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***** To pre-order
The Code for Global Ethics
by Rodrigue Tremblay
click: The Code for Global Ethics, Ten Humanist Principles
Article #1122
Monday, March 8, 2010
The Moral Dimension of Things
By Rodrigue Tremblay
"When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it."
Frederic Bastiat (1801-1850), French economist
"Certain hierarchs of the Catholic Church in Latin America used prayer as an anesthesia to put the people to sleep. When they cannot dominate us with law, then comes prayer, and when they can't humiliate or dominate us with prayer, then comes the gun."
Evo Morales, President of Bolivia (July 13, 2009)
"The single most important quality needed to resist evil is moral autonomy. Moral autonomy is possible only through reflection, self-determination and the courage not to cooperate."
Immanuel Kant (1724-1804) German philosopher
Why do political leaders seem to be lying most of the time? Why is uncontrolled greed so prevalent in corporate rooms? Why do wicked men wage wars of aggression and become indifferent to the killing of innocent people? Why does materialism seem to trump everything else? Why do we have the uneasy feeling that our society is going in the wrong direction? The very fact that we have to raise such questions may be a sign of the times.
Indeed, when the stench of moral decay becomes overwhelming, bad things inevitably follow. Historically, it can be shown that when the moral environment in a society is deteriorating, problems tend to pile up.
We are presently living in one of those times, characterized by deep and entrenched political corruption, by routine abuse of power and disregard for the rule of law in high places, and by unchecked greed, fraud and deception in the economic sphere. The results are all there to see: Severe and prolonged economic and financial crises, rising social inequalities and social injustice, increasing intolerance toward individual choices, the disregard for environmental decay, the rise of religious absolutism, a return to whimsical wars of aggression (or of pre-emptive wars), to blind terrorism and to the repugnant use of torture, and even to genocide and to blatant war crimes. These are all indicators that our civilization has lost its moral compass.
With all these throwbacks to an unpalatable past, it is not surprising there is a resurgence of interest nowadays for questions of morality and of ethics.
The contradiction between modern problems, new scientific knowledge and the inadequacy of our prevalent source of morality or of ethics, which are mainly religion-based, has led a humanist like me to write a book, “The Code for GLOBAL ETHICS, Ten Humanist Principles”, [ISBN: 978-1616141721] prefaced by Dr. Paul Kurtz and published this year by Prometheus Books. The book is a down-to-earth discussion of ten basic humanist principles for our new global context.
Why such a renewed interest in the moral dimension of things? —First, partly because many of our problems and threats are not only severe but they have also become global in nature. —Second, the fact that we seem to be unable to solve our global problems might also be because our scientific and technological progress is advancing much faster than our moral progress, with the consequence that problems arise faster than our moral ability to face them and to solve them. —And third, this is also partly due to the fact that the old religion-based rules of morality are of little help in solving these new problems, basically because they belong to the past and because, unfortunately, they have not incorporated new scientific knowledge.
Indeed, humans' vision of themselves in the Universe has been forever altered by three fundamental scientific breakthroughs:
- Galileo's proof, in 1632, that the Earth and humans were not the center of the Universe, as supposedly holy books have proclaimed.
- Darwin's discovery, in 1859, (“On the Origin of Species”) that humans are not some god-like creatures unique among all species, destined to live forever, but are rather the outcome of a very long natural biological evolution.
- And, the Watson-Crick-Wilkins-Franklin's discovery, in 1953, of the structure of the double helix DNA molecule (Deoxyribo Nucleic Acid) in each of the 46 chromosomes in human cells, and the devastating knowledge that humans share more than 95 percent of the same genes with chimpanzees.
I would add, also, that ongoing research about how the human brain functions has cast new light on how some phenomena, such as different thoughts, including religious thoughts, are generated in different zones of the brain.
Therefore, nobody can claim anymore that the Earth is the center of the Universe; nobody can claim that humans are unique in the scale of things; and nobody can claim that the human body and the human mind are two unrelated entities. This knowledge has tremendous consequences for our moral stance.
My best hope is that we will avoid falling back into an age of obscurantism and of decadence, and that we will be able to build a truly humanist civilization for the future.
______
***N.B. : Conference by Dr. Rodrigue Tremblay “Economic Bubbles and Financial Crises” at the Renaissance Academy (Florida Gulf Coast University (FGCU)), Yacht Club, Marco Island, Florida, Friday, March 19, 2010 (239-434-4737).
__________________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com.
He is the author of the coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/
You can reserve a copy of the book on Amazon
*****The French version of the book is now available. See:
www.lecodepouruneethiqueglobale.com/
or on Amazon.
Register to be alerted when the English version is available by sending the word “Code” to bigpictureworld@yahoo.com
Please visit the book site at:
www.TheCodeForGlobalEthics.com/
_____________________________________
Posted, Monday, March 8, 2010, at 5:30 am
Email to a friend:
http://www.TheNewAmericanEmpire.com/tremblay=1121
or,
http://www.thecodeforglobalethics.com/pb/wp_26f7a0c1/wp_26f7a0c1.html
Send contact, comments or commercial reproduction requests (in English or in French) to:
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© 2010 by Big Picture World Syndicate, Inc.
Please read Dr. Tremblay's coming book:
The Code for Global Ethics, Ten Humanist Principles
To pre-order:
http://www.amazon.com/
Article #1121
Friday, January 22, 2010
The United States of Corporate America: From Democracy to Plutocracy.
"The price of apathy towards public affairs is to be ruled by evil men."
Plato, ancient Greek philosopher
...“The 20th century has been characterized by three developments of great political importance: The growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.”
Alex Carey, Australian social scientist
“The most effective way to restrict democracy is to transfer decision-making from the public arena to unaccountable institutions: kings and princes, priestly castes, military juntas, party dictatorships, or modern corporations.”
Noam Chomsky, M.I.T. emeritus Professor of Linguistics
On Tuesday, January 19 (2010), the Obama administration got a kick in the pants from the Massachusetts voters when they filled former Senator Ted Kennedy's seat by electing a conservative Republican candidate. The essence of their message was: stop dithering and start governing; stop trying to satisfy the bankers and please the anonymous editors of Rupert Murdoch's Wall Street Journal, and start caring for the ordinary people.
Two days later, President Barack Obama seemed to have understood the people's message when he announced a “Volcker rule” that will forbid large banks from owning hedge funds that make money by placing large bets against their own clients, using information that these same clients gave them. It was time. Such a policy should have been announced months ago, if not years ago.
On the same day, however, a nonelected body, the U.S. Supreme Court, threw a different challenge to the Obama administration. Indeed, on Thursday January 21 (2010), a Republican-appointed majority on the U.S. Supreme Court took it upon itself to profoundly change the U.S. Constitution and American democracy. Indeed, in what can be labeled a most reactionary decision, the Roberts U.S. Supreme Court, ruled that legal entities, such as corporations and labor unions, have the same purely personal rights to free speech as living individuals. Indeed, the First Amendment of the U.S. Constitution says “Congress shall make no law ... abridging the freedom of speech.
The only problem with such a wide interpretation of the U.S. Bills of Rights (N.B.: The first ten amendments to the United States Constitution are known as the Bill of Rights) is that this runs contrary to its letter and its spirit, since it clearly states later on that "the enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people, and reserves all powers not granted to the federal government to the citizenry or States.” The words “people” and “citizenry” clearly refer here to living human beings, not to legal or artificial entities such as business corporations, labor unions, financial organizations or political lobbies.
Such entities, for example, cannot vote in an election. Indeed, laws governing voting rights in the United States clearly establish that only “Adult citizens of the United States who are residents of one of the 50 states have the right to participate fully in the political system of the United States”. No mention is made of corporations or other legal entities.
However, with its January 19 (2010) decision, the majority on the Roberts U.S. Supreme Court is saying in effect that even if artificial entities cannot vote in an election, they can spend as much money as they like to influence the outcome of an election. Money is speech for them, and the more a legal entity has of it, the more it has a right to become powerful politically and control the political agenda.
In fact, what Chief Justice Roberts and his conservative Supreme Court majority have done is to overcome a century-old democratic tradition in the United States in granting a constitutional right to business corporations and to banks, (because they are really the ones with a lot of money), to use their enormous resources to not only participate in debates about public issues, but also, and above all, to de facto dictate the election of candidates of their choice to public office.
That's plutocracy, not democracy!
Plutocracy is defined as a political system characterized by “the rule by the wealthy, or power provided by wealth.” Democracy, on the other hand, is defined as a political system where political power belongs to the people. This means “a political government either carried out directly by the people (direct democracy) or by means of elected representatives of the people (representative democracy). The terms "the power to the people" are derived from the words "people" and "power" in Greek.
This fundamental idea of democracy was well summarized by President Abraham Lincoln, in his 1863 Gettysburg Address, when he said that it is “a government of the people, by the people and for the people.” This is a definition that is based on the basic democratic principle of equality among human beings.
But now, the Roberts Court's decision must have made President Lincoln turn in his grave, because that decision, in effect, transfers political power from the living “people” to artificial corporate entities, with tons of money to spend. If Congress does not act quickly to reverse this decision, legal entities will be able to spend freely in the media to support or oppose political candidates for president and Congress, and this, as far as the last moment of a political campaign. This is quite something!
By a stroke of the pen, the Roberts Court has thus abolished the laws governing American electoral financing and removed limits to how much special money interests can spend to have the elected officials they want. The government they want will largely be “a government of the corporations, by the corporations, for the corporations.” Truly amazing!
To reflect the new political philosophy of the five-member majority of the Roberts Court, the Preambule of the U.S. Constitution that says “We the People of the United States, in order to form a more perfect Union...” should, maybe, more appropriately be changed for “We, the business corporations of America...”
It is that much more ironic that the word “corporation” appears nowhere in the U.S. Constitution or in the Bill of Rights. It is scarcely conceivable that the drafters of the Constitution had anything resembling corporate entities in mind when they drafted the Bill of Rights. But the Roberts Court majority does not seem to agree with Washington, Jefferson, Franklin, Madison, Mason...etc. Because of their decision, the five conservative members of the U. S. Supreme Court of today have become the new Fathers of the U. S. Constitution.
For nearly a century, it has been assumed that the U.S. Bill of Rights protected persons, not corporations. Even if sometimes the courts have extended the rights of the 14th Amendment banning the deprivation of property without due process or equal protection of the law to the property of corporations, it was never thought that the purely personal rights of the first Amendment of the Bill of Rights applied to corporate entities as well as to human beings. This is understandable. Business corporations are created through legislation that gives them potentially perpetual life and limited liability to enhance their efficiency as economic entities. While such characteristics can be beneficial in the economic sphere, they represent special dangers in the political sphere. That is the rationale for not extending constitutional rights to purely legal entities.
But now, the five-member majority of the Roberts Court have said that such legalized artificial entities have the same constitutionally protected rights to engage in political activities as living individuals.
In conclusion, let us reiterate that in a democracy—and as it is clearly established also in the U.S. Bill of Rights and in all democratic constitutions—the citizens are the only legitimate source of law. It follows inexorably that corporations, not being citizens, cannot be legitimate political actors. Chief Justice Roberts and his conservative Supreme Court majority have thus badly erred in their anti-democratic judgment.
Their judgment is clearly revolutionary or, more precisely, counter-revolutionary.
_____________________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com.
He is the author of the coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/
You can reserve a copy of the book on Amazon
*****The French version of the book is now available. See:
www.lecodepouruneethiqueglobale.com/
or on Amazon.
Register to be alerted when the English version is available by sending the word “Code” to bigpictureworld@yahoo.com
Please visit the book site at:
www.TheCodeForGlobalEthics.com/
_____________________________________
Posted, Thursday, January 7, 2010, at 5:30 am
Email to a friend:
http://www.TheNewAmericanEmpire.com/tremblay=1121
or,
http://www.thecodeforglobalethics.com/pb/wp_26f7a0c1/wp_26f7a0c1.html
Send contact, comments or commercial reproduction requests (in English or in French) to:
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© 2010 by Big Picture World Syndicate, Inc.
Please read Dr. Tremblay's coming book:
The Code for Global Ethics, Ten Humanist Principles
To pre-order:
http://www.amazon.com/
Comments (17)
New
A Constitutional Republic
Posted, Sunday, January 31, 2010 2:03 pm
I read your article, "The United States of Corporate America: From Democracy to Plutocracy" and am in agreement with what the title says. The principles upon which American was founded are being murdered and the deed is just about complete.
What I do not like about your article and what way to many other people say is you/they keep referring to America as a "democracy". Why do you not called it what it is suppose to be? a "Constitutional Republic".There is a big difference between
"rule by majority" and "rule by law"
Mike
Answer by R. T.:
It is true that the U. S. is a democratic republic with checks and balances, and not a so-called popular democracy. But let us not play with words here.
A republic is:
1, “ a government in which the head of state is usually a president”.
And 2, “a country governed by the elected representatives of its people.”
So it's true that the United States is a republic, but it is also a representative democracy. One does not exclude the other.
In fact, the principles proclaimed in the U.S. Bill of Rights and the U.S. Constitution (the Bill of Rights is part of the constitution) are democratic principles that apply to all citizens. With the Civil War and the abolishment of slavery, plus the extension of the right to vote to non-property owners and to women, the United States has become even more democratic.
That's why American leaders profess to go around the world waging war to establish “democracy”.
New
Corporations as Persons and Money as Speech
Posted, Tuesday, January 26, 2010 3:12 pm
If we roll back this U.S. Supreme Court decision, what do we do about media corporations who demonstrate their political bias on a daily basis? Why should one corporate entity (ABC, NBC, CBS, CNN, MSNBC, FOX) have the ability to spend huge sums of money promoting their candidate through “friendly reporting” while another non-media corporation is banned from buying time to do the same for their chosen candidate? ...I support the Supreme Court ruling and believe that non-media corporations are disadvantaged against the predominately liberally biased media who have free reign to influence elections through unfair and biased reporting.
I happen to believe that the Supreme Court made the right decision by determining that a corporation is a form of association of people. I work for a corporation. Nobody forces me to work there. ...Another reason I support the decision is the inherent unfairness that existed prior to the ruling. Other groups of individuals such as MoveOn.org and the Center for American Progress could spend as much money as they wished on advocacy or individual candidates, yet corporations, which are also groups of individuals (they both have boards of directors who decide how the money is spent) were banned from even doing advocacy advertising, much less financially supporting candidates. ...If we are going to allow 501c3 non-profits to support individual candidates, we must also allow business corporations to do the same since both corporations and 501c3's are non-person entities...
The Supreme Court is making the argument that a corporation is to be viewed the same as an individual since it is a group of individuals. ...It should be all or nothing; all associations of individuals should be excluded from contributing funds to political campaigns, or none. ...Let the free flow of ideas occur and let the people decide.
Ron (Montana)
Answer by R. T.:
Well, the answer to your first question is easy: Reinstate the “Fairness Doctrine” that Reagan abolished in 1986. President Obama should put on his pants and start governing.
My answer to your second assertion is the following:
There is a big difference between economic corporations whose business is to produce and distribute goods and services, and thus benefit from the privilege of limited liability, and voluntary political action committees whose main purpose is to engage in political debate. Such PACs are more similar to political parties than to business corporations or unions. This does not mean that the amount of money spent by PACs during a political campaign cannot or should not be capped.
Banning such PACs, however, would deny the freedom of association guaranteed by the Constitution and would be an infringement of the First Amendment.
The answer to your third point is this one:
Incorporated businesses are not voluntary associations of persons. They are a legal entity with the privilege of limited liability in order to join capital and labor in the production of goods and services. They are not created under the constitutional right of association but by legislation as an efficient way to promote economic activity.
That's why incorporated businesses cannot be treated as associations of individuals for political purposes. In fact, people who invest in them are rarely de facto consulted in regard to the direction of the company. Their real recourse, unless they are a majority shareholder, is to sell their shares if they disagree. Management has no right to speak for the individuals connected to the corporation. The same can be said about labor unions when leaders impose their political views on the membership and use union dues to favor one candidate or one political party, irrespective of a member's choice. That's undemocratic and abusive.
