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Pentagon Tries to Blame Financial Crisis on Foreign Financial Terrorists
The Pentagon is paying contractors to claim that it was foreign financial terrorists - instead of fraud by American financial executives - which caused the 2008 financial crisis.
While a Pentagon contractor said,
“This is the equivalent of box cutters on an airplane,” Paul Backen - a
Yale University professor who has studied economic warfare, said he saw
“no convincing evidence that ‘outside forces’ colluded to bring about
the 2008 crisis.”
Indeed, the claim that terrorism caused the financial crisis is about as believable as Gaddafi trying to blame the Libyan protests on Osama Bin Laden, or al-Maliki blaming Al Qaeda for the Iraqi protests.
But it's not an isolated incident. In fact, the government is trying in many ways to convince us that financial fraud is isolated, not systemic, and - most of all - not important to rein in.
For example, the U.S State Department's website says (click on link entitled "economic")"
Economic
conspiracy theories are often based on the false, but popular, idea
that powerful individuals are motivated overwhelmingly by their desire
for wealth, rather than the wide variety of human motivations we all
experience.This one-dimensional, cartoonish view of human nature
is at the heart of Marxist ideology, which once held hundreds of
millions under its sway.)
If I didn't know better, I would say that the State Department is implying that anyone that questions the intent behind even a particular powerful individual's actions is a conspiracy theorist or a Marxist.
More
importantly, Obama's current head of the Office of Information and
Regulatory Affairs - and a favored pick for the Supreme Court (Cass
Sunstein) - previously:
Defined a conspiracy theory as "an effort to explain some event or practice by reference to the machinations of powerful people, who have also managed to conceal their role."
William
K. Black - professor of economics and law, and the senior regulator
who put 1,000 top executives in jail during the S & L crisis - says
that that the government's entire strategy now - as during the S&L crisis - is to cover up how bad things are: "the entire strategy is to keep people from getting the facts".
Similarly , 7 out of the 8 giant, money center banks went bankrupt in the 1980's during the "Latin American Crisis", and the government's response was to cover up their insolvency.
So powerful people have conspired to try to downplay the severity of various economic crises.
And - as Matt Taibbi notes that the government is doing more to protect them than to prosecute them:
Federal
regulators and prosecutors have let the banks and finance companies
that tried to burn the world economy to the ground get off with
carefully orchestrated settlements — whitewash jobs that involve the
firms paying pathetically small fines without even being required to
admit wrongdoing. To add insult to injury, the people who actually
committed the crimes almost never pay the fines themselves; banks caught
defrauding their shareholders often use shareholder money to foot the
tab of justice.***
A veritable mountain of evidence
indicates that when it comes to Wall Street, the justice system not
only sucks at punishing financial criminals, it has actually evolved
into a highly effective mechanism for protecting financial
criminals. This institutional reality has absolutely nothing to do with
politics or ideology — it takes place no matter who's in office or
which party's in power. To understand how the machinery functions, you
have to start back at least a decade ago, as case after case of
financial malfeasance was pursued too slowly or not at all, fumbled by a
government bureaucracy that too often is on a first-name basis with
its targets. Indeed, the shocking pattern of nonenforcement with regard
to Wall Street is so deeply ingrained in Washington that it raises a
profound and difficult question about the very nature of our society:
whether we have created a class of people whose misdeeds are no longer
perceived as crimes, almost no matter what those misdeeds are. The SEC
and the Justice Department have evolved into a bizarre species of
social surgeon serving this nonjailable class, expert not at
administering punishment and justice, but at finding and removing
criminal responsibility from the bodies of the accused.The
systematic lack of regulation has left even the country's top
regulators frustrated. Lynn Turner, a former chief accountant for the
SEC, laughs darkly at the idea that the criminal justice system is
broken when it comes to Wall Street. "I think you've got a wrong
assumption — that we even have a law-enforcement agency when it comes to Wall Street," he says.
A wild conspiracy theory?
