurice R. Greenberg, told the House Oversight and Government Reform Committee that the effort to prop up the firm with $170-billion has “failed.” He said the company should be restructured. AIG, he said, would have been better off filing for Chapter 11 bankruptcy protection instead of seeking government help.

“These are signs of hyper-decay,” Nader said from his office in Washington. “You spend this kind of money and do not know if it will work.

“Bankrupt corporate capitalism is on its way to bankrupting the socialism that is trying to save it,” he added. “That is the end stage. If they no longer have socialism to save them, then we are into feudalism. We are into private police, gated communities, and serfs with a 21st-century nomenclature.”

The United States will not be able to raise another $3- or $4-trillion, especially with our commitments now totalling more than $12-trillion, to fix the mess.

It was not long ago that such profligate government spending was unthinkable. There was an $800-billion limit placed on the Federal Reserve. The economic stimulus and the bailouts will not bring back our casino capitalism. And as the meltdown shows no signs of abating, and the bailouts show no sign of working, the recklessness and desperation of our capitalist overlords have increased.

The cost to the working and middle class is becoming unsustainable. The Fed reported that households lost $5.1-trillion, or 9 per cent, of their wealth in the last three months of 2008, the most ever in a single quarter in the 57-year history of record-keeping by the central bank. For the full year, household wealth dropped $11.1-trillion, or about 18 per cent.

These figures did not record the decline of investments in the stock market, which has probably erased trillions more in the country's collective net worth.

The bullet to our head, inevitable if we do not radically alter course, will be sudden. We have been borrowing at the rate of more than $2-billion a day over the last 10 years, and at some point it has to stop. The moment China, the oil-rich states, and other international investors stop buying U.S. Treasury Bonds, the dollar will become junk.

Inflation will rocket upward. We will become Weimar Germany. A furious and sustained backlash by a betrayed and angry populace, one unprepared intellectually and psychologically for collapse, will sweep aside the Democrats and most of the Republicans.

A cabal of proto-fascist misfits, from Christian demagogues to simpletons like Sarah Palin to loudmouth talk-show hosts, whom we naïvely dismiss as buffoons, will find a following with promises of revenge and moral renewal. The elites, the ones with their Harvard Business School degrees and expensive vocabularies, will retreat into their sheltered enclaves of privilege and comfort. We will be left bereft, abandoned outside the gates, and at the mercy of the security state.

Lenin said that the best way to destroy the capitalist system was to debauch its currency. As our financial crisis unravels, and our currency becomes worthless, there will be a loss of confidence in the traditional mechanisms that regulate society. When money becomes worthless, so does government.

All traditional standards and beliefs are shattered in a severe economic crisis. The moral order is turned upside down. The honest and industrious are wiped out while the gangsters, profiteers, and speculators walk away with millions.

There are signs that this has begun. Look at Lehman Brothers CEO Richard Fuld. Many of his investors lost everything and yet he pocketed $485-million. An economic collapse does not mean only the degradation of trade and commerce, food shortages, bankruptcies, and unemployment.

It also means the systematic dynamiting of the foundations of a society. I watched this happen in Yugoslavia. I watch it now in the United States.

The free market and globalization, promised as routes to worldwide prosperity, have been exposed as two parts of a con game. But this exposure does not mean our corporate masters will disappear. Totalitarianism, as George Orwell pointed out, is not so much an age of faith as an age of schizophrenia.

“A society becomes totalitarian when its structure becomes flagrantly artificial,” Orwell wrote. “That is when its ruling class has lost its function but succeeds in clinging to power by force or fraud.”

They have engaged in massive fraud. Force is all they have left.

There are powerful corporate entities, fearful of losing their influence and wealth, arrayed against us. They are waiting for a moment to strike, a national crisis that will allow them, in the name of national security and moral renewal, to take complete control. The tools are in place.

These antidemocratic forces, which will seek to make an alliance with the radical Christian Right and other extremists, will use fear, chaos, the hatred for the ruling elites, and the spectre of left-wing dissent and terrorism to impose draconian controls to extinguish our democracy. And while they do it, they will be waving the American flag, chanting patriotic slogans, promising law and order, and clutching the Christian cross.

