Guest Post: What This Country Needs Now Is Hope

Submitted by Jim Quinn of The Burning Platform

What This Country Needs Now Is Hope

Finch: Why are you doing this?
Evey Hammond: Because he was right.
Finch: About what?
Evey Hammond: That the world needs more than just a building right now. It needs hope.

  

The dialogue above occurred at the end of the dystopian movie V for Vendetta. It is a tale of revenge and restoring hope among citizens who had chosen safety and security over freedom and liberty. Even though this movie was fictional and adapted from a comic strip, its message and warnings should be heeded. Millions of middle class citizens in the U.S. sink deeper into despair every day. Day by day hope is being lost that the future for our children will be better than our past. The political, financial, and corporate leaders of our country are intellectually and morally bankrupt. The major Wall Street banks are bankrupt. Social Security is bankrupt. Medicare is bankrupt. The whole damned world is bankrupt. Anyone with an unbiased view of our planet would conclude that we are in unfathomable danger. The list of impending catastrophic issues that will blow up the world for millions in the U.S. and across the globe is virtually endless:

U.S. Debt

• The national debt is currently $14.6 trillion, up from $5.7 trillion in 2000. It took over 200 years to accumulate the first $5.7 trillion of debt and only 11 years to tack on another $8.9 trillion.
• With the new $450 billion jobs package proposed by President Obama, the deficit in FY12 will likely exceed $1.8 trillion, or 12% of GDP. Greece’s 2010 deficit was 10.5% of GDP.
• Kenneth Rogoff and Carmen Reinhart in their book This Time is Different: Eight Centuries of Financial Folly, using data from 44 countries over 200 years, concluded that once a country’s national debt exceeds 90% of GDP, the economy stagnates and ultimately makes that country vulnerable to a debt crisis. The U.S. national debt as a percentage of GDP is currently 97% and will reach 107% in 2012. This does not count state and local debt, Fannie Mae and Freddie Mac debt, and the unfunded liabilities for Social Security and Medicare. We are at the same place Greece was in 2007. But we’re no Greece, right? This time is different.

 

• Total credit market debt of $52.5 trillion is 3.5 times GDP, versus a long-term leverage ratio of 1.6. This is called living well above your means on borrowed money. We have a long way down before we reach the bottom of this mountain of debt.

• Despite the rhetoric out of Washington D.C. by the thieves and knaves about cutting deficits, the National Debt is on course to increase by $9 trillion in the next 10 years. It will reach $20 trillion by 2015.

 

Entitlements

• The commitments made by politicians over decades in order to get elected have resulted in unfunded liabilities for Social Security and Medicare exceeding $100 trillion.

• In 1980, just 11.7% of all personal income came from government transfer payments.  Today, 18.0% of all personal income comes from government transfer payments. Wages and salaries paid by private industries totals $5.5 trillion per year, while wages paid by government total $1.2 trillion and social welfare payments from the government total $2.3 trillion. Only ten years ago wages and salaries from private industries totaled $4.1 trillion, while government wages were only $800 billion and welfare payments totaled $1.1 trillion. In ten years the percentage increases paint the true picture: 
  • Private wages & salaries increased 34% 
  • Government wages & salaries increased 50% 
  • Government social welfare transfer payments increased 109% 
• Despite the rhetoric from politicians, there is no lock box and there is no cash in the Social Security fund. John Mauldin summed it up nicely: “Social Security funds are an entry into a government accounting book that don’t really exist except as an IOU. Politicians of all stripes have used the Social Security money to pay for other government expenses. Those funds were even counted to offset the deficit, although now that Social Security is no longer in a surplus that has gone away.”
• This year, about 3.3 million people are expected to apply for federal Social Security Disability benefits. That’s 700,000 more than in 2008 and 1 million more than a decade ago. Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.

Employment

• The official unemployment rate in the U.S. is 9.1% with 14 million people unemployed. The true unemployment rate, taking into account discouraged workers, part time workers who want a full time job, and people who have dropped out of the work force, is above 20%, or 31 million people.
• It now takes the average unemployed worker in America about 40 weeks to find a new job.

• Even after a supposed recovery, there are approximately 7 million less people employed today than there were in 2007.
• The employment to population ratio of 58.2% is at the same level as 1969, before women entered the workforce in record numbers. As wages stagnated and inflation drove costs higher, families were forced to send two parents into the workforce, with predictable consequences to their latchkey children. The ratio peaked in 2001 at 64.4% and has declined precipitously since 2008.

Poverty

• The number of people on food stamps has gone from 27 million people receiving $30 billion of aid in 2007 to 45 million people (14.5% of U.S. population) receiving $72 billion in aid today.

 

• The number of uninsured Americans totals 49.9 million.
• Those covered by employer-based insurance continued to decline in 2010, to about 55%, while those with government-provided coverage continued to increase, up slightly to 31%. Employer-based coverage was down from 65% in 2000.
• One out of every six elderly Americans now lives below the federal poverty line.
• Another 2.6 million people slipped into poverty in the United States last year and the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the Census Bureau has been publishing figures on it.
• The percentage of Americans living below the poverty line last year, 15.1%, was the highest level since 1993. (The poverty line in 2010 for a family of four was $22,314)
• Blacks experienced the highest poverty rate, at 27%, up from 25% in 2009, and Hispanics rose to 26% from 25%. For whites, 9.9% lived in poverty, up from 9.4% in 2009. Asians were unchanged at 12.1%.

Income

• Median household income fell 2.3% to $49,445 last year and has dropped 7% from the peak of $53,252 reached in 1999.
• Median household income for the bottom tenth of the income spectrum fell by 12% from a peak in 1999, while the top 90th percentile dropped by just 1.5%.
• Between 1969 and 2009, the median wages earned by American men between the ages of 30 and 50 dropped by 27% after you account for inflation.
• Median income fell across all working-age categories, but the sharpest drop was among young working Americans, ages 15 to 24, which experienced a decline of 9%.
• When you adjust wages for inflation, middle class workers in the United States make less money today than they did back in 1971.

Wealth Inequality

• The wealthiest 1% of all Americans now controls 43% of all the financial wealth in this country.
• According to the Federal Reserve, the richest 1% of all Americans has a greater net worth than the bottom 90% combined.

 

• The fact is that many people in the bottom half of the top 1% wealthiest Americans usually achieved their success after decades of education, hard work, saving and investing as a professional or small business person. A recent article by William Domhoff quotes an investment manager who works with very wealthy clients regarding the top 0.1%:

Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Membership in this elite group is likely to come from being involved in some aspect of the financial services or banking industry, real estate development involved with those industries, or government contracting.