Kansas City Fed President Thomas Hoenig doesn't think so. He recommends Taibbi's article.
Indeed, Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky, the Wall Street Journal and Bernie Madoff all say that the U.S. economy is a giant Ponzi scheme.
They Didn't MEAN to Cause a Depression
Sunstein argues:
Many social effects, including large movements in the economy, occur as a result of the acts and omissions of many people, none of whom intended to cause those effects.
The Great Depression of the 1930s was not self-consciously engineered
by anyone; increases in the unemployment or inflation rate, or in the
price of gasoline, may reflect market pressures rather than intentional
action.
However, Sunstein is neither an economist nor a criminologist, and - as such - is completely out of his depth.
Whether or not anyone intended to cause the Great Depression, top economists - including Robert
Shiller, Robert Kuttner, William Black and John Kenneth Galbraith, and
the former chief accountant of the S.E.C. ( Lynn Turner) - have said that criminal fraud led to the Great Depression (and to the current crisis). Even Alan Greenspan says fraud caused the current crisis.
Economics professor James K. Galbraith testified as follows to the Senate Judiciary Committee's Subcommittee on Crime:
I write to you from a disgraced profession. Economic theory, as
widely taught since the 1980s, failed miserably to understand the
forces behind the financial crisis. ... Economists [argued that]
widespread fraud therefore could not occur. Not all economists believed this – but most did.
Thus
the study of financial fraud received little attention. Practically
no research institutes exist; collaboration between economists and
criminologists is rare; in the leading departments there are few
specialists and very few students. Economists
have soft-pedaled the role of fraud in every crisis they examined,
including the Savings & Loan debacle, the Russian transition, the
Asian meltdown and the dot.com bubble. They continue to do so now.
At a conference sponsored by the Levy Economics Institute in New York
on April 17, the closest a former Under Secretary of the Treasury,
Peter Fisher, got to this question was to use the word “naughtiness.”
This was on the day that the SEC charged Goldman Sachs with fraud. ..."
***
An
older strand of institutional economics understood that a security is a
contract in law. It can only be as good as the legal system that
stands behind it. Some fraud is inevitable, but in a functioning system
it must be rare. It must be considered – and rightly – a minor
problem. If fraud – or even the perception of fraud – comes to dominate
the system, then there is no foundation for a market in the
securities. They become trash. And more deeply, so do the institutions
responsible for creating, rating and selling them. Including, so long
as it fails to respond with appropriate force, the legal system itself.
***
Ask
yourselves: is it possible for mortgage originators, ratings agencies,
underwriters, insurers and supervising agencies NOT to have known that
the system of housing finance had become infested with fraud? Every
statistical indicator of fraudulent practice – growth and profitability –
suggests otherwise. Every examination of the record so far suggests
otherwise. The very language in use: “liars’ loans,” “ninja loans,”
“neutron loans,” and “toxic waste,” tells you that people knew. I have
also heard the expression, “IBG,YBG;” the meaning of that bit of code
was: “I’ll be gone, you’ll be gone.”
***
Some appear to
believe that “confidence in the banks” can be rebuilt by a new round of
good economic news, by rising stock prices, by the reassurances of
high officials – and by not looking
too closely at the underlying evidence of fraud, abuse, deception and
deceit. As you pursue your investigations, you will undermine, and I
believe you may destroy, that illusion.
But
you have to act. The true alternative is a failure extending over time
from the economic to the political system. Just as too few predicted
the financial crisis, it may be that too few are today speaking frankly
about where a failure to deal with the aftermath may lead.
In
this situation, let me suggest, the country faces an existential
threat. Either the legal system must do its work. Or the market system
cannot be restored. There must be a thorough, transparent,
effective, radical cleaning of the financial sector and also of those
public officials who failed the public trust. The financiers must be
made to feel, in their bones, the power of the law. And the public,
which lives by the law, must see very clearly and unambiguously that
this is the case.
William K. Black has made the same points.
