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Economics is defined
as:
The science of household affairs, or of domestic
management.
The social
science that deals with the
production, distribution and
consumption of
goods and
services as well as the
theory and management of
economic
systems.
It is the
duty of those who are in charge of the
organization of society to give every
individual the
opportunity of acquiring the
necessary talent or skill and the means of utilizing such a
talent so that that
individual may exercise their
inherent talent in the pursuit of a
livelihood.
"Wherever politics
intrudes upon economic
life, political
success is readily attained by saying what
people like to hear rather than what is demonstrably
true. Instead of safeguarding
truth and honesty, the
State then tends to become a major
source of insincerity and mendacity."
Hans F. Sennholz "The
Federal Reserve's
attempt at a quick fix for the economy through lowered
interest rates to
encourage personal borrowing will put pressure on a Treasury Department that
has to offer competitive worldwide
interest rates to
attract money used to finance the $9 trillion national
debt.
Karl Marx, whose
economic analyses
are strikingly prescient and relevant today, demonstrated how the credit
economy is one way that capitalism attempts to stretch out and soften the
boundary where the private accumulation of profit from production runs up
against the waning purchasing power of the
consuming public. This is exactly
what we see here on both a domestic and international scale, where - ironically
for a country that coerces all others
into free-market capitalism -
America is
effectively bankrupt.
In a
nation whose governing parties and
increasingly wealthy corporate elite
can't restrain themselves from devastating and costly
imperialist wars overseas while at
the same time impoverishing ever-growing numbers of the struggling and poor at
home, there isn't going to be any good
economic
news for most people." - Eric Brill
01/08
"Asset-price inflation fueled by the
Federal Reserve
is giving way to debt deflation. The
United States and other countries have reached a limit in which scheduled
interest and
amortization absorb the entire
economic surplus of
so many individuals, companies and government bodies that new construction,
investment and employment are grinding to a halt. Families, real estate investors and companies are
obliged to use their entire disposable income to pay their creditors or face
bankruptcy." - Michael Hudson 06/08
"Why is it that promising help to ordinary people
is pandering but giving aid to corporations is serious
economic
policy?" - Jean Lecuyer Over the
last 25 years America has regressed into a
"plutonomy" - a society in which the largest
economic gains flow
to an ever smaller portion of the population creating a decadent social order that poorly rewards human labor. (Could this be an explanation
for why Americans will not work -
meager wages?)
According to recent
economic statistics,
from 1999 to 2004, the inflation adjusted income of the bottom 90% of all
American households grew by 2%, compared with
a 57% jump for the richest 10%.
"We must abandon the weird notion that
the wealthy can only be motivated by
huge sums of money but workers' behavior
will not change if they are paid less than it costs to live." - Robert Lee
Hotchkiss
"In times past, bankruptcy would have wiped out the bad
debts. The problem
with debt write-offs
is that bad savings go by the boards too. But today, the very wealthy hold most
of the savings, so the government doesnt want to have them take a
loss. It would rather wipe out pensioners,
consumers, workers, industrial companies and foreign investors. So
debts will be kept on
the books and the economy will slowly be strangled by
debt deflation." -
Michael Hudson 06/08
American
workers losing the most
economic ground are
not the uneducated and unskilled but those with high
school, community college and four-year
degrees.
Globalization, automation and
illegal immigration have not only hurt
manufacturing workers but also mid-level
managers, engineers and software programmers.
Despite enormous
media hype America
lost more than 700,000 middle
class information industry jobs between 2001 and 2004.
During the
1930s American government sought to increase
economic strength by
putting people to work on an unprecedented number
of infrastructure improvements. About 3 million
workers were employed to build roads,
bridges and dams. American
citizen
workers planted millions of
trees in middle America to prevent soil erosion.
American
citizen
workers built transportation networks that
helped cities increase their industrial productivity. Rural electrification
programs lifted sections of the Midwest and South out of
darkness.
In the 1950s, under the
Dwight Eisenhower administration,
construction began on an interstate highway system that reduced travel times
which in turn helped the economy to operate more efficiently. By promoting
suburban development, the new roads also sparked an unprecedented growth in
home ownership for working and
middle class
families.
The capital investment in
infrastructure created one of the most prosperous periods in
American history.
"The government needs to
invest in America. To receive government
funding, cities should be required to use local contractors and workers.
Corporations that
outsource should be taxed at much
higher rates than those that contribute directly to the
American economy by maintaining their
operations within America." - Elizabeth
Eyerman
A comprehensive program to rebuild the nation's highways and
bridges, upgrade its ports, construct and expand energy lifelines and enlarge
public transportation systems could generate hundreds of thousands of
good-paying jobs, but instead the rulers of America, American
aristocracy have sunk all the money into
hedge funds in the hopes of ever
increasing their share of the American pie.