• Until 1980, the U.S. economic system was reasonably balanced, with manufacturing still the driving force in creating wealth for the middle class. In the three decades since, our political, banking and corporate elite have gutted our industrial base, shipped millions of jobs overseas and have used financial schemes and scams to suck the vast majority of middle class wealth into their grubby little hands. Wall Street has slowly and methodically pillaged the nation’s wealth, hollowing out a once vibrant nation, and their insatiable greed driven appetite drives them to want more. 

 

Consumer Debt

• Total consumer debt in the United States at $2.45 trillion is now more than 8 times larger than it was just 30 years ago. The recent leveling off is completely due to hundreds of billions in write-offs by the Wall Street banks. The chart below is a Keynesian dream of government borrowing to create prosperity. The fallacy of Keynesianism is evident for all to see.

• According to the Federal Reserve, between 2007 and 2009 household net worth in the United States fell by 25%, or $16.4 trillion.
• The Federal Reserve says that median household debt in the United States has risen to $75,600.
• Of U.S. households that have credit card debt, the average amount owed on credit cards is $15,800.
• The top 10 credit card issuing banks control 80% of the credit card market, with Bank of America, Citicorp, JP Morgan Chase and Wells Fargo accounting for almost 60% of the market.

 

• The average APR on credit card with a balance on it is 13.1%. These same banks are borrowing at 0% from the Federal Reserve.
• Penalty fees from credit cards added up to over $21 billion in 2010.
• There are 610 million credit cards held by U.S. consumers, with 3.5 credit cards per cardholder.
• Americans now owe more than $887 billion on student loans, which is even more than they owe on credit cards.

Real Estate

• U.S. home values have fallen an astounding $6.6 trillion since the peak of the real estate market.
• National home prices have fallen 31% from their peak in 2005.
• Approximately 11 million households, or 23% of all households with a mortgage, are underwater on their mortgage.
• Household percent of equity is at 38.6% today, down from 60% in 2006. There are 87 million households in the U.S. Approximately 25 million of these houses have no mortgage, so the 52 million have significantly less than 38.6% equity.

 

• Americans were so sure their houses would appreciate to infinity during boom years of 2005 through 2008 they withdrew over $3 trillion of equity from their homes and spent it like drunken sailors. The hangover will last for decades.

 

Savings & Retirement 

• The S&P 500 Index reached 1,100 on March 24, 1998. The S&P 500 Index on October 4, 2011 is 1,100. Wall Street convinced millions of dupes that they needed to buy stocks for the long run. Thirteen years later, the average investor has nothing, while the shysters on Wall Street have reaped hundreds of billions in fees.
• The stock market is priced to return 5% over the next decade, while bonds are priced to deliver no more than 2%.
• 1 out of 3 Americans has no savings at all.
• Workers estimate their retirement savings needs at $600,000 (median), but in comparison, less than one-third (30%) have currently saved more than $100,000 in all household retirement accounts.
• The average 401k balance at the end of 2010 was $71,500. Aon Hewitt estimates that it will take retirement savings of 15 times your final salary to maintain your current lifestyle. Someone making $50,000 per year would need $750,000.
• 50% of all the households in the U.S. (57 million households) have a total net worth less than $70,000. 
• Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern’s Kellogg School of Management recently calculated the combined pension liability for all 50 U.S. states.  What they found was that the 50 states are collectively facing $5.17 trillion in pension obligations, but they only have $1.94 trillion set aside in state pension funds.
• Every single day more than 10,000 Baby Boomers will reach the age of 65.  That is going to keep happening every single day for the next 19 years.
• Approximately 3 out of 4 Americans start claiming Social Security benefits the moment they are eligible at age 62.  Most are doing this out of necessity.
• 35% of Americans already over the age of 65 rely almost entirely on Social Security payments alone.

Foreign Trade

• The U.S. trade deficit is now running at approximately $600 billion per year. It is clear that with the shift from a manufacturing based saving society in the 1960s and 1970s to a Wall Street finance based, debt driven consumption society from 1980 onward has led to massive trade deficits.

 

• The gutting of the American middle class can again be traced back to 1980 when manufacturing employment peaked at 19.5 million. Once corporate CEOs embraced “globalization” in the late 1990s and realized they could reap obscene profits and compensation packages by utilizing slave labor in China to do American manufacturing jobs at 10% of the cost, the jobs disappeared. There are less than 12 million manufacturing jobs in the U.S. today, replaced by jobs at Wal-Mart and McDonalds.

 

• The U.S. imports 9.5 million barrels per day of oil, more than 50% of our daily consumption. At an average price of $90 for 2011, we are sending $300 billion per year to countries that hate us and despise our way of life.

Energy

• The U.S consumes 22% of the world’s oil output despite having only 4.5% of the world’s population.
• The U.S. has less than 3% of the world’s proven oil reserves.
• The Department of Energy was created in 1977 with the mission to reduce our dependence on foreign oil. The country has not built a new oil refinery or nuclear power plant since 1980.
• In 1980 the U.S. imported 37% of our oil consumption. We now import 51% of our oil consumption.
• In 1980 the price of a gallon was $0.58 per gallon ($1.90 adjusted for inflation). Today, the price of a gallon of gasoline is $3.40.
• The DOE employs 16,000 workers & 100,000 contract workers, and operates on a mere $27 billion per year. Ironically, the DOE spends $300 million per year for energy in its 9,000 buildings around the country.
• Despite being created to create a comprehensive energy policy, the DOE has no plan or strategy to address peak cheap oil. The impact on U.S. society from declining world oil supply will be devastating to the U.S. economy within the next five years.

Foreign Interventionism

• America’s two wars of choice in the Middle East have cost $1.3 trillion in direct costs, thus far. The long-term costs will total over $3 trillion. 
• The United States annual military spending is 8 times as large as China and Russia. We spend 73 times as much as the supposed dire threat of Iran. The U.S. accounts for over 44% of worldwide military spending.

• In the year 2000, the U.S. spent $359 billion on Defense, including veterans and foreign aid ($17 billion). The 2011 expenditure is $965 billion, with $45 billion in foreign aid. Do the politicians in Washington D.C. recognize the irony of borrowing $45 billion from foreigners and then giving the $45 billion to other foreigners?
• The U.S. operates 11 large carriers, all nuclear powered. In terms of size and striking power, no other country has even one comparable ship.  The displacement of the U.S. battle fleet – a proxy for overall fleet capabilities – exceeds, by one recent estimate, at least the next 13 navies combined, of which 11 are our allies or partners.
• The U.S. military empire is vast. Officially, more than 190,000 troops and 115,000 civilian employees are massed in approximately 900 military facilities in 46 countries and territories (the unofficial figure is far greater). The US military owns or rents 795,000 acres of land, with 26,000 buildings and structures, valued at $146 billion.
• With the collapse of the Soviet Union in the early 1990s, the military industrial complex needed to create a new enemy in order to keep the billions in profits flowing to the arms manufacturers. The War on Terror has been a windfall for the military industrial complex. The American people did not heed President Eisenhower’s warning.