Sunstein is Using the Wrong Standard
Of
course, "intent to cause" harm is not the standard. If two criminals
disable the power to a nuclear power plant in order to steal a computer
containing valuable information (to sell it to a foreign country), and
if the lack of power to the cooling systems causes a core meltdown which
releases radioactivity into the surrounding town, they are guilty of
mass murder, even if they didn't intentionally try to expose anyone to
radioactivity.
Similarly, if two robbers unplug an old tycoon's
dialysis machine so that they can steal his wallet, ring and watch, and
don't bother to plug it back in, they are guilty of murder even if they
didn't actually intend to kill him.
Likewise, as Nobel prize winning economist George Akerloff demonstrated
in 1993, big financial players intentionally loot the economy time and
again, knowing that could very well lead to an economic crisis.
This is not rocket science. It is a dynamic which has been understood for "hundreds of years".
Therefore,
Sunstein's argument that - because the heads of the giant financial
companies probably didn't intend to cause a depression - that shows that
there was no conspiracy to commit fraud makes as little sense as saying
that the criminals who caused a nuclear meltdown or killed the old
tycoon couldn't have engaged in a conspiracy.
In fact, nobel prize winning economist Joseph
Stiglitz, PhD economists Dean Baker, Michael Hudson, Paul Craig Roberts
and Michel Chossudovsky and Time Magazine's Justin Fox all say that financial conspiracies have been committed by big American financial players. Leading Austrian economist Murray Rothbard agreed.
The REAL Conspiracy
Indeed, the real conspiracy
is that the government is trying to hide the fact that massive
conspiracy to commit fraud by Wall Street's biggest players is a prime cause of the financial crisis.
As I noted a year ago:
The label "conspiracy theory" is commonly used to try to discredit criticism of the powerful in government or business.
***
Acceptable Versus Unacceptable Conspiracy Theories
Bernie Madoff's Ponzi scheme was a conspiracy. The heads of Enron were found guilty of conspiracy, as was the head of Adelphia. Numerous lower-level government officials have been found guilty of conspiracy. See this, this, this, this and this.
Time Magazine's financial columnist Justin Fox writes:
Some financial market conspiracies are real ...
Most good investigative reporters are conspiracy theorists, by the way.
Indeed, conspiracies are so common that judges are trained to look at conspiracy allegations as just another legal claim to be disproven or proven by the evidence.
But
- while people might admit that corporate executives and low-level
government officials might have engaged in conspiracies - they may be
strongly opposed to considering that the wealthiest or most powerful might possibly have done so.
Indeed, those who most loudly attempt to ridicule and discredit conspiracy theories tend to focus on defending against criticism involving the powerful.
This
may be partly due to psychology: it is scary for people to admit that
those who are supposed to be their "leaders" protecting them may in
fact be human beings with complicated motives who may not always have
their best interests in mind.And see this.
Michael
Kelly, a Washington Post journalist and neoconservative critic of
anti-war movements on both the left and right, coined the term "fusion
paranoia" to refer to a political convergence of left-wing and
right-wing activists around anti-war issues and civil liberties, which
he claimed were motivated by a shared belief in conspiracism or
anti-government views.In other words,
prominent neocon writer Kelly believes that everyone who is not a
booster for government power and war is a crazy conspiracy theorist.
Similarly, psychologists who serve the government eagerly label anyone "taking a cynical stance toward politics, mistrusting authority, endorsing democratic practices, ... and displaying an inquisitive, imaginative outlook" as crazy conspiracy theorists.
This
is not really new. In Stalinist Russia, anyone who criticized the
government was labeled crazy, and many were sent to insane asylums.
Using the Power of the State to Crush Criticism of the Government
The
bottom line is that the power of the state is used to crush criticism
of major government policies and actions (or failures to act) and
high-level government officials.Pay attention, and you'll notice
that criticism of "conspiracy theories" is usually aimed at attempting
to protect the state and key government players. The power of the
state is seldom used to crush conspiracy theories regarding people who
are not powerful . . . at least to the extent that they are not
important to the government.