That's why both business corporations and labor unions should be barred from spending a corporation's or a union's money in a political campaign. That's not the managers' money. They are only custodians of that money. Their use of it to intervene in the political process reduces the importance of each individual citizen's participation in the democratic process.
To summarize, and as I explain in my coming book The Code for Global Ethics, (chap. 9), I say that corporations are not moral agents—only breathing individuals are—only they can adopt moral standards of conduct and be a source of law. Contrary to what you say, and what the Roberts Court majority seems to think, incorporated businesses are not associations of persons. They are a legal entity with the privilege of limited liability with the purpose of using capital and labor in the production of goods and services. They are not created under the constitutional right of association but by legislation as an efficient way to promote economic activity. Therefore, my conclusion is that the five-member majority on the U. S. Supreme Court rendered not only an antidemocratic judgment, but also an immoral one.
I would add that what the Roberts Court majority has done is to devalue the importance of each American's vote and increase tremendously the political power of the money class and business corporations in the United States.
They will be able to buy senators and representives, even presidents, at will. I thus predict that the U. S. which has the lowest voting turn-out of all democratic counries (a bit above 50 percent for presidential elections and a bit above 33 percent for mid-term elections) will see voter participation decline further in the coming years, if this revolutionary Supreme court judgment is not over-turned one way or another. Ordinary people, i.e. living persons, will arrive at the conclusion that their vote has no value, everything being decided in advance by the corporate full-time 35,000 lobbyists in Washington D.C. and by the billions of dollars used by them to buy influence and political access.
I would bet that 10-15 years from now, the participation rate will drop to 33 percent for presidential elections and to 25 percent for mid-term elections. That would be a true mockery of democracy and the U.S. will be laughed at for pretending to “spread democracy around the world” when it does not practice it at home. Alexander Hamilton, who wanted an elected aristocracy, would have won over Thomas Jefferson and James Madison.
New
The Grand Conspiracy of Corporate Personhood
Posted, Tuesday, January 26, 2010 11:12 am
Perhaps you may want to read the history of the machinations by which corporations became persons. I have copied excerpts from Chapter 6 of Thom Hartmann's book Unequal Protection. They are most instructive and demonstate the long reach of corporate personhood.
In The Rise of American Civilization (1927), Columbia history professor Charles Beard and woman’s suffrage movement activist Mary Beard suggested that the rise of corporations on the American landscape was the result of a grand conspiracy that reached from the boardrooms of the nation’s railroads all the way to the Supreme Court.
Lynn
Answer by R. T.:
The latest manifestation of corporate power, of course, is the extremist Roberts Court's decision to extend the Bill of Rights to corporations and other legislatively created entities. That's why I say that this January 21 decision is really the equivalent of a political and constitutional “coup d'état”.
It is truly a revolutionary and system-changing decision. This is reminiscent of Hitler burning The Reichstag (Assembly Chamber) in Germany in 1933. This is an event that marked the establishment of Nazi Germany. If the January 21 (2010) Roberts court's decision is not overturned one way or another by the President and Congress, it will have devastating consequences for the future of U.S. democracy.
New
Strains on American Society
Posted, Monday, January 25, 2010 4:05 pm
That there are stresses and strains on American society is clear for anyone to see. These stresses and strains are the result of changes that include the country's demographic composition, but more importantly, fundamental changes in the way value has been created during the last decade and a half.
As these changes are now making their impact felt, many thinking people struggle with the question of what will happen to American Capitalism.
My own take on it is driven by a simple distinction that I find helpful in trying to understand what is going on. That distinction is between "Culture" and "Structure." For example, the American business culture has always been and continues to be informed by a spirit of innovation and entrepreneurship, and a willingness to take a chance.
The structure of our present model of capitalism is another story. There is no doubt in my mind that a large part of today's societal frictions is the result of the fact that several important industries have morphed into what can be labeled as "Oligopolies". An oligopoly is a market system dominated by three or four major players and in which everyone else operates on the periphery. Today, we find this condition in such sectors as, financial services, automotive (the domestic portion, anyway), the health insurance industry and pharmaceuticals. One of the more salient characteristics of an oligopoly is that the leading participants try to avoid competing on price in as many ways possible.
At the same time, you will find that large corporations, including those operating under conditions of oligopoly, are not exactly stellar creators of jobs. To the contrary, it is a well-established fact that job creation occurs mostly at the bottom of the pyramid, where the millions of smaller and medium-sized companies reside.
Those players operate under conditions of "Free Enterprise", where many players compete vigorously on price and all other ingredients of the competitive landscape. Free enterprise of course, is merely a different shade of grey within the entire spectrum of capitalism's organizing principles. ...
Tom
New
Taking the Judgment not Lying Down
Posted, Monday, January 25, 2010 10:45 am
Most Americans have taken that judgment not lying down, but standing up, which is the usual position for sleepwalking.
Neocons, who control U.S. media and finance, are reactionary corporatists who purged from the GOP us bonafide conservatives who had built the party. Bush/41 and self-styled neoconservatives then hijacked it.
I suggest to all true conservatives in the South that henceforth we call ourselves 'seventy-sixers' or 'grandkids' (re the Revolutionary 'Sons of Liberty'), as neocon anticonservatives have now dropped the 'neo', thereby making 'conservative' the 'new gay' -- a misappropriated word that in no way means what it had once meant.
Liberal collectivists, having trashed their own 'brand' through unpopular policy positions and distasteful political tactics, have rebranded themselves as 'progressives'. Ironically, we conservatives had our brand trashed for us by reactionary collectivists who misnamed themselves neoconservatives in order to steal an impeccable brandname and displace us.
Given the malicious and destructive domestic and foreign policies they have pursued, the neocons -- now led domestically by Benny Bernanke-panky (Time Magazine's 'Poison of the Year') -- would have more accurately called themselves the 'Merchants of Menace'. Had the banking racket been more developed in his day, perhaps Shakespeare might not have written [Henry VI] "kill all the lawyers".
Johnny
New
Real Democracy in Australia!
Posted, Sunday, January 24, 2010 6:22 pm
Your books are in excellent company. I will read them with great interest.
Because no realistic political remedy appears to exist that might rescue democratic government in the US, UK or Canada, I thought you might enjoy reading the product of a real live plot to achieve this in Australia. In the event we are successful this will provide a model for others to emulate.
Although our membership structure prohibits accurate assessment of our numbers, it would appear that we are now the third largest political entity in the country; happily, a growth that has developed entirely below the media and party political radar. This discretion is important to us because the last entity to attempt a return to democracy was destroyed by the Murdoch-dominated media and by academia, and its members ridiculed and reviled and, finally, politically assassinated. The leader was imprisoned.
Our second method favouring our survival is the adoption of a strategy by which instead of one single organisation, which would attract unwelcome attention and harassment, we function as nine separate entities. One of these, for example, promotes music and bands that tend to politicise working class youth, for these are the main sector that can be relied upon to get up and fight, should this be required. (University youth, seeing themselves as the future elite, are in favour of a more hierarchical and anti-egalitarian society). However, our spearhead groups pursue tariff restoration and opposition to ETS.
A second advantage of multiple entities is that by exposing prospective members only to specific causes they approve, we alienate no one. So far, members have proved to be very comfortable with this. By comparison, political parties, carrying a platform of policies, are inevitably limited in their growth and support, to tolerance for all of their policies. This is why small parties rarely attract more than 8-10% of the electorate; generally settling at 7%.
The first e-mail attachment elaborates on the points you made about democracy. I have researched this subject quite exhaustively, including spending many years within tribal communities in which consensus protocols guide pure democracy. You may be aware that most anthropological opinion would deny this interpretation, however, in Australia, I never encountered an Anthropologist who bothered to learn Aboriginal languages whereas I learned one quite thoroughly and several other languages to varying stages of fluency; flowing from an investment of 25 years. I consider monolingualism to be the absolute disqualification for any attempt at interpreting a disparate culture.
The second attachment has been described by some notable readers as our manifesto, which I suppose it is to some extent. However, the intent is simply to acquaint pro-democracy entities with an overview of the real globalisation; as launched by the Rockefeller/Rothschild group.
We are attempting to establish a globalisation resistance movement around the world in which members contribute their own special knowledge, thus educating us all. To a considerable extent, www.GlobalResearch.com performs this function admirably but we seek additional coordination of action. One can talk only for so long but eventually active strategies must be launched. We are quite expert at knowing what works and what are deliberate pitfalls ready to bog down naive campaigners, and we have proselytised techinques since 2006.
Tony
(Electing someone to do our thinking for us is foolish. Imposing the people's consensus on government is democracy.)
New
Corporate globalism
Posted, Sunday, January 24, 2010 2:22 pm
I just read an article by you on corporate globalism. I think that the word "globalism" should not be used without the word "corporate" in front of it. I am a singer-songwriter in Berkeley, CA who recently learned to make music videos.
Vic
New
Labor Unions and Corporations
Posted, Sunday, January 24, 2010 10:19 am
Although you mentioned labor unions in the beginning of your article, you failed to include them in your revision of the constitution. They have been allowed this opportunity even prior to the court's recent decision. Why leave them out?
Phyllis
New
Plutocracy vs Democracy
Posted, Saturday, January 23, 2010 8:42 pm
As per your article titled: "The United States of Corporate America: From Democracy to Plutocracy", nowhere in the US Constitution does it even mention the word Democracy, let alone this being its form of Government. The article you have so eloquently written is only partially true, the US is now and has been a Plutocracy since the beginning of the War between the States in 1863. The Republic went thru it's final unseating in 1916 with the re-election of Woodrow Wilson. In future if you intend to write an article "Based on the facts" please include them.
Douglas
New
Excellent Piece
Posted, Saturday, January 23, 2010 10:43 am
This is an excellent piece. What a travesty! Even John McCain has come out against the Roberts Court's decision.
Diana
New
Heading toward a Revolution?
Posted, Friday, January 22, 2010 12:25 am
About the Supreme Court decision, your article is exactly to the point. I fully concur. Consequences of that Court decision will be dramatically bad, unfortunately. The paradox is in the fact that the Supreme Court acts against the Consitution, which it is supposed to guard. I'm afraid we are heading toward a revolution.
Karol
New
Ordinary People!
Posted, Saturday, January 23, 2010 2:05 pm
The Constitution doesn’t begin with “We the Ordinary People”. We all have our individual talents; that does not make us better than others. Thomas Jefferson had the decency to refer to the citizens as the people when he spoke. Drop the “ordinary” language from your vocabulary. I seem to recall a skirmish (war) fought in the late 1700’s to rid ourselves of corporate rule. The British East India Corporation with the backing of King George III sent in troops to quell the rabble and lost. I am still quite puzzled by this-when anytime in history before this event did the loser get to dictate the terms of the treaty. In essence they didn’t lose much at the time, however in the long run they lost a great deal. So you see the Founders were painfully aware of the evils of corporations and left it up to the states to make laws governing them. I am looking forward to reading your book.
Harvey
New
Fine Article
Posted, Saturday, January 23, 2010 10:25 am
Many thanks for the vary fine article clearly reflecting America's slide into slavery. You are so right in that so many people are asleep and just don't give a damn, but maybe the upset in Mass. is a dim light into the future. Heep up the good work, Professor, the Americas need more of you.
Walter
New
The Word “Equality” is Dangerous
Posted, Friday, January 22, 2010 10:00 pm
It is very good stuff, and fundamental, with the potential of affecting millions.
I would like to raise a fundamental point:
The word "equality" used in the article is a dangerous one at times, to wit: "We hold these truths to be self evident, that all men are created equal." Which originated from what became the US. It was, and is, an absolute blatant, damnable, lie, that supported the American Revolution, that preceded the French Revolution, that preceded the Russian Revolution, and that has encouraged socialism and jealousy and dissatisfaction around the world ever since!
No two people are equal. Even two identical twins of the same sex, are not equal! Finger printing and DNA prove it.
I would prefer, for possible example: ... the basic democratic principle that all citizens have equal voting rights.
Jim
Answer by R. T.:
Of course, regarding the word equality, some definitions and precisions would be useful here. What is meant in the context I use it is that each human being belongs to the human race and is thus worthy of being treated with respect. Each individual, of course, has his or her own characteristics, personality and potential. No two individuals are identical in this sense. And, of course also, at another level, no two cultures are equal or of the same value regarding social or economic efficiency or any other goal.
What is meant in the U. S. Declaration of Independence that you cite (“...that all men are created equal"), I think, is the idea that there is no superior race who have rights that other people don't have. At birth, every human being has the same human rights to life, liberty and the pursuit of happiness. Thinking otherwise is racism and has been a source of much evil during human history.
New
Why are Supreme Court Judges Appointed for Lifetime?
Posted, Friday, January 22, 2010 6:06 pm
Admirable article. This was a long time coming and the Bushites merely ushered it in faster. I am in the camp where none of the Supreme Court appointees should be lifetime. They should be elected to term as well as term limits. Of course, I also believe the electoral college system should be abolished, electronic voting done away with, one vote for each voter and winner takes all. Politicians should all have term limits as well as corporations recognized for what they are: Businesses. Being a politician was never created to be a job and career. Officials who refuse to abide by the Constitution and the Bill of Rights should be removed from office as they have committed acts of treason.
Ron (Miami)
Answer by R. T.:
I agree with you regarding term limits. In Canada, for example, Supreme Court justices have to retire when they are 75 years old. In the U. S., Supreme Court justices tend to wait to be near death before retiring, because they know the partisan appointments swing the Court from one extreme to the other for a long time.
As to the five Republican judges on the US Supreme Court involved in the revolutionary decision of January 21, they seem to be part of a powerful oligarchy that controls things in the United States pretty much irrespective of the people's wishes. In 2000, let us remember, they elected George W. Bush who had received 500,000,000 fewer votes than Al Gore. —A decade of disasters followed. We should also keep in mind that when a country is under a system of plutocracy and of oligarchy, it can be said to be run by a plutarchy.
New
The Enemy is Here
Posted, Friday, January 22, 2010 10:54 am
The Supreme Court ruling has been described by several major pundits and bloggers as the end of Democracy.
When I enlisted in the Marine Corps in 1966, I swore an oath to defend my country. I was sent to Vietnam, where someone else who was defending his country shot me.
It is said, “Once a Marine, always a Mariine.”. Am I still under obligation of the oath I swore? If corporate entities are ending my Democracy, it means the enemy is here and now. What should I do?
hgovernick
New
Responsibility
Posted, Friday, January 22, 2010 12:57 pm
If the congress allows this decision to stand, allowing them (corporate entities) the freedoms and responsibilities of a person or citizen, then perhaps they could be held responsible for the deaths of a half million Iraqi civilians during the embargo years. There is little doubt of corporate involvement.
Charles
Article #2120
Thursday, January 7, 2010
Economy 2010: From the Scandalous Known Past to the Uncertain Future
By Rodrigue Tremblay
“Homes rose markedly in value, especially in hot markets like Florida and New York City. Borrowers believed that home purchases were no-risk ventures certain to escalade, and they went out on a limb to buy. Lenders who had once required large down payments now permitted home purchasers to combine two and three loans to buy a home. People took out what were called “buffet” loans, which were interest-only loans that buyers were told they should refinance in three years or five years. Lenders told home buyers not to worry; homes were rising so fast in value that it would always be easy to refinance into another loan. Developpers built larger houses. Why not? Borrowers wanted larger homes. They needed the space to hold all the things they were buying.”
—U. S. Housing market in 1928-29, in Kristin Downey, The Woman Behind the New Deal (Frances Perkins), 2009, p. 106, from Gail Radford, Modern Housing for America: Policy Struggles in the New Deal, 1996, pp.10-22
"I place economy (saving) among the first and most important virtues, and debt as the greatest of dangers to be feared."
