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Great Recession? Or Great Reconstruction?

10:13 am in Uncategorized by marsdragon

The Great Recession is turning out to be a great front and cover for what I term the “Great Reconstruction” of American Society.  It is the overturning of democracy in favor of Corporate Oligarcy, and it is the desctruction of the Middle Class to create Two Americas – the very wealthy, and the very poor.  The War on Women that we are seeing it really a sub-part of that agenda.  By forcing women to submit to the morality of their employers, they are being turned into second-class citizens.

A couple of threads come together in my mind to make this conclusion.

1) The Banks were too big to fail, and were given bailouts and Investment Banks like Goldman, Merril Lynch, and others were allowed to convert to Bank Holding Companies within 48 hours of failure.  This gave them access to Federal Reserve lending and discount windows.  This process should have had a much longer vetting, but did not.  It was fast-tracked.  That tells you who runs the show.  The Financial Industry.

2) Bill Clinton and a Republican Congress passed the bipartisan Gramm-Leech-Bliley Act in 1999 (the Financial Services Modernizatino Act of 2000).   Almost on Christamas Eve of 1999 to be exact.  I remember because I was a law student that year, and I was taking financial analysis and securities law courses that Fall and Spring Semester.  The professors were abuzz with discussion of the new laws, and they made us do papers analyzing parts of the bill.  The number one thing I remember learning is that this was a dismantling of Glass-Steagall and the Securities laws of FDR passed in the wake of the 1929 Stock Market Crash.  Specifically – this new law tore down the Firewalls between Banking, Insurance, and Investment Banking.  From 1933 until 1999, those 3 sectors were not allowed to comingle funds, deposits, income, assets, etc.   The Greg Smith op-ed is insightful, since he started working at Goldman in 2000, exactly when these protections had just been dismantled.  In addition, this law created the plethora of newly designed FINANCIAL DERIVATES and allowed for the SECURITIZATION OF MORTGAGE BACKED SECURITIES.  As some prominent economisists have noted, this was nothing short of MORAL HAZARD. 

3) The Citizens United Case, as we all know, enshrines the concepts that MONEY is SPEECH and that Corporations are People.  More specifically, it provides for a framework in which the CORPORATE ENTITY is treated as an individual for CONSTITUTIONAL PROTECTION purposes.  A Corporation is therefore allowed to asserts it FIRST AMENDMENT RIGHTS as if it were an individual.

4) The War on Women that appears to have finally become the new frontline of political reality.   While this is, at one level, a continuation of the Conservative attempt to overturn Roe v. Wade and establish a religious-right perspective on this nation, it is much more than that.

Case in point.  Arizona House Bill 2625.  I’ve linked to the article at, but you can find analysis of that at Think Progress and other progressive sites.    In summary, this bill will require women to bring a NOTE to their EMPLOYER proving that they are not having sex, or that they are not using the Birth Control Pill to prevent pregnancy.  In other words, women, whether married or not, must get their Employers’ permission to use birth control.  And if the Employer does not believe in Birth Control Pills as a way to prevent Pregnancy (“Sex is only for Procreation and NOT Pleasure” mindset) then it means that the Employer will have the RIGHT under the Arizona Law (and other laws passed by likeminded states) to PREVENT COVERAGE BY THE INSURANCE CARRIER for that birth control pill.  The law also requires the women to show their medical histories to the employer to prove their point.  The entire decision rests with the Employer.  And the women who work in “right-to-work” states will also be at risk of instant termination, without cause, for failure to do anything the Employer likes.   Those states are very difficult to prosecute employment discrimination claims in, particularly in the 5th circuit (Texas, Lousiana, Mississippi).  The result is that the women must oblige the employer or risk being fired.  And above all, cannot obtain birth control pills without her employer’s MORAL CONSENT.

If that wasn’t enough, the reason it is included in this analysis is because of a curious comment made by the bill’s SPONSOR.  A Repulican Woman, Majority Whip Debbie Lesko, R-Glendale, stated:

“I believe we live in America. We don’t live in the  Soviet Union,” Lesko said. “So, government should not be telling the organizations or mom and pop employers to do something against their moral beliefs.”