(Used to be natural wholesome apple pie now
it is whipped soy-product sweetened with
high fructose corn syrup and flavored with yummy chemical flavorings!)
American
leadership has largely abandoned
policies that led to balanced prosperous
economic expansion
beneficial to the average working
American
citizen in
favor of short sighted
manipulation of resources gains.
Earth's population overall is exploding,
and the best idea American aristocracy can come up with to
solve the
economic
problem of an aging
populace is to increase the
population through
illegal immigration?
"As the
middle class continues to flee the
increasingly expensive Southland, and the rich
wall themselves up on hills and in towers, the city of Los Angeles grows each
year more congested, degraded and balkanized. How will millions more people,
most of whom are poor and undereducated, halt this decline?" - John L.
Murphy
"Unchecked population growth from our nation's unofficial
open-borders policy is contributing not, only to gridlock but is stressing our
schools, emergency rooms, the environment and our overall quality of life. It's
completely unsustainable." - Maria Fotopoulos
"Elites are less
likely to be inconvenienced by illegal
immigration. They are hiring illegals, not competing against them for
work." - Wayne Cornelius, director of the
Center for Comparative Immigration Studies, UC San Diego
"George W. Bush has said that these
illegal immigration will "do the jobs
that Americans won't do." I have a question.
Who did these jobs before 12 million people sneaked into the country? Crops got
picked, lawns got mowed, construction was done, hotels had housekeeping
services, trash was hauled away,
your house got cleaned. Those things all got done by somebody. This is about
low wages, not "jobs Americans won't do."
Please come up with a better excuse to justify these people who broke the
law staying in the country." - Pat
Parrish
"We are often told that Americans won't do that job,' but never does a
businessman or politician add the
other half of that argument, namely,
at the meager wage that I am willing to pay.'" - Gary Peters
"The
blame for our illegal immigration mess
belongs squarely in the laps of power hungry
politicians and
greedy corporate fat cats. If it weren't
for those who supposedly represent all Americans kowtowing to
big business interests that, over the years,
have threatened to withhold all important dollars from the
politicos' campaign war
chests unless they were guaranteed an endless supply of cheap labor from south
of the border, we wouldn't have the catastrophic immigration situation that we
have today." - Blake Kleckner
"Victor Hugo correctly
stated, "There is one thing stronger than all the kings and queens, and all the
armies of the Earth combined, and that is the
power of an idea
whose time has come."
And that
idea is that no democratic society can
indefinitely allow a relentless flood of
illegal immigrants to contravene its
laws, violate its borders,
overwhelm its infrastructure and
social systems, diminish job possibilities for its
indigenous uneducated and poor and degrade
its way of life as is happening throughout
America.
Whenever we
hear smaltzy blather about 'the jobs that
nobody wants' what is really at stake are 'jobs that pay less than most
Americans need to support their
families'." - Michael Scott
Why don't we try to fix
our economic
systems in question rather than simply procreate until
the Earth's resources are reduced to the point at
which they can no longer support human
life?
The Earth would be better able to sustain a population of about 4 billion
people, not the current 6 billion, and
certainly not the soon-to-be12 billion. The countries of Europe with declining
birthrates should be lauded for thinking ahead
and for their concern for their children
and their children's children. Clearly,
what is needed is a better manner in which to deal with longer
life spans and the attendant
social
economic
problems rather than a
policy of limitless
population growth on a finite
sized Earth.
Rampant
materialistic consumerism must give
way to a more
balance view of the
Earth, in which everyone has the
right to a
reasonable standard of
living and in which
resources are
conserved as opposed to the
corporate-industrial global economy that employees
the techniques of the sweatshop while
acting environmentally and
socially
irresponsible.
"The Senate has again (June 22, 2006)
voted against raising the minimum wage, which has been stuck at $5.15 an hour
since 1997. This would provide a full-time employee with an annual salary of
$10,712. On the other hand,
congressional salaries have gone from $133,600 in 1997 to $165,200 now, an
annual average raise of about $3,500. Isn't there something wrong with this
picture?" - Donna Le Blanc
The Center for Housing Policy study found
that from 1996 to 2006 all major types of homeowner-related expenses rose
faster than incomes. The National Housing Conference, a research affiliate,
reported mortgage payments rose 46%, utilities 43%, property taxes 66% and
homeowner insurance 83%, while homeowner incomes increased only 36.3%. During
the same period rents rose 51% while renters' incomes rose only 31.4%.
