Saturday, May 22, 2010

Senate Passes Wall Street Permanent Bailout Bill, It’s a Job Killer!

NoWorldSystem.com
April 21, 2010

The Senate passes the Wall Street Reform Bill (S. 3217) by a 59-39 vote, if it passes the House it will kill jobs by making it difficult for small businesses to succeed and it will give permanent and unlimited bailout authority for the big banks on Wall Street. It would also do nothing to solve problems in the financial system and won’t prevent the next financial crisis.

Republican Senator David Vitter: “Congressional Democrats and the Obama Administration want to create a permanent bailout mechanism all while spouting their rhetoric of getting tough on Wall Street, but if you look at who is already lining up to support their ‘reform’ measure it’s a who’s who of the big banks that have already received the taxpayer bailout the first time.” Democrat Congressman Brad Sherman: “There are serious problems with the Dodd bill. The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for.”

This bill would also break the back of small business by having them register with the SEC to only wait 120 days for the SEC to review their filing. A second provision in the bill raises the wealth requirements for venture capitalists that want to invest in startups – if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.” There’s no doubt about it that the provisions in the bill would absolutely chill investing and small business which is the backbone of our economy. [Source]

Dr. Cass Sunstein wants to turn off the lights



Jerry Mazza
Infowars.com
May 21, 2010

Paul Joseph Watson, a writer at Prison Planet whom I greatly respect, gave us a reminder Monday May 17th that Obama Czar Wants Mandatory Government Propaganda On Political Websites. The Big Brother Czar is also a Harvard Professor currently dishing up the pabulum for Obama’s White House that “conspiracy theories” should be banned from the Internet; so much for Harvard, Czar-Dr. Cass Sunstein and intellectual freedom.

Sunstein’s tonality is reminiscent of Joseph Goebbels New Years Address for 1939.

What’s more Sunstein wants to “legally force” Americans “to do what’s best for our society” and water down their free speech (granted by the US Constitution), by mandating websites with pop-up links to opposing government propaganda be “forcibly included on political blogs.” Could we have such pop-ups when the President is speaking, Henry Kissinger, Bibi Netanyahu, AIPAC, Larry Silverstein, NIST, Fox News, Lloyd Blankfein?

Coincidentally, the also Harvard educated Constitutional lawyer now President, Barack Obama, agrees with Sunstein and has knighted him “Head of Information Technology in the White House for ‘Conspiracy Theories,’” i.e. any political thought that doesn’t regurgitate establishment views, like Obama’s ties to the CIA at Columbia University and after. Those who talk truth to power will be taxed or banned. I hear the clicking of boot heels as Sunstein speaks and I write.

In fact, Sunstein’s “thinking” came from a rather sullied “White Paper,” in which he talks about countering “dangerous ideas” and “taking those who disseminate such theories” to where? Prisons like Hitler’s camps, Stalin’s Siberian gulags.

These dangerous ideas and/or theories would include “some held by the vast majorities of Americans,” such as the incredible body of facts that prove the JFK assassination was part of a wider plot, including the CIA, Big Oil, the Mafia, the defense industry, and a combination of assassins. Sunstein is such a patent ploy for the New World Order that he should wear an “NWO” armband, perhaps a skull and bones on his lapel.

Sunstein adds to his hit list that believing “global warming is a deliberate fraud” is another theory government censorship should stomp its black boot on. Frankly, whether you or I believe in global warming or not is our business and constitutional right, and not his. Sunstein calls “false and dangerous” the idea that exposure to sunlight is healthy, despite certain medical experts that agree prolonged exposure reduces risk of developing certain cancers. Again, whether it does or doesn’t is a matter for open discussion in a democratic society. Choices of credence should be made by individual physicians and lay people according to their patients and health.

Basically, this crypto-Nazi wants to write into law that government should dictate “the very nature of reality to Americans and that their opinions can only be voiced at best when accompanied by mandatory federal propaganda or at worst that Americans can be silenced entirely by federal decree,” as Watson writes. He also points out that our Supreme Court nominee Elena Kagan argued “that the government can ban books and political pamphlets.” What’s going on there at Harvard (where Kagan served as law school Dean) that cries out for such repression? Tom Paine must be turning over in his grave.

Memories of Goebbels



Frankly, Sunstein’s tonality is reminiscent of Joseph Goebbels New Years Address for 1939. “This is Goebbels’… address to Germany, delivered on 31 December 1938. He reviews the past year, recalling repeatedly that Austria had been incorporated into Germany. Despite his claim that complainers are not worth dealing with, he devotes a major part of the speech to denouncing those who failed to share his faith in Adolf Hitler….”