That is worth dissecting for a moment.  She believes that this is not the USSR, but the USA, and therefore, she feels justified in asserting this law.  She believes that the FIRST AMENDMENT FREEDOM OF RELIGION applies to a COMPANY itself.  And by extension, that COMPANY’s RELIGION is epitomized by the OWNER of that company.

First – the woman who uses birth control pills is an individual.  She is making a MEDICAL DECISION for herself.  The decision is between herself and her doctor.  The Insurance Company should not really be part of that equation in the first place.  But, for purposes of PAYMENT, they are a third party.  FOR PAYMENT PURPOSES.  And of course, the slippery slope is that they get involved in appropriateness of payment issues.  Is the medical procedure, pill, device, etc for a REAL purpose or a SHAM purpose.  That kind of involvment.  But Insurance Companies have never before been given MORAL ANALYSIS rights.  They never were allowed, under prior laws, to dictate which surgeries or procedures or pills could be given on a MORAL BASIS.  Only on a MEDICAL BASIS.  Insurers were allowed to request a less expensive method be used or to limit certain exams to once a year instead of twice, because there was a SCIENTIFIC RATIONALE (however thin or untested it may have been) to the objection.  But never a moral objection.

Second – the EMPLOYER is not the one making the moral decision here.  Nowhere in the Bible or American Jurisprudence has there ever been a statement or precedent or law or proverb that says an EMPLOYER will be judged or damned based on the decisions of the EMPLOYEES.   The only SECULAR law I can find that mirrors this kind of thinking is the one that that FEUDAL laws espoused.  Where the NOBLE was responsible for his vassal’s conduct on his land.  In Scotland in 1609, laws were passed enjoining the Highland Chiefs to become responsible for their clan members.  They were being held accountable for the actions of those who were under their authority.   Employer liability laws have been routinely and severely CURTAILED in the past 30 years by TORT REFORM.  No longer are Employers liable under the law for the actions of their employees in thousands of cases.  There are so few ways to attach liability to an employer for the actions of an employee.  So, all of a sudden, a woman employee’s ACTIONS are now a breach of an EMPLOYER’s religion?

Third – the woman employee used to have RIGHTS under the Constitution.  To engage in HER OWN religious and medical decisions.  To allow an EMployer the right to RESTRICT that employee’s protection is to basically say that the COMPANY/OWNER right are more protected under the FIRST AMENDMENT than the Employee’s rights under the same constitution. 

Conclusion/Analysis:   This is nothing short of an extension under Citizens United.   CORPORATIONS (and by proxy, their OWNERS) are allowed to assert the Constitutional Protections as FULL CITIZENS UNDER THE LAW.   Therefore, an OWNERS’ religion is the same as that of the CORPORATION.  Its like the old European Peace of Augsburg Treaty (1555) where the Prince’s Religion was to be the People’s Religion.  A Lutheran Prince could enforce Lutheranism in his province, and a Catholic Prince could enforce Catholicism in his province.  The Princes had liberties under the Constitution of the Holy Roman Empire.  But the PEASANTS had no such freedoms.  They were brutally suppressed if they tried to practice a different faith than their Secular lord.  That is how this law is applied.  A Catholic Business-Owner (Corporation) can impose its religious beliefs on the INDIVIDUAL EMPLOYEES, even if its a secular business that pays taxes.  

The INDIVIDUAL EMPLOYEES are not FULL CITIZENS any longer.  They are FRACTIONAL citizens.  They only get First Amendment Protection in limited cases.  They can’t freely choose a medical or religious application of medical decisions.  They must submit to the FULL CITIZEN power/rights of the CORPORATION.

And these are CORPORATIONS that have the backing of the US GOVERNMENT.  They have access to the US Federal Reserve, Treasury, and other Taxpayer funds to keep themselves afloat.

This is the emergence of a FEUDAL-FASCISM.  In other words, we are witnessing not the Great Recession, but the GREAT RECONSTRUCTION of America from a Democratic Capitalist Nation to a FEUDAL FASCIST NATION.

American Capitalism: Devaluing Labor Outputs, Credit Markets and Economic Slavery

7:10 pm in Uncategorized by marsdragon

Southof has posted a diary about Joseph Stiglitz’ comments regarding a new stimulus and the pros and cons of that strategy in today’s economy. I decided not to derail the thread there and instead reference it and put my thoughts in a separate diary. The basic questions about American Capitalism and how we can salvage our economy in the wake of all that has happened (and is still happening) is one that is so fundamental to all of us. Particuarly in an election year.