When the need for justice and social
equality is universally recognized
then the reality that "all must prosper for one to prosper" will have been recognized.
Civilization
is created by a implied
social contract between the participants that
requires all participants to be treated fairly and receive sustenance. The
withholding of sustenance from those on the bottom tier of the
social pyramid breaches the
social contract. When the
social contract of
civilization is abnegated by those in the
upper echelon of the pyramid the
collapse of the
civilization bound by the
social contract inevitably occurs as those on
the bottom tier find the social contract to be
null and void.
"Poverty is the root of all
evil." - Diane Dixon, chairwoman of United Way's
Women Leaders bridging the Gap.
"While my experience as Assistant Secretary cleaning up
significant mortgage fraud that lost the government billions during the 1980s
confirmed that HUDs financial reputation was deserved, leading the FHA
provided invaluable insight into how government management of the economy one
neighborhood at a time really harms communities." -
Catherine Austin Fitts
By the late 1970's, with
interest rates raised
to stratospheric heights by Paul Volker in an attempt to reign in inflation,
most savings and loans fixed rate
assets rate of return were considerably below the prevailing rate of
Federal Reserve
funds. In
other words the loans were upside down. The
savings and loans were paying,
let's say 12 percent, for loan
capital but their return on previous released capital was only 6 percent.
In 1980 deregulation legislation to address the
problem created by a portfolio full of
long-term, low fixed-rate assets, so the federal government sought to offer
savings and loans additional
investment opportunities and
adjustable rate mortgages were allowed.
The
deregulation legislation
known as the Gain-St Germain Depository
Institutions Act of 1982 expanded acceptable
savings and loans
investments by permitting
savings and loans to make
short-term consumer
loans, issue credit cards, and make
commercial
real estate
loans, among
other things.
Regulators
hoped that broader investment
opportunities would allow savings and
loans to better diversify their portfolios enabling them to increase their
short-term earnings and financial stabilty.
Most
savings and loans
executives set out with the intention of
restoring their
institutions to financial health.
Unfortunately a fundamental
reality faced the management of insolvent
financial institutions.
Beginning from a situation where liabilities
exceed assets, managers cannot overcome financial problems by pursuing a
conservative investment course. In
the absence of a capital infusion to boost assets past liabilities (and return
the institution to solvency), managers
must substantially increase portfolio risk if they are serious about regaining
financial health.
In the 1980 and 1982
deregulation legislation, the federal
government provided the means for increased
risk taking while ignoring the need for capital
investments. The legislation lowered
capital requirements and revised the accounting rules so that the
savings and loans reported equity
was artificially boosted.
Many savings and loans
executives began to look for new lending
and investment opportunities that
promised high rates of returns. If all went well, the
institution would regain its financial
health, and savings and loans
owners had nothing left to lose if the new
investments soured.
When
investments soured,
savings and loans
executives responded by raising rates on
certificates of disposits - CDs - to garner more deposits and to make new
investments which promised still
higher returns. The industry's
interest rate problem,
stemming for Paul A. Volker's attempt to reign in inflation, thus became a
credit quality problem.
The rapid expansion
experienced by
savings and loans bent on
outgrowing their problems would not have been possible when computer
technology was limited, deposit
interest rates were
strictly controlled and deposit
markets were local
markets.
In the past depositors had
no reason to send funds to
savings and loans halfway across
America. Deregulation of deposit
interest rates coupled
with rapidly advancing computer technology changed that by making
possible a nationwide market in deposits -
the overnight transfer. Expansive federal deposit
insurance put insolvent
savings and loans in a position to
abuse the new market.
Weak
institutions needed continued infusions
of funds to pay operating expenses and to
support increased investments.
Federally insured
depositors were largely unconcerned about the health of the
institutions in which they placed their
money - federally insured deposit, no
worrys.
Undercapitalized savings and loans assured themselves a
continuous inflow of funds by simply
offering to pay slightly higher
interest rates than
their competitors.
During the 1980s funds
flowed from stronger banks and
savings and loans to the weakest
depositories.
Federal deposit insurance short-circuited the
market's natural risk-braking mechanisms and for many
savings and loans during the 1980s,
the absence of regulatory supervision was particularly acute.
Healthy
savings and loans were asked to pay
increasing deposit insurance
premiums to protect depositors in failed institutions.
For depositors
placing $100,000 or less in any single institution, all federally insured
banks and
savings and loans represent the
same risk, and rational investors seek to maximize their returns.
Healthy banks and
savings and loans consequently
gained little or no cost advantage from the fact that they were well
capitalized.
