REDS IN THE BED

The greatest trick the Devil ever pulled was convincing the world he didn't exist.


September 25th 2008

Or should that be,

REDS IN THE FED?

When my steam ship docked in New York many years ago McCarthyism was rife. My luggage was searched for Marxist literature and my name checked in a very large black book containing the names of Charlie Chaplin and thousands of others, to make sure that I was not a communist.

The long Cold War and the long Vietnam wars, both ideological, followed. After the Americans left Vietnam many South Vietnamese, who had fought or sided with the American army, were sent to re-education camps to learn to be good socialists. Many of these are now living in America and don't like being reminded of their experiences.

Any person suggesting the sort of nationalization at present being proposed by Mr Paulson would certainly have been arrested and then charged with being a "Card carrying Commi". To read what follows makes me realise I am living in very strange and extra ordinary times:



President George W Bush talks to the nation and the world

Americans must support a massive bail-out of financial markets to ease a "serious financial crisis", US President George W Bush has said.


The entire economy was in danger, he said in a live TV speech, and failure to act now would cost more later.

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In an interview with Fortune magazine, Mr Paulson admits: "Raw capitalism is a dead end. I've seen it."

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New York Times, 25th September 2008

WASHINGTON — The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.

“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.


When Congressional leaders and Senators John McCain and Barack Obama, the two major party presidential candidates, trooped to the White House on Thursday afternoon, most signs pointed toward a bipartisan agreement on a grand compromise that could be accepted by all sides and signed into law by the weekend. It was intended to pump billions of dollars into the financial system, restoring liquidity and keeping credit flowing to businesses and consumers.

“We’re in a serious economic crisis,” Mr. Bush told reporters as the meeting began shortly before 4 p.m. in the Cabinet Room, adding, “My hope is we can reach an agreement very shortly.”

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A large proportion of the American people, who will be those who have to foot the enormous bill,are far from satisfied and many have become very angry. It looks as though they are being frightened by their leaders, who are pulling out the fear stops, to back a very dodgy deal. Plenty is being written and spoken about this bail out so I have chosen just one letter, from a Congressman who has a positive alternative, to publish here. I will happily find space for anyone who has an alternative to Capitalism and Communism.

First let me squeeze this in here, (just for posterity) as it is the biggest bank to fail in US history and the event could easily be overlooked.

Washington Mutual has been closed by its regulator, making it the biggest US bank to fail.


Dear Friends,

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."

That describes the current bailout package to a T. And we're being told it's unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

* The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

* Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

* Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are,and what kind of country we shall be.

In liberty,

Ron Paul

is a Texas congressman and a candidate for the 2008 Republican Party's presidential nomination.

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September 25th 2998

Speaking in New York, Mr Gordon Brown today called for an end to the “age of irresponsibility” in the financial sector, his most frank acknowledgement so far that the City of London was allowed to run wild while he was Chancellor in charge of irresponsibility and the Financial Services Authority.

He also informed us that this is the first "Global Crises". This is perhaps news for him but most people have been well aware of this for a long time. He hasn't lost his job - yet.

"America and Britain have always stood together as one in times of difficulty and challenging times, and I have told President Bush today that facing global turbulence Britain supports the US plan," Mr Brown said.

"Whatever the details of it, it is the right thing to do." said Prime Minister Mr Gordon Brown.
(One detail is for British Banks to receive billions for which they are truly grateful)


It is irresponsible to sanction agreements without first paying attention to the small print and the substantial problems still to be resolved. Did Mr Brown read the details of the Lisbon Treaty before creeping in at midnight to sign it without his promised referendum?

The unelected and unpopular Scottish Mr Brown may well be making arrangements for a new job with the banks he is now bailing out at taxpayers expense. Perhaps he will soon be sitting alongside Mr Blair who is reportedly "earning" $10,000,000 a year from Morgans.


THE ROYAL Bank of Scotland is to be one of the biggest beneficiaries of the planned $700 billion bail-out that comes courtesy of the American tax-payer if the US Congress gives the financial rescue package the go-ahead this weekend.