I’ve been trying to wrap my head around this issue for the past 2 years now, and I have to admit – so many of our presuppositions and assumptions about the market forces, financial repercussions of decisions made in the capital markets, international monetary and trade policies, and political tendencies in nation-states to sometimes do things that are counterintuitive all makes this a complicated equation.

But I think that some key fundamentals have made themselves pretty clear over time in this nation.

(1) While INNOVATION and INVENTION used to be something that could create dynamic growth and better quality of life for people, it appears that our economy and political structure have ossified and decayed to the point where only those inventions that will generate profit for the established corporate powers will be allowed to survive. Example: Solar Panels on rooftops. Not being feasibly allowed due to the reverse incentives of subsidizing the dinosaur energy distribution industry, tax credits, etc. The Transmission Profiteers won’t allow "GENERATION AT USE" but will instead lobby to keep that new technology cost prohibitive. Agribusiness subsidies that prevent healthier choices from reaching the consumer (example: it is ILLEGAL for those healthier options to ADVERTISE that they do not use GMOs, but it is LEGAL for large companies to make quasi-false statements about health and receive subsidies in the process). IN short, those with power now pay to play. They pay to shut down innovation unless they can capture that innovation to maximize their own profit.

(2) The Largest growth sector during the 90s and 2000-2009 was the the FINANCIAL SERVICES SECTOR. Why does that matter? IT signals a continuing trend in our economy. The rise of the "middleman." We no longer CREATE or PRODUCE. (Except those concentrated, near monopolistic corporate power strucures mentioned in #1). We instead have middlemen for every function in society. Health Care is a prime example. Doctor-Patient no longer exists. Now, it is Patient-Insurer-Pharma-Med-Device Maker-Government-Doctor. And Government is not acting like it does in Britain or France, to ensure Patient access. No, instead it is acting as Gatekeeper to ensure MAXIMUM PROFITS for all the parties in between Patient and Doctor. Now, we have laws enacted REQUIRING that we the consumer purchase FINANCIAL PRODUCTS that masquerade under the name "health insurance" but which are merely another form of Financial Wizardry foisted upon the consumers.

(3) WE are a "Consumer-Economy." And we live off Credit. That is because of the Creation of the Federal Reserve as the sole monopolistic manipulator of CURRENCY VALUE AND CREDIT FLOW. The Federal Reserve is nothing but a Cartel of Private Banks, exempt from Congressional or Executive or Judicial Oversight. They are a "4th Branch" of government, not mentioned in the Constitution, and not governed by the Constitution. They have successfully won court case after court case involving their refusal to comply with Freedom of Information Act Requests. There is CASE LAW in this nation that establihed the precedent that the Federal Reserve’s activities involving the US CURRENCY, PRINTING OF THE CURRENCY, and ISSUANCE OF CREDIT OF THAT CURRENCY are "TRADE SECRETS" and therefore subject to full protection under the US Statutory and Common Law defining "TRADE SECRETS." In other words, you have a better chance of obtaining the Colonel’s "Secret Recipe" for KFC or Coca-Cola’s formula for Coke(R) than you will getting hold of the doing of the Federal Reserve member banks. That means that the entire US CURRENCY VALUE AND CREDIT MARKETS are completely governed by a MONOPOLY that is wholly unaccountable to anybody, anywhere. And that is a BIG REASON why we are a Consumer-economy driven by Credit.

(4)The primary beneficiaries of the Corporate-run Washington, D.C. establishment, outside of the Financial Sector (which specializes in making money off of other people’s money. AND NOTHING ELSE. THAT IS ALL THEY DO! THEY MAKE MONEY OFF YOUR MONEY. Even if they lose your money, they still get their cut!) is the Military/Defense establishment. If we do make "stuff" it is war and death. And we have to export that around the world so as to make more money for our corporate profit centers.

So, I think that just looking at those 4 basic concepts we can find a LOT to start fixing at the FUNDAMENTAL level. Not this window-dressing that gets debated in D.C. by "left" and "right." The strutural economy is itself flawed from top to bottom.