To retain their customers, more conservative
savings and loans
executives often had to match the
interest rates set by
weak institutions.
When federal regulators did get around to dealing with
insolvent institutions they would
remove bad assets and inject capital before selling the
savings and loans to
new investors.
Savings and loans
executives who had maneuvered through the
worst pitfalls of the period then found themselves competing against
counterparts revitalized by government
funds.
In the late 1970s and early
1980s congressmen's long-time friends and acquaintances - acknowledged pillars
of the community - approached them to seek relief for the
industry.
The widespread tendency
of political decision makers to focus on the
short term contributed to their willingness to ignore the growing crisis.
It is ironic that
Ronald Reagan's administration,
rhetorically dedicated to
free markets, could have condoned the
policies that short-circuited
market
discipline where
savings and loans were
concerned.
"Imagine learning to play basketball, except in
consecutive decades they changed the surface from hardwood to AstroTurf,
replaced the basket with a painted target and then had dedicated five-man
defensive and offensive specialist squads.
Why
learn skills when the
rules keep changing?
Yes, there are
basics, but financial literacy doesn't make sense when you have no sense of
control over the future of your finances.
I think the wrong people are being
blamed for the problem.
After two horrific housing debacles (in the
'80s and today), it's time the brilliant financial minds
admitted that deregulating the savings and loan industry was a mistake.
Deregulation destroyed a haven for
middle class assets, in which we
essentially funded our
futures with our mortgages and taxes. It
created predictability for us.
Interest rate
differentials were minimized in that controlled
market, and loan decisions were made on the
basis of well-established track records." - Brian Balek
01/08
When the cheap money of the post 9-11
economy dried up a significant percentage of sub-prime mortgages went into
default. As interest
rates rose those who had purchased at the peak in the run up of housing
prices or those who had overextended themselves hoping for a continuing run up
in the price of housing found they could not refinance as there homes had less
value at higher interest
rates.
Mortgages with lower
interest rates have
lower payments. When interest rates go up
mortgage payments increase proportionally. If the increase in income had kept
pace with the increase in mortgage costs then there would not be a problem.
Unfortunately that has not been the case.
"A few years ago, I
discovered that my domicile was more than a household - it was, and still is, a
piggy bank in disguise. This happened when the mortgage
industry began bombarding me with pitches
encouraging me to crack open the bank. I'll admit I was naive enough to be
taken in by this new financial scheme and used the ready cash to improve the
property. Once hooked, I decided to purchase a better car and
create an investment account. Next, I tapped
into it to bail out a struggling offspring and shore up a retirement portfolio.
All this said, I now have a humongous mortgage and barely enough income to make
the nut on a monthly basis.
A house is really a domicile; a place to
relax and embrace the family in a sheltered environment.
It ought not
be a ready source of cash, and it never ought to be a speculative tool subject
to high-risk ploys. The time has come to cover the bets; it's really tragic to
see so many of us unable to do so." - Earl H. Hygh 01/08
"Predatory
lenders deserve a lot of blame for foreclosures and bankruptcies. If real wages
kept up with rising productivity and inflation over the years, more working
Americans could meet their mortgage payments.
If tax policy
not helped shift wealth distribution to the
richest, more would be ensconced in their own
living rooms. If labor laws kept pace with the
flourishing corporate world, maybe a bigger share of
those skyrocketing profits would keep the sheriff from the door. The fact that
the American dream of homeownership is now
being exported abroad or into the pockets of CEOs is
not simply the result of naive purchasers and their
unscrupulous lenders. It's also
the result of the way the economy has been working or, more accurately, not
been working. How odd to think that the hopes
of everyone owning a piece of property is now as
utopian as the collectivist
dreams of communism." - Doug Doepke
"Americans aren't
financially illiterate. We are willing to work, budget, scrimp and save to
achieve the American dream. The trouble is that this
dream eludes most but the
upper class. Three decades ago, a single income
could purchase a house and pay taxes, utilities, gas, insurance, etc. That was
a time when you could buy a new home for about $20,000. Today, no single-income
earner can afford to buy a house even at the "bargain" price of $400,000. How
does someone purchase a house or even keep up with rent and modern living
expenses earning $30,000 a year? Today,
debt - not hard work
and saving - makes the American dream possible.