Monetary Policy

• The Federal Reserve was created in 1913 with the purpose of stabilizing the country’s financial system, eliminating financial panics, keeping prices steady, and insuring maximum employment. The result has been more instability, depressions, recessions, market crashes, unemployment as high as 25%, and inflation that has reduced the purchasing power of the U.S. dollar by 96% since 1913.

• The Consumer Price Index was 10.0 in December 1913 when the Federal Reserve was created. Today, the index stands at 227. Prices have risen 2,270% in the almost 100 years since the Federal Reserve’s inception, or inversely the dollar can buy what it took $.04 to buy in 1913. Somehow, the banking syndicate that has “achieved” this result has convinced the public that inflation is good for them.
• When Richard Nixon closed the gold window in 1971, the last check and balance on politicians and bankers was scrapped. The result has been predictable. The National Debt swelled from $400 billion in 1971 to $14.6 trillion today, a 3,650% increase in 40 years. The GDP grew from $1.13 trillion to $15.0 trillion today, a 1,332% increase in 40 years. Politicians have bought the votes of their constituents by making promises and financial commitments that have made debt slaves out of future unborn generations. Without a restraint on money printing, politicians will always choose to not worry about tomorrow.
• The Federal Reserve policies of Alan Greenspan and Ben Bernanke were the single biggest cause of the 2008 financial catastrophe and their current policies have set the country up for the final cataclysmic disintegration of our economic system. By bailing out Wall Street every time they made a high risk bet and lost (1987 Crash, Latin America, S&L Crisis, Asian Crisis, LTCM, Dot Com, 9/11, Housing collapse, Lehman) the Federal Reserve has proven to be a tool for the super rich power elite. By keeping interest rates below where they would be in a free market, the Federal Reserve created the climate for gambling on Wall Street, the home price 3 standard deviation bubble, and the current screwing of senior citizens and savers to boost the profits of Wall Street bankers.
• In August 2008 the Federal Reserve balance sheet consisted of $940 billion of mostly U.S. Treasury securities. Today, the Federal Reserve balance sheet totals $2.9 trillion and is filled with toxic mortgage debt shoveled from the insolvent Wall Street banks onto the plate of the American taxpayer. The Federal Reserve balance sheet is leveraged 55 to 1, meaning a 2% loss would wipe out their capital. Lehman Brothers and Bear Stearns were leveraged 30 to 1 when they went belly up.

 

• During the recent financial crisis the Federal Reserve secretly loaned $16 trillion to the biggest banks in the world, including $4 trillion to foreign banks. This goes far beyond the mandate they were given by Congress in 1913. The Fed had no regulatory authority or ability to judge the credit worthiness of these foreign banks, but risked $4 trillion of U.S. taxpayer funds propping them up. With European banks on the verge of bankruptcy, the Federal Reserve risks losing even more money if they become the lender of last resort.

 

• In the 3^rd Quarter of 2008 American savers were able to generate $1.4 trillion of interest income on their savings. Much of this interest went to risk adverse senior citizens who depended on this income to make ends meet after two years of no increases in their Social Security payments. Three years later savers are only generating $1 trillion of interest income or 30% less, while their costs for food and energy have risen 5% to 10%. The Federal Reserve instituted a zero interest rate policy in order to enrich their Wall Street masters, while further impoverishing the middle class and senior citizen savers that are the true backbone of the nation. Ben Bernanke has purposely transferred $400 billion from the prudent to the profligate.

When I started to detail the issues facing our country today, I expected to come up with 10 to 20 bullet points of key concerns. As I methodically worked through the categories of challenges facing the American Empire, the total reached 76 bullet points. The facts as presented above paint a picture of impending doom for America. The slogans and vapid “solutions” proposed by political candidates and entrenched Washington politicians do not even scratch the surface of what would need to be done to save this country from economic collapse. Many of these problems took decades to create and are not solvable in a reasonable time frame. With the country still delusion, overleveraged, and underemployed, it seems like the existing economic and social structure will need to be blown up to restore hope in this country.

“A building is a symbol, as is the act of destroying it. Symbols are given power by people. A symbol, in and of itself is powerless, but with enough people behind it, blowing up a building can change the world.” – V in V for Vendetta

Look In the Mirror

After accepting the fact that the economic situation as presented above is beyond repair, two questions come to mind:

1. How did we get in this predicament?
2. How do we get out of this predicament?

The difficulty with trying to explain how we got here is that people want simple answers and a bad guy to blame. People want to blame the rich or blame the poor or blame the phantom ruling elite or blame the other political party. They prefer to blame someone else, rather than looking in the mirror. It took a century of bad decisions, delusional thinking, unparalleled hubris, greed, sloth and willful ignorance to place the country on the precipice of ruin. The American people are responsible for the situation they find themselves in today. We elected the politicians that passed the laws, created the agencies, borrowed the money, and spent the country into oblivion. The truth is human beings are flawed creatures. We are prone to greed, laziness, seeking power, worrying about what others think about us, delusional thinking, herd mentality, shallowness, and cognitive dissonance. All of these human weaknesses have contributed to our current dilemma.

Until the twentieth century the United States generally kept their nose out of foreign conflicts, only getting involved in small regional conflicts. The country experienced tremendous growth during the 1800s and early 1900s with virtually no inflation and no central bank. The country experienced this remarkable expansion with no personal or corporate income tax. The nation also benefitted tremendously from the discovery of oil in Titusville, PA in 1859, as oil fueled the industrial revolution in the U.S. The election of Woodrow Wilson in 1912 marked a dramatic turning point in U.S. history. Within one year the country had a personal income tax and a central bank. As with most things created by politicians, they seemed harmless at first. The tax rate for 99% of Americans was 1%. The central bank was given a limited mandate to keep our banking system stable. Within a century we have a 60,000 page Federal tax code and a myriad of taxes at the Federal, State and local level. The Federal Reserve has more power and control over our lives than any entity on earth.

Giving politicians the ability to tax its citizens and print money allowed them to do things and make commitments that would have been impossible prior to 1913. After being re-elected in 1916 on a platform of keeping the country out of World War I, Wilson committed the country to that war. By 1919 the tax rate was already at 4% for most Americans and the Federal Reserve was printing money to finance the war, generating inflation of 16% per year between 1917 and 1920. Thus began a century of foreign interventionism and debt financed social welfare programs. The Federal Reserve created the easy monetary conditions of the 1920s which brought about the boom and bust of the 1929 stock market collapse. This precipitated the Great Depression and the conditions that led to the rise of fascism and World War II. The tinkering by politicians with our monetary system created more problems, which politicians attempted to solve by passing new laws and creating new programs and agencies. Without an unlimited supply of taxes and money printed by the Federal Reserve, politicians would have been constrained.