If you work 50 hours a week, and make X amount of money, you plan to spend 30% of X on housing cost, 10% on utilities, 30% on food, and that leaves you 30% to spend on transportation and health. But when all the levers of costs are pushed upwards but your rate of income does not correspondingly go up, then your percentages start to break. You now have to spend 40% on health, 30% on transporation, and 30% on housing. That leaves NOTHING for food or utilities. So, CREDIT becomes the only option.

And therein lay the door to Economic Slavery. Which is what everyone who has "CREDIT" now has a form of. Economic Slavery. And when the Credit Rating AGencies for Consumers can be allowed to get so much so wrong so often without much incentive to fix it (short of you putting your life on hold for half a year to fight them), it almost makes it impossible to function properly in this economy. Yet, the Credit Ratings Agencies for Corporations and Wall Street are allowed to whitewash and candycoat those credit ratings. With no enforcement.

The entire system depends upon CONSUMPTION by the CONSUMER, yet it is completely stacked against the consumer. The net effect is that as wages stagnate, you have to work harder, or sell yourself into economic slavery, just to maintain your standard of living.

And let me make a point about "standard of living" – people sometimes roll their eyes at that statement and say, basically, "Oh please, stop bellyaching. So, you can’t keep your standard of living. Get over it! ITs time to suck it up and make some sacrifices."

But let’s look at what "standard of living" means. It is not a statement of luxury. In our economy, with a FIAT currency now having replaced all other tangible forms of valuing your work output, we have to look at what economies USED to be first:

IN olden days, if you made a horseshoe and the rider needed it, you could ask for a bag of wheat (or some volume of wheat) in exchange. That Wheat fed you. That horseshoe therefore had REAL VALUE to you and to that owner of the horse. This was bartering.

For most of human history, the production of food, shelter and clothing were always considered the primary fundamental goals of an economy. People worked to acquire or produce those 3 things. IN time, the acquisition of “Security” became a 4th item that was tangible enough to establish governments and interlocking loyalties, duties, and laws around. The entire Feudal concept was premised upon those 4 concepts.

So, people performed manual labor to produce food and materials for clothing or shelter. In exchange for that, others would barter their services to provide SECURITY in exchange for the food, shelter and clothing provided by the others. In some societies, that SECURITY was sometimes provided by the same people who performed the other 3 functions (these were forms of societal militias, all going by different names in different cultures and throughout history).

Now, in all those instances, you had a pretty good idea of the value of your labor. You knew that if you could harvest enough food to feed 4 families, for example, that you had earned the equivalent of the services that those 4 families could in turn provide. A form of symbiosis developed. People could reasonably value their efforts against the efforts of others, and as long as people worked hard, and nature cooperated (which it didn’t always), there was a degree of economic predictability and thus, the ability to budget and plan and live responsibly.

Fast forward to today. How do you measure the VALUE of your efforts?

If you sit in an office and push paper and click on a computer, then what are you worth? Well, if you are using DOLLARS to value your work, then you have effectively bought into a shell game that is designed to devalue your labor output and drive you into the shackles of CREDIT (also known as “economic slavery”) just to survive.

In a village where I grow wheat and you log wood and our neighbor builds housing and furniture with that wood, do you think it is very likely that some guy will come along and say “you give me 10 days worth of wheat, and you give me 10 homes worth of wood, and you build me 10 homes with that wood, and I’ll give you all the right to stay in your homes.” Is that possible? No way. You’d laugh and ignore the fool. Unless he came at the head of an army larger than one you and your fellow community members could stand against and resist.

But, today, we all do allow that to happen. We work and we create something of value to someone. But now, we have a predatory class of people known as FINANCIAL WIZARDS.

These people don’t create anything. They don’t produce. They don’t enhance the value of anything. What they do is become intermediaries between the Farmer, the Logger and the Builder. They have disconnected the economic community bonds. They have dissociated all forms of valuation from reality. Now, they assign a number called “DOLLARS” to your work effort.

It started out with the Builder being told that 1 home was 100 Dollars. And the Farmer told that the food grown for the time it takes that Builder to build the home is 100 Dollars. And the Logger gets 100 Dollars for the amount of wood chopped to give that builder to make that 1 home.