By then, exhausted and broken, we may have lost the power to resist.

http://www.theglobeandmail.com/news/world/no-bailout-can-stop-the-sinking/article1238242/

[seemslikeadream]

Thanks for that, did you get a chance to see this?

http://www.rigorousintuition.ca/board/viewtopic.php?t=24709

I am preparing for the worst


http://www.youtube.com/watch?v=jaEGnMjYg_w

http://www.youtube.com/watch?v=eymoUFoduTE

http://www.youtube.com/watch?v=Fl3vT4-sWLI




http://www.dailyfinance.com/2009/07/...erge-of-colla/

After $182 billion taxpayer rescue, is AIG on the verge of collapse?

Peter CohanPeter Cohan RSS Feed
Jul 31st 2009 at 8:20AM

Now, thanks to some solid reporting in The New York Times, it looks like the rot at AIG is not limited to FPG. While AIG officials have claimed that its problems were isolated to FPG, the reality is that AIG seems to have been running something akin to a shell game of massive proportions. Its shell game version took the form of selling insurance and assigning the resultant risks among its 71 different North American insurance companies.

Thanks to AIG's regulatory arbitrage -- taking advantage of the fact that its 19 state insurance regulators never conduct examinations at the same time -- AIG may have been able to shift assets among the companies to fool state regulators. If one its companies did not have enough money set aside as reserves against future claims, AIG could move assets to that reserve-deficient company right before the state insurance examiner moved in. And once that examiner was gone, AIG could in theory shift the extra cash to the next reserves-deficient company.

Want an example? Consider AIG affiliate National Union (NU). AIG indicated to Pennsylvania state insurance investigators that it had $33.7 billion in assets at the end of 2008 -- more than enough to protect against $21.9 billion in liabilities. But what the Pennsylvania regulators did not see is that $10.9 billion worth of NU's assets were investments in other AIG affiliates, which are not publicly traded and whose value is hard to measure. Subtract that and you have only $22.8 billion in assets.

But wait -- there's more. NU had $42 billion more in liabilities that the Pennsylvania regulators missed. How so? NU had obligations to pay claims of other AIG insurance affiliates -- the biggest of which was $23.1 billion that it owed AIG affiliate American Home (AH). NU owed another $19 billion to several other AIG afiiliates.

Meanwhile, AH had crushing obligations of its own. While the New York state regulators thought it had $26.3 billion in assets to a mere $19.9 billion in liabilities, the reality was far more dire. How so? AH was on the hook for an additional $120.7 billion in guarantees to 16 other AIG affiliates. Thus AH's liabilities really exceeded its assets by $114 billion.

To summarize, AIG's core insurance companies seem to be like a shell game which AIG was able to continue operating because it was able to keep the cash moving from the affiliate that one state regulator had just examined to the one that another state regulator was about to examine.

Unfortunately, it would not surprise me if this was happening and continues to happen at all big U.S. insurance companies. Moreover, I would be shocked if former AIG CEO Hank Greenberg -- who has heaped scorn on his successors -- was unaware of this practice.

Is it too early to write off that $182 billion?
_________________
The US elites have lost the Mandate of Heaven

[Hugh Manatee Wins]

This post is about Chris Hedges who I revere and recommend.

Chris Hedges is circling closer and closer to the truth.

His latest book describes all the symptoms of psyops culture but he doesn't quite make the diagnosis. He will eventually.

His book 'War is a Force that Gives Us Meaning' describes the psychology of war in a way that only someone who had been there for years acquiring PTSD, like Chris Hedges, can.

Responding to username Zap's coincidence peddling here at RI I cited Chris Hedges point about how humans need a coherent narrative to cope.
He'd seen this dynamic in the trauma from the missing and those disposed of in mass graves.

This actually has a name in cognitive science. It is the Zeigarnik effect, the brain's tendency to have closure on concepts. I wrote about this as "Knowing." So I was fascinated to find that the latest movie in the series of Nicholas Cage sci-fi woo-clue genre flix was called...'Knowing.'