Instead of creating an Office of Financial
Education or an Advisory Council on Financial Literacy(sounds Orwellian), our
government should instead investigate why
home prices,
gas prices,
food prices,
insurance prices and healthcare
prices have skyrocketed over the years while salaries have remained relatively
stagnant." - Regina Powers 01/08
"Why anyone would be surprised by the growing
number of foreclosures is beyond me. Years of unchecked, artificial inflation
of housing prices made homes unaffordable to average Californians or drove them
to suspect financing options. This is less a reflection of a changing
economic climate and
more an end result of a period of unbridled greed
that showed no concern over whether home buyers could really carry the
debt incurred." -
David D. Manos II
"Economic
history is a long record of government
policies that failed because they were designed with a bold disregard for the
laws of economics."
Ludwig von Mises"The advantages of a college degree are
being erased," said Marcus Courtenay, president of a branch of the Communications
Workers of America that represents technology employees in the Seattle
area. "The same thing that happened to
non college educated employees during the
last recession is now happening to college educated employees."
After the stock market
crash of 1929, Congress passed a series of laws
designed to restrict the ability of Wall Street to
manipulate markets through the
banking
industry. The Glass-Steagall Act of 1933
separated commercial
banks, which accepted deposits and
issued loans, from investment
banks, which underwrote stocks and
bonds.
This was the governing
principle for more than half a century.
Then along came Alan
Greenspan*.
The most widely known
role of the Federal Reserve
Board is to set monetary policy.
A
less publicized part of the job is to regulate America's banks.
"Mr. Chairman, we have in this country one of the most
corrupt institutions the
world has ever known. I refer to the
Federal Reserve Board
and the Federal
Reserve banks. The Federal Reserve Board, a
"Government Board", has cheated the Government of the United States and the
people of the United States out of enough money to pay the national
debt.
The
depredations and the iniquities of the
Federal Reserve Board
and the Federal
Reserve banks acting together have cost this country enough
money to pay the national
debt several times
over.
This evil
institution has impoverished and ruined
the people of the United States; has bankrupted itself, and has practically
bankrupted our Government. It has done this
through the maladministration of that law by which
the Federal Reserve
Board, and through the corrupt practices of
the moneyed vultures who control it.
Some people think the
Federal Reserve
central banks are United States Government institutions. They are not government
institutions. They are
private credit
monopolies, if not - will the controllers
please step forward which prey upon the people of the United States for the
benefit of themselves and their foreign customers; foreign and domestic
speculators and swindlers; and rich
and predatory money lenders.
In that
dark crew of financial pirates
there are those who would cut a man's throat to get a dollar out of his pocket;
there are those who send money into States to buy votes to control our
legislation; and there are those who maintain an international
propaganda for the purpose of
deceiving us and of wheedling us into the
granting of new concessions which will permit them to cover up their past
misdeeds and set again in motion their
gigantic train of crime.
Those 12
private credit
monopolies were deceitfully and disloyally foisted upon this country
by bankers who came here from
Europe and who repaid us for our hospitality by undermining our
American institutions." -
Louis T. McFadden
chairman of the House Banking Committee Congressional Record, House pages 1295
and 1296, June 10, 1932.
Congress passed the Glass-Steagall Act/Banking
Act and Franklin Delano Roosevelt
signed it into law in 1933.
The movement to use the
Federal Reserve Board
to kill Glass-Steagall began in 1986 when the
Federal Reserve Board
reinterpreted the
existing law to
allow commercial
banks to derive a minuscule 5% of
their revenues from investment
banking activities.
In 1989,
Alan Greenspan* bumped it up to 10%.
In 1996,
Alan Greenspan* basically obliterated Glass-Steagall
when he upped the limit to 25%.
When Citicorp and Travelers Group
merged in 1998, forming the behemoth Citigroup.
In
essence Glass-Steagall was dead.
"What we are seeing is the creation of a highly concentrated
financial oligarchy precisely the power that the Glass-Steagall Act was
designed to prevent. A combination of deregulation and moral hazard
bailouts for the top of the
economic pyramid,
not the bottom will polarize the economy all the more." - Michael
Hudson
Before Citicorp and Travelers announced their deal,
Sanford Weill spoke to
Alan Greenspan* as the deal was illegal under the
existing law.
Alan Greenspan* assured
Sanford Weill the merger had the blessing
of the Federal Reserve Board
chairman.
[Travelers, at the time of merger, was
a diverse group of financial concerns that had been brought together under CEO
Sanford Weill. Its roots came from
Commercial Credit, a subsidiary of Control Data Systems that
Sanford Weill took private in November.
Two years later, Sanford Weill mastered
the buyout of Primerica - a conglomerate that had already bought life insurer A
L Williams as well as stock broker Smith Barney. Travelers then acquired
Shearson Lehman - which was headed by Sanford
Weill until 1985 and merged it with Smith Barney. In November 1997,
Travelers purchased Salomon Brothers in a $9 billion deal.