But over time, those Financial Wizards have created a new reality. The Farmer makes about 100 Dollars still. The Builder makes about 100 Dollars still. The Logger makes about 100 Dollars still. And the FINANCIAL WIZARD makes about 100,000 Dollars now. And the CEO of the Logging Consortium makes 1,000,000 DOLLARS NOW. So too with the CEO for the consortium of other professions.

Think about that. These intermediaries, managers, tyrants, and brokers (all who do nothing but point and stamp the foot and gamble the efforts of the producers and creators) now have valued themselves as being equal to 10,000 people. They now have the purchasing power of 10,000 people. That is the size of a small town in modern terms. ONE PERSON. Because the financial architecture of this nation makes it possible to DEVALUE the hard work of so many people by allowing OVERVALUATION of the handful who manipulate the system.

Why does that matter? Well, if this was a true ECONOMY, then if the Logger truly did log 10,000 times as much as the Farmer or Builder produced, maybe the Logger could justify his sudden increase in wealth. Maybe. But the Financial Wizards did not actually create 10,000x more in value. They merely manipulated the system of Credit and FIAT CURRENCY to just create a value for themselves. Of course, our government and our own willingness to go along with this system for the past 100 years or more is a big reason why it exists.

But since this is not a true ECONOMY, but instead something else (we can debate labels), we now have the ability of small groups of individuals to drive up the value of goods and services to the detriment of the rest of us. They can corner the market on commodities. They can manipulate capital markets. They can purchase political power. They can simply “buy-out” the smaller competitors and then drive the entire industry into the toilet (Wal-Mart, Barnes & Noble, Agriculture, etc). They can even do that in their own industry (Too Big to Fail Banks are now systemic parts of the government, have access to tax receipts, and can use that tax money to purchase community banks and smaller players, thereby consolidating their own industry even further).

What does this mean? Well, Rush Limbaugh will stamp his feet to proclaim the “Rights” of these Financial Wizards to pay themselves whatever they want. But look at the other side of the equation. This is effectively the same as saying that the Financial Wizards have a right to DEVALUE the rest of America’s labor and output by exponential orders of magnitude.

So, my hypothetical above has come true. The Village Doctor continues to be paid less and less by his Financial Wizard Master (Insurance Companies). The Village Farmers continue to be paid less and less by their Financial Wizard Masters (Monsanto with its Government cover to lie, collect subsidies, and banks like JPMORGANCHASE to collect tax revenue so they don’t fail and then give credit to Monsanto but withhold it for all their smaller competitors). Every “consumer” in America (also known as EMPLOYEES and SELF EMPLOYED SMALL BUSINESS OWNERS and MIDDLE CLASS and WORKING POOR) is now the recipient of this cruel revaluation of labor.

But the Financial Wizards continue to have multi-million dollar payouts, partially paid for with taxes levied upon those Consumers described above.

We have to rethink the entire paradigm for our economy and capital markets. We have consumer deposits being gambled in the capital markets. We have life insurance premiums being gambled in the capital markets. Those gamblers are able to “move the market” and basically crush the individual investor trying to make his or her hard earned dollar yield something a little more.

But that individual investor would not have to even go to the Capital Market Casinos if his/her labor wasn’t devalued in the first place, right? For most of human history, people who had to work that hard just to die starving and broke were often considered SLAVES or the lowest class of untouchables.

So, we have not advanced whatsoever. The difference between the SERFS of the Middle Ages and the Consumer/Employee/Self-Employed Business Owner/Middle Class/Working Poor of today is that in the Middle Ages, the Serf had FOOD, CLOTHING, and SHELTER almost all the time short of natural causes. Today’s modern “Serf” has no guarantee of any of that. We no longer grow our own food, make our own clothes, or provide our own shelter on our own land. We have no more “Social Contract” with our Lords and Masters. At least the Serfs had that. They had a SOCIAL CONTRACT. The basic incidentals of HUMAN RIGHTS were provided in exchange for a lifetime of work and service.

Today, we are without that. We have to work harder and harder to earn less and less. And those BASIC INCIDENTALS – Food, Shelter, Clothing – are becoming more and more expensive. Not to mention the new basic incidentals of our time: Transportation and Health Care.

When Trillions of Dollars are printed just to pay off the gambling debts of the Financial Wizards and to wage war on behalf of those Financial Wizards, then the value of those dollars start to plummet. And all of our hard work and labor is devalued in the process.