The “complainers” that Goebbels was referencing were the intellectuals, writers, journalists, activists, the Internet bloggers and questioners of their day, who had criticized Hitler’s barbaric behavior, including the burning of the Reichstag, which Hitler and the Nazis blamed on the vision-impaired, Dutch left-wing radical Marinus van der Lubbe, who later was tried by them and beheaded. Or course, after successfully lying that the communists, not the Nazis under Goebbels direction did it, Hitler went on to create the “Enabling Act” which enabled the Nazis to strip away most of the civil rights of Germans, as did George Bush’s renewed PATRIOTACT for Americans, and which this author would like to see banned forever from our laws.

But after praising the “miracles” [read violence] that brought the Nazis to power, Goebbels goes on to say, “This ability to believe is rather weak in some circles, above all in those with money and education. They may trust more in pure cold reason than a glowing idealistic heart. Our so-called intellectuals do not like to hear this, but it is true anyway. They know so much that in the end they do not know what to do with their wisdom. They can see the past, but not much of the present, and nothing at all of the future. Their imagination is insufficient to deal with a distant goal in a way such that one already thinks it achieved.” I assume that distant, imagined goal was the fall of the Third Reich a decade later, leaving Germany in ruins, poverty and disgrace, a path on which the US may be dangerously in its pursuit to world hegemony.

Goebbels continues, “They [the complainers] were also unable to believe in the victory of National Socialism while the National Socialist movement was still fighting for power. They are as little able today to believe in the greatness of our national German future. They perceive only what they can see, but not what is happening, and what will happen.”

We perceive only what they see, like the red nanothermite dust in the ruins of Ground Zero, the high-powered aerosolized military explosive that took the towers down on 9/11. But then, we also see what has happened as a result, the creation of the War on Terror, blamed on the Muslim’s, Osama bin Laden and box-cutter carrying hijackers, which lies gave us the right to start our ongoing havoc, still running in Iraq, Afghanistan, now Pakistan, and all points south and east.

Returning to Goebbels, “That is why their carping criticisms generally focus on laughable trivialities. Whenever some unavoidable difficulty pops up, the kind of thing that always happens, they are immediately inclined to doubt everything [the administration’s 9/11 conspiracy theory] and to throw the baby out with the bath water [the truth out with blind belief]. To them difficulties are not there to be mastered, but rather to be surrendered to [lies are there to believed rather than questioned].

Goebbels adds, “One cannot make history with such quivering [sic questioning] people. They are only chaff in God’s breath. Thankfully, they are only a thin intellectual or social upper class, particularly in the case of Germany. They are not an upper class in the sense that they govern the nation, but rather more a fact of nature like the bubbles of fat that always float on the surface of things.” Bubbles of fat floating on the surface of things? Could that be the corpulent Goering? Today’s rotund Rush Limbaugh, Newt Gingrich? I’ll work on that one.

Ergo, on mindless blasts of rhetoric like those of Goebbels, the Third Reich, meant to last a thousand years, fell into dust and disgrace in 12. Alas and alack, for the sake of freedom, for the future of America, to all who would turn off the light of truth, professors or thugs, presidents or prelates, philosophers or fools, czars or czarinas, I wish you all a hard landing in reality, ASAP.

The Continuing Erosion of the Bill of Rights

NowPublic
May 23, 2010

I keep seeing people go absolutely mad over Arizona’s immigration reform bill. But nobody seems to care about the ever growing erosion of our civil liberties by the federal government! Why is this?

Why do people get so worked up about a bill in a state that they don’t even live in, but completely ignore the fact that the federal government keeps chipping away at thier rights with a sledgehammer?

Under George W. Bush and continuing under Barack H. Obama, you have the following threats to your individual liberty:

1. The Patriot Act, originally signed into law by George Bush and reauthorized by Barack Obama. Which gives the federal government the ability to listen in on your phone calls, read your mail and email, search and seize your property or you all without a warrant! It also strips you of your writ of Habeus Corpus, they can arrest you and hold you without a warrant, without charging you, and without access to legal representation indefinitely,as long as they claim you are a “terrorist” or an “enemy combatant” which would not be determined by a court of law, because you are not being charged with a crime!

2.The nomination of Elena Kagan for Supreme Court justice by Barack Obama. This woman believes that the government can ban books and speech it deems offensive.

Supplanting the United States Constitution: War, National Emergency and “Continuity of Government”

Peter Dale Scott
Global Research
May 23, 2010

In July 1987, during the Iran-Contra Hearings grilling of Oliver North, the American public got a glimpse of “highly sensitive” emergency planning North had been involved in. Ostensibly these were emergency plans to suspend the American constitution in the event of a nuclear attack (a legitimate concern). But press accounts alleged that the planning was for a more generalized suspension of the constitution.

As part of its routine Iran-contra coverage, the following exchange was printed in the New York Times, but without journalistic comment or follow-up:

[Congressman Jack] Brooks: Colonel North, in your work at the N.S.C. were you not assigned, at one time, to work on plans for the continuity of government in the event of a major disaster?

Both North’s attorney and Sen. Daniel Inouye, the Democratic Chair of the Committee, responded in a way that showed they were aware of the issue:

Brendan Sullivan [North's counsel, agitatedly]: Mr. Chairman?