Sanford Weill, owned almost 17 million
Citigroup shares as of April
2006.
In the 4th quarter of 2007 Citigroup posted a $10 billion
loss. In 2007 21,200
Citigroup employees were laid off.
Citigroup's single largest
shareholder became Abu Dhabi Investment Authority, the investment arm of Abu
Dhabi government, with a $7.5 billion injection of capital in late 2007 in
exchange for a 4.9 percent stake which pays a $1.7 billion a year dividend.
This capital injection helped cover the $10 billion lose in the subprime
mortgage market. The second largest Citigroup shareholder, with a 3.6
percent stake, is now Kingdom Holding Company owned by Prince Al-Waleed bin
Talal of Saudi Arabia. $6.88 billion of prefered stock was sold to an
investment fund controlled by the government of Singapore.(In 2005 16 US
Senators and 30 US Represenatives owned stock in
Citigroup]
In 1999, the Gramm-Leach-Bliley Act, officially repealing
the Glass-Steagall Act of 1933, was signed into law by Bill Clinton. The merger
of commercial and
investment
banking once again allowed the
bankers to use FDIC insured personal deposits to purchase "financial
instruments" from hedge funds.
During the first phase of
deregulation the financial
industry had a near-meltdown in 1998
triggered by the collapse of the hedge
fund Long-Term Capital
Management. The loss of $4 billion in
five weeks were followed by a precipitous drop in stock
value across the board. Sometimes touted as the
'tech bubble' this wiped out much of the paper wealth of lower echelon
corporate management, members of
the middle class, in the form of
under water' stock options. (This is stock options that were granted at a
price higher than the price the grantee can now sell the stock for on the open
market.)
"The SEC's best estimate is
that there are now approximately 8,800 hedge funds, with approximately $1.2
trillion of assets. If this estimate is accurate, it implies a remarkable
growth in hedge fund assets of
almost 3,000% in the last 16 years. We are also seeing
hedge funds becoming more active in
such varied activities as the market for
corporate
control,
private lending, and the
trading of crude petroleum. Hedge
fund account for about 30% of all U.S. equity trading volume.
Investment strategies or operations
of hedge fund include their use of
derivatives trading, leverage, and short selling. The number of enforcement
cases against hedge fund
advisers has grown from just four in
2001 to more than 90 since then. These cases involve
hedge fund
managers who have misappropriated
funds assets; engaged in insider trading;
misrepresented portfolio performance; falsified their
experience and credentials; and lied about
past returns. " - Securities and Exchange Commission Chairman Christopher Cox,
July 25, 2006
"I continue to be concerned about the
influence of pooled vehicles (leveraged buyouts,
hedge funds) in the
marketplace. I see it as a ticking time
bomb that is going to blow at some point." - former Securities and Exchange
Commission Chairman William H. Donaldson, May 24, 2007
A hedge fund
is a private
investment fund.
Hedge funds are not currently
subject to any direct regulation by
the SEC, the NASD, or other federal regulating commissions.
Hedge funds may hold long or short
assets, may enter into futures, swaps, short selling schemes, security
investment vehicles or other derivative contracts. Some
hedge funds focus on other financial
instruments including commodity futures, options, and emerging market
debt.
Hedge funds focus on and may place
funds in anything that is touted as a "security." (Note: A security may be
simply an electronic entry in a software system that is fungible, ie. you can
trade it for an electronic entry in a different software system.) As
hedge funds typically use
leverage/gearing or debt to invest, the
positions they can take in the financial markets are larger than their assets
under management. At the end of 2006 it was estimated that
hedge funds had $1.9 trillion of
assets.
Hedge fund managers are the best paid
individuals on
Earth .
Edward Lampert "earned" managing
hedge funds $1.02 billion in 2004
and $1.3 billion in 2006.
James
Harris Simons "earned" managing hedge funds $1.6 billion in 2005 and
$1.7 billion in 2006.
T. Boone
Pickens "earned" managing hedge
funds $1.5 billion in 2005.
Ken
Griffin "earned" managing hedge
funds $1.5 billion in 2005.
George
Soros "earned" managing hedge
funds $1 billion in 2007.
Managing
hedge funds in 2007 -
Stephen Cohen "earned" $900 million,
Bruce Kovner "earned" $715 million,
Paul Tudor Jones "earned" $690 million,
Tim Barakett "earned" $675 million, David
Tepper "earned" $670 million, Carl
Icahn "earned" $600 million.