The somewhat logical reaction to the Great Depression by Franklin Delano Roosevelt was to create make work programs, housing agencies and social welfare programs to keep the citizens from revolting. He did this through the creation of debt, doubling the National Debt from $22 billion in 1932 to $44 billion by 1940. This is when the entitlement mindset took root. The creation of OASDI (Old Age, Survivors, and Disability Insurance) in 1935 was not supposed to be a retirement plan. People didn’t retire in 1935. It was created to make sure widows and orphans did not starve to death during the Great Depression. Again, the rate was only 1% at the outset. The age at which you were eligible to receive assistance was 65, four years greater than the average life expectancy of 61 years old. It was created as an insurance program and has morphed into a glorified retirement plan that convinced millions of Americans they didn’t need to save for their own retirement. It is $17.5 trillion in the hole because life expectancy is now 79 years old, politicians expanded coverage and refused to level with the American public for fear of losing elections.

The psychology of entitlement has grown over the decades as politicians made promises with borrowed money. They created Social Security, Medicaid, and Medicare to provide pension and healthcare to all senior citizens. They created Fannie Mae, Freddie Mac and Section 8 housing because everyone deserved to own a home. They created unemployment compensation, SNAP, and SSDI to sustain the disabled and down on their luck.  Veterans are entitled to benefits as a result of their military service. These entitlements have become ingrained in our society. Charles Hugh Smith captured the essence of our entitlement mindset in a recent article:

“The entitlement mindset is thus firmly established in the American psyche. If we experience bad luck and/or the negative consequences of poor choices, we have been trained to expect the government at some level to alleviate our suffering, cut us a check or otherwise address our difficulties. The poisonous problem with the entitlement mindset is intrinsic to human nature: once we “deserve” something, then our minds fill with resentment and greed, and we focus obsessively on creating multiple rationalizations for why we deserve our fair share.”

The ability to tax and print trillions of dollars has enabled politicians to convince Americans they don’t need to save for their own retirement, they don’t need to worry about the cost of their healthcare, they don’t need to educate themselves, and they don’t need to help their neighbors because the government will do it for them. Once the entitlement mindset became ingrained in our society, self reliance, the ability to adapt to adverse circumstances, charitable acts, and taking responsibility for your own health and welfare rapidly declined among the populace. Government programs have been sold to the American people as acts of compassion for the less fortunate. Instead they have become a bureaucratic nightmare, creating dependence and a permanent underclass with no incentive, ability or desire to raise themselves up.

Human weakness and failings have also led to an over-class that have done far more damage to the country than those in society dependent on the state for their subsistence. The best description of this country at this point in history is a Warfare-Welfare-Corporatocracy. Since World War II the undue influence of the military industrial complex has led to almost constant conflict and foreign interventionism on a grand scale never matched in world history. President Eisenhower’s warning went unheeded:

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”

The people of this country have traded liberty and freedom for the appearance of safety and security by allowing the corporate military establishment and their bought political cronies to use fear and phantom threats to convince the non-critical thinking masses to beg for protection. The Cold War was replaced by the War on Terror, while the truth is that we keep our troops in the Middle East to protect “our” oil under “their” sand. Attempting to maintain an empire through troops garrisoned in countries across the globe, patrolling the seas with our navies, buying the “friendship” of dictators, and saber rattling or invading countries we don’t like is a folly that has brought down many empires before ours.

The most decisive factor in the disastrous financial predicament we are experiencing today is the tsunami of Wall Street greed and avarice that was unleashed upon the nation starting in 1971 with Nixon closing the gold window and allowing the Federal Reserve to “manage” the currency with no hindrances like gold to keep them from going too far. Prior to the 1980’s Wall Street investment banks were partnerships. If a partner took an extreme risk he would endanger the personal assets of all the partners. This insured prudent lending practices. Once they became corporations the risk was passed to shareholders and as we’ve recently found out – taxpayers, while bank executives could reap obscene compensation by taking world shattering risks. The repeal of the Glass Steagall Act in 1999 and the obstruction in regulating the derivatives market by Alan Greenspan and Larry Summers created the playing field that allowed Wall Street go on a drunken rampage, pushing the worldwide financial system to the point of collapse in 2008.   

 What Happens Next?

 

“I felt like I could see everything that happened, and everything that is going to happen. It was like a perfect pattern, laid out in front of me. And I realized we’re all part of it, and all trapped by it. With so much chaos, someone will do something stupid. And when they do, things will turn nasty.” – Inspector Finch – V for Vendetta

The chart above explains why anger and rage are beginning to bubble to the surface in cities across the country. It is clear there are no simple explanations or one answer to why the country is facing such calamitous circumstances. Essentially, human failings that have existed for all eternity have conspired to drain the vitality, risk taking, self reliance, personal responsibility and common sense from a once great nation. We know the uneducated, unmotivated lower classes, after decades of being kept down through our entitlement system, are unable and unwilling to do anything about their situation, as long as the entitlements keep flowing. It is the richest .01% that has accumulated the wealth, power and undue influence over the management of country. Either through inheritance, intelligence, connections, hard work, or luck, a few hundred thousand individuals out of 310 million people control the system. Immense wealth in the hands of the few has created a system where the few control the media, politicians, banking system, and mega-corporations that dominate our economy. Their human weaknesses include being egomaniacal power hungry materialistic greedy men who will stop at nothing to retain and increase their vast wealth. They have succeeded beyond their wildest dreams in pillaging the wealth of the middle class. But, they’ve gone too far.

They’ve manipulated the tax code in their favor. They make up most of the Senate, House and Judiciary. They own the mainstream media outlets. They are the masters of the universe on Wall Street. They run the mega-corporations that have shipped American jobs overseas. They pay millions to have the laws and regulations written for their benefit. They created the social welfare system, the public education system, and the healthcare system that keeps a vast swath of the population impoverished, ignorant and dependent upon the mutant organism that enriches the few. They’ve convinced the bulk of non-critical thinking Americans that the government can create jobs and make their lives safe and secure. This is the point where critical thinking Americans need to honestly answer a few questions to decide what happens next.  

Did Social Security make our retirements more secure? Did the Department of Education make our children smarter? Did the Department of Energy reduce our dependence on foreign oil? Would there be more or less than 160,000 structurally deficient bridges in the U.S. without the Department of Transportation? Does paying unemployment compensation for 99 weeks increase employment or create jobs? Did Medicare and Medicaid make people healthier and reduce healthcare costs? Has putting our faith in mega-corporations for health insurance, drugs and job creation benefitted middle class workers? Has the War on Terror made the average American safer? Did the War on Drugs reduce the usage and availability of illegal drugs? Did passing more laws lead to a more law abiding society? Does incarcerating more criminals in more prisons reduce crime? Does a 60,000 page IRS tax code result in more taxes being collected? Has issuing more debt to solve a debt induced crisis resulted in a stronger financial system? Does the Republican or Democratic parties have your best interests at heart? Does it matter who is elected President in 2012?