Sunstein has called for the use of state power to crush conspiracy allegations of state wrongdoing. See this, this and this.
And as I've previously noted, the government is using massive state power to try to redirect people away from even questioning the financial system. See this, this, this and this. Indeed, claims of "national security" are being used to keep criminal fraud hidden and out of public view.
And as Glenn Greenwald points out, the government is already implementing Sunstein's program (starting around 20 minutes into video)
And the government is gaming many of the economic indicators - such as unemployment - and allowing the big financial players to use ipse dixit accounting and sleights of hand,
in order to try to convince everyone that things are not that bad, that
everything is returning to normal, that the fraud isn't really that
widespread. As Warren Buffet noted, when the water level drops, the
rocks at the bottom of the river are exposed. In other words, if the
true financial conditions of the big financial players - and the U.S.
economy - were reported, the massive fraud would be exposed.
- advertisements -
Lost all my money in vegas.
How did that happen?
Terrorists. True story.
yep. another heeb to complement the other heebs in charge of the zionist USA.
was it better under waspish USA?
yes,...because the wasps were so fucked up and disorganized that free will men were left alone to conduct their business and love their families as they saw fit.
State of Emergency yet?
I haven't even been in de nile yet!
We are already in a state of emergency with the waste of taxpayers money. We don't need a bunch of bloated politicians to declare such a condition, we already know.
It is all about acceptable behaviour within reasonable limits.
Employees of banks pay taxes, as do the banks themselves. Banks have simply highlighted the stupidity of rules set by regulators and law makers.
It is now apparent that super profits enabling fat bonuses preceding super losses is unacceptable behaviour. Had there not been a crash, where would we be? Banks would be paying taxes and employees would be paying more taxes.
Could it be that banks and their employees have paid more taxes than any other sector over the last 40 years by engaging in unacceptable behaviour only when we see a screw up?
Or could it be that we need to go for some kind of sytem that rewards effort of a different kind, given that we have dumb laws and regulations.
Banks have added to the friction of a functioning economy because the framework in which they operate encourages their behaviour. A much deeper question is "what is the fair price at which banks should operate, for each sector of the economy?"
It is painfully obvious that
a) paying the banks via the yield curve to increase taxes
b) allowing the banks to charge anything above a 0.25% margin for on lending Fed Funds (given their A rated credit quality compared to a group of 50,000 mortgage payers with a AAA credit quality)
Represents fraud by all participant banks, regulators, governments and government agencies. It's not rocket science.
Tax payers are being defrauded of their wealth because toothless "change is nigh" politicians just can't get their head round the simple truth that "if you spend it, it is gone".
Accumulated excess spending has to be repaid.
Is it really the view of all those making decisions about government finances that pretty soon we will be running 10 years of 5% fiscal surpluses to reduce the accumulated debt to a mere 50% of GDP, whilst at the same time maintaining a US style ZIRP?
The best fraudsters always leave you thinking you were just unlucky. There needs to be smart people who set the rules. I am sorry Volcker has no successors from business schools or industry to replace a healthy dose of ability and realism.
excuse me guys. Is there any possibility to send an e-mail to ZH or an special blogger?
thx
just use their email address and hit send :)
Financial terrorist playing cards already printed so citizens can id the perps.
http://financialterrorists.wordpress.com/sample-cards/
Look forward to the mugshot of a disheveled Lloyd Blankfein hauled from his lair in his skivvies, à la the CIA capture photo of Khalid Sheikh Mohammed in Pakistan.
Nero burnt Rome on a false flag!
Piece of cake! If they can convince most Americans that 9-11 was perpetrated by 19 dumbfuck ragheads commanded by another religious raghead nut on dialysis from a cave in Afghanistan, this media operation should be easy.
Just keep buying silver (and lead) bullets, cuz, damn it's close to kill or/and die time...