[Senator Daniel] Inouye: I believe that question touches upon a highly sensitive and classified area so may I request that you not touch upon that?

Brooks: I was particularly concerned, Mr. Chairman, because I read in Miami papers, and several others, that there had been a plan developed, by that same agency, a contingency plan in the event of emergency, that would suspend the American constitution. And I was deeply concerned about it and wondered if that was an area in which he had worked. I believe that it was and I wanted to get his confirmation.

Inouye: May I most respectfully request that that matter not be touched upon at this stage. If we wish to get into this, I’m certain arrangements can be made for an executive session.[1]

But we have never heard if there was or was not an executive session, or if the rest of Congress was ever aware of the matter. According to James Bamford, “The existence of the secret government was so closely held that Congress was completely bypassed.”[2] (Key individuals in Congress were almost certainly aware.)

Brooks was responding to a story by Alfonzo Chardy in the Miami Herald. Chardy’s story alleged that Oliver North was involved with the Federal Emergency Management Agency (FEMA) in plans to take over federal, state and local functions during a national emergency. This planning for “Continuity of Government” (COG) called for “suspension of the Constitution, turning control of the government over to the Federal Emergency Management Agency, emergency appointment of military commanders to run state and local governments and declaration of martial law.”[3]

To my knowledge no one in the public (including myself) attached enough importance to the Chardy story. Chardy himself suggested that Reagan’s Attorney General, William French Smith, had intervened to stop the COG plan from being presented to the President. Seven years later, in 1994, Tim Weiner reported in the New York Times that what he called “The Doomsday Project” – the search for “ways to keep the Government running after a sustained nuclear attack on Washington” –had “less than six months to live.”[4]

To say that nuclear attack planning was over was correct, But this statement was also very misleading. On the basis of Weiner’s report, the first two books on COG planning, by James Bamford and James Mann, books otherwise excellent and well-informed, reported that COG planning had been abandoned.[5] They were wrong.

Mann and Bamford did report that, from the beginning, two of the key COG planners on the secret committee were Dick Cheney and Donald Rumsfeld, the two men who implemented COG under 9/11.[6] What they and Weiner did not report was that under Reagan the purpose of COG planning had officially changed: it was no longer for arrangements “after a nuclear war,” but for any “national security emergency.” This was defined in Executive Order 12656 of 1988 as: “any occurrence, including natural disaster, military attack, technological emergency, or other emergency, that seriously degrades or seriously threatens the national security of the United States.”[7]

In other words extraordinary emergency measures, originally designed for an America devastated in a nuclear attack, were now to be applied to anything the White House considered an emergency. Thus Cheney and Rumsfeld continued their secret planning when Clinton was president; both men, both Republicans, were heads of major corporations and not even in the government at that time. Moreover, Andrew Cockburn claims that the Clinton administration, according to a Pentagon source, had “no idea what was going on.”[8] (As I shall explain later, this sweeping claim needs some qualification.)

The expanded application of COG to any emergency was envisaged as early as 1984, when, according to Boston Globe reporter Ross Gelbspan,

Lt. Col. Oliver North was working with officials of the Federal Emergency Management Agency . . . to draw up a secret contingency plan to surveil political dissenters and to arrange for the detention of hundreds of thousands of undocumented aliens in case of an unspecified national emergency. The plan, part of which was codenamed Rex 84, called for the suspension of the Constitution under a number of scenarios, including a U.S. invasion of Nicaragua.[9]

Clearly 9/11 met the conditions for the imposition of COG measures, and we know for certain that COG planning was instituted on that day in 2001, before the last plane had crashed in Pennsylvania. The 9/11 Report confirms this twice, on pages 38 and 326.[10] It was under the auspices of COG that Bush stayed out of Washington on that day, and other government leaders like Paul Wolfowitz were swiftly evacuated to Site R, inside a hollowed out mountain near Camp David.[11]

What few have recognized is that, nearly a decade later, some aspects of COG remain in effect. COG plans are still authorized by a proclamation of emergency that has been extended each year by presidential authority, most recently by President Obama in September 2009. COG plans are also the probable source for the 1000-page Patriot Act presented to Congress five days after 9/11, and also for the Department of Homeland Security’s Project Endgame — a ten-year plan, initiated in September 2001, to expand detention camps, at a cost of $400 million in Fiscal Year 2007 alone.[12]

At the same time we have seen the implementation of the plans outlined by Chardy in 1987: the warrantless detentions that Oliver North had planned for in Rex 1984, the warrantless eavesdropping that is their logical counterpart, and the militarization of the domestic United States under a new military command, NORTHCOM.[13] Through NORTHCOM the U.S. Army now is engaged with local enforcement to control America, in the same way that through CENTCOM it is engaged with local enforcement to control Afghanistan and Iraq.