Thomas Jefferson: 3rd US President (1801-09)
"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich -- it's just bailing out financial institutions. This is madness; this is insanity; they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents."
Jim Rogers, American investor
After a decade plus of unchecked greed by money-changers, of the political dismantling of financial regulation, of large “too-big-to-fail” banks made larger, of artificial easy money by the central bank, of the risky securitization of all kinds of debt instruments and of leveraged buy-outs of scores of companies with their own debts by financial operators, it was no surprise that the financial house of cards came crashing down in 2007-2008. It was like a pre-programmed financial crisis. A perfect financial storm.
What lessons can be drawn from the recent unhealthy and unpalatable past? And, what is in store for the near future, considering that hardly anything in the financial environment has changed? A crisis caused by a near total absence of financial regulation, by a too easy monetary policy and by too much debt, has been met with no additional financial regulation, by an even easier monetary policy and by even more debt. In fact, the U.S. ratio of total debt ($57 trillion) to the economy (GDP: $14.5 trillion in 2009) is even higher today at 3.9, then it was before the onset of the crisis in 2007-08, when it stood at 3.4.
That is why we will argue here that the problems of U.S. financial dysfunction have not been solved. On the contrary, they have been swept under the large rug of even easier money and of even larger debts, which is only postponing the day of reckoning. For sure, the large Wall Street banks' bad debts have been transferred to the public sector (the Treasury and the Fed) and to the quasi public sector (Fannie Mae and Freddie Mac), but the overall debt load of the U.S. economy has not been reduced; it has been increased. That is why the U.S. is condemned to continue its foreign borrowing binge for some time to come.
In general, too much foreign borrowing is bad for an economy, especially if it is done to finance an excessive level of domestic consumption. When this happens, it is a sign that total domestic expenditures (government, corporations, consumers) exceed total incomes. The country lives beyond its means and the gap has to be filled with net foreign borrowings.
The principal indicator of this situation is the current account (a broader measure than the external trade balance) of the country. When a country's current account turns negative, more money for imports and interest payments is flowing out of the country than is coming in through exports and investment income. Like any individual, of course, a country can borrow abroad if its credit rating is good. The question is how much and for how long. For countries that have fully convertible currencies or, better, for countries like the United States whose national currency also serves as an international key-currency, the situation can endure for a longer period, but there is always a day of reckoning.
In general, for a normal economy, a negative current account that exceeds six (6) percent of Gross Domestic Product (GDP), especially if this is due to a negative trade balance, usually indicates a non sustainable situation of foreign borrowing and foreign indebtedness that can lead to a financial crisis. Countries like Mexico (1994-95) and Thailand (1997-98) experienced such a financial crisis in the 1990's. Such was the case also with Argentina at the turn of the century.
Since 2000, and coinciding with the arrival of the George W. Bush Republican administration, the United States has also embarked upon a policy of excessive domestic spending, resulting in larger and larger and persistent current account deficits and huge foreign borrowings. Indeed, the adoption of an imperial foreign policy of permanent war throughout the world, financed on credit, and an ideological preference for large fiscal deficits, have translated into large American current account deficits.
In 2006, the U.S. (external) current account deficit reached 6.5 percent of GDP. This was the apex of external debt sustainability and a harbinger of economic troubles to come for the U.S. economy. As a matter of fact, this induced me to write an article on October 16, 2006 entitled “Headwinds for the US Economy”, in which I warned that it was a "matter of months, not years", before the U.S. economy and the U.S. dollar begin to experience some downward pressures. I repeated the warning a few months later when I wrote on May 5, 2007, (A Slowdown or a Recession in the U.S. in 2008?), that we could expect "the collapse of one and possibly several major financial institutions under the pressures of bad loans and record foreclosures... The rate of foreclosure is bound to spike in the coming months, possibly culminating in the next two years into a financial hurricane." This was said many months before the onset of the 2008-09 recession and the September 15, 2008 failure of the large investment bank Lehman Brothers.
In 2008, in the midst of the economic recession, the U.S. current account deficit was still estimated at –$706 billion (nearly all caused by a –$707.8 billion trade deficit) for a $14,441 U. S. GDP, that translated into a 4.9 percent current account deficit relative to the economy.
With the 2008–09 economic crisis and recession, the US current account deficit has since been somewhat reduced due to a drop in incomes and in imports, and partly due to a sharp decline in oil prices, but it is expected to remain above four percent of GDP. In the coming years, this ratio is likely to increase again as the long-term U.S. fiscal deficit is expected to remain at 10 percent of GDP for years to come.
The Fed's Role in Creating Asset Price Bubbles
The causes of a financial crisis are complex and can vary from one country to the next. In general, however, they usually stem from the central bank becoming subservient to the government when the latter decides to embark upon a policy of large fiscal deficits. If the central government opts in favor of monetizing the public deficits and keeping interest rates low, an asset bubble is bound to emerge.
Unfortunately, that's pretty much what the Greenspan Fed elected to do in maintaining an easy money policy for too long and in keeping interest rates too low, for too long, in the late 1990s and in the first part of the 2000 decade. Indeed, most economists agree that in 2003-04, the U.S. Fed should have raised short-term interest rates (pushed down to 1 percent in June 2003 from 6.5 percent in December 2000). But the then Greenspan Fed (current Fed Chairman Ben S. Bernanke has been a Fed Board member since 2002) was deeply embroiled in the Bush political agenda. Chairman Alan Greenspan publicly acknowledged this fact when he declared on September 17, 2007, in an interview with the Financial Times, that “raising interest rates sooner and faster (before the 2004 presidential election) would not have been acceptable to the political establishment given the very low (official) rate of inflation”.
In financial matters, the American central bank (the Fed or the Federal Reserve System) is a curious animal. It is an institution that is entrusted to regulate banks and other financial institutions, but it is partly owned by the large money center banks. It is in a perpetual conflict of interests. In fact, it can be said that the Fed is the banks' own private government. In good times, large Wall Street banks, bank holding companies and other large integrated financial groups, such as AIG (American International Group), are pretty much left alone and allowed to build profitable but risky and shaky financial pyramids, with scant supervision. When things go bad, however, the Fed stands ready to bail them out with automatic discounting, zero-interest loans and other goodies, the overall cost being transferred to the general public through an inflation tax and a debased currency. We know since 2008 that the U.S. Treasury also stands ready with public money to bailout the large Wall Street banks when their gambles go sour. The $700 billion Troubled Assets Relief Program (TARP) is testimony to that effect.
A central bank can always print new money. But this is hardly a magic recipe for prosperity. If it were so, many Third World countries could claim to have discovered this magic potion. The current Bernanke Fed is tragically wrong in its belief that it can reverse the current over-indebtedness situation in the economy and its mismanagement of the financial crisis by printing money. It is not true that the real economy always respond positively to heavy doses of monetary stimulus. In fact, the contrary is usually the case. If it were true, Zimbabwe, which is an African economic basket case with an uncontrolled bout of hyperinflation, would be prosperous. The U.S. economy is not exempt from fundamental economic laws. A few years down the road, people will see why.
It is my feeling that the U.S. economy is presently in the eye of a powerful financial hurricane of debt liquidation. Such systemic crisis happens no more than twice in a century and it takes at least a decade to work itself out. In this environment, one should be wary of the stock market as a barometer of the real economy. There could be artificially created short-term “liquidity” rallies, when all the while the real economy remains in the doldrums. The 2009 liquidity-driven stock market rally has all the appearances of such a bear market rally destined to fail and trap many unwary investors. In fact, this rally looks like a mirror repeat of the 1930 stock market rally that saw stocks retrace some fifty percent of their initial 1929 losses. We know now that this was only a mirage, and that the worst was still to come.
In my last July 10 blog, I stated that there is likely to be a prolonged 2007-2017 economic stagnation period in the U.S. —I reconfirm this assessment, which is reinforced by my conviction that the Bernanke Fed is making matters worse by its unlimited printing press so-called “solution” of discounting everything but the kitchen sink. It is my contention that this imprudent Fed is paving the way for the mother load of bubble and subsequent crash. This is because, as alluded to above, they seem to have forgotten that the credit cycle and the process of debt build-up, and the subsequent debt liquidation that follows, are the primary driving forces in the underlying economic cycle.
This time the crash will be initiated in the huge bond market, will spread to the commercial loan market and ultimately to the stock market, and then will further crush the real economy in a way that few understand today but will learn the hard way in the coming years.
Let us keep in mind that in the recent past, the Fed and the U.S. Treasury did not see the subprime and housing crises coming. They were completely taken off-guard. In 2005, according to then Fed member Ben Bernanke, “there was no housing bubble”, even though everybody and his uncle could see that the real estate bubble was about to burst.
And now, let us look at the figures. At the end of 2009, reflecting a binge of printing new money by the Fed, the U.S. monetary base, i.e. money circulating through the public and banking reserves on deposit with the Federal Reserve, stood at more than $2,016,136,000,000, after having increased 146 percent in three years. This is unprecedented. —Even if one subtracts the inactive excess bank reserves at the Fed, worth more than $1 trillion (and earning interest!), the U.S.'s monetary base has grown 22 percent in three years, from a starting point of $818 billion in early 2006.
Nevertheless, Fed Chairman Ben Bernanke said in 2009, that he does not fear inflation and that, in fact, inflation could even go down from then on. He could be right for the next few months, but how about the next few years?
Those who listened to Chairman B. B. in 2005, and kept buying leveraged real estate, lost their shirt. I am of the feeling that those who believed Chairman B.B in 2009, and kept buying long-term U.S. Treasury bonds, are also going to lose their shirt. Because of the huge federal deficits and Fed policy to monetize a big chunk of them, U.S. long-term rates are bound to increase in the coming years, whether the real economy grows or not. That would be the next Fed-created bubble bursting, the bubble of artificially low interest rates, excessive money creation and artificially high asset prices for long-term Treasury bonds.
In the past, the big losers of this policy were the millions of people who lost their homes through mortgage foreclosures, the millions of people who lost their jobs through bankruptcies and the millions of retirees who saw their retirement incomes plummet with near zero interest rates. In the future, the principal losers will still be middle class families who will continue being the victims of a massive spoliation and will still have trouble making ends meet, plus retirees whose retirement capital will be further eroded. Where is AARP when we need it?
__________________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com.
He is the author of the coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/
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Comments (10)
Economy 2010: From the Scandalous Known Past to the Uncertain Future
New
A very well written article
Posted, Thursday, January 7, 2010 10:00 pm
This was a very well written article and it serves a most useful purpose. As you know I appreciate your writing. You are not writing for an academic audience, even though the scholarship is there....
Andrew
New
The Plight of Retirees
Posted, Thursday, January 7, 2010 12:42 am
As one of those retirees getting 0.1 % on my money, i am desperately awaiting that increase in interest rates. i have been waiting and planning on it since the U.S.'s invasion of iraq. It has not happened yet. I know it, logically, must. Yet I know that China continues to support the U.S. Treasury bond market. It could be 2012 or 2017 before we see those double digit treasury rates again.
Joe
Answer by R.T.:
Interest income has vanished over the last few years. Long-term Treasury rates are at 4.65% now, and are expected to rise 1.0% this year and next.
Non-taxable muni-bonds are giving a fair return, but one has to go 10 years+. Another alternative is some high-paying dividend stocks.
To pre-order The Code for Global Ethics, by Rodrigue Tremblay, click: The Code for Global Ethics, Ten Humanist Principles
New
Looting the economy
Posted, Thursday, January 7, 2010 2:05 am
I enjoyed your last piece!
Was Obama's little-publicized Christmas Eve executive-decree bankrolling of Fannie Mae and Freddy Mac to the tune of an additional $1,000,000,000,000.00 (one-trillion dollars) the biggest bailout yet--with no legislative input? Here's one analyst that would agree. He's very understated but stay with it and pay attention to what he's saying: http://www.forextv.com/Forex/Video.jsp?channel=276&movieie=61345
But wait, this is small potatoes compared to the latest bailout scheme being "stealthed" through Washington D.C. by Dem. Rep. Barney Frank and his merry band of financial pirates.
Yes, that's $4,000,000,000,000.00 (four-trillion dollars). "Days of awe" indeed--for the "too big to fail" banks and other financial "Madoffs"!
Tom
New
Another excellent article
Posted, Thursday, January 7, 2010 9:31 pm
I have found your recent articles very insightful. I am most interested about WWII and have written articles about it. This year will be 65 years since this most damaging war to Western civilization. It ought to be commemorated given the path of the U.S. military and NATO.
Walter
New
Small Communities
Posted, Wednesday, January 6, 2010 8:47 pm
You say that “This time the crash will be initiated in the huge bond market, will spread to the commercial loan market and ultimately to the stock market, and then will further crush the real economy in a way that few understand today but will learn the hard way in the coming years.”
I am interested in what you write. It seems that you can predict how the economy will unfold. Are you aware of any measures that small communities can take to make a difference to what will transpire?
A reader
Answer by R.T.:
I am sorry if I gave you the wrong impression that I can predict the future. —I can't.
What I can do is analyze the consequences that logically follow from certain choices and policies, according to economic laws.
Small communities, and states for that matter, are presently seeing big drops in tax revenues, as property values decline and contract. Raising tax rates is not an option because taxpayers also have lowered incomes. Local governments have no choice but to economize and streamline their operations, i.e. raise productivity.
To pre-order The Code for Global Ethics, by Rodrigue Tremblay, click: The Code for Global Ethics, Ten Humanist Principles
New
An informative article
Posted, Wednesday, January 6, 2010 3:21 pm
This was an informative article. What are needed now are more hard-hitting articles to wake people up. Ben Bernanke is misinformed and Tim Geithner is misplaced, to put it politely. Neither is self-directed. Rather they are pawns in a larger game that you can only touch from a distance because of your position.
Ray
New
The Costs of Wars
Posted, Wednesday, January 6, 2010 3:32 pm
As an interested reader I was refreshed by your article and thank you for writing so lucidly on the subject matter – this is empowering for ordinary people like myself.
I would be interested to know how you see the impact of the financial cost of the new wars ‘without end’ on the various trends which you discuss. Could it be that this, and the other factors, is rapidly leading us into a situation akin to recent times when science was forced to drastically re-calculate (and bring forward) critical timescales relating to anticipated trends in global warming? Is this view far too pessimistic?
Rob
Answer by R.T.:
U.S.-led permanent wars cost the U.S. $110 billion plus a year in direct costs, plus of course a large chunk of the Pentagon's basic annual budget of $660 billion.
These wars consume a lot of energy and are a subtantial contributor to pollution. I am no expert in climate warming, but this is bound to have an impact.
To pre-order The Code for Global Ethics, by Rodrigue Tremblay, click: The Code for Global Ethics, Ten Humanist Principles
New
An understandable article
Posted, Wednesday, January 6, 2010 11:59 am
I read your new article today. I'm not one who normally believes in conspiracy theories, but I think this is a 100 plan going back to 1913 by the Fed to ultimately dismantle the U.S. as a super power and institute a One World Gov't. There are many articles & videos online about this as I'm sure you're aware. I also liked very much how understandable your article was to non financial experts like myself. Thank you again and keep the great articles
Coming.
Susan
New
Questions
Posted, Wednesday, January 6, 2010 11:59 am
I just read a great article you wrote.
I have a question and/or new article suggestion. What does this mean to us? I'm extremly concerned about the coming financial storm and I'd like to know how to prepare my family to get through it. I just don't see any safe investments, currencies, properties, etc.. Maybe precious metals and gemstones physically in my possession but I have my concerns there too. There are a lot of folks who see this spending spree coming to a head but not many discussing what to do about it. What say you?
Bill
Answer by R.T.:
It is not easy to navigate financially in those troubled waters.
One has to be careful and not be too deep in debt. There are a few basic economic facts to keep in mind. Today's government deficits will be tomorrow's taxes and one must prepare for that.