"Congratulations on pointing out
the outrage of tax-breaks for hedge fund managers." - Robert Siebert
"Truth is, when those who have benefitted the most
don't pay their fair share of taxes, the tax burden gets shifted to workaday
people and the shrinking middle
class, where it has a far bigger effect on the overall standard of living.
Perhaps the real question is, are we going to have a tax structure based on
fairness or continue to support
economic
policies that amount to
socialism for the rich?" -
Shawn Casey O'Brien 3/25/08
"The banks are trying to win back their
losses by arbitrage operations, borrowing
from the Federal
Reserve at a low interest rate and lending
at a higher one, and gambling on options. But
options and derivatives are a zero-sum game: one partys gain is
anothers loss. So the banks
collectively are simply painting themselves into a deeper corner. They hope
they can tell the Federal
Reserve and Treasury to keep bailing them out or else theyll fail and
cost the FDIC even more money to make good on insuring the bad
savings that have been steered into these bad
debts and bad
gambles. The
Federal Reserve and
Treasury certainly seem more willing to bail out the big financial institutions
than to bail out savers, pensioners, social Security recipients and other small
fry. They thus follow the traditional Big fish eat little fish
principle of favoring the vested interests." - Michael Hudson
06/08
"What we have found over the years in the marketplace is that
derivatives have been an extraordinarily useful vehicle to transfer risk from
those who shouldn't be taking it to those who are willing to and are capable of
doing so." - Alan
Greenspan 2003
Clearly, derivatives are a centerpiece of the
crisis, and Alan
Greenspan was the leading proponent of the deregulation of
derivatives. - Frank Partnoy 10/08/08
"The derivatives market is
$531 trillion, up from $106 trillion in 2002 and a relative pittance just two
decades ago. Alan
Greenspan banked on the good will of Wall Street to self-regulate." - Peter
S. Goodman
In a market system based on
trust, reputation has a significant economic value. -
Alan
Greenspan
The sudden failure or abrupt withdrawal from
trading of any of these large U.S. dealers could cause liquidity problems in
the markets and could also pose risks to
others, including federally insured banks and the financial system as a whole.
In some cases intervention has and could result in a financial bailout paid for
or guaranteed by taxpayers.- Charles A. Bowsher, Comptroller General,
Government Accountability Office 1994
In 1997, the Commodity Futures
Trading Commission chairwoman Brooksley E. Born, concerned that unfettered,
opaque trading could "threaten our regulated markets or, indeed, our economy
without any federal agency knowing about it," called for greater disclosure of
trades and reserves to cushion against losses. Brooksley E. Born's views incited fierce
opposition from Alan
Greenspan and Robert E. Rubin who claimed traders would take their business
overseas.
In November 1999, senior regulators including
Alan Greenspan and
Robert E. Rubin recommended that Congress permanently strip the
Commodity Futures Trading Commission of regulatory authority over
derivatives.
You will go down as the greatest chairman in the
history of the Federal Reserve Bank. - Senator Phil Gramm to
Alan Greenspan at a
Senate Banking Committee hearing in February 1999
Simply churning financial instruments does not
wealth create!!!
"Let's hope we are all
wealthy and retired by the time this house of
cards falls." - Standard & Poor analyst texing about collateralized debt
obligations Submitted to congressional oversite committee
questioning the need for a 700 billion dollar bailout!
"In the last quarter of a
century the whole American
economic system has
lived off the speculations generated by the financial sector - sometimes given
the acronym FIRE (for finance, insurance and real estate). It has grown
exponentially while, in the country's industrial heartland in particular, much
of the rest of the economy has withered away. FIRE carries enormous weight and
the capacity to do great harm. Its growth, moreover, has fed a proliferation of
financial activities and assets so complex and arcane that even
their designers don't fully understand how they operate.
Today's Wall Street fabricators of avant-garde
financial instruments are actually called "financial
engineers." They got their training in
"labs" much like Dr.
Frankenstein's, located places like Wharton, Princeton, Harvard and
Berkeley which is based upon the laissez-faire
economic
ideology of
Milton Friedman and the
Chicago School of
Economics. Each time one of their concoctions goes south, like the
bewildering "security investment vehicles" that
helped precipitate the mortgage industry collapse, they scratch their heads in
bewilderment - always making sure, of course, that they have financial life
rafts handy, while investors, employees, suppliers and whole communities go
down with the ship.