We learned that COG planning was still active in 2007, when President Bush issued National Security Presidential Directive 51 (NSPD 51). This, for the sixth time, extended for one year the emergency proclaimed on September 14, 2001. It empowered the President to personally ensure “continuity of government” in the event of any “catastrophic emergency.” He announced that NSPD 51 contains “classified Continuity Annexes” which shall “be protected from unauthorized disclosure.” Under pressure from his 911truth constituents, Congressman Peter DeFazio of the Homeland Security Committee twice requested to see these Annexes, the second time in a letter signed by the Chair of his committee. His request was denied.

The National Emergencies Act, one of the post-Watergate reforms that Vice-President Cheney so abhorred, specifies that: “Not later than six months after a national emergency is declared, and not later than the end of each six-month period thereafter that such emergency continues, each House of Congress shall meet to consider a vote on a joint resolution to determine whether that emergency shall be terminated” (50 U.S.C. 1622, 2002). Yet in nine years Congress has not once met to discuss the State of Emergency declared by George W. Bush in response to 9/11, a State of Emergency that remains in effect today. Appeals to the Congress to meet its responsibilities to review COG have fallen on deaf ears.[14]

Former Congressman Dan Hamburg and I appealed publicly last year, both to Obama to terminate the emergency, and to Congress to hold the hearings required of them by statute.[15] But Obama, without discussion, extended the 9/11 Emergency again on September 10, 2009;[16] and Congress has continued to ignore its statutory obligations. One Congressman explained to a constituent that the provisions of the National Emergencies Act have now been rendered inoperative by COG. If true, this would seem to justify Chardy’s description of COG as suspension of the Constitution. Are there other parts of the Constitution that have been suspended? We do not know, and the Chair of the Homeland Security Committee has been told he cannot find out.

Plans drafted by a secret committee, including corporation heads not in the government, have provided rules that allegedly override public law and the separation of powers that is at the heart of the Constitution. Congress is derelict in addressing this situation. Even Congressman Kucinich, the one Congressman I have met, will not answer my communications on this subject.

Yet as I see it, the only authorization for the COG planning was a secret decision by President Reagan (NSDD 55 of September 14, 1982) which in effect federalized the counterinsurgency planning (called Cable Splicer), which he had authorized in California when governor there.

It is clear that the planning by Cheney, Rumsfeld and others in the last two decades was not confined to an immediate response to 9/11. The 1000-page Patriot Act, dropped on Congress as promptly as the Tonkin Gulf Resolution had been back in 1964, is still with us; Congress has never seriously challenged it, and Obama quietly extended it on February 27 of this year.

We should not forget that the Patriot Act was only passed after lethal anthrax letters were mailed to two crucial Democratic Senators – Senators Daschle and Leahy – who had initially questioned the bill. After the anthrax letters, however, they withdrew their initial opposition.[17] Someone — we still do not know who – must have planned those anthrax letters well in advance. This is a fact most Americans do not want to think about.

Someone also must have planned the unusual number of war games taking place on 9/11. COG planners and FEMA had been involved in war games planning over the previous two decades; and on 9/11 FEMA was again involved with other agencies in preparing for Operation Tripod, a bioterrorism exercise in New York City. [18]

Someone also must have planned the new more restrictive instructions, on June 1, 2001, determining that military interceptions of hijacked aircraft had to be approved “at the highest levels of government” (i.e. the President, Vice-President, or Secretary of Defense).[19] The Report attributes this order to a JCS Memo of June 1, 2001, entitled “Aircraft Piracy (Hijacking) and Destruction of Derelict Airborne Objects.” But the written requirements had been less restrictive before June 1, 2001, and I am informed that the change was quietly revoked the following December.

In The Road to 9/11 I suggest the change in the JCS memo came from the National Preparedness Review in which President Bush authorized Vice-President Cheney, together with FEMA, “to tackle the… task of dealing with terrorist attacks.”[20] Not noticed by the press was the fact that Cheney and FEMA had already been working on COG planning as a team throughout the 1980s and 1990s.[21]

As I wrote above, it is necessary to qualify a Pentagon official’s claim (to author Andrew Cockburn) that the Clinton administration had “no idea what was going on” in COG. Let me quote from my response to Cockburn’s book in my own, The Road to 9/11:

[Weiner’s] article persuaded authors James Mann and James Bamford that Reagan’s COG plans had now been abandoned, because “there was, it seemed, no longer any enemy in the world capable of . . . decapitating America’s leadership.” [22] In fact, however, only one phase of COG planning had been terminated, a Pentagon program for response to a nuclear attack. Instead, according to author Andrew Cockburn, a new target was found:

Although the exercises continued, still budgeted at over $200 million a year in the Clinton era, the vanished Soviets were now replaced by terrorists. . . . There were other changes, too. In earlier times the specialists selected to run the “shadow government” had been drawn from across the political spectrum, Democrats and Republicans alike. But now, down in the bunkers, Rumsfeld found himself in politically congenial company, the players’ roster being filled almost exclusively with Republican hawks. . . .“You could say this was a secret government-in-waiting. The Clinton administration was extraordinarily inattentive, [they had] no idea what was going on.”