If there is inflation in the coming years, this means fixed income investments should not have a maturity much longer than 5-6 years. Some good dividend paying stocks can also be a protection against inflation.
As for real estate, this year and next should be the bottom of the 18-year real estate cycle. In general, this should not be a time to sell, unless forced to, but a time to buy.
To pre-order The Code for Global Ethics, by Rodrigue Tremblay, click: The Code for Global Ethics, Ten Humanist Principles
New
Wow! Super Article!
Posted, Tuesday, January 5, 2010 9:13 am
Je veux vous dire que vos articles sont particulièrement intéressants. Je partage entièrement vos points de vue sur l'imminente prochaine crise financière et de devises.
Yves
Article #1119
Posted Wednesday, December 23, 2009
The New Crusade: Imperial U.S. vs Political Islam
By Rodrigue Tremblay
"I am as intolerant of imperialistic designs on the part of other nations as I was of such designs on the part of Germany. The choice is between two ideals; on the one hand, the ideal of democracy, which represents the rights of free peoples everywhere to govern themselves, and, the ideal of imperialism which seeks to dominate by force and unjust power, an ideal which is by no means dead and which is earnestly [sought] in many quarters still."
U.S. President Woodrow Wilson, July 1919
"Fight and kill the disbelievers wherever you find them, take them captive, harass them, lie in wait and ambush them using every stratagem of war."
The Qur'an (9:5), Islam's holy book
"We are fighting them (the terrorists) over there so that we won't have to fight them here at home."
Former U.S. President George W. Bush's political slogan
“I, like any head of state, reserve the right to act unilaterally if necessary to defend my nation.”
U.S. President Barack Obama, December 10, 2009
“When the tyrant has disposed of foreign enemies by conquest...and there is nothing to fear from them, then he is always stirring up some war.”
Plato, ancient Greek philosopher (428/427-348/347 B.C.)
In the political movie “Charlie Wilson's War” about the Soviet-Afghanistan war, the hero states “America does not fight religious wars.” Is this possibly wrong, dead wrong?
In fact, is it not possible that since September 11, 2001, a new type of “holy war” may have begun? This time, the new crusade with strong religious overtones pits fundamentalist Christian America and its allies, against political Islam and the Islamist al Qaeda terrorist organization. On September 16, 2001, then President George W. Bush set the tone when he said: “This crusade, this war on terrorism, is gonna take awhile.”
On December 1, 2009 Nobel “Peace” laureate Barack Obama, president of the United States since January 20, 2009, decided to follow in the footsteps of his predecessor, President George W. Bush. He announced a policy of stepping up the U.S.-led war in Afghanistan-Pashtunistan. He announced an escalation in the military occupation of Afghanistan by sending extra American troops in that Muslim country, putting the number of American soldiers in Afghanistan at more than 100,000. Not satisfied in using the same vocabulary as George W. Bush, Barack Obama pushed the symbolism by adopting Bush's practice of announcing policies surrounded by more than 4,000 students dressed as soldiers at the West Point Academy. This was all too reminiscent of President Lyndon B. Johnson's fatal decision in 1965 to acquiesce to the request from U.S. commanders to enlarge the Vietnam war by sending scores of additional U.S. soldiers to that Asiatic country.
America seems to be in a constant need of a foreign enemy. First, it was the British. Then it was the Indians. Then it was the Mexicans. Then it was the Spanish. Then it was the Philippinos. Then it was the Japanese. Then it was the Germans. Then it was the Italians. Then it was the Koreans. Then it was the Cubans. Then it was the Vietnamese. Then it was the Soviets. Then it was the Iraqis. Then it was the Islamists. Then it was the Talibans. And, once the current conflict in Pashtunistan-Afghanistan-Pakistan is over, it will possibly be the Iranians, the Chinese, the Russians...etc.!
The reason for such a permanent-war mentality is most likely related to the U.S. military-industrial complex, an enormous beast that must be fed regularly hundreds and hundreds of billions of dollars, if not trillions of dollars, to sustain itself.
In the months following the collapse of the Soviet Union in December 1991, the high echelons at the Pentagon were busy designing a new post-cold-war strategy designed to keep the U.S. war machine humming. Paul Wolfowitz, then Undersecretary of Defense for Policy under Secretary of Defense Dick Cheney in the George H. Bush administration, wrote a memorandum titled “The Defense Policy Guidance 1992-1994”, which was dated February 18, 1992. The new so-called Wolfowitz Doctrine was a blueprint to "set the nation’s [military] direction for the next century." This new neocon military doctrine called for the replacement of the policy of "containment" with one of military "preemption" and international "unilateralism", in effect, discarding the United Nations Charter that forbids such international behavior.
The Pentagon's overall goal was to establish, through military force, a “one-Superpower World”. The more immediate objectives of the new U.S. neocon doctrine was to "...preserve U.S. and Western access to the [Middle East and Southwest Asia] region's oil", and, as stated in an April 16, 1992 addendum, to contribute “to the security of Israel and to maintaining the qualitative edge that is critical to Israel's security”.
Because of some opposition within the U.S. Government, the new policy did not become immediately effective. But the objective remained.
For instance, in September 2000, under the auspices of “The Project for the New American Century”, a new strategic document was issued and was entitled "Rebuilding America's Defenses, Strategy: Forces and Resources For a New Century". The same goals expressed in the 1992 document were reiterated.
The belief was expressed that the kind of military transformation the (neocon) planners were considering required "some catastrophic and catalyzing event — like a new Pearl Harbor”, to make it possible to sell the plan to the American public.
They were either very prescient or very lucky, because exactly one year later, they were served with the "New Pearl Harbor" they had been openly hoping for. Indeed, the Islamist terrorist attacks of Sept. 11, 2001, turned out to have been a bonanza for the American military-industrial complex. The military planners' wish for a "New Pearl Harbor", was fulfilled at the right time. It is important to remember that from 2001 to 2005, Paul Wolfowitz served as U.S. Deputy Secretary of Defense in the George W. Bush administration, reporting to U.S. Secretary of Defense Donald Rumsfeld. In this capacity, he was well positioned to implement his own Wolfowitz doctrine that later morphed into the George W. Bush Doctrine. For the time being, this is the “doctrine” that newly-elected President Barack Obama continues to implement in the Pashtunistan-Afghanistan-Pakistan corridor. As a politician, Barack Obama may be new at the job, but the policy he is being asked to implement was crafted long before he even set foot in Washington D.C.
Another possible reason why the United States is so often involved in foreign wars, besides its obvious aim of imposing a New American Empire on the world, may be due to the strong influence of religion in the United States. Just as for some aggressive Islamic countries, the U.S. is also the most religious of all first world countries. Researchers have found strong positive correlations between a nation's religious belief and high levels of domestic stress and anxiety, and other indicators of social dysfunction such as homicides, the proportion of people incarcerated, infant mortality, drug abuse, sexually transmitted diseases, teenage births and abortions, corruption, large income inequalities, economic and social insecurity...etc.
It is possible that wars serve as an emotional outlet that allows some Americans to forget about their nation's domestic problems. I suppose more research would be necessary on this issue. Indeed, is it possible that foreign wars, including wars of aggression, are a way for the American elites to deflect attention from domestic social problems and, as such, are a convenient pretext to direct tax money to defense expenditures rather than to social programs? The issue deserves at least to be raised. This could explain why U.S. foreign policy is so devoid of fundamental morality.
U. S. politicians who become president understand this American proclivity for war. They know that the best way to popularity is to be seen as a “war president”. A president who does not start a war abroad or who does not enlarge one already in progress is open to criticism and is likely to suffer politically. He must be seen less as a president than as “commander-in-chief”, in effect, as an emperor. How could this be, when the framers of the U.S. Constitution attempted precisely to avoid that?
Indeed, Article One (the War Powers Clause) of the U.S. Constitution gives Congress, and not the President, the authority to declare war.
Since World War II, however, this central article of the U.S. Constitution has been circumvented by having Congress give the President a blanket authorization to deploy troops abroad for euphemistically called "police actions", without an explicit or formal congressional declaration of war. The term was first used by President Harry S. Truman to describe the Korean War.
This artifice has done a lot to trivialize the act of war. It also contributed much in the transfer of the powers of war and peace from the legislative branch to the executive branch. In doing so, it has reinforced the role of the U.S. president as a commander-in-chief or as a de facto emperor. Only a formal constitutional amendment could restore, in practice, the framers' initial intent.
All said, it is easy to understand why when political faces change in Washington D.C., policies do not necessarily change. This push toward empire on the part of the United States can also explain why there is resentment and an anti-Americanism movement abroad.
______________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com.
He is the author of the coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/
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COMMENTS (20)
New
Identity vacuum
Posted, Sunday, December 27, 2009 12:30 pm
The article you posted is so fine; thank you.
There may be another reason that the U.S. seems to need one war after another from it's beginning. I think de Toqueville touched on it. Identity vacuum. The City on the Hill seemed to promise the possibility of a country that would resemble no other country, a new race of citizens unlike any others on earth, in short, exceptionalism.
One of the enculturating rules for new immigrants from as far back as I remember, never taught in any U.S. school or citizenship class, was to remove or change, deform out of recognition, the ''old'country, country of origin, identity. You can see an example of that in the millions of family names changed to fit the new homeland. I think that the baby of millions of people was thrown out with the bathwater, leaving a nation bereft of many things, not the least of which is integrety, cultural, moral, ethical, legal, institutional.
One of the most memorable residues of WWI and WWII seems to have been the solidarity the veterans had for the men they fought with, for the rest of their lives. One might argue that war for the United States is a vital bonding mechanism they otherwise do not have and so, desperately need?
Suzanne
_______________________
Answer by R.T.:
Indeed, exceptionalism and “Manifest Destiny” are not that far from “the chosen people” complex that some Jews have. I have written about that in my book “The New American Empire” and in some of my blogs. For example, see “The myth of Manifest Destiny, Take Two”, August 28, 2006.
Of course, there are many other reasons why the United States has become a bellicose country since World War II. For example, I should have stressed the central role presently played by the Israel Lobby, [http://www.vdare.com/roberts/091228_israel.htm] in promoting the most recent American-led wars in the Middle East. That powerful lobby carries a tremendous influence not only in Congress, but also within the Obama's White House.
Keep in mind that before World War II, the United States was not a militarist country. In fact, in 1940, the U.S. Army stood only eighteenth in the world regarding the size of its army, trailing not only Germany, France, Britain, Russia, Italy, Japan, and China, but also Belgium, the Netherlands, Portugal, Spain, Sweden and Switzerland.
[See “No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II” by Doris Kearns Goodwin, Oct 1, 1995].
New
The Qur'an quote
Posted, Sunday, November 27, 2009 09:57 am
In your article, there is this quote:
"Fight and kill the disbelievers wherever you find them, take them captive, harass them, lie in wait and ambush them using every stratagem of war." The Qur'an (9:5), Islam's holy book
I was about to send your article to a long list of mine, but I couldn't find the quote above. You mentioned 5:9. I found a similar quote at Qur'an 9:5, instead of 5:9, but it continued immediately in the same 9:5 "But if they repent, and establish regular prayers And practise regular charity, Then open the way for them: For God is Oft-forgiving, Most Merciful."
My point: this is such an important quote, and should be accurate as to where to find it, and would be better to be more complete.
Sam
__________
Answer by R.T.:
Indeed, many readers have volonteered to complete the above quote.
It seems that the correct quote is:
"Fight and kill the disbelievers wherever you find them, take them captive, lie in wait and ambush them using every stratagem of war, but if they repent, establish regular prayers, and practice regular charity, then open the way for them, for God is oft-forgiving, Most Merciful." Qur'an (9:5)
In my original article, the reference is at 9:5, not 5:9.
This verse in the Qur'an is often called the “verse of the sword”. Even in its entirety, however, the quote is a terrible one, because it alludes to forced conversion under the threat of death.
In other so-called religious books, such as the Jewish Torah or the Christian Bible, there are passages similar to those found in the Qur'an. I do not pretend to know all the subtleties of Islam, or of any religion for that matter. But I think that it is the responsibility of those who promote such religions to be clear in the messages they convey. Otherwise, some weak minds could be forgiven for being confused as to their real meaning.
Expansionist ideologies, such as communism, fascism, colonialism, Christianism, Islamism and Zionism, are powerful seeds of war. The more so, it seems, when one relies on the exhortations of a so-called “holy” book. The first three ideologies nearly destroyed the Planet in the 20th century, while the last three threaten to do the same in the 21st century.
I talk more about that in my coming book:
The Code for Global Ethics, Ten Humanist Principles
Click to preorder on AMAZON
New
How about the Balkans!
Posted, Sunday, December 27, 2009 09:52 am
I read with interest your fine article America's New Crusade: Imperial U.S. vs Political Islam. However, it appears to me that you made a glaring omission. You show a lengthy list of US wars (feeding USA's explanding military-industrial complex) but omitted mention of the Balkans. That is where USA chose to appease Islam and, in tandem with that, USA now has a huge miltary base in Kosovo, Camp Bondsteel.
Liz
Answer by R.T.:
Of course, mine was a short article. I did not include references to the Balkans or to Latin America and U.S. Gun Boat diplomacy for that matter. I hope, however, that the general message was clear.
New
This Article Should Go out to Every Newspaper in the Land
Posted, Sunday, December 27, 2009 06:52 am
Your message to America in your article “America's New Crusade: Imperial U.S. vs Political Islam”, should go out to every newspaper in the land. The implications are valid, the possibilities for good are enormous yet the refusal by the American public to take action is unfathomable.
I offer no insight as to the reasons; I can only track the senseless progress to self-destruction. Indeed, the senseless destruction of other peoples in other lands.
The only possibility for cessation or reversal of policy, in my opinion, is when the notice comes: America, your account has been closed because of "insufficient funds".
Sadly, the unbelievable advertising and manipulative power of the military-industrial complex is so great that it over-powers all that stand in its way.
I applaud your efforts to alert the country.
Charles
Answer by R. T.:
Indeed, since World War II, there seems to exist a mentality in the U.S. that the rest of the world should adapt to U.S. interests and that the U.S. has an unlimited right to intervene in the affairs of other nations. This is a very dangerous mentality indeed, and it could lead to disaster. As you stated, such a policy is geared to drive the U.S. toward over-extension and bankruptcy.
Western countries, and the U.S in particular, would do better to be more careful in their immigration policies and be less arrogant in their attempt to rule the world by force. I think this would be beneficial to all.
New
The Real Power Behind the Scenes
Posted, Sunday, December 27, 2009 01:36 am
Having read your article, it appears that you, like most of the U.S. populace, do not understand what goes on behind the scenes in the U.S. and probably globally which has its effects on the whole world, especially now that it is clear that the present "financial crisis" was cooked up by the cabal of finance, the U.S. Federal Reserve and their OWNERS in complete secrecy. Since the Fed is privately owned, and is only a quasi government associated entity, which is the real power behind the scenes, and is responsible for changing the nature of money into a completely fiat currency, unbacked by anything but counterfeit dollars as part of the Ponzi scheme which was intended to control the country, as the Rothchild banking cartel had learned to do a century previously, and which was instituted in 1913 under cover of night when all but the plotters of the Senate had gone home for Christmas. My Dad was a "runner" riding his bike to deliver the messages and packages of the big wigs on Wall Street at the time, so he was witness to the thickery. ...
With the paid compliance of the major media, who are given "talking points" the media does the bidding of the powers behind the scenes, who supply the money to elect their chosen ones, having arranged to back both a Republican and a Democrat through the primaries that will be in place to do the bidding of the "wise ones". The end result is that it really doesn't matter who we vote for by the time elections roll around; both parties and their nominees are beholden to the powers behind the scenes. (Those so-called "think tanks", such as the Council on Foreign Relations, Trilateral Commission, and of course the Bilderbergers, who represent the bankers, lawyers, and transnational corporations and industrial cartels such as the Chamber of Commerce, through their lobbyists plus the "elite" super rich of the world.).