There are solutions to the issues facing our country but they all would result in painful choices, tremendous sacrifice, a willingness to rebalance our economy and lives, and the loss of vast stores of wealth by the top .01% richest Americans. The steps needed would be:

• A nationalization of the Too Big To Fail banks with the required losses inflicted upon shareholders, bondholders and executives.
• Re-institution of mark to market accounting rules requiring companies to truthfully report the losses on their loan portfolios.
• The re-institution of Glass-Steagall to insure that no bank could become too big to fail.
• Instituting a transparent regulated derivatives market that would insure that no single entity could threaten to crash the worldwide financial system.
• Scrapping the existing individual personal income tax and replacing it with a flat, fair and/or consumption tax would take away the power of politicians.
• The elimination of all corporate tax breaks so that multi-billion dollar conglomerates could not get away with paying no corporate taxes (GE).
• The withdrawal of thousands of U.S. troops from across the globe and a dramatic decrease in military spending would be a voluntary reduction in our empire.
• A renegotiation of the social contract with changes in eligibility based on age and financial means is the only way to retain a semblance of a social net to protect those who are truly needy. Otherwise the social welfare system will crash.
• The population would need to accept a dramatic decrease in their standard of living as interest rates would need to be raised and saving would need to replace borrowing as our economic mantra.
• Acceptance of the impact from peak oil would require a complete restructuring of our suburban sprawl existence with communities forced to become more locally self sufficient.
• The political system would need to be overhauled with term limits and the elimination of corporate and special interest control over the election process.
• The Federal Reserve would need to be constrained through the re-introduction of gold and/or a basket of hard currencies as a check on their ability to print money.

Sadly, we all know that none of these solutions would ever be willingly implemented by the existing ruling class. Anyone with an ounce of common sense can see the system is crumbling. The .01% went too far and stole too much. An unsustainable system will not be sustained. The debt load is too burdensome. The peasants are growing restless. Young people have occupied Wall Street. They are beginning to occupy other cities. 700 were arrested on the Brooklyn Bridge. Older people are joining the protests. There isn’t a cohesive message coming from the protestors other than the system is rigged in favor of the top .01%. Those who think they are in control are losing their grip. They see their power and wealth slipping away. They’ve had their way for decades and will not willingly submit to a change in the existing social order. Last night Jim Cramer voiced the concerns of the .01% by saying the Occupy Wall Street protests were worrisome. They are worrisome to the moneyed interests. They are a reason for hope to the 99.9%. We are approaching our moment of truth. There is something terribly wrong with this country. A new American Revolution has begun. It is time to stop being afraid and take this country back. What happens next? The choice is ours.

While the truncheon may be used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who will listen, the enunciation of truth. And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression. And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission. How did this happen? Who’s to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you’re looking for the guilty, you need only look into a mirror. I know why you did it. I know you were afraid. Who wouldn’t be? War, terror, disease. There were a myriad of problems which conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic you turned to….. – V’s speech to the British people in V for Vendetta

 

Comments

[Calmyourself]

Legalize all drugs but eliminate ( extreme prejudice perhaps) the fast food and tobacco industries..  How does a statist/faux libertarian like you find your way here, Michelle Obama send you maybe??  Fast food hmm, does that cover Red lobster and other chains doing fat ass Michelles bidding?

[cranky-old-geezer]

Hope is what people have when they don't have fucking clue how to solve the problem.

People on the Titanic hoped they would be rescued as they got dumped in the water and quickly died from hypothermia.

Anyone preaching hope is a con artist.  Hope is worthless.  It's the most worhtless emotion humans can have. 

[Shvanztanz]

Cranky,

    The fact that your avatar picture is such a sweet landing strip tells me you live on even more hope than I do.  

[Shvanztanz]

WHAT! Seriously! There is only one person who could have (-1)'d me.

Cranky, I mean, you show your ass, literally, or someone's ass, and then you fault me for commenting on it?

Point blank bro, have you ever even been in the shit? With bombs blowing up around you? Ever had bullets flying? No.

So, the minute I point out that if your mind is on, what it clearly is, smooth landing strips, then I guess you ain't got shit to worry about yet?

I was joking before, but in this case. I'm serious. Take your head out of your own avatar, try to focus on something cerebral and don't put a (-1) on anyone who points out that your center of gravity, is, well, in the CENTER. 

[daxtonbrown]

Nothing can begin to change for at least two years and probably four because of the election cycles. Even then, even with perfect new legislators, nothing will happen over night. That means an alternative scenario is in play - change through systemic collapse. That means we are in lifeboat mode where you may have to use the oars to break the heads of those trying to swamp the boat. That means Going Galt http://www.futurnamics.com/goinggalt.php

We are in the middle of a low grade civil war that will take a decade or more. Think of this as a wartime economy where industries have been bombed.

[cranky-old-geezer]

What horseshit.  There's no such thing as a low grade civil war.  It's all or nothing.  Fight to the death or submit and shut the fuck up. 

Wartime economy?  What bullshit.  There is no war.  Just a bunch of whining sheep headed to the slaughter.

Bankers will win this one.  Just like they won every one before.  The people won't be saved.  But smart individuals will save themselves.  Just like it's always been.  Masses get slaughtered.  But smart individuals get the hell out while there's time.

[Shvanztanz]

This comes from the cranky old geezer who was probably in Canada for the entire Viet Nam (Conflict) War. 

Please, Cranky, educate us on how a real struggle is fought!

Of course the bankers will win! They are counting on you to avoid anything resembling a real stand off.

For anyone who wants to misinterpret my message, the banks want you to go postal, so they can deploy the black suit swat teams from the black helicopters.

All the thinking people will use their brains and words and "force" a real change.

Ignore this old cranky coward.

[SoNH80]

"What this country needs is a good five-cent cigar." -Thomas Marshall, Vice President of the United States, 1913-1921

A good five-cent cigar in 1913 would cost AT LEAST $1.41 today.  What happened in 1913?  The beginnings of many of our problems.

[cranky-old-geezer]

Way low.  It's $2.50 now.

[SoNH80]

Agreed... Just goes to show how cooked the CPI is.... here's a decent $2 candidate (note how they're nearly all sold out)-- Connecticut Shade wrapper, albeit machine made

http://www.2guyssmokeshop.com/search_results.asp?txtsearchParamCat=ALL&txtsearchParamVen=ALL&txtFromSearch=fromSearch&iLevel=1&txtsearchParamMan=4

[zerozulu]

Wonderful read.