Cockburn’s account requires some qualification. Richard Clarke, a Clinton Democrat, makes it clear that he participated in the COG games in the 1990s and indeed drafted Clinton ’s Presidential Decision Directive (PDD) 67 on “Enduring Constitutional Government and Continuity of Government.” But COG planning involved different teams for different purposes. It is quite possible that the Pentagon official was describing the Department of Defense team dealing with retaliation.

The Pentagon official’s description of a “secret government-in-waiting” (which still included both Cheney and Rumsfeld) is very close to the standard definition of a cabal, as a group of persons secretly united to bring about a change or overthrow of government. In the same era Cheney and Rumsfeld projected change also by their public lobbying, through the Project for the New American Century, for a more militant Middle East policy. In light of how COG was actually implemented in 2001, one can legitimately suspect that, however interested this group had been in continuity of government under Reagan, under Clinton the focus of Cheney’s and Rumsfeld’s COG planning was now a change of government.[23]

Understandably there is great psychological resistance to the extraordinary claim that Cheney and Rumsfeld, even when not in government, were able to help plan successfully for constitutional modifications, which they themselves implemented when back in power. Most people cannot bring themselves even to believe the second, known half of this claim: that on September 11, 2001, COG plans overriding the constitution were indeed implemented. This is why the first two print reviews of The Road to 9/11, both favorable and intelligently written, both reported that I speculated that COG had been imposed on 9/11. No, it was not a speculation: the 9/11 Commission Report twice confirms that COG was instituted on the authority of a phone call between Bush and Cheney of which they could find no record. No record, I did speculate, because it took place on a secure COG phone outside the presidential bunker – with such a high classification that the 9/11 Commission was never supplied the phone records.

A footnote in the 9/11 Report says

“The 9/11 crisis tested the U.S. government’s plans and capabilities to ensure the continuity of constitutional government and the continuity of government operations. We did not investigate this topic, except as needed to understand the activities and communications of key officials on 9/11. The Chair, Vice Chair, and senior staff were briefed on the general nature and implementation of these continuity plans.[24]

The other footnotes confirm that no information from COG files was used to document the 9/11 report. At a minimum these files might resolve the mystery of the missing phone call which simultaneously authorized COG, and (in consequence) determined that Bush should continue to stay out of Washington . I suspect that they might tell us a great deal more.

What is the first step out of this current state of affairs, in which the constitution has in effect been superseded by a higher, if less legitimate authority? I submit that it is to get Congress to do what the law requires, and determine whether our present proclamation of emergency “shall be terminated” (50 U.S.C. 1622, 2002).

An earlier polite, judiciously worded appeal to this effect failed. It may be necessary to raise the issue in a larger, albeit more controversial context: the scandal that a small cabal was able to supersede the Constitution, and Congress has failed, despite repeated requests, to do anything about it. I would hope that Americans concerned about this matter would raise it with all the congressional candidates in the forthcoming elections. At a minimum, candidates should promise to call for a full discussion of the proclaimed national emergency, as the law requires.

Great Depression 2.0. Bet on it



Mike Whitney
Information Clearing House
May 22, 2010

Deficits create demand. Demand generates spending. Spending generates economic activity. Economic activity generates growth. Growth generates jobs, increases government revenues, reduces deficits and ends recessions.

Simple, right?

Global markets have plunged for more than a month, wiping out more than $5.3 trillion in total market value.

When consumers have too much debt, they will not spend no matter how low interest rates are. This is not theory, this is fact.

If the government cuts spending at the same time as consumers, then overall spending declines and the economy slips into recession. This is what the deficit hawks want–a return to recession. This is politics, not economics.

KEYNE’S KOAN: Increasing the deficits, lowers the deficits

The deficit hawks say “You can’t solve a debt problem by adding more debt”. This is a very persuasive argument, but it’s wrong. Increasing the deficits, lowers the deficits. This sounds wrong, but its right. Here’s proof from a recent article by economist Marshall Auerback:

“Ireland began cutting back deficit spending in 2008, when its banking crisis began to spread and its budget deficit as a percentage of GDP was 7.3 per cent. The economy promptly contracted by 10 per cent and, surprise, surprise, the deficit exploded to 14.3 per cent of GDP.” (“The US is not Greece”, Marshall Auerback, counterpunch.org)

Ireland is not the exception. Ireland is the rule. A nation cannot starve itself to prosperity nor can it shrink its way to growth. Austerity is fine for monks, but bad for the economy.

Deficit cutting during a downturn creates bigger deficits, higher unemployment, greater economic contraction, and more suffering. Every country that follows the IMF’s prescription for belt-tightening, undergoes a mini-Depression. That’s because its bad economics (or, rather) politically-driven economics. By weakening the state, private industry and speculators hope to grab public assets on-the-cheap and force privatization of public services. These are the real objectives behind the austerity measures.