It is well recognized that the history of central banks boils down to the history of the world, from money changers of the Bible to Rothchild and the Bank of England to the Federal Reserve: He who controls the money and has the gold controls the world literally through the politics of each country. The problem we now have is that the bankers' history shows that they make money by financing wars. Thus we have a government that is controlled by the theoretically elected, but whose allegiance is determined by the "Modern Day Money changers" of the world, who are in cahoots with the central bankers of the world.... The citizens of the United States have been so brainwashed for so long by our media and our so-called educational system, as instructed by their bosses, that the average citizen is too busy trying to make a living and live a decent life but has no time to really know what our politicians have done to us. There is nothing to this history of the "US great super power" that is the beloved war cry of the politicos, but not of the people. ...
There is effectively nothing left of our constitution, to which every elected representative and our president swear allegiance, but by which they stomp on the very document and its directives given us by our founders, on a daily basis, as they thumb their noses at the citizens of this country. Just watch them: they will at the behest of the bankers dredge up WWIII, in order to save the owners of the world's central banks' assets, and to take over the losers assets, yet again!
Patricia
_______________
Answer by R. T.:
I agree with a lot of what you write. The U.S. Fed is a disgrace in the way it acts as a private government for big financial interests and as a creator of financial bubbles. And, I congratulate Rep. Ron Paul for asking for a public audit of the Fed's books.
New
The Distribution of Wealth
Posted, Saturday, December 26, 2009 11:46 pm
I read your piece "America's New Crusade: Imperial U.S. vs Political Islam", and it has added to my own research on how the distribution of wealth and the transfer of huge amounts of money to the banking cartels affects us all.
Tom
New
Women's Rights
Posted, Saturday, December 26, 2009 05:15 pm
How do you see the women situation in all this Bazar? The world's events are and will stay in a repetitive situation unless women get really on the board. Women's studies at the universities are rediculous and wasting time and money. I am not talking of women tokenism such as Madame Rice or even Hillary.
Victoria
Answer by R. T.:
Of course, my short piece did not raise this issue.
In my coming book “The Code for Global Ethics”, however, the question of human rights and the equality of sexes feature proeminently.
New
Terrific Article
Posted, Saturday, December 26, 2009 04:04 pm
Your latest article is terrific. Meets with my full approval.
Congratulations and thanks for speaking out.
Charlie
New
World War II in Europe
Posted, Saturday, December 26, 2009 03:54 pm
Your article is excellent. It is very timely and describes the role of the U.S.A. as the world's aggressor.
I have been interested in the subject of WWII in Europe from the time I was 11 years old and followed the progress of the war on a daily basis with my father. I would appreciate your comments about an article I prepared about WWII in Europe (enclosed).
Walter
New
Stuff that Brings Down Madmen and Empires
Posted, Saturday, December 26, 2009 02:40 pm
This type of behavior is what brings about the down fall of many madmen and empires. As I see it, America will never be the same. American foreign policy has made the world a dangerous place to live in. As a muslim, I resent it when people continue to label some groups as extremist. In that case what would you label the C.I.A., the Mossad and other western intel agencies? What about the atrocities committed by the U.S. and it's allies against these muslim countries? They are causing the suffering and deaths of thousands of people. Mostly innocent people.
I have read the N.S.P.D.51. The average American is clueless about these directives. One of the things that concerns me is these illegal immigrants invading the U.S. I see the tension between them and the American people. I think the U.S. is headed toward civil unrest. According to the international bill of human rights, every government is suppose to address the basic needs of their people; health, education and welfare. Mexico is not doing that. When I ask a Mexican why don't they stand up to that corrupt and racist government, they don't answer.
Rashaad
New
The Causes of War
Posted, Saturday, December 26, 2009 11:48 am
Thank you for this excellent and useful article. To my mind, your most useful passages were those inquiring into the causes of war, since I would like the U.S. to stop its continual pattern of attacking other peoples' countries.
There are of course many books, countless books on the causes of war.
Wikipedia had, in the past, an entire section on the causes of war but it was moved into "War" and then renamed "motivations for war". The material includes your theories,
and more.
We need first of all, a definition of exactly what sorts of war we oppose.
And if we do not, at the same time, understand very deeply in our own motivations, why we oppose such wars, we'll surely drop the inquiry and resume other, more enjoyable activities as almost every peace activist always has done in the past. It's as if they are somehow drawn to the subject by some deep fear or cognitive dissonance, and without ever seizing control of the operation of the mind, allow it to mend itself by finding whatever rationalizations or theories put the mind to rest. Then, they disappear from the movement and resume the feeding of their appetites.
Besides the problem that peace activists almost always fail to define what kind of wars they object to, and why, there is another problem: we don't understand the nature of causality. What is a "cause", for such vast thing as war, reaching so far beyond our immediate perception, so far into the past, and covering such large areas of the planet?...
Todd
Answer by R. T.:
Judging from the large number of comments I have received, it seems this article has touched a nerve.
Questions of war and peace are very complex. A few years ago, I wrote an article for the magazine “The Humanist” about the “Just War Theory”, and found that G.W. Bush's war in Iraq did not meet any of the five principal criteria for a just war.
I agree with you that we should spell out exactly what sorts of war we oppose. In general, war is too serious an affair for having it trivialized as this seems to be the case presently in the U.S.
New
The Quote Again
Posted, Saturday, December 26, 2009 01:39 pm
It is disappointing that the desired effect of such a wonderful article should have been basically marginalized if not completely nullified by an incomplete quote from the Qur'an out of context, the purpose of which is to abrogate the merciful and loving verses of the Qur’an with an incomplete specific verse concerning battle. ...
First, we shall provide the verse in its context: 9:5-6
“But when the forbidden months are past, then fight and slay the Pagans wherever ye find them, an seize them, beleaguer them, and lie in wait for them in every stratagem (of war); but if they repent, and establish regular prayers and practise regular charity, then open the way for them: for Allah is Oft-forgiving, Most Merciful. If one amongst the Pagans ask thee for asylum, grant it to him, so that he may hear the word of Allah. and then escort him to where he can be secure. That is because they are men without knowledge.”...
Jay
______________
Answer by R. T:
By essence, a quotation is always taken out of context. But even in its complete form, the quote from the Qur'an is a terrible one. And it may explain why some terrorists could rely on the Qur'an to find inspiration for their acts.
New
Data to Confirm?
Posted, Saturday, December 26, 2009 1:35 pm
Thank you for taking the time to write and share your views with the world.
I have a data question, and a comment.
Concerning your passage "Just as for some aggressive Islamic countries, the U.S. is also the most religious of all first world countries. Researchers have found strong positive correlations between a nation's religious belief and high levels of domestic stress and anxiety, and other indicators of social dysfunction such as homicides, the proportion of people incarcerated, infant mortality, drug abuse, sexually transmitted diseases, teenage births and abortions, corruption, large income inequalities, economic and social insecurity...etc "
-I would like to know if you have data that confirms this? How "most religeous" is calculated, and how many countries were considered? Also, does this pattern also apply to 3rd world countries? If you have data table / graph of some kind, with source references, that would be most useful.
My comment is regarding your referrence to the "source" of US military-ism, stating that it comes from the military industrial complex. However you correctly state that this started many decades before the military was industrialized, with the native Americans and the British, African people. Therefore the military industrial complex can not be the source of the problem, but rather a symptom which aids the perpetuation of past (initial) colonialism.
Rather it is the context of a people's national-formation which sets the stage for further developments. If a nation is bred from war, and rewarded for conquest, it will add this meme to it's psychy (culture). This is how cultures evolve, for beter or for worse, and this is how the US one got to where it is today.
Sebastian
Answer by R. T.:
Many studies have documented that religion is an outlet for social stress and poverty, and may be a factor in retarding social progess. Overall, the richer and the more socially stable a society is, the less religious it is. On the other hand, the poorer and the more socially dysfunctional a country is, the more religious it is. For example, in the U.S., the poorest state (Mississippi) is also the most religious. The poorest continent and the least well organized (Africa) is also the most religious of all. [http://www.usatoday.com/news/religion/2009-12-21-south-bible-belt_N.htm]
By many measures, the U.S. can be considered a socially dysfunctional country in which the level of social stress is very high, even if the average GDP per capita is also high, according to primary indicators such as homicide, incarceration, juvenile mortality, lifespan, adolescent and all age gonorrhea and syphilis infections, adolescent abortion, adolescent births, youth and all age suicide, fertility, marriage, marriage duration, divorce, life satisfaction, alcohol consumption, corruption, income, income disparity, poverty, employment, work hours and resource exploitation base. (See Gregory Paul's paper "The Chronic Dependence of Popular Religiosity upon Dysfunctional Psychosociological Conditions" available online.http://www.epjournal.net/filestore/EP073984414.pdf) For example, there is no other country in the world, even compared to much more populous countries like China, that has so many inmates as does the U.S., (over 2 million).
Religiosity is usually calculated as the proportion of people attending church regularly and who say that religion is important in their lives. For example, in the U.S., there are about some 52 percent of very religious people. A highly religious group (34% of adult Americans) is composed of those who attend church at least once a week and for whom religion is important in their daily lives. Another religious group (18%) is made of people attending church almost every week or once a month and saying religion is important. [http://www.gallup.com/poll/124649/Religious-Intensity-Remains-Powerful-Predictor-Politics.aspx?]
This level of American religiosity is much higher than in Europe, Canada or Australia.
New
Oil as a Driving Force Behind U.S. Foreigh Policy
Posted, Saturday, November 26, 2009 03:40 pm
I agree with your analysis. The only thing I would add is that isn't it the case that oil access for the US and especially the EU is the driving force behind the maintainance of the MIC. Therefore in their minds it is a rational process to have permanent preemptive war.
That's why one of the neo-cons made the comment 8 yrs. ago that future generations would thank us for their war initiative assumedly to procure M.E. oil access. Most Americans agree with this policy.
Once you create an oil dependent car culture this is the outcome for foreign policy.
Answer by R. T.:
Oil access is certainly an important driving force of U.S. foreign policy. However, it is not certain that a comprehensive cost-benefit analysis would not reveal that this approach is net negative. The costs of permanent war are very high indeed, and long lasting, while the benefits are short and medium term in nature. Such a policy is geared to drive the U.S. toward bankruptcy.
Moreover, the heavy dependence on oil as the main source of car energy should be over twenty years from now when hydrogen will take the place of oil and electricity.
New
Does Islam promote violence?
Posted, Friday, December 25, 2009 06:26 pm
You quoted the quranic verse (9:5) out of context. Please read through it.
"Does Islam promote violence?
A few selected verses from the Qur’an are often misquoted to perpetuate the myth that Islam promotes violence, and exhorts its followers to kill those outside the pale of Islam.
1. Verse from Surah Taubah
The following verse from Surah Taubah is very often quoted by critics of Islam, to show that Islam promotes violence, bloodshed and brutality:
"Kill the mushriqeen (pagans, polytheists, kuffar) where ever you find them." [Al-Qur’an 9:5]
2. Context of verse is during battlefield
Critics of Islam actually quote this verse out of context. In order to understand the context, we need to read from verse 1 of this surah. It says that there was a peace treaty between the Muslims and the Mushriqs (pagans) of Makkah. This treaty was violated by the Mushriqs of Makkah. A period of four months was given to the Mushriqs of Makkah to make amends. Otherwise war would be declared against them. Verse 5 of Surah Taubah says:
"But when the forbidden months are past, then fight and slay the Pagans wherever ye find them, and seize them, beleaguer them, and lie in wait for them in every stratagem (of war); but if they repent, and establish regular prayers and practise regular charity, then open the way for them: for Allah is oft-forgiving, Most merciful." [Al-Qur’an 9:5]
This verse is quoted during a battle.
3. Example of war between America and Vietnam
We know that America was once at war with Vietnam. Suppose the President of America or the General of the American Army told the American soldiers during the war: "Wherever you find the Vietnamese, kill them". Today if I say that the American President said, "Wherever you find Vietnamese, kill them" without giving the context, I will make him sound like a butcher.
But if I quote him in context, that he said it during a war, it will sound very logical, as he was trying to boost the morale of the American soldiers during the war...
Habib
Answer by R. T.:
Indeed, it has been pointed out to me that the complete quote is:
"Fight and kill the disbelievers wherever you find them, take them captive, lie in wait and ambush them using every stratagem of war, but if they repent, establish regular prayers, and practice regular charity, then open the way for them, for God is oft-forgiving, Most Merciful." The Qur'an (9:5)
Even in its complete form, the quote in the Qur'an is a terrible one. This reference to forced conversion under the threat of death in the Qur'an is a negation of basic human freedom of conscience and is therefore unacceptable.
By definition, any quote is out of context. But, if a verse cannot stand on its own, it should not be in the book.
Your reference to the American war in Vietnam hardly applies, because no leader could have issued a blanket order to kill Vietnamese because they were Vietnamese, even in time of war. This would have been tantamount to genocide, a crime severely punishable by international law.
If a religious book contains passages that can only apply in times of war, it should say so, in order for weak minds not to misinterpret them.
Mind you, there are a lot of similar appeals to violence in other religious books such as in the Jewish Torah and in the Christian Bible. As long as these passages are not clearly explained or expurgated, they will continue to be misinterpreted.
New
Could not Agree More
Posted, Tuesday, December 22, 2009 02:40 pm
Could not agree with Dr. Tremblay more.
My country is well on its way to being the worst racist shit disturber in history. It is forcing islam to be an enemy of it and it is succeeding. it started with the creation of israel in muslim lands and continues with the support of the kosher nazis who rule israel and are now essentially controlling the US. This gringo nazism and kosher nazism is going to kill several of our people, both in and out of uniform, in future generations
Mazdi,
New
Subtleties of Islam
Posted, Tuesday, December 22, 2009 01:58 pm
The complete quote should be:
"Fight and kill the disbelievers wherever you find them, take them captive, harass them, lie in wait and ambush them using every stratagem of war, but if they repent, establish regular prayers, and practice regular charity, then open the way for them, for God is oft-forgiving, Most Merciful."
The Qur'an (9:5), Islam's holy book
In this case, the reference to "if they repent" indicates clearly that this was a strong warning to prevent an existing or potential threat at the time, and certainly indicates that the purpose of the threat was to end the conflict peacefully and justly, and not to just wanting to kill indiscriminately.
There is no mention in the Qur'an that indicates any kind of indiscriminate killing under any circumstances, or against any particular race or group....
Hatem
Answer by R. T.:
I do not pretend to know all the subtleties of Islam, or of any religion for that matter. It is the responsibility of those who promote such religions to be clear in the messages they convey.
As to Islam, it is understandable that people can be confused as to its messages, especially when they witness suicide bombers killing innocents in many countries.
The deeply religious terrorist Osama bin Laden may have also contributed to this confusion when, after the terrorist acts of September 11, 2001, he explained the Islamic rationale behind the killing of thousands of innocent people with these words: “It is allowed for Muslims to kill protected ones among unbelievers in the event of an attack against them in which it is not possible to differentiate the protected ones from the combatants or from the strongholds. It is permissible to kill them incidentally and unintentionally according to the saying of the Prophet.”
That may be a fundamental problem with so-called “holy” books, when they can be interpreted according to one's immediate interests or intentions. What counts is the practice, not the pious theory.
New
“Useful Idiots”
Posted, Tuesday, December 22, 2009 12:25 pm
While fundamentalist Christian 'useful idiots' are largely antiIslamic, the big impetus comes from the industrial/financial/commercial oligarchs that reap the benefits of 'wars for fun (public catharsis) and profit'.
John,
Answer by R. T.:
Religion has often been a tool for the rich and powerful to use the “useful idiots” as you say to advance their interests.
This was true in the past and this is true today. This new American-led crusade is not different.