Thank Chris Hedges. He's getting really close to It.

http://rigorousintuition.ca/board/viewtopic.php?t=9960

[seemslikeadream]

Jeff Sharlett discusses The Family on Bill Maher's Real Time
http://www.youtube.com/watch?v=Nq20THy7Hbk



The Family has been working on this for 70 years, sorry it's a AJ interview but well worth it to listen to Sharlett

http://www.youtube.com/watch?v=jMjGTxv0tQQ

http://www.youtube.com/watch?v=e71BwmCkBtc

http://www.youtube.com/watch?v=c6a1smBgUIw

http://www.youtube.com/watch?v=pgZvMKlNV0o
_________________
The US elites have lost the Mandate of Heaven

[Nordic]

Agreed, Chris Hedges has it pretty well figured out. Better than most.

[barracuda]

The good news is that when it all goes Weimar on us, you can pay off your existing 30-year fixed with a day's pay. The bad news? Your neighbor aready ate your cat.
_________________
The most dangerous traps are the ones you set for yourself. - Phillip Marlowe

[jingofever]

[Hugh Manatee Wins]

"A cabal of proto-fascist misfits, from Christian demagogues to simpletons like Sarah Palin to loudmouth talk-show hosts, whom we naïvely dismiss as buffoons, will find a following with promises of revenge and moral renewal. The elites, the ones with their Harvard Business School degrees and expensive vocabularies, will retreat into their sheltered enclaves of privilege and comfort. We will be left bereft, abandoned outside the gates, and at the mercy of the security state."

Heed this warning.

This is why we should be spending our bandwith warning everyone we can about psyops culture that lies and divides and demonizes using established psyops techniques out of FM33-1.

Not playing with numerology and woo. Our asses are on the line.
_________________
CIA runs mainstream media since WWII:
news rooms, movies/TV, publishing
...
Disney is CIA for kidz!

[brainpanhandler]

[§ê¢rꆧ]

[brainpanhandler]

[lupercal]

Good analysis. And there's an even bigger and more ferocious monster parasite than the financial sector, the MIC:

Three Good Reasons To Liquidate Our Empire
And Ten Steps to Take to Do So
By Chalmers Johnson
Tom Dispatch, posted 2009-07-30 10:28:23

(snip)

According to the 2008 official Pentagon inventory of our military bases around the world, our empire consists of 865 facilities in more than 40 countries and overseas U.S. territories. We deploy over 190,000 troops in 46 countries and territories.

In just one such country, Japan, at the end of March 2008, we still had 99,295 people connected to U.S. military forces living and working there -- 49,364 members of our armed services, 45,753 dependent family members, and 4,178 civilian employees. Some 13,975 of these were crowded into the small island of Okinawa, the largest concentration of foreign troops anywhere in Japan.

(snip)

According to Anita Dancs, an analyst for the website Foreign Policy in Focus, the United States spends approximately $250 billion each year maintaining its global military presence. The sole purpose of this is to give us hegemony -- that is, control or dominance -- over as many nations on the planet as possible.

We are like the British at the end of World War II: desperately trying to shore up an empire that we never needed and can no longer afford, using methods that often resemble those of failed empires of the past -- including the Axis powers of World War II and the former Soviet Union.

There is an important lesson for us in the British decision, starting in 1945, to liquidate their empire relatively voluntarily, rather than being forced to do so by defeat in war, as were Japan and Germany, or by debilitating colonial conflicts, as were the French and Dutch. We should follow the British example. (Alas, they are currently backsliding and following our example by assisting us in the war in Afghanistan.)

Here are three basic reasons why we must liquidate our empire or else watch it liquidate us.