When the government is in surplus, the private sector must be in deficit. When the government is in deficit, the private sector must be in surplus. It’s that simple. So, when consumers and households must save to make up for lost equity and falling revenue, (such as, after the collapse of the housing bubble) the government MUST increase deficits to keep the economy running, to reduce slack in demand and to lower high levels of unemployment. Without Obama’s fiscal stimulus, the economy would not have produced 3 quarters of positive growth. The stimulus (and monetary policy) kept the economy from tipping into a severe recession. Had Obama followed the advice of the deficit hawks (many of who also supported Bush’s wars in Iraq and Afghanistan) the country would be mired in another Great Depression. This is worth considering when some Fox bimbo in a plunging-neckline says “The stimulus did nothing.”

Sovereign governments whose debts are paid in its own currency, are not like you and me. They are not fiscally constrained or required to balance their checkbook. Nor should they if it weakens the economy or increases unemployment. The government can spend without risk of going broke because the debt is owed to itself. Yes, this can create inflation when unemployment is low and there is too much money chasing too few goods. But that should not deter government from stimulating the economy when unemployment is 10%, underemployment is 20%, manufacturing is slow, housing is in a shambles, core CPI is below 1%, and the economy is teetering towards outright deflation. Deficits should be increased and sustained at a high level until unemployment and overcapacity begin to retreat. Economists know that consumer deleveraging is a long-term project, which means that government stimulus will be required for a very long time. Get used to it.

Last week, economist James Galbraith was interviewed by the Washington Post’s Ezra Klein. Klein asked Galbraith if he thought “the danger posed by the long-term deficit is overstated by most economists?” Here’s his answer:

James Galbraith:”I think the danger is zero. It’s not overstated. It’s completely misstated.

Ezra Klein: “Why?”

James Galbraith: “What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn’t be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn’t rational. And if the market isn’t rational, there’s no point in designing policy to accommodate the markets because you can’t accommodate an irrational entity.” (Washington Post)

Naturally, Galbraith’s answer stirred up controversy at the Fox School of Economics where Andrew Mellon’s photo is still proudly on display. But Galbraith is right. If the markets were really worried, then yields on long-term Treasuries would go up. But they’re not going up, because the economy is still battling deflation. The 10-year Treasury is presently 3.4%, just as one would expect in a Depression. On Wednesday, core CPI came in at 1%. There is no inflation in the system. The inflation doomsters are discredited alarmists who should be ignored. The economy needs more stimulus, more government spending. Here’s Galbraith again:

“To put the point firmly…. the economy is recovering because of the budget deficits. Without these budget deficits, there would be no recovery, because it is the deficits that are helping to put more money into households’ pockets. To talk of recovery but to criticize the deficits is ridiculous. The whole point of this thing [stimulus spending] is to add to the deficit. The patient is recovering from a deadly illness and yet the press is attacking the medicine….”

“The deficit and the public debt of the U.S. government can, should, must, and will increase in this crisis. They will increase whether the government acts or not. The choice is between an active program, running up debt while creating jobs and rebuilding America, or a passive program, running up debt because revenues collapse, because the population has to be maintained on the dole, and because the Treasury wishes, for no constructive reason, to rescue the big bankers and make them whole.” (“Galbraith: deficits are the solution not the problem”, John Hanrahan, Nieman Watchdog)

Not all deficit spending is good. John Maynard Keynes never advocated bailing out underwater financial institutions run by crooks, and yet, that has been the essential Fed policy from Day 1. Keynes believed that markets were fundamentally unstable; that government had a role to play in smoothing out capitalism’s excesses, reducing inequality and creating jobs. He also believed that slumps will last much longer than necessary if government does not intervene and stimulate demand.

The value of deficits depends on how the money is spent. The $700 billion TARP was largely wasted on financial institutions that should have been nationalized, broken up, and their toxic assets put up for auction. The $787 billion stimulus, on the other hand, was largely a success, because it provided urgently needed relief for the states, benefits for unemployed workers, tax cuts and infrastructure programs. Experts belief the stimulus increased employment by roughly 2 million workers and raised GDP by 1.5% to 2.5%. Stimulus is not a panacea, and no one ever said it was. It’s an emergency blood-transfusion to get a sickly patient through a violent trauma. It did what it was designed to do, and it paid for itself via the uptick in economic activity and growth. Here’s how Paul Krugman sums it up:

“…increasing government spending in a slump more or less pays for itself: it leads to higher output not just in the short run but in the long run, and therefore leads to higher revenue that very likely more than offsets the original expense.” (Paul Krugman’s blog, “The Conscience of a Liberal”, New York Times).