1. How did we get in this predicament?

Authors forget to mention one key reason in his research and that is giving your financial decisions in the hands of Jews.

Any student of the history will tell you that whenever any country or society gets a status of a super power, Jews moved in and with their financial trickery robbed that super power from their wealth. This is true since the day of Mosses to Ferro to Germany.  Here is the list of places they robed and were kicked hard

http://www.simpletoremember.com/articles/a/HistoryJewishPersecution/

2. How do we get out of this predicament?

Same way as 200+ countries in the list above did, i.e. by adding another line in that long list...

[GOSPLAN HERO]

“Education is dangerous - Every educated person is a future enemy” -- Hermann Goering

[lovemesomeZH]

The ONLY hope is in the LORD JESUS THE CHRIST. All this stuff is fleeting. When you are stripped of all things wht will you be hollding?

I thank ZH for keeping me informed.

[akak]

When you are stripped of all things what will you be hollding?

The same thing I hold every day when I sit stripped naked in front of my usual computer porn.

[bid the soldier...]

Your green arrow has been disabled.  I am conferring it by text.

[cranky-old-geezer]

Boy are you morons ever in for a huge fucking letdown.  You'll die rght along with everyone around you, and no, you won't wake up in "heaven".

[LFMayor]

but you first, old timer.

[akak]

Not as long as you sincerely believe in the one true God!  LOL!

Funny how 99% of mankind throughout history has failed to believe in "the one true God" --- regardless of one's perspective or particular religious beliefs.  Ah, yes, but YOU, dear reader, have successfully navigated the treacherous theological rapids, and are now assured of salvation, right?  Bully for you!

Never underestimate the power of superstition and mythology.
By all rational analysis, religion is a mental disease and a form of insanity.

(But then again, so is faith in government.)

[pazmaker]

Humanity's problem is a spiritual one.... and it will never be solved until that is realized.   Our society is short on love, peace and compassion and infested with greed, selfishness and hate.

Capitalism doesn't work because of man's spiritual problem.  Capitalism doesn't work in the midst of greed, dishonesty and selfishness, that is why it fails.

Socialism doesn't work because of slothfulness and entitlement mentality as well as greed and dishonesty.

All of these issues stem from man's spiritual state.

junk away if you wish.  Peace

[No More Bubbles]

Well said.  But I still think "Hope" is the wrong term.  People need to face up to REALITY and deal with each other as fellow beings.  We need to treat each other better.

[High Plains Drifter]

only in the gulag called amerika. the story of how california police and national guard troops stopped the legal and lawful migration of poor starving farmers from the dust bowl areas of oklahoma during the 1930's. these people were stopped in the deserts and were not allowed to continue on to california and there many of them starved to death. a little known epic in our history that nobody wants to talk about much i guess....

http://vickeyk.hubpages.com/hub/Immigration_Policy_in_the_Depression

you may say to yourself. how can this be? how can this happen here in this land where we are supposed to be a free people? freedom is just another word for nothing left to lose. do you have anything to lose yet?

[GhostfaceCracka]

Can you junk an article? I've no qualms with all the doomsaying statistics and facts posted, but it's nothing that ZH readers haven't seen before. The multiple quotes from V for Vendetta made it impossible to take the article seriously, this impression was confirmed by the "what to do's" at the end. Childish, unrealistic demands about the role of the State in alleviating the burdens of life for the population are as much to blame for our current crisis as are Wall Street crooks or empire building.

"We are oppressed by the State! Let's revolt and build a huge State that will cater to our every need!" Idiots.  And before you start quoting Occupy Wall Street and the "I am the 99%" bullshit, go on over and view those pathetic weepy screeds the "99%" have been posting.

I AM IN HOCK FOR $70,000 FOR MY FINE ARTS DEGREE AND I CAN'T LAND A SIX FIGURE JOB IN A FEMINIST THINK TANK. I AM THE 99%!!11

I GAMBLED MY CHILDREN'S COLLEGE FUND ON REAL ESTATE AND LOST AND NOW I CAN'T SEND THEM TO SCHOOL. I AM THE 99%

GTFO

[unerman]

Did you actually read the article? He criticizes the sense of entitlement that has helped create the problem.

Keep thinking from only one side, that is how you old timers fucked it up for us.

[linrom]

You would think that for once, one of these countless blog writers would connect the dots? But no! The chart of total debt looks ominous; and it is! There is another ominous looking chart that is very similar-- and that is, the chart of wealth accumulation, it too has gone parabolic. These two charts are symbiotic, they are one and the same.

That is why austerity will never work! Not in Greece and not in the USA. The only thing that will work is debt forgiveness or income redistribution--this too is one and the same.

To show all these ' hopeless' economic looking charts and not to propose the only mathematical solution that will work is nothing short of disinformation campaign; austerity and regressive taxation such as an attempt to 'broaden' the tax base serves the same economic status quo and will fail.

So yes, my 'economic hitman charter'  would read " Don't eat the rich, make them pay for ALL the debts."

[PulauHantu29]

Hope & Change?...sounds like a good campaign spiel.

Yes, I think the Sheeples will like that..."Hope & Change"...I think I've got it!

[Cathartes Aura]

it's not a lot different than "vote for Ron Paul - he's our last HOPE to CHANGE the system" - until people begin to admit to themselves just how past hope for change this place is, then they'll continue to HOPE their individual lives can stay the same, they can keep everything around them in place, while gambling the markets & buying PM so they can be fabulously wealthy soon!!! and the "sheep" will all die off and leave them in paradise. . .

keep banking at the TBTF dudes.  be the change.

[dcb]

lol when I voted for Obama I thougt I was voting for hope and change, it must have missed heard because he clearly intended hope of change. well I got exaclty what I wanted, I am still hoping for a change.

[akak]

At least you are honest and brave enough here to admit to having voted for The Great Mulatto Messiah.

Tell me, when you do make such an admission, do you feel an instinctive urge to immediately take a long, thorough shower --- or an enema?  I know I would.

[dcb]

I wasn't sure of the author, but it did soulnd like Jim Quinn

[SystemsGuy]

Liberty vs. Equality.

At the heart of this discussion is the question of balance between these two qualities.

In 1913, the US population was 93 million people. Cars were rare and largely experimental, roads between cities were pretty much non-existent if they exceeded fifty miles. Telephony was rare - maybe one person in five had one, and the costs for anything but local calls were prohibitive for all but the wealthiest. One person in twenty had a college education, only one person in four lived in cities. Most people lived on farms, and manufacturing was the second largest sector at about 20 percent of the total economy. The petroleum economy was in its infancy - ships were the largest users of petroleum, and most still used coal. The US military was tiny, having largely been dismantled after the Civil War.