George Osborne, shadow Chancellor, said: “Gordon Brown has now accurately described his time in office as the 'age of irresponsibility'. For ten years Mr Brown presided over a debt fuelled boom and failed to call time on debt. The age of irresponsibility has now become the age of hypocrisy.”



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Since its inception this blog has been very much centered on World Economics because that has been the most visible symptom of the workings of invisible forces.

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McCarthyism is a term describing the intense anti-communist suspicion in the United States in a period that lasted roughly from the late 1940s to the late 1950s. This period is also referred to as the Second Red Scare, and coincided with increased fears about communist influence on American institutions and espionage by Soviet agents. Originally coined to criticize the actions of U.S. Senator Joseph McCarthy, "McCarthyism" later took on a more general meaning, not necessarily referring to the conduct of Joseph McCarthy alone.

During this time many thousands of Americans were accused of being Communists or communist sympathizers and became the subject of aggressive investigations and questioning before government or private-industry panels, committees and agencies. The primary targets of such suspicions were government employees, those in the entertainment industry, educators and union activists. Suspicions were often given credence despite inconclusive or questionable evidence, and the level of threat posed by a person's real or supposed leftist associations or beliefs was often greatly exaggerated. Many people suffered loss of employment, destruction of their careers, and even imprisonment. Most of these punishments came about through trial verdicts later overturned.

The most famous examples of McCarthyism include the Hollywood blacklist and the investigations and hearings conducted by Joseph McCarthy. It was a widespread social and cultural phenomenon that affected all levels of society and was the source of a great deal of debate and conflict in the United States.(Wiki)

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JMP Group is the only company listed on the New York Stock Exchange which has voluntarily opted out of the Securities and Exchange Commission's temporary rule protecting more than 800 financial firms from short-sellers.

The San Francisco-based company's president, Craig Johnson, told the Guardian that he disapproved of the rule: "It's counter-intuitive to us and to the wonderful free-market system we've got in this country."

He described the SEC's temporary ban on short-selling as "very draconian" and said it did not make sense: "We're not trying to jump on a soap box but we've decided to opt out of it."

Meanwhile China will proceed with the introducing of margin trading and short selling of shares in spite of the current turmoil. Many countries have imposed restrictions on short selling to combat market turbulence so where is Capitalism today?

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It’s not up to the EU; it’s up to every one of the member states to decide whether they need to launch this kind of fiscal initiative.”

The comments fell far short of reassuring doubters that the EU system has the machinery to tackle a major financial crisis. The problems at Fortis Bank are big news on European television.

Daniel Gross, director of the Centre for European Policy Studies in Brussels, said euro-zone lenders are heavily exposed to the fall-out from the US credit crisis, describing the Paulson plan as a de facto rescue for the Euopean banking system.

If a Spanish bank is in trouble will the Central Bank help? Will the German public be happy to pay for banking problems in other countries. I dont now the answer and I dont think an arrangement was ever made for such an eventuality.

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You cannot eat derivatives. You cannot live in a derivative. You cannot wear derivatives as clothing, nor can you drive a derivative work. You cannot sail in them or fly in them. They cannot be used as tools of any useful trade. They are not computers, not machine tools, not pharmaceutical equipment, not agricultural implements.

Paulson wants to buy up derivatives. But at what price? Derivatives have no intrinsic value. (Prison Planet)

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Dr Rowan Williams, the Archbishop of Canterbury,

The Church of England's two most senior clerics have launched a scathing attack on the financial industry, calling the bankers and speculators behind the credit crisis "bank robbers" and "asset strippers".

Dr Rowan Williams, the Archbishop of Canterbury, demanded tighter regulation of the industry and said it was out of touch with reality.

Williams added that Karl Marx had been right in his assessment of the nature of capitalism.

Meanwhile, the Archbishop of York, Dr John Sentamu, said the market took its rules of trade "from Alice in Wonderland".