Stimulus critics may want to memorize the Krugman quote. Or, maybe, this from the April 2010 IMF World Economic Outlook:

“Fiscal policy provided major support in response to the deep downturn, especially in advanced economies…..Fiscal balances have deteriorated, mainly because of falling revenue resulting from decreased real and financial activity. Fiscal stimulus has played a major role in stabilizing output but has contributed little to increases in public debt, which are especially large in advanced economies.” (Found at Billy Blog, Bill Mitchell)

Repeat: Stimulus has “contributed little to increases in public debt.” In other words, the giant deficits are not the result of stimulus (or so-called “profligate” public spending) but of “falling revenue” because the economy is still flat on its back. The message is simple; put people back to work, increase demand, restore public confidence, and spend more money. Now.

MELTDOWN IN THE EU: What happens when deficit hawks set policy

Global markets have plunged for more than a month, wiping out more than $5.3 trillion in total market value. Ostensibly, the catalyst was Greece’s large deficits, but that’s only part of the story. Under the terms of the Maastricht Treaty, (aka–the Treaty on European Union) EU countries are not allowed to exceed the treaty’s 3% ceiling on fiscal deficits. The nonsensical treaty basically repeals the business cycle by edict. Are recessions forbidden, too?

Sanctimonious German bureaucrats and heads-of-state have taken up the cause of fiscal probity and turned a thoroughly-manageable matter into a full-blown crisis that could break up the EU and drag the world back into deep recession. Keep in mind, Germany has been the main beneficiary of Greek deficits as reflected in their bulging surpluses. One does not exist without the other; and as Keynes pointed out, surplus countries increase global instability by exerting “negative externality”. That hasn’t stopped German media from finger-wagging at their “spendthrift” neighbors to the south.

Now markets are in a frenzy; volatility has skyrocketed and gauges of market stress (Libor) are steadily rising. Interbank lending has begun to slow. Greek deficits have uncovered the systemic-rot in the EU banking system which is overloaded with garbage assets and non performing loans, only the EU does not have the fiscal/political infrastructure in place to guarantee the dodgy paper. So the pressure on the banks continues to grow and the prospect of another Lehman crash looms larger by the day.

Meanwhile, in Berlin, embattled politicians–who are 100% certain that the “everyone else is to blame”–are sticking to their Hooverian economics plan; balanced budgets, austerity programs, fiscal straight-jackets all around. This is the deficit hawks remedy, too, the Hoover Solution. Take a good look; this is what the U.S. will look like if the Keynes-bashers, the belt-tighteners, and the deficit gloomsters get their way. Great Depression 2.0. Bet on it.

Friday, May 21, 2010

Mexican President Wants to Disarm Americans

Felipe Calderón Pressures U.S. Leadership to Re-Enact Unconstitutional Assault-Weapons Ban from House Floor

Aaron Dykes
Infowars.com
May 20, 2010

Mexican President Felipe Calderón called upon the United States Congress to re-enact the assault weapons ban in a bid to disarm the American people as they are integrated into the North American Union system. Further, he placed blame for fueling drug cartels and gang violence squarely on the United States and their supply of firearms.

Calderón made these outrageous and anti-American remarks from the floor of the U.S. Congress during an official visit, and also renewed attacks on the immigration legislation passed by Arizona.

President Obama joined in his cause, making the startling declaration that “We are not defined by our borders” during a press conference welcoming Calderón on the White House lawn. Such a statement with immigration AND “weapons” problems on the border? Whatever happened to the Robert Frost adage ‘Good fences make good neighbors‘?



Alex Jones responds to these radical statements in a video address, questioning Calderón’s wherewithal to scold the United States or meddle with its internal affairs, particularly when Mexico has become such an unmanageable, nightmarish police state– where, by the way, there is a total gun ban for ordinary citizens.

Calderón told the United States that it must “regulate the sale of these weapons in the right way.” He continued:

“Many of these guns are not going to honest American hands. Instead, thousands are ending up in the hands of criminals.”

Calderón’s Call to Disarmament is particularly inappropriate before Congress, who are Constitutionally barred from making any law which would violate any part of the Bill of Rights– secured to the people and several states in balance against the power given to the Federal Government. Further, Calderón’s plan holds the same fallacy as other attempts at gun control. If carried out, banning “assault” weapons would empower– rather than restrict– narcotrafficking gangs and leave “good” people helpless. It would not, as he naively intends, curb cartel violence or dry out the tools of their intimidation.

Yet his proposals have long been advanced and supported by the likes of Barack Obama and Hillary Clinton, among others. President Obama voiced general support for a renewed ban last year, but acknowledged that it would be difficult to achieve politically. Moreover, Obama’s Attorney General Eric Holder has also expressed support for re-enacting a gun ban, but has shied away from it while the White House has kept it quiet purposely to avoid political damage to other parts of President Obama’s already wildly-radical agenda. Last year, Newsweek scolded Eric Holder for “backing away” from the ban issue and failing to support an issue ‘important to Mexican officials.’