This is another phony trumped up excuse for more government sinking America deeper into the Soviet style KGB state. They use the word "terrorists" as excuse for more intrusion into our lives.
What a disgraceful report by the pentagon.
Why shouldn't the Pentagon write 'disgraceful' reports, their future depends on defending their turf against all-comers, including the corruption of those who approve their budgets and their financial sponsors. They exercise a regal function defending the state. From their point of view it gives them special powers. It's the history of all countries, empires; why should it change? What makes this century different to all others? What makes the USA so different to all other nation states? That is a question worthy of debate. The rest is business as usual...ask Machiavelli...I know he's dead but...his spirit lives on. I feel based on my experience I know the answer to these shenanigans but what do others feel?
It really was financial terrorism when you think about it. Wall Street created financial weapons of mass destruction that they then used to blackmail the public into giving them all the power they desired. You can be sure they are brewing the next crisis as we speak because they will never have enough power to feel satiated, and so must create ever more chaos which allows them to grab more power.
Hopefully the inklings of change we are seeing through some states beginning to deal with the corruption that is "public unions" is the beginnings of a tide that will ultimately someday sweep the "new robber barrons" out of the house.
Somebody still needs convincing?
The reason they get away with murder is because they own every freking "institution" in this country; from the pentagon to the C!A, all bankster run.
See: www.scribd.com/zaknick
"A brief comment"
I was just reading this report. The smoking gun I found in it dealt with 2 small unnamed market-makers that suddenly traded trillions in all the affected equities.
Find out who these entities front for, and things could get interesting.
As much as Getco's name comes up around here, I'd have to wonder if they are one of the two.
I wonder how did he calculate this number? Whole global economy is around $50 trillion. I bet he used one of Enron's mathematical models!
If "financial terrorism" is defined as "the sum of all Wall Street transactions, then yes, I agree. Other wise, go FUCK yourselves. We're going balls to the wall with this muthafucker. Fucking two bit banker crooks.
Watch the video 'BERNIE MADOFF PONZI SCHEME & TRILLION DOLLAR MORTGAGE TIME BOMB' at (http://www.youtube.com/watch?v=LOPu8V6qdeA).
Anonymous -
I could not believe the testimony from Ben Bernanke this morning! He literally admits we are headed for a systemic crash! This is unbelievable!
It is very easy to see who caused the financial collapse, just follow the money trail. All paths lead to wall street and the primary dealers.
Crash the system, crash it now. The sooner we do, the sooner compensation returns to those that are actually worth a shit.
Yeah,... that's right,... and bullshit (see here),... and fucking bullshit (see here),.... and more fucking bullshit (see here)..... This is the best they've been reduced to for propaganda,.... this government is on its last legs and people still don't see it. When it happens here in America it will be so quick that people will be absolutely dumbfounded and be open to any life preserver thrown them unless they allready have their own.
And now this story on Yahoo Finance... Remember Bill and Hillary Clinton's good friend Marc Rich?
http://ca.finance.yahoo.com/news/Special-report-The-biggest-reuters-1618334715.html
Just more of 'God's Work' in progress I guess!
Zero head are you an ET from outer space? With a mission to convert the net-world to your vision of tomorrow, where the day after never knows what the day before has displayed to all, like compartmentalized areas of the space shuttle. I have an eerie-queerie feeling you're a walking, talking avatar of the next generation of falsified geeks with plastic teeth. Am I near the truth when I talk thus to your avatar? Or is this an enigma too confused to be worthy of elucidation? I hope you like left handed humor.
akkkkkkk.
Lol, only kidding Zero head!
No worries mate...
If you didn't exist I'd have to create you!
(Nice O to 0 swapout BTW... Perhaps a 'schitzophrenic' conversation might liven things up a bit!)
To tell you the truth much as I respect GW for playing his banjo, I find his songs a trifle heavy and I feel I need some light refreshments here. So I invent a subject to create a feeling of irrepressible exuberance. Time out!