New
Question
Posted, Tuesday, December 22, 2009 10:27 am
Are you a Jesuit? Are you a Zionist? The obvious lack of Old Testaments quotes to a war like the God of Abraham defines all three religions in my mind. The Palestinian holocaust and genocide is proof that King Harrod is alive and well. The Christian crusades, inquisitions and murder of the Cathars address the politics of Empire. The Islamic crusades were fashioned by the other to brothers in this trio.
So perhaps, we must be fair and balanced about the causes of evil in this world and look to the profiteers among the ruling elite.
Lyn
Answer By R. T.:
I am neither. Usually, I only post three quotes at the beginning of my articles. This time, I had five.
In my coming book, “The Code for Global Ethics”, besides outlining the basic humanist principles, I have numerous Jewish, Christian and Islamic quotes you may appreciate.
Indeed, when I refered to a new crusade, I had the Papal crusades in mind, including the crusade against the Cathars in the south of France in the early 13th century.
New
Congratulation
Posted, Tuesday, December 22, 2009 08:04 am
Congratulation on excellent article !!!
Right on -on all counts. Presidents come & go but the invisible /unelected government is the controller ( Israel security is also a priority).
Eva
Article #1118
Wednesday, November 25, 2009
A Real Revolution in the Making in the U.S. Health Care Industry
by Rodrigue Tremblay
“The conservative goal has been the "Third Worldization" of the United States: an increasingly underemployed, lower-wage work-force; a small but growing moneyed class that pays almost no taxes; the privatization or elimination of human services; the elimination of public education for low-income people; the easing of restrictions against child labor; the exporting of industries and jobs to low-wage, free-trade countries; the breaking of labor unions; and the elimination of occupational safety and environmental controls and regulations.”
Michael Parenti, progressive author and lecturer
“As to diseases, make a habit of two things - to help, or at least, to do no harm.”
Hippocrates (460-277 BC), ancient Greek physician
“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.”
Confucius (551-479 BC), Chinese philosopher
The U.S. Congress is presently debating a most important piece of legislation that would profoundly reform the U.S. healthcare system. This is without a doubt the most important domestic proposal advanced by the Obama administration.
To understand what is at stake here, one should know that in the U.S., there are three industries that operate in a political and economic environment such that they can literally write their own ticket: the tentacular defense industry, the large financial and banking industry and the pivotal health industry. Together, these industries account for more than forty percent of the U.S. economy. Their common characteristic is that suppliers can more or less create their own demand and fix prices accordingly. The potential for gouging is enormous. Needless to say, these industries are among the most profitable ones... for those who can enter them.
The health industry is particularly insulated from normal market competition and from critical assessment by the consumer. The products and services that the consumer requires are “prescribed” to him or to her. If sick or requiring treatment, the consumer is in no position to argue and to contest costs and prices. He is not even considered a consumer but a “patient”! In a medical establishment, he is admitted, then “discharged”! Economists call such a situation a price-inelastic demand. The supplier of the service is the one who calls the shots. He decides the quantities to be administered and the price to be charged. This is a cost-plus situation fraught with mostly unregulated monopoly pricing practices.
This may partially explain why since 1970, American health costs have grown at an average annual rate of 9.6 percent per year. That is close to twice the pace of the increase of the overall economy. For example in 2010, health costs in the U.S. are expected to increase four times faster than the annual increase in the average hourly wage of American workers. This is clearly unsustainable, less it bankrupts the entire U.S. economy.
Since medical treatment is in many cases not a choice but a necessity, people have very little leeway in economizing on such consumption within their normal budget constraints. If one requires urgent treatment, one must willy-nilly enter the medical system and pay to the hilt. An example observed recently would illustrate the fundamentals. A friend visiting Florida recently had a case of severe indigestion during the night. He was driven to the emergency room of a local hospital, where he spent two hours. The total cost was in excess of $3,000, half of it for simply crossing the door of the ER room and the rest for two simple blood and urine tests. Maybe Walmart should take over the administration of U.S. hospitals!
To protect against unforeseen medical outlays that can seriously perturb their financial position, most people rely on one form or another of health insurance. This could be private insurance, group coverage insurance, cooperative insurance or collective or public insurance.
For example, members of Congress are covered by a public health insurance plan. Military personnel and military veterans are insured through a public plan, either through the U.S. Department of Defense Military Health System or through the Veterans Health Administration (VHA).
Americans who are over 65 years old are covered by a public single-payer health care system, called Medicare. Such a public American health program has been in existence since 1965. This is a large public health plan that presently covers more than 43 million Americans. It now provides comprehensive hospital, medical and drug coverage for those lucky enough to qualify because of age and residency.
For the population at large, individuals or families can be privately insured, underinsured or less than fully insured for medical costs they might incur, or, for some fifteen percent of Americans, not insured at all (45.7 million people in 2007). Private health insurance companies routinely deny insurance coverage for people who have pre-existing health conditions. It has been estimated that the total number of people in the United States who die because of lack of medical care is about 100,000 per year.
One can therefore understand why the issue of comprehensive health care insurance is so politically contentious in the United States. Those who are already covered by a generous public health care program—by such public programs such as Medicare, i.e. the insiders, possibly a third of the U.S. population—do not see an urgent need to change a situation that benefits them. Those who rake in tremendous profits in the private health industry are also fighting to maintain their privileged position. Being already covered, they are less persuaded that there is such a thing as a fundamental right to health care.
The victims, the outsiders whose health insurance is tied to their job or who are not covered at all, do not have the same political clout nor the same access that the insiders have to the media or to members of Congress. Generally speaking, the Republican party and its allies in the far right media side with the insiders, and vigorously oppose most attempts for health care reform and an extension of their privileged position to others. Generally speaking again, the Democratic party and its progressive allies tend to side with the outsiders and have been pushing for reform for many years.
Ethically speaking, it is generally accepted that those who benefit the most from random natural endowments or from the working of the social and economic system have a moral obligation and an inescapable responsibility to share their good fortune with the less lucky or the less fortunate among us. Naked egoism is the anti-thesis of modern humanist morality.
As to the political tug-of-war being played in the U.S. around health care reform, it is too early to know the final result, but it surely will have major consequences.
____________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com.
He is the author of the coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/
You can reserve a copy of the book on Amazon
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_____________________________________
Posted, Wednesday, November 25, 2009, at 5:30 am
Email to a friend:
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A Real Revolution in the Making in the U.S. Health Care Industry
COMMENTS
New
Many Thanks
Posted, Sunday, November 29, 2009 23:48 pm
Many thanks for this excellent piece. I have posted inks to it from my website.
Diana
New
Non-competitive Pricing
Posted, Tuesday, November 24, 2009 10:06 am
A good read...
While price-inelastic is a great technical term, non-competitive pricing better sums up the situation in my mind (Not to be pedantic). Consumers of health care, aside from those seeking cosmetic surgery, do not seek out medical care like they would any other service or consumable. They use it when they need it. They also rarely have a chance to "shop around" for the best deal. Nor can they choose to delay their purchase to a better time in many situations. All of the hallmarks of normal consumer free market involvement seem to be missing and yet so many wish to apply the rules of a market economy to a situation in which it simply does not fit.
Wellscent
New
The Canadian healthcare System
Posted, Monday, November 23, 2009 5:24 pm
I read with interest your article. I found it informative but not complete.
I do not follow (or wish I did not follow – happenings in the US) in detail the US political state of affairs…. Meaning that I am not uniquely informed on these topics. I do however find myself – attention attracted by the actions of Rep. Ron Paul (I think because he appears honest – and motivated to reduce the power of people in the middle) and Rep. Dennis Kucinich (as his politics appear to be somewhat aligned with what I think).
I notice that Rep. Kucinich did not vote for the healthcare bill.
I notice that you did not mention – or did not go far enough in your article to explain reasoning that he might have used for not supporting the existing package/amendments.
I find that your article was useful, informative but complete enough. It seems to me that a healthcare program such as Canada’s would be of most use to the Americans. Of course, there are issues as to how to get there – that is how to remove the healthcare industry from control, but I really do not see the value in the current Reid bill.
I watched a video recently form California in which Rep. Nancy Pelosi avoided answering a question about enforcement policies for the healthcare bill. The question was generally along the lines of – if someone does not purchase healthcare will they be prosecuted. She heard the question – she understood and you could see in her body language that she was uncomfortable with it. She could have said, no of course not. She said nothing.
From this perspective, it looks to like fascism. I do not like this term as it places the speaker (me) in the position of appearing extreme. But if people will be forced to purchase a corporate product then I think it is fascist.
My point in writing is that I think your article is insightful… I think you could go further as I sense that you have deep understanding of the matters.
Thank you for the article.
John
Answer by R.T.
I keep my articles short because most people don't like to read long and technical articles.
Thank you for raising Rep. Ron Paul's and Rep. Dennis Kucinich's positions on U.S. health care reform. As you know, these two congressmen are at the opposite ends of the political spectrum. Paul is a libertarian who is opposed to most government interventions. Kucinich is a progressive who considers the government an agent of change and of social progress.
The reason why Rep. Kucinich voted against the House bill, is because he thought the bill did not go far enough to counteract the lobbying influence of the health insurance industry and did not have a true public option in it.
The Canadian health system is not perfect. It relies more and more on rationing by queuing. This is because it has no deductible or coinsurance features in it, and because of a high inflow of immigrants. Sooner or later, with the arrival of aging baby-boomers, the Canadian health system will have to be reformed also.
Article #1117
Friday, October 30, 2009
President Barack H. Obama, One Year Later: 'C' for Effort
By Rodrigue Tremblay
"I don't want to just end the [Iraq] war, but I want to end the mind-set that got us into war in the first place."
Presidential candidate Barack Obama, January 31, 2008
“Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.”
Theodore Roosevelt (1882-1945), 26th US president
“If we are strong, our character will speak for itself. If we are weak, words will be of no help.”
John F. Kennedy (1917-1963), 35th US President
“If the Nuremberg laws were applied, then every post-war American president would have been hanged.”
Noam Chomsky, linguist and political expert
Barack H. Obama was a good presidential candidate but, so far, in crucial areas, he has been a somewhat disappointing president.
In November 2008, Democratic presidential candidate Barack H. Obama, and the first black American to have that chance, got to the U.S. presidency on the coattails of a despised Bush-Cheney administration. Indeed, it was a relief for a majority of Americans to have Senator Obama replace “facts-do-not-matter” George W. Bush as president of the was little more than a Bush-retread. It was therefore unavoidable that such an election would generate big expectations that things would change for the better. As a matter of fact, candidate Obama's electoral slogans were “Yes we can” and “change we can believe in”.
Because President Obama is America’s first black President, he is symbolically the culmination of Martin Luther King's Civil Rights movement. Because of that, many have hesitated to criticize him or his administration. But his record, so far, speaks for itself. In two central areas, defense and the economy, his performance has been, at best, lackluster. In fact, Obama's performance in these areas has betrayed a lot of highly held expectations.
He seems to have been ill prepared for such a big time job. It is true that the function of president of the United States, as the country becomes more and more a militaristic empire and less and less a democratic republic, is most demanding. Possibly, nobody can be qualified and prepared enough for such a challenge.
In Obama's case, he was promoted from being a junior senator with a limited staff (one secretary and a few assistants), and no real administrative experience, to running the huge U.S. government with its three trillion dollar budget. And, moreover, he had not had the time or the wisdom to build around him a strong enough “brain-trust” to intellectually control the agenda. Rather the agenda seems to have been imposed upon him. It can be said that he asked for it when, after moving into office, his first move was to keep at their job key Bush appointees to implement the all-too-important defense and economic policies. As it is said in French “Plus ça change, plus c'est pareil” (The more things change, the more they remain the same!)
In Obama's case, the disappointment is not only a question of poor performance due to a lack of depth, formation or experience. It is a question of promises not kept and of vision betrayed. The disappointment is palpable in polls. His job approval rating hovers around 50 percent (only 45 percent of adults), while only 43 percent of Americans say they would vote to reelect him, and 48 percent say they would vote for someone else. Obama's performance has reinforced the cynicism and disillusion felt by many voters and their uneasy feeling that most politicians are either corrupt, incompetent, deceitful or hypocrites, or all of the above. In such an environment, it appears to many that voting has become a waste of time. Voter turnout in the U.S., already one of the lowest in the world, may take a turn for the worse if confidence is not restored soon. On that score, the 2010 turnout should be watched closely, especially among young disillusioned voters.
As far as foreign wars are concerned, Obama's record is less than positive. Although there has been a timid beginning of troop withdrawals in Iraq—notwithstanding the promises—in Afghanistan, things have taken a turn for the worse. Indeed, President Obama has only made things worse in that remote part of the world, by accelerating the killing and by illegally upgrading the killing in Pakistan with the Pentagon's drones. This is dangerous politics because this open-ended military adventure is all too reminiscent of the Vietnam quagmire that destroyed President Johnson, mired the last days of President Nixon's term, and tarnished America's reputation in the world.
Similarly in financial matters. Under Obama, the causes of the 2007-2009 financial crisis have not been clearly identified, let alone corrected or eradicated. Instead, they have been swept under the rug and covered with tax money bailouts and an orgy of newly created money. In fact, just as for defense, President Obama has delegated his economic and financial policies to the troika of Bernanke-Geithner-Summers, just as President Clinton had delegated the same responsibility to the troika of Greenspan-Rubin-Summers, and just as President G. W. Bush had done with the troika of Bernanke-Paulson-Geithner. We cannot help but detecting a pattern here.
It must be recorded that the Bernanke-Geithner-Summers team was deeply involved in the financial deregulation that led to the securization banking crisis and to the subprime mortgage crisis. When one considers the trillions of dollars in public money that have been used to camouflage the large N. Y. banks' bad debts, it is obvious that the Obama administration has adopted the old political technique of pandering to the rich with the blind support of the poor. (N.B.: The top 23 Wall Street banks and financial firms are expected to hand out a record $140 billion in bonus compensation during this year of 2009—$10 billion more than the previous record year of 2007. It has since been announced that the seven largest bailed out banks may see their bonus plans scaled down, and the Obama admistration should get the benefit of the doubt for this small and possibly symbolic step toward public morality.)
Such practically unconditional bailouts of “too-big-to-fail” banks can be seen as some plush state socialism for the rich, coupled with harsh and unregulated market capitalism for the poor, saddled as they are with unlimited home foreclosures and personal bankruptcies.
The epicenter of the unprecedented banking salvage operation has been the Federal Reserve System, sort of a parallel government with the power to impose hidden taxes. Even more than the Treasury's generous Troubled Asset Relief Program (TARP) of purchasing preferred equity in troubled banks, and other similar Treasury plans, the bulk of the banking bailouts came from the Federal Reserve system. The list of the Fed's bailout programs is very long and very complicated and remains mostly off screen, because it is mostly camouflaged within a super-easy monetary policy.
The U.S. Fed is a sort of semi-private central bank that often caters to private banking interests at the expense of the public good. Many Americans realize that the Fed is as much a creator of financial crises as it is an instrument to fight them. In fact, the Fed is presently busy preparing the next big financial crisis, i.e. the collapse of the bond market two or three years from now. —That could explain why the remote and mysterious semi-private Fed is the least popular of all American federal institutions, and why grass roots efforts to submit it to a public audit are gaining momentum.
In fact, the U.S. Fed is an institution that has gone much further than the U.S. Treasury in socializing the large N.Y. banks' losses and in privatizing their huge profits in the hands of profiteers, at a time, especially after the Sept. 15 (2008) demise of Lehman Brothers, when many of them were technically insolvent.
Thus, by buying large amounts of toxic and unmarketable assets from the large N.Y. banks and from large insurers, such as the huge American International Group (AIG), at close to zero cost to them, and by creating new deposits in exchange, and by paying interest on such bank deposits, the Fed has in effect transferred all or most of the seigniorage of money creation from the public to the private sector. Everybody holding U.S. dollars has paid a huge hidden tax imposed by the Fed to salvage the large “too-big-to-fail” N.Y. banks. Sooner or later, somebody will have to calculate that hidden tax and make it public. Most likely, this could only be done if the Fed were to be thoroughly audited, which it has so far staunchly refused.