In an article published in the Spectator magazine, Williams wrote: "It is no use pretending that the financial world can maintain indefinitely the degree of exemption from scrutiny and regulation that it has got used to.

"This crisis exposes the basic level of unreality in the situation — the truth that almost unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders.

"Marx long ago observed the way in which unbridled capitalism became a kind of mythology, ascribing reality, power and agency to things that had no life in themselves; he was right about that, if about little else."

In a speech to last night's annual dinner of the Worshipful Company of International Bankers, Sentamu criticised the practice of short-selling, temporarily banned by the Financial Services Authority following the takeover of HBOS by Lloyds TSB.

"To a bystander like me, those who made £190m deliberately underselling the shares of HBOS in spite of a very strong capital base, and drove it into the arms of Lloyds TSB, are clearly bank robbers and asset strippers," he said.

"We find ourselves in a market system which seems to have taken its rules of trade from Alice in Wonderland.

"Our country has built its financial strength historically on the manufacturing of goods, where money was the medium of exchange.

"In the last week, we have seen its systems come close to ruin because now money is no longer being the medium of exchange for goods, but rather is the very item that is being traded."

Sentamu also spoke about today's talks at the UN in New York about the 15-year millennium development goals project to reduce global poverty.

The initiative's target of halving the number of people who live on less than a dollar a day by 2015 was unlikely to be met in sub-Saharan Africa, he said.

"Without a solid global economic base to work from, the eradication of world poverty would be an even greater task," he added.

"One of the ironies about this financial crisis is that it makes action on poverty look utterly achievable. It would cost $5bn (£2.7bn) to save six million children's lives.

"World leaders could find 140 times that amount for the banking system in a week. How can they tell us that action for the poorest is too expensive?"

Guardian,UK
Thursday September 25 2008
(There is a very nice sentiment here but the wealthy Church of England owns shares, in for example Man Group, which is involved with short selling. This just shows that many of us don't know where our money is or what it is doing.)

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Note:

The works of Dr Rudolf Steiner were banned both by the Nazi regime, (National Socialism), and the East Bloc, (Bolshevik Communism). In America, the land of the free, I was allowed to read Steiner but not the works of Marx. Today Dr Steiners books are available in just about every country.

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PART TWO OF THE BAIL OUT or CASH FOR TRASH

Michaelmas September 2008 (Even if you have seen Christmas sales in your shopping mall!)

We are having our Michaelmas celebration but I want to know how the bail out is progressing. It is Michael who is fighting the dragon and requires our help.

oOo


The dragon?

What has the dragon to do with financial affairs at the start of the 21st Century?


The blog Michael and Globalization. on this site, is an attempt to answer these questions and explain a very complex but important matter.

oOo

By Ken Bensinger, Los Angeles Times Staff Writer
September 26, 2008
As congressional leaders struggled to craft a bailout plan for the nation's troubled financial system Thursday, angry protesters mobbed Wall Street, telephones rang off the hook in House and Senate offices and a group of prominent economists sent off e-mail blasts critiquing the proposal.

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Yahoo news September 27th 2008

Automakers gained $25 billion in taxpayer-subsidized loans and oil companies won elimination of a long-standing ban on drilling off the Atlantic and Pacific coasts as the Senate passed a sprawling spending bill Saturday.

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In the UK a big building society - BRADFORD AND BINGLOEY - is being nationalized. Taxpayers are again being told they must bail out the rich guys. Lasy week LLOYDSTSB took over the HALIFAX making it a bank so big that the Monopolies commission would not, under normal circumstances, be allowed.

"It will mean that every building society that floated on the stock market in the wave of demutualisations of the past two decades will either have collapsed or been sold to a conventional bank."

Fortunes have been made and its the taxpayer who pays, the Labour government is both responsible and irresponsible.



The B&B was in trouble last year and Mr Brown and his government did nothing. More irresponsibility, more nationalization. It was Marx who said that capitalism results in monopolies and the banks getting ever bigger.

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