Link to the rest: http://www.tomdispatch.com/post/print/175101/Tomgram%253A%2520%2520Chalmers%2520Johnson%252C%2520Dismantling%2520the%2520Empire
_________________
My new peace and justice action forum: http://peaceonearth.myfreeforum.org

[StarmanSkye]

Outstanding article by Hedges: WoW, he REALLY puts the America's economic, social and political decay into a cohesive context, as extending from collusion between the architects of capitalist predation with global warfare. Among his key points: Whereas classical totalitarian subordinates economics to politics, we have an inverted totalitarianism where politics is subordinate to economics, largely because of our consumer/celebrity culture in which the drive for profits undermines our sense of the sacred and bequeathes us junk politics and spectacle. We've become completely controlled while the levers for power are held by terribly destructive forces.

"It's the story of an America that has transferred its allegiance to spectacle, to pseudo-events, that no longer can determine what is real and what is illusion, that confuses what they feel with knowledge, that confuses propaganda with ideology, and that's exceedingly dangerous. All totalitarian societies are image-based societies, and that is what our society has become." Chris Hedges on his book, Empire of Illusion

Thom Hartman interview:
http://www.youtube.com/watch?v=0eZ6PeoBPyI

Chris Hedges on American Fascists and the Christian Right on the Power Hour, Feb 2009
http://www.youtube.com/watch?v=p-fbcy1tRoA&NR=1

American Fascists: The Christian Right and the War on USA by Chris Hedges
Democracy Now 1: http://www.youtube.com/watch?v=Vt8HHTHEMKI&feature=related

War is a Force that Gives Us Meaning: 1 hour talk by Vhris Hedges
http://www.youtube.com/watch?v=B2SaM8RJ30c&feature=related

[pepsified thinker]

yeah, 'bout that collapse scenario--

Just to spark discussion--because this has already been said here in many ways, on many threads--and give a bit of an intro to a book, this is from John Birmingham's Without Warning, a novel about 'what if America suddenly ceased to exist?' In the novel an unexplained phenomenon settles over the U.S., eliminating all mammals (or at least, all people). It gets part of Mexico too, and maybe Canada. Guatanamo is spared as is a sliver of Washington state. Hawaii too. It happens on the eve of the most recent invasion of Iraq.

I'm posting about it because the idea of what would the REST of the world do if the U.S. suddenly collapsed seems worth looking at.

Birmingham's scenario is chaos and war and more chaos and more war. [psyop message: You may hate the U.S., but you need the U.S.]

Yes, I realize it's very psyops-y, and I say that without even going into how it plays the U.S.-anglo-French relationship(s) and the Islamic world and so on.

But I don't think the general idea of the book is too far off in psyops-land. I think a sudden collapse of the U.S. would lead to chaos and war--more so than we've already seen.

So I wonder if it will actually be 'allowed' to happen.

I imagine a lot of the assorted 'players' and wannabe 'players' on the world-stage level are eager to push the bloated, decadent behemoth of the U.S. off-stage, but will others arrange a gentler 'landing' so as to ease a transition? Who wins in a worst case scenario and who would want to play the U.S. as we've sometimes played Britain--as a faithful side-kick (useful proxie?) with some decent military assets and so on?

Obviously, an instantaneous elimination of the U.S. is just about impossible--but even if it were spread over a year or two, it would create a huge power vacuum (and chaos and war, blah, blah, blah).

Call this the 'too big to fail' scenario.

Maybe reading the excerpt below isn't so necessary now--but if you care to, a quick read will give a feel for Birmingham's degree of insight, or whatever you want to call it.

To intro this a bit more:

Caitlin = spy (for the U.S.) in ultra-ultra secret organization who's on the run with,

Monique = a peace activist who Caitlin was tagging along with in order to get at a Islamo-fascist terrorist dude.

They're in Paris, a day or two after the 'Disappearance' of the U.S. (which various webcams, etc. have show the rest of the world, is now emptied of people).

[pepsified thinker]

a further thought though,

how many of you that are predicting imminent EOTW stuff, thought that was going to happen with Y2K, or last fall (in time for the election, or whatever), and so on.

Why is this prediction any more likely than those?

I'm not denying that the economic collapse is a HUGE event, but still.
_________________
"we must cultivate our garden"
--Voltaire