All and all, and where it counts the most, in matters of wars and peace and in economic matters, things have hardly changed under the new Obama administration. It is likely that an even more pugnacious McCain administration would have been worse, considering Sen. McCain's public declarations and pronouncements. Nevertheless, this is poor consolation to those who had high expectations and who were led to believe that President Obama's election would really bring fundamental change.
_________________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at
rodrigue.tremblay@ yahoo.com.
He is the author of the book 'The New American Empire'.
*****The French version of The Code for Gloal Ethics is now available. See: www.lecodepouruneethiqueglobale.com/
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COMMENTS
New
Break Free from the Neo-Cons' Tentacles.
Posted, Friday, October 30, 2009 01:49 am
Obama has had plenty of time already. If he is given any more time, before he knows it, his 4 years tenure would be over. Obama's intentions might be good & noble, but he will not be able to achieve much unless he breaks free from the Neo-Cons' tentacles. If Obama manages to break shake of the Neo-Cons, he might help USA regain it's position the comity of nations which it has lost due to behaving like a mad rampaging bull-elephant enforcing the Law Of The Jungle around the world that "Might Is Right", with it's two cohorts Israel and India in tow...
Maqsood
New
A symptom, not a Cause?
Posted, Thursday, November 5, 2009 10:22 am
I would want to say that there are some experts who think the subprime mortgage default was more of a symptom than a cause of the US-originated Global financial debacle. I would like to know what you think?
Ebenezer
Answer by R. T.
Yes.
It was the end-result of corrupt political financial deregulation and corrupt financial and banking practices.
See my blog on the issue:
http://www.thenewamericanempire.com/tremblay=1082
New
Jefferson's Quote.
Posted, Friday, October 25, 2009 5:41 am
I have just read and enjoyed your article, ‘The Great Fed-Financed Dollar Decline and Stock Market Rally of 2009’ at www.globalresearch.ca. I look forward to reading your book ”The Code for Global Ethics”.
I have a question about the Jefferson quote you use:
‘If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.’
Do you have a citation for that quote, Professor? A friend suggested it comes from one of Jefferson’s letters to Albert Salatin but I can’t find it among the collected correspondence at the Library of Online Liberty. Any help much appreciated.
Nick.
Answer by R. T.:
I checked my bank of quotes and, indeed, here is what I found:
Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802).
New
Mother of all False Flags!
Posted, Wednesday, October 28, 2009 18:33 pm
Here is a summary of an article i wrote recently. It is of course a polemic with facts. Things are so hot that everything you write must be factual. Let me know what you think.
Mother of all False Flags
October 23, 2009
www.Newswithviews.com
...If most Americans were racists, Obama would not have been elected; and Federal and State governments would not be spending one dollar out of seven on means tested welfare for one third of the American population, most of whom reside in the inner cities. Means tested welfare spending is $28,000 per household of four, for a total of 714 Billion dollars, 5% of GDP, which means that two thirds of American households are paying $6,720 a year to support the less productive one third. Social Security, Medicare, Police, and Education are additional costs not included in the preceding. Facts from Robert Rector, Special report #67, The Heritage Foundation.
Brian Riedl of The Heritage Foundation just reported “that our Federal Government will spend $33,880 per household in 2009, the highest level in history adjusted for inflation which is $8,000 more per household than last year. $18,277 per household of the $33,880 will be in taxes and the remaining $15,630 will be debt”. This is impossible to sustain and will quickly result in recognized Bankruptcy and abject poverty for all Americans, except for the Traitors who did the looting. Worthless paper money will not pay for benefits.
...Your fascist government allowed corporations, with the eager support of unions, to employ low skilled foreign born workers for cheap wages to take our jobs. Taxpayers are forced to subsidize these exploited workers, most of whom are illegals, in the amount of about $900 for each American household, (based on Heritage Foundation figures) which are also included in the preceding Brian Riedl figures. Each illegal head of household costs American taxpayers about $25,000 a year after deducting any taxes paid.
...The greatest political awakening in our lifetime was the Massive Protest March by both White and Black Patriots to the nation’s capital on September 12, 2009 which demonstrated to Patriots and Fascists alike that rule by Unconstitutional Corruption and Treason was going to end.
...You don’t need to be an economist and attorney, to know that government printing of money and looting on such a large scale, while destroying the private capitalistic job creating economy is unconstitutional; resulting in abject poverty and Fascist slavery for all of us.
Most of our officials and judges at every level of government are corrupt. Obama refuses to meet the constitutional requirements to be president, and not one single official or judge, had the courage to enforce the constitution, but that will change. The Patriots in this country, both Black and White, will stop the Fascist Treason of our elected officials and take back our country by throwing them out of office. Arm yourself with the truth by verifying what I have written and join us in our fight for survival.
Andrew.
http://www.newswithviews.com/Wallace/andrew121.htm
New
What Change? Corporate Oligarchy and the Need for a Reform.
Posted, Friday, October 27, 2009 2:42 pm
Corporate oligarchs have increasingly gained power over government in the USA, so that no candidate for president can be nominated by either major political party who would not be a sock puppet on either the right or left hand of the same puppeteer.
E.g., Obama reappointed as Fed Chairman the same Ben Bernanke who had been appointed by Bush/43 -- what "change"?
Obama also appointed as Treasury Secretary the same Timothy Geithner who, as president of the New York Fed, had plotted the October 2008 Bush Treasury raids with past Secretary Hank 'Goldman' Paulson -- what change?
Looking further back, the Conservative Republican Reagan (under duress) appointed Alan Greenspan as Fed Chairman, who was re-appointed by the Establishment Republican Bush/41, then re-appointed by the Democrat Clinton, then re-appointed by the Neocon Republican Bush.
As sock puppets came and went, right or left handed, the corporate oligarchs who really run America kept their boy in place.
Thus Obama, as was Reagan, is limited in the amount of real change the oligarchy will tolerate. He's not the master, but a dog, straining on the leash to try to go where he wants to go, with only occasional success.
Having lived in the US, Canada, and other countries, the US is the least free place I've been in -- especially for the last five years.
Moderate 'blue dog' Democrats are now the swing vote in Congress, courted by both Obama loyalists and mainline GOPs.
There's little hope of anything beneficial coming from the Federal government, as it's run by Goldman-Sachs minions for the benefit of Wall Street. Banksters and shylocks are in ultimate control.
I never expect to see things 'get back to normal' in the USA, because the Bush maladministration had pursued manifold policies that served to dispossess Americans economically or disenfranchise them politically.
Thus, the malaise in which ordinary citizens now find themselves is not the result of incompetence or exogenous shocks, but the result of the successful implementation and execution of perverse fraticidal policies designed to subjugate America to its industrial barons and financial dukes -- the land of the free is now the home of the slaves.
John
Answer by R. T.:
It is a fact that modern politicians are often puppets of masters behind the curtains.
To get out of this political quagmire, proportional representation could be introduced, as in many European countries. This takes leadership and it is doubtful that the oligarchy, as you call it, would ever accept such a reform. Alternatively, a reform could be introduced that requires a systematic run-off between the two front-runners, when a winner receives less than fifty percent of the votes. This way, nobody could be elected with a majority of the people being against him or her.
A less drastic reform would be to introduce some element of public financing of political parties according to the votes they receive. There is such a system in Canada and this has helped a few minority parties to get exposure and traction.
Another reform, which is less costly and easier to implement, would be to reestablish the media Fairness Doctrine that Reagan abolished in 1987. TV and radio stations would have to provide minimum air time to all political parties free, as a compensation for using public airwaves and receiving public licenses.
After Reagan abolished the Fairness Doctrine in 1987, Congress attempted to revive the Doctrine legislatively that same year, only to have President Reagan veto the attempt. Congress made another effort in 1991. Maybe today, with a large democratic majority, these attempts should be reinstated. A public debate on this issue would seem to be required.
New
A New Political Party?
Posted, Tuesday, October 27, 2009 03:34 pm
This is an interesting article, and I would like to respond to some things you say: "In such an environment, it appears to many that voting has become a waste of time. Voter turnout in the U.S., already one of the lowest in the world, may take a turn for the worse if confidence is not restored soon. On that score, the 2010 turnout should be watched closely."
I believe everything you say is true - which brings us to the important question of "Whither American Democracy?" i.e. poetic for "Which Way will American Democracy go from here?" In my view, since there is really only one political party - the Ploutocratic Party, with 2 heads (Demo. and Repo.) - unless the American PEOPLE/DEMOS invent a new and truly independent party themselves, they will no choice but to "choose" not to vote for the Ploutocratic candidates in the next elections.
I hope that you will do what you can to promote the development of a truly independent new political party in America.
Ross Perot tried to start an Independent political party in 1992 and was credibly threatened with assassination, until he dropped out of the contest for a couple of months. And, Barack Obama has also been credibly threatened with assassination - and this has compelled him to "wimp out" and abandon all of his "Democratic" plans and "Vision," in order to become yet one more lackey for the Ploutocratic Party (which wears two masks). My own opinion is that there are only 2 ways out of this: (1) Armed, violent Revolution, or (2) having a leader who is "From God" and who therefore cannot be assassinated, but rather will be protected and guided to do "God's Perfect Work" on earth.
And, until (1) or (2) happen, THE PLOUTOCRATIC PARTY WILL CONTINUE TO ENRAGE THE AMERICAN PEOPLE AND THE HUMAN RACE AS A WHOLE, BY VIRTUE OF ITS ARROGANCE AND IGNORANCE - UNTIL THE ENTIRE THING COLLAPSES. Wait and see. I would like to see a "Peaceful Revolution" based on Dialogue and Democratic votes at the ballot box. But, if this is not allowed, then I predict Violent Revolution in the USA - and soon. Keep up the good work, sir!
Gary
____________
Answer by R. T.:
In a large country such as the United States, a new political party not only needs members. It needs media attention and/or tons of money to buy media time and space. This is a vicious cycle.
Article #1116
Friday, September 25, 2009
The Great Fed-Financed Dollar Decline and Stock Market Rally of 2009
by Rodrigue Tremblay
"The liberty of a democracy is not safe if the people tolerate the growth of private power to the point where it becomes stronger than the democratic state itself. That in its essence is fascism — ownership of government by an individual, by a group or any controlling private power."
Franklin D. Roosevelt (1882-1945), 32nd and longest-serving US president
“This great and powerful force—the accumulated wealth of the United States—has taken over all the functions of Government, Congress, the issue of money, and banking and the army and navy in order to have a band of mercenaries to do their bidding and protect their stolen property.”
Senator Richard Pettigrew, Triumphant Plutocracy, 1922
'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'
Thomas Jefferson, (1743-1826), 3rd US President, 1802
The U.S. national debt clock is clicking and it is fast approaching the $12 trillion mark, all the while the Fed (less a central bank than the banks' Bank) is printing new money like crazy and lending it to its client banks at close to zero interest rates (i.e. at negative interest rates). What is wrong with this picture? It simply means that most Americans are losing big at this game, but a handful of mega-banks and their affiliates are raking in tremendous amounts of money in easily made profits.
Indeed, the Federal Reserve’s balance sheet has more than doubled since August 2007, going from $870 billion to more than $2 trillion. It is expected to keep growing as banks avail themselves of the cheap funds the Fed made available to them. The Fed, indeed, has the unique ability to create new dollars (paper currency) for the accounts of assets (good or bad) that it buys from banks, the Treasury, or other entities. This increases the monetary base (the sum of currency plus total banking reserves), and banks through their lending can expand this money supply even further.
And the Fed has been extraordinarily generous to the banks, the largest of them are in fact owners of the twelve regional Fed banks. In fact, the Fed has broken practically every central banking rule in order to provide cheap funds to the banks. First, it has pushed the fed funds rate to close to zero so banks could have credit at close to zero cost to them. Second, it has expanded the range and quality of assets it stood ready to accept as collateral for its loans to the banks, so much so that it can be said that the U.S. Fed is presently creating new money backed by the shakiest of assets, some being called “toxic waste”. This is reminiscent of the eighteenth century (beginning in 1789) practice of the French revolutionary government of creating new money (the assignats) backed by the seized properties of the Catholic Church.
Let's summarize quickly the numerous ways the Fed (and to a certain extent, the U.S. Treasury) have found to channel cheap funds to the banks and to brokers. In September 2008, some investment banks, such as Goldman Sachs and J.P. Morgan, officially became commercial banks in order to profit from the Fed's new generosity.
• The Term Auction Facility (TAF);
• The Primary Dealer Credit Facility (PDCF);
• The Foreign Exchange Swap programs (the currency swap lines);
• The Commercial Paper Funding Facility (CPFF);
• The Term Asset-Backed Securities Loan Facility (TALF);
• The Agency debt, Agency mortgage-backed securities (MBS) and Treasury purchase programs;
• The Treasury's $700 billion Troubled Asset Relief Program (TARP);
• The payment of interest on the banks' excess reserves at the Fed.
The last disposition is worthy of attention. Because of the easy and cheap lending to the banks, the latter piled up tremendous amounts of excess reserves at the Fed, reaching more than $700 billion. Normally, banks would quickly lend these non-interest paying excess reserves to the economy. But, in October 2008, the Fed got imaginative and obtained the authority to pay interest on the banks' reserves, including excess reserves, at a risk-free rate (the IOER rate). Since then, the banks have been earning interest on their excess reserve holdings, and therefore had little inclination to lend those reserves out to creditworthy but nevertheless risky borrowers in the rest of the economy. With this practice, the circle has been closed, and the Fed was able to provide needed funds to the banks, at close to zero cost, and enable them to rid themselves of their bad investments, without risking creating inflation. That's quite a banking salvage operation that will be studied by economists in detail in the future.
Indeed, it was well understood after the onset of the financial crisis in August 2007, that public capital would be needed to refinance the American banking system. Private capital was too risk adverse to do that. What was less understood was the fact that the Bush administration, and now the Obama administration that continues this policy, intended to provide this capital at close to no cost to the banks and with very scant conditions.
But who really paid and has continued to pay for this imaginative recapitalization of American banks, and who profits the most?
First of all, of course, bank profits, especially those profits by big international banks, have exploded. Bank stocks have followed suit with tremendous gains. That's why I say the stock market rally since March 5 (2009) has been a liquidity-driven rally, engineered by the Fed.
And it is easy to see why banks raked in so much money: They have been borrowing funds at close to zero cost to themselves and either were paid by the Fed to leave these funds unused or they have used them, with leverage through their hedge fund like activities, to buy interest-paying assets in the U.S. or abroad. In essence, the large “too big to fail” have been allowed to make various trading bets with the cheap public capital provided by the Fed. They gorged themselves with near free public money and used it to enrich themselves, and very little to finance the real economy.
One profitable trade, among others, that large international banks and other operators are found to embrace is a form of arbitrage: They borrow and sell the currency of the country that has the lowest possible short-term funding costs and invest the proceeds in countries whose currency and asset markets yield the most. This has the consequence of depreciating further the currency with low interest rates and of appreciating the other currencies.
During the 1990s, the Japanese economy was in the doldrums. Its short-term interest rates, just as in the U.S. today, were close to zero. International banks and hedge funds would then borrow yens in Japan, sell them for dollars or euros and invest the proceeds in high-yielding financial assets in the U.S. or in Europe. Provided the interest rate environment does not change suddenly, this sort of “carry trade” is an easy way to make money. The result, however, is a more depressed currency than necessary for the low interest rate country and more imported inflation as the price of imported goods (oil, food, commodities...) increases.