Liberty - the freedom to do what you wanted - was perhaps at its greatest extent, because there was simply not enough money for most towns to field an effective police force. This meant that the gun was the great leveler, especially on the still evolving frontier (keep in mind that the US was also at about 42 states at that point). 

Today there are 315 million people in the country. In 2011, 52% of all Americans live in urban environments, another 39% live in suburban environments, with only 5% living in agricultural areas. Life expectancies are nearly twenty years longer, in part because there has been a profound investment in medical technologies and understanding, people are not engaged in heavy labor under environmental conditions, and educational levels are considerably higher. Most people today are engaged in careers that did not exist in 1913.

For all the talk of outsourcing (and there are legitimate issues there), the reality is that the vast number of jobs that have disappeared have been lost not to outsourcing but to automation, automation that in general has found its way into the hands of the vast majority of people out there. In 1985, putting together a presentation would have required the work of eight to ten people, and would have taken a couple of weeks. Today, ten year olds are putting together animated videos for school presentations in a couple of hours. It takes roughly 1/10 the number of people to put together a car that it did in 1985.

The world is not about to end. Peak oil has likely hit, and that will make things interesting, but a big part of the reason the economies are collapsing is because a lot of the operating assumptions under which they worked are no longer really valid. The rich by and large had access to technology first and were able to benefit most from it, and as a consequence were able to institutionalize changes that locked these benefits in.

This will change - despite all the moaning about "The Sheeple" on this site, people are waking up to the imbalances and are beginning to do those things necessary to change that. Many are adapting by dropping out of the BAU mentality entirely, by changing their lives to recognize a new reality. Some are just becoming less dependent upon money, some are working to reorganize their communities.  Some are looking at punishment of the maledictors which, while cathartic, really won't change anything - the money itself is gone, or was never really there in the first place. The economy is reorganizing around different patterns - high information availability, lower energy availability, the freelance agent or the studio model rather than the company man. Big everything is dying - big government, big business, big religion, big unions - and like any revolutionary changes, most of the old measures of wealth which were accumulated by these organizations disappear into holes, enriching a new generation of entitled but otherwise worthless aristocrats who for the most part represent the dying embers of the last major turning.

America will go crazy for a little bit - perhaps the next ten to fifteen years. It might even split apart, at least some. Dying empires tend to. The US military is overextended and will lose lost its technological edge, and those aircraft carriers that are out there will become rusting hulks, with fewer and fewer ships, even smaller ones, replacing the ones that are out there. Once that happens, our ability to control global oil supplies (which is what the military is ultimately about) will end, and the US will face a day of reckoning in which it will have the oil cut off. Those places that have the alternative energy (and water) reserves will survive. Those that won't will face internal turmoil and shrink, will be unable to pay the price to remain in the American Union, and will secede or begin local wars of aggression on its neighbors.  The US military will turn inward, but a day will come when an Air Force base commander will be asked to bomb an American city, and he will refuse that order. That's the day the second US Civil War begins, and it won't be begun by State legislatures, but by the military that fragments into regional commands.

Decentralization is going to be the dominant theme of the first half of the twenty first century. It's an ongoing trend that began with the Internet, but it's a theme that's just really beginning globally. Decentralization does not in fact favor existing political or business structures, most of which arose during an age of consolidation. Nor will it be a fading back to a distant past - we will no more return to 1913 than we will to the existing structures, because the conditions for 1913 no longer apply. Instead, society will become somewhat more freeform for a while, as people seek a new equilibrium that works, there will be microwars and political alliances, but that's somewhat further down the road. 

I think its the next phase of the great American experiment. From what I've seen from history, most of what's "wrong" at this standpoint exists because of the discrepancy between what has existed and what needs to exist given changes in the environment. There have always been (and always will be) conmen and whores, scoundrels and ruffians, and as often as not they end up getting immortalized in the names of streets for some bizarre reason. Yet if you look at the present situation not as the world going to hell in a handbasket because of generations of bad decisions but the social structure realigning itself (messily and not without pain) to better fit the physical needs of the world, then what's going on now makes a lot more sense, and makes it easier for you to appreciate how to adapt to those changes. 

[akak]

Thought-provoking post, SystemsGuy.  Thanks!

[MachoMan]

Wow.  Kudos.  +1

[Dyler Turden II Esq]

THAT, SystemsGuy (and all), was not a good post. Not, not, not. It was a GREAT post. Worth re-reading 3 times at least!

Thanks!

Write more, please.

[htp]

Great article. Dubious title.

What America needs is a revolution. The system needs to be overhauled. It's too corrupt to be fixed.

[bid the soldier...]

+ 10

Title too Clintonesque  ^

[High Plains Drifter]

in 2005, in the aftermath of hurricane katrina in new orleans , police fired guns at crowds of people attempting to walk across the highway 90 bridge which crossed the mississippi river in new orleans.  why would cops refuse to allow hungry and thirsty people to leave the new orleans area on foot?  will this ever happen again?  you betcha...........

http://workbench.cadenhead.org/news/2748/police-trapped-thousands-new-or...

the answer is to be heavily armed and if cops get in the way, then deal with the problem............

[SILVERGEDDON]

Hope. And Change. We got them, all right. Bob Hope is dead, and "spare change?" is the traffic light mantra for way too many people. But, it is all a guy could offer once the Republicans finished the job of pushing the entire country cart off the lemming cliff in 2007. And, yes, a lot of Democratic administrations had their whack at the revenue base as well, being as they are the two faces of Janus, THE POLITICAL GOD OF DESTRUCTION.

Blame it on the Boomers? I don't think so - they are no more or less culpable than any other generation that got co-opted by the System. "Money, it's a hit - don't give me none of that do good bull------shit." There you go - those corrupted by greed are at the top of the food chain, and they are not interested in the welfare of the world, and never have been, throughout history.

it looks like a car crash in slow motion - you know that some are going to die, and you cannot stop the outcome, and you cannot stop looking at the carnage in horrified fascination either. Welcome to the human race. Don't finish last, and if you value your soul, don't finish first, either.

[Lester]

The political, financial, and corporate leaders of our country are intellectually and morally bankrupt. The major Wall Street banks are bankrupt. Social Security is bankrupt. Medicare is bankrupt.

The correct term is CORRUPT... 

Leaders at every social, political, and business level have Sold US Out, Betrayed their Fiduciary Duty to Nation, Hometown, and Family.

America has been slaughtered like a beef on the killing floor.  All that remains is hooves, some sawdust soaked blood, and remaining offal from chest cavity.

The corrupt motherfuckers have robbed US and made sure there can be no recovery.  Only hope there is is for the American People to repudiate the FRAUD and call our Betrayers to Justice and recover all assets stolen.