A MESSAGE FOR ARIZONA

President Calderón also used the opportunity to amplify his criticism of Arizona’s immigration laws, a position which is hypocritical on several points. First, why would he have a voice among Mexican people who fled at all costs from the failing and violent narco-state which he heads? Furthermore, how can the Mexican President decry the efforts of Arizona to control its borders and maintain stability, when Mexico has considerably more severe laws against illegal immigration than that recently introduced by the under-pressure border state.

Though Calderón issued a tongue-in-cheek travel advisory to ‘visiting’ Mexican citizens warning them to be wary of the strict new attitude in Arizona, it is his own country which has grown wild with corruption, violence, drug cartels, authoritarian police and the unsustainable blow of mass exodus which has turned Mexico into a vacuum and failed state. While the United States has attempted to progress on issues of discrimination, Mexico continues to openly oppress its minority groups and stifle attempts at resistance. Despite this distinction, many sanctuary cities across the United States have joined with Calderón and proposed bans on Arizona of their own.

‘SOUTHBOUND FLOW OF ILLEGAL WEAPONS’ ISSUE RAISED TO PROMOTE NORTH AMERICAN INTEGRATION

Most of all, the two heads of state, Calderón and Obama, have demonstrated a reckless and uncaring attitude towards curbing illegal immigration– which threatens to wreck both countries. Yet they have pushed hard for amnesty and other provisions to legalize workers and prevented any attempts to impede the open flow of goods and people across the border.



They have both worked furiously to fast-track North American regional integration. They met in Guadalajara in August 2009 alongside Canadian PM Stephen Harper to continue– largely in secret — the agenda announced under the Bush-era Security and Prosperity Partnership for North America agreement (talks included the hot-button issue of “illegal southbound flow of American guns and cash that helps fuel this extraordinary violence”).

President Obama– for someone who claimed ignorance about the North American Union during his 2008 campaign [video]– certainly has gone a long way in supporting the total destruction of United States sovereignty, all while embracing cheap globalist clichés, obliterating the economy and opening-up the floodgates to labor replacement from Mexico and other Latin American countries.

Politicians– through NAFTA, WTO, CAFTA and SPP agreements, among others– are ushering in a corporatist-controlled North American Union, alongside a longer-term global merger. Robert Pastor and other key architects from the Council on Foreign Relations clearly designed the North American Union to circumvent the confines of the U.S. Constitution, and such a system is unlikely (once in power) to allow or accept the resistance of an armed population.

UNITED NATIONS ATTACK ON THE SECOND AMENDMENT

Unfortunately, the United States has long-ago set its course in that direction, having signed onto the United Nations treaty and its disarmament plan, already poignantly and also frighteningly symbolized by the monument outside its headquarters of a tied-up gun barrel, rendered incapable of effective action.

Clearly, Calderón and Obama now hope to finish the deal.



At the same time, Secretary of State Hillary Clinton has recently renewed her campaign for the UN Small Arms Treaty (NEW START), urging the Senate to ratify the treaty signed back in December with the Russian Federation. Clinton utilized frightening Cold War rhetoric about the proliferation of nuclear armaments to argue for the control of “small arms.” Unless the Senate ratifies the treaty, Clinton argued, there would be no existing protection against a nuclear threat (despite a valid 2002 treaty). She stated:

“The choice before us is between this treaty and no treaty governing our nuclear security relationship with Russia, between this treaty and no agreed verification mechanisms on Russia’s strategic nuclear forces, between this treaty and no legal obligation for Russia to maintain its strategic nuclear forces below an agreed level.”

To fulfill the UN’s mandate of eventual disarmament (of private, citizen-held arms) or to listen to the dictates of a corrupt puppet-figurehead like Calderón is to commit treason against the American people and our way of life. How many authoritarian regimes in the 20th and 21st Centuries have taken away its people’s arms, only to enslave and exterminate them? How could we in the United States allow ourselves to be disarmed at a time when law enforcement along the border have warned citizens to buy guns because its sheriffs, police and other authorities cannot protect the border zone?

Calderón should take the advice not of his flattering host Obama, eager to dismantle America’s strengths, but from his harshest critics, who would gladly embrace a neighbor, were he not spitting on our culture and seeking to undermine it through diplomatic channels or base immigration-attrition. We at Infowars.com have already recommended that he get the hell out of our country and refrain from being the pot who called the kettle black. His country has too many problems for him to be busy with the lessons America should learn. He should go back to Mexico and start on his own mess. Let’s hope he takes the recommendation.

Top Official Says Feds May Not Process Illegals Referred From Arizona



FOXNews.com
MaY 21, 2010

A top Department of Homeland Security official reportedly said his agency will not necessarily process illegal immigrants referred to them by Arizona authorities.

John Morton, assistant secretary of homeland security for U.S. Immigration and Customs Enforcement, made the comment during a meeting on Wednesday with the editorial board of the Chicago Tribune, the newspaper reports.

“I don’t think the Arizona law, or laws like it, are the solution,” Morton told the newspaper.

The best way to reduce illegal immigration is through a comprehensive federal approach, he said, and not a patchwork of state laws.