The U.S. is presently in that predicament. The U.S. Fed and Treasury have abandoned the U.S. dollar and the large international banks have depressed it further at the same time they fill their coffers. That is why we can say that, besides the profitable carry currency trade that banks and other operators employ to dump the U.S. dollar on foreign exchange markets, this currency will remain under pressure for as long as the spread of short-term interest rates favors other currencies and as long as the spread of expected inflation rates and of expected economic growth remain stable. Paradoxically, longer-term interest rates have only increased marginally. This is because banks and other Fed borrowers, when they do not leave their low interest-paying excess reserves dormant at the Fed, can buy risk-free Treasury bonds. This has the consequence of depressing longer-term interest rates and of boosting stock market prices, even as inflation expectations are on the rise.
What is to be understood is that the weak dollar is the direct consequence of the Fed's extraordinary cheap money policy. To summarize, the average American household is being hit from all sides with this policy. First, if it is a net creditor (as most retirees are), its savings are earning paltry returns (most likely negative after inflation and taxes). Second, the U.S. dollar keeps falling in value, raising the cost of traveling abroad and of everything that is imported. Third, real incomes fall with rising prices as the purchasing power of stable or declining money incomes contracts. Fourth, the exploding public debt will translate sooner or later into higher taxes, thus reducing private disposable incomes. All in all, the standard of living of most people falls.
Don't get me wrong. I do not question the need to inject liquidity into the banking system after the onset of the financial crisis in August 2007. What I question is the way this was done and how the public interest was sacrificed in favor of narrow private interests. Indeed it was done in the worst possible social way, with private gains and social costs. They (the Bush and Obama administrations) recapitalized the banks to the benefit of a small class of bankers, while taxing the entire population in a multitude of ways to finance the public subsidy.
There were other ways to attain the same end without taxing the many for the benefit of a few. The U.S. Treasury and the U.S. Fed, both under the Bush administration and the Obama administration discarded these solutions. That's where the scandal lies. But since it is likely that only a handful of senators and congressmen understand what has happened, I would not be too confident in expecting that there would ever be a public investigation of the scandal, beginning with Congress auditing the Federal Reserve's subsidized banking loans to large banks and its lack of needed regulatory activities. Kudos, however, to the Manhattan Chief U.S. District Court Judge who has ordered the Fed to make public its lending records. Similarly, at least, some timid steps are being taken in the U.S. and in Europe to impose some limits or restrictions on the discretionary and exorbitant bankers' bonuses.
This comes a bit late, and we shall see if this is merely some political window-dressing to deflect criticism or if it is a structural step to curb oligopolistic and abusive banking practices.
_________________________________
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at
rodrigue.tremblay@ yahoo.com.
He is the author of the book 'The New American Empire'.
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COMMENTS
New
An Alternative to Capitalism?
Posted, Friday, September 25, 2009 10:54 pm
"Home of the Brave?"
... The following problems have become inherent in our economy. What does that mean? It means they will be around for a while:
Needless poverty, unemployment, inflation, the threat of depression, taxes, crimes related to profit (sale of illicit drugs, stolen IDs, muggings, bribery, con artists, etc.), conflict of interest, endless red tape, a staggering national debt plus a widening budget deficit, 48 out of 50 states in debt, cities in debt, counties in debt, skyrocketing personal debts, 50 percent of Americans unhappy at their work, saving for retirement and our children's education, health being a matter of wealth, competing in the "rat race", the need for insurance, being a nation of litigation, being subject to the tremors on Wall Street, fear of downsizing and automation, fear of more Enrons, outsourcing, bankruptcies, crippling strikes, materialism, corruption, welfare, social security, sacrificing quality and safety in our products for the sake of profit, the social problem of the "haves" vs. the "havenots" and the inevitable family quarrels over money. Have we become gluttons for punishment? My college professor once said, "You can get used to hanging if you live long enough!"
...Yes, there is something we can do. We can look into ourselves for an answer. We may find that we have the strength to carry out our internal economic affairs without the need to use money. Yes, we will still need to use money when dealing with other countries. There is no question that a way of life without money will alleviate if not completely eliminate all of the previously mentioned problems. Yet, we scoff at the idea. We are totally convinced that money is a necessity. We cannot imagine life without money. Perhaps the time has come to think otherwise. It is completely obvious our present economy no longer satisfies our present day needs.
...Cooperation will replace wasteful competition. We will all work together as a team. Work will become a way to help people, to meet people or to be part of something meaningful. It is a proven fact that people like to help one another. An esprit de corps will naturally build up and make work more enjoyable. Even the most menial task becomes easier when people work together. Yes, work will become more of a "togetherness" thing.
...Yes, we will still import and export goods with foreign countries as our needs dictate; but what money will be used in place of the almighty dollar? Would the dollar have any value if everything is free in the USA? Would that be a problem? We would, however, still be able to use the currency of the country we are doing business with. For example, if we export goods to Germany, we would accept marks or euros in payment. The euros would then be deposited in our national treasury for future use. The money could then be used to import goods or perhaps send Americans overseas on vacation.
Yes, a way of life without money could be compared to the kibbutz which now exist in Israel. Can you picture the USA as one big kibbutz? However, ownership of property will remain the same as it is today. Our government will remain the same. Our free enterprise system will remain in place as it is today. There will be no need for money or any substitute for money since everything will be free.
The advantages of a way of life without money stagger the imagination; but they are real and cannot be disputed. Perhaps it is time for us to grab the brass ring?
"The Human Race has improved everything except the Human Race.“
Adlai Stevenson
John
_____________
Answer by R. T.:
I admire your idealism and romantism.
May I remind you that the principle of “everything will be free according to need” was tried for three-quarters of a century in many countries, and it was called communism. It failed.
New
Money Creation without Inflation.
Posted, Thursday, September 24, 2009 9:56 am
When the FED took over troubled assets on its balance sheet, it produced central bank money on the right side, but this newly created money is subtotaly sequestered / pledged, thats probably the clue.
Now, that's the reason why the FED pays interests to the Banks as part of its Seignorage as long as it receives payments out of the toxic waste it holds on the left side.
So - what I guess nobody is understanding - the monetary base was expanding, but the banks can't use the fresh money fully for credit creation (even if they wanted to), the money is inert.
Stefan
Answer by R. T.:
Yes. The monetary base expanded but not the money supply, as long as the banks' deposits at the N.Y. Fed bank remain there. As to the money the Fed could make on the toxic assets it took as collateral, nobody will ever know because the Fed refuses to be audited.
New
Trouble Ahead?
Posted, Wednesday, September 23, 2009 9:00 pm
Your analysis is by far most accurate and complete on topics that relate to the current crisis.
By this time I have already read numerous articles on different websites with authors views ranging from traditional economics (who do not know what to expect in future other than general "inflation thing" ) to conspiracy theorists who hype about tens of trillions of dollars in debt (that will be simply impossible to repay), international Money and Banking conspiracy, and the coming collapse of the dollar.
Your view on that topic has actually stricken me, as being totally comprehensive in terms that you fully analyze actions, done by the Fed and the Treasury, what they meant to do and what they achieved by this, and somewhat prophetic (you predicted about B.Bernanke saying that "the recession is finally over" 3 months before that actually happened). Your analogies with the past is also a nice thing, Japanese recession and so on. For which we all must thank you.
And this brings two questions:
1) Do you believe that the current pattern of crisis will remind that of the Great Depression (with stock market rebounding quickly before testing new lows)?
2) What is the best hedge against coming hyperstagflation. Are silver and gold stocks good enough to protect against troubles lying ahead?
That information really would be very valuable to all of us who read your articles and appreciate them as much as I do. Once again, thank you very much!
Andrei
Answer by R. T.:
Reality is complex and difficult to anticipate in advance. So many things can happen and it's difficult to protect oneself against every unforeseen event. For example, if Israel (or the U.S.) were to attack Iran and if Iran were to close the Strait of Hormuz, the price of oil would quickly rise to $150 US a barrel and the current recession could be turned into a worldwide economic depression. Inflation and interest rates would rise and the stock market would plunge further down than most people expect.
For the time being, it's true that the Fed can generate sufficient liquidity to raise all boats... for a while. This does not guarantee that economic activity will necessary follow. From 1932 to 1937, the US stock market was rising at the same time as the real economy remained in depression. My feeling is that an important stock market correction is just around the corner.
During the coming stagflation, the challenge is to protect one's real income or purchasing power. Prices will keep increasing while money incomes will stagnate. Gold and silver are good stores of value but they do not generate income. The IMF has just announced that it will sell for $15 billion of gold. The central banks want to prevent the gold price from going too much above $1,000 an ounce. Unless China's central bank scoops up this extra gold on the market, gold prices could stabilize for a while, but the secular trend is up. Essentials, i.e. food, energy and pharmaceuticals, could be the best place to be invested for the retiring baby-boomers.
Nouveau
Nouvelles règles comptables.
Posté, mercredi, le 23 september, 2009 6:54 am
Vous dites:
“But who really paid and has continued to pay for this imaginative recapitalization of American banks, and who profits the most?
First of all, of course, bank profits, specially those profits by big international banks, have exploded. Bank stocks have followed suit with tremendous gains. That's why I say the stock market rally since March 5 (2009) has been a liquidity-driven rally, engineered by the Fed.''
Faut voir également ce que donnent les nouvelles pratiques comptables qui donnent l'opportunité de présenter des bilans avec la valeur des actifs, selon des valeurs hypothétiques; afin de savoir vraiment si les profits sont rééls ou fictifs. On pourrait être surpris....
Gilbert.
New
"Money" and "Currency".
Posted, Tuesday, September 22, 2009 8:46 pm
Just a brief suggestion: It might serve your purposes to resist using the terms "money" and "currency" as interchangeable, for money (gold) can be currency, but currency (paper certificates) cannot be money. Unless it is something of value, it cannot be money:
http://www.marketoracle.co.uk/Article7235.html
Edward
_________________________
Answer by R. T.:
Money, as a means of exchange, is anything that is generally accepted as payment for goods and services and repayment of debts. The US dollar is such a means of exchange. It is fiat money. In economics, the term currency can refer either to a particular currency, for example the US dollar or the euro, or to the coins and banknotes of a particular currency.
Historically, money in the form of currency, usually gold and/or silver, has been the norm. Nowadays, gold and silver are considered precious metals and a form of commodities. No fiat money, and that includes the Swiss franc, has a fixed value in precious metals. That does not mean that gold and/or silver are not stores of value and a protection against fiat money inflation. However, gold and silver are rarely used as means of exchange.
New
Basic Economics.
Posted, Tuesday, September 22, 2009 6:51 pm
There is something that defies my logic and understanding of basic economics. The Treasury supplies the special paper on which to print money to the Fed. The Fed then prints the money on this donated paper. The Treasury issues t-bills to the Fed and gets printed paper (money) in return. Gov't then funnels these freshly minted dollars back into the banking system, getting toxic debt (no value) in return. Now the government has piles of toxic debt and the money it has given back to the Fed and banking system for bad debt is disbursed in a manner that goes unreported. The government i.e. the public then, presumably, has to pay the interest on this money. I have heard of traditional socialism where the gov't takes from the haves to give to the have nots. This sounds like the reverse or corporate socialism. In the meantime the bankers receiving these bailouts get huge bonuses while the tax payer who pays the interest on the loans is just trying to hang onto his job.
But now the same taxpayer can go to the banks and borrow this free money from the banks and pay a higher interest for a second time. The bank is collecting twice from the same guy. In my mind this defies logic. What am I missing?
If I had to make an analogy it would be like me going to a Mercedes Dealer. I select the nicest car on the lot. The dealer, then, gives me the car for free, and agrees to pay me interest on the value of the car.
In your scenario the government is pumping enormous amounts of money into the banking system and they are not lending the money to the public, or corporations. To have a recovery someone has to be priming the pump ie stimulating the economy. The banks still seem to be in big trouble and won't lend, the government is not pushing money into the hands of the public and corporations to any degree, so who is left to stimulate the economy. Furthermore the gov't is proposing big new spending programs like socialized medicine and Cap and Trade that will burden the tax payer even more. Bernake then says the recession is over. Again, something does not compute. Seems like my understanding of economics is flawed.
Rick
_____________________
Answer by R. T.:
When it is said that the Fed prints money, this is a figure of style. The Fed does not physically “print” money. It creates money. The printing of dollar bills is the responsibility of the Bureau of Engraving and Printing. It produces about 16.65 million $1 bills per day; which means that the mean life of a $1 bill is about 21 months:
How does the Fed create money? When the Fed lends money to the banks or to brokers, it creates bank deposits in its books that represent new money. This is high-power money because the banks can lend their new cash to borrowers and this increases the money supply by a multiple. That's what can create inflation: too much money chasing too few goods.
That's the reason why the Fed has decided to pay interest on the banks' deposits in its books as of October 2008. The Fed does not want the banks to create inflation. It primarily wants to make the banks more liquid and better capitalized.
As to the Treasury, when it borrows, it issues bills or bonds with different maturities and paying a certain interest rate. Banks can buy these issues and profit from the spread they paid the Fed to borrow the funds (nearly nothing these days) and the interest paid by the Treasury. This is a risk-free operation by the banks that increases their profits (and bonuses).
Since the government spends the proceeds, this could create inflation down the road. In fact, the banks prefer to lend to the government rather than to busines or consumers, because this is risk-free. The Fed can also lend directly to the government by buying new Treasury issues. This is less costly to the government (and to curent and future taxpayers) because the Fed's net profits are returned to the government at the end of the year.
New
Canadians as “hewers of wood and drawers of water”.
Posted, Tuesday, September 22, 2009 6:19 pm
Dr. Tremblay's articles are being widely circulated and appreciated here on Vancouver Island, B. C. (Canada). They are probably circulated through out the province. Most of us have our own list serves.
What I would love to see is an analysis on the impact of this on Canadians as well as a critique of what actions the Canadian Government is taking to try and offset the damage cause by the Great Fed-Financed Dollar Decline. Perhaps they are not taking any action other than bailing out our own banks to the tune of $75 billion.
There is a great deal of criticism being cast by the Opposition Leaders regarding cut backs but no good analysis being given by any of these yahoos. They no doubt believe we will not understand or that we will and will become angry.
Here in B.C., another swindle called the HST is being imposed on the population. http://thetyee.ca/Opinion/2009/09/22/HSTMyths/
"As thousands protest, BC's government wildly spins its Harmonized Sales Tax". By Bill Tieleman, Today, TheTyee.ca
I am a retired senior living for the past few years on an extremely modest pension. Already I am having difficulty getting to the end of the month. The increases in the cost of food and energy are rarely discussed by our politicians. Of course they, themselves do not feel it like people similar to myself. There are many of us too. I feel that food has increased by at least 50% over the past three years. I suppose this is in part because of the decrease in the value of our dollar which has been going on for years now as well as increased transportation costs. A very sneaky way of stealing money from the population and lowering everyone's income. Perhaps I am wrong as I am not an economist. I just know that something is very very wrong for people like myself and even for many who are better off than I. I worked hard all of my life and paid my taxes. Now as a senior I am suffering. I am incredibly angry about this. It is a good thing I am old as otherwise I would be looking for a Che Guevara to take to the hills with.
Thanks for reading this. I don't really expect you to do the article I am requesting. I would just like you to.
Thank you for what you are doing. I appreciate it.
Stephanie,
_________________
Answer by R. T.:
The demise of the US dollar will sooner or later translate into higher oil and gold prices and other commodities. This in turn will push the Canadian dollar (and the Aussie and New Zealand dollars) higher.
The danger for Canada, if the government does not take countermeasures, is disindustrialization because of an over-valued Canadian dollar. This is called the “Dutch disease” that renders the industrial sector non-competitive. This has already begun in Canada, especially in Ontario, Quebec and British Columbia. If this were to last many years, Canadians would thus be pushed back to the status of “hewers of wood and drawers of water” for the Americans.
New
Long Overdue
Posted, Tuesday, September 22, 2009 6:10 pm
Simply one very pertinent article, long over due some might say.
Of course this email will be forwarded to very many people, like all get out.
As always, thanks for the heads up and do take care.
JZ
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