[Dyler Turden II Esq]

A few points of fact:
"[Social Security] is $17.5 trillion in the hole because life expectancy is now 79 years old"

No. Social Security is OK and sustainable for the long term. It is MEDICARE AND MEDICAID that are unsustainable and that will -- if allowed to -- pull down everything else (e.g. SS) along with them when they collapse. Medical expenses are FAR greater than SS, and far less sustainable. The medical stuff is the elephant in the room.

"They created Fannie Mae, Freddie Mac and Section 8 housing because everyone deserved to own a home."

No. Section 8 is not about home ownership. It is about cheap rent for people living on disability and etc. (e.g. living on a $700 monthly check).

"Did Social Security make our retirements more secure?"

Yep! Greatly. SS is the main reason that we don't have 10s of millions of impoverished elderly.

[sgt_doom]

And please don't forget the top three cost drivers in the American healthcare economics (nor that Medicare was partially privatized with that passage of Section D for no-bid purchase of private non-generic drugs, etc.):

(1) Leveraged and ultra-leveraged speculation by hedge funds (an estimated 90 dedicated healthcare hedge funds in 2007) across the entire healthcare sector;

(2) Private equity leveraged buyouts across the healthcare sector; and,

(3) Criminal penalties levied against various top biopharmaceutical and healthcare corporations (Eli Lilly, HCA, Merck, Pfizer, etc.), plus numerous scams involving corporations and Medicare/Medicad.

[sgt_doom]

Well, no hope from this direction:

The Obama Memorandum:  leaked speech draft of President Obama’s next talk before the US Chamber of Commerce

My name is Barack Obama and I’m concerned about jobs.

That’s why one of my first appointments was Diana Farrell from  McKinsey.  She’s the number one jobs-offshoring specialist in North America.

That’s why I appointed Jeff Immelt, CEO of major jobs-offshorer and zero-taxpaying GE to be my jobs czar.  (Hee…hee…hee.)

I even appointed Jim Kolbe, Reagan’s old congressional point man in offshoring jobs back in the ‘80s.

I’m also promoting  three new free trade agreements – I love that term, “free trade” – to offshore a bunch of more jobs.

Now, people have criticized that Columbia FTA because of their murderous record regarding labor organizers and workers.  Don’t worry!  That’s why my main man, Eric Holder, is attorney general; he has oodles of experience in defending corporations and countries that hire assassins and mercenaries to kill those protesters, labor organizers and annoying workers.

I’m Obama of Wall Street --- vote for me!

http://disinfo.s3.amazonaws.com/wp-content/uploads/2011/01/456495d050a9ca164ca6c9bf0ed0-grande.jpg

And for a more articulate suggestion on these matters:

http://www.youtube.com/watch?v=7I4vIvVFPzY&feature=player_embedded

[BernankeHasHemo...]

The only hope I have is that I see our fearless Muslim criminal leader, Obama bin laden, swing from a light pole after mobs have attacked the White House and decided to summarily execute him for treason. That would be a nice change. Too bad the meth-addicted white trash population of the US is too messed up to do anything about their sad sack predicament. Those stupid losers deserve to have Goldman Sachs fuck them up their collective asses.

[SILVERGEDDON]

Goldman Sachs already did fuck everybody up the ass, you included. Take a look at this, you rocket scientist. String up the right people, if you wanna get all dramastic about payback, Rambo.

The Federal Reserve is neither Federal nor a "Reserve". This private bank run by the "Bank of England" has been stripping the US of its assets since the days of Andrew Jackson.  If the $16,000,000,000,000.00 given away secretly, since 2007, to the member banks isn't reason enough to overhaul our entire government financial system then our country is doomed to financial failure. You won't read this in the mainstream media....but it may emerge in the coming elections. Read about this first ever audit of the Fed and understand why we are in such trouble.  Tuesday, September 27, 2011 First Ever GAO Audit Of The Federal Reserve

(You can click on the site and read the report).

The first ever GAO audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill (HR1207), so that a complete audit would not be carried out. Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve nearly 100 year history were posted on Senator Sanderâs webpage earlier this morning.

sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3   (Summarized below)

What was revealed in the audit was startling:

$16,000,000,000,000.00 (TRILLION) had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the worldâs banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest.

Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs. To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is only $14.5 trillion.

The budget that is being debated so heavily in Congress and the Senate is only $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world. In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion. ****

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self-identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.

Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and super-corporations like Halloween candy.

The list of institutions which received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows:

Citigroup: $2.5 trillion($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion* ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)

IT WILL BE INTERESTING AS TO HOW MUCH ATTENTION (AS WELL AS THE SLANT) THE MAINSTREAM MEDIA GIVES THIS UNBELIEVABLE POSITION OF OUR GOVERNMENT HAS PLACED US IN WITH NEVER PREVIOUSLY HAVING AN AUDIT OF THE FEDERAL RESERVE.

I AM CONFIDENT THAT WE WILL HEAR SOMETHING LIKE THE FED HAD TO GIVE STIMULUS TO WHOM THE $16 TRILLION WENT TOO BECAUSE IF WE HAD NOT ALLOWED THIS IT WOULD BE THEIR COLLAPSE AND THE OURS.

HAS ANYONE EVER HEARD OF CLOWARD AND PIVEN ECONOMICS? (PARAPHRASING) IT INVOLVES TWO HARVARD PROFESSORS WHOSE BOOK SAID TO CHANGE ANY GOVERNMENTâS ECONOMIC SYSTEM INTO A SOCIALIST ONE, IT SIMPLY DRIVES THEIR ECONOMY INTO THE DITCH THEN THE CITIZENS ALLOW THE GOVERNMENT TO DO WHAT THEY WISH TO SAVE THEM

[jomama]

what this country really needs is a fresh, clever catchphrase to get all the idiots to vote for someone who promises change.

[unerman]

Wow. Great article. This guy nailed it.

People, stop fighting one another. Stop blaming Bush or Obama. They are all to blame! The system is corrupt and needs an overhaul.

[dolly madison]

Modern living hasn't been working out too well lately.  This world where everyone lives on a postage stamp piece of land, with no ability to feed themselves without a job or food stamps is falling apart.  It hasn't been going on very long in the grand scheme of things.  Before world war II most still lived on small farms.  It hasn't even been 100 years.  The government loved it at first because it was so easy to collect payroll taxes.

We're definitely going to have to go through some pain to get to a more sustainable way of living because those in power will not give it up easily.

[DavidC]

This is one of the best summations of the current debacle I've yet read. Excellent.

DavidC

[karmete]

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[SILVERGEDDON]

I'll take Zero Hedge over any mainstream media, political, financial, or religious source of information, hands down any mother fucking day of the week, and twice on Sundays. Shove that up your poop chute, and light it on fire Gene Marching banks trool dupe no mind mothuhfuckuh!