It is vital to recall that this tsunami of bad
business is about to wash over an already very-sick economy. While the old
regime, the Reagan-Bush counterrevolution, has lived off the heady vapors of
the FIRE sector, it has left in its wake a deindustrialized nation, full of
super-exploited immigrants and millions
of families whose earnings have suffered steady erosion. Two wage-earners,
working longer hours, are now needed to (barely) sustain a standard of living
once earned by one. And that doesn't count the melting away of
health insurance, pensions and
other forms of protection against the vicissitudes of the
free market or natural calamities." - Steve
Fraser - just before the unprecidented three quarter percent rate cut to 3.5
percent on Tuesday January 22, 2008.
Some hail the remarkably low rates of inflation and
unemployment during Alan
Greenspan's* term as his
greatest achievement.
In 1987
Alan Greenspan* inherited an economy primed for
expansion. Seven years earlier
Federal Reserve Board chairman
Paul A. Volcker* was given the credit for checking an
inflationary spiral by increasing the prime loan rate to 21.5% on December 12,
1980.
Alan
Greenspan's* greatest
accomplishment was using oblique statements to create an aura of
mysticism around monetary
policy that never actually
existed.
When Eric J. Weiner
interviewed Harvard economist
John Kenneth Galbraith for his
book, "What Goes Up: The Uncensored
History of Modern Wall street", John Kenneth
Galbraith described Alan
Greenspan's* management of the
publicity surrounding the movement of
interest rates as "one
of the brilliant theatrical exercises of all time."
"Former
Federal Reserve Board chairman
Alan Greenspan* defined his role rather narrowly.
Rather than being the custodian for the American economy, he encouraged - or at the very
least did not discourage boom-and-bust cycles, enriching a few people at the
expense of everyone else. Perhaps he couldn't have done more, but to gush over
his legacy when our economy is facing a bursting housing bubble, ever
increasing budget and trade deficits and the impending retirement of the baby
boomers is simply premature." - Sridhar Subramanian
"The idea that
were even in a business cycle is whistling in the dark. If
were in a cycle, then that implies theres an automatic recovery in
store. This happy free-market idea was developed at the National Bureau of
Economic Research by opponents of government regulatory policy. But the
economy doesnt move by a sine curve. There is a slow buildup, and a
sudden plunge, so the shape is ratchet-shaped. This is why 19th-century writers
didnt speak of economic cycles, but
rather of periodic financial crises." - Michael Hudson
"The Federal Reserve Board allowed the growth of an $8 trillion
housing bubble ($110,000 of housing bubble wealth for every homeowner) in the
years from 1996 to 2006. While this bubble was easily recognizable to competent
economists, the entire political and financial establishments managed to ignore
the housing bubble until it began to burst last year." - Dean Baker, March 24,
2008
Major banks and other financial
institutions around the world reported losses
of approximately $435 billion as of July 17, 2008. The ability of
corporations to obtain funds
through the issuance of commercial paper was affected as liquidity concerns
drove central banks
around the world to refuse to re-negotiate commercial
paper or renew loans to banks and financial institutions that no longer could
meet the newly revised central banking
regulatory standards.
In June
Merrill Lynch seized $850 million worth
of the underlying collateral from Bear Stearns but only recouped $100 million
in auction. In March of 2008 the Federal Reserve forced Bear Stearns to be sold
to JPMorgan Chase for ten dollars per share, a price far below the previous
52-week high of $133.20 per share.
On July 9, 2008, IndyMac bank's
shares closed at $0.31 in trading on the New York Stock Exchange, a
loss of over 99% from its high of $50 in
2006. IndyMac Bank was seized on July 11, 2008 and was the fourth largest bank
failure in United States history. IndyMac Bank held $32 billion in assets.
The director of the Federal Housing Finance Agency
(FHFA), James B. Lockhart III. on September 7, 2008 announced his decision to
place two privately operated government sponsored enterprises,
Fannie Mae (Federal National Mortgage
Association) and Freddie
Mac (Federal Home Loan Mortgage
Corporation), into conservatorship run by FHFA. Over 98 percent of
Fannie's loans were paying timely during 2008.
Fannie Mae and
Freddie Mac each had a positive net
worth as of the date of the takeover which was triggered by credit default swap
derivative contracts.
In the credit default swap market, the standard
contracts typically used between parties to a swap define the action of placing
Fannie Mae and
Freddie Mac into conservatorship to
be equivalent to bankruptcy, because of the change in corporate control.
In credit default swap parlance, this is termed a credit event, and
that triggers the settling of outstanding contracts for the derivatives, which
are used to hedge or speculate on the potential risk that a company will
default on its bonds.
Fannie
Mae and Freddie Mac had
approximately $ 1.5 trillion in bonds outstanding, and since the market in
credit default swaps is not public, there is no central reporting mechanism to
verify how many credit default swaps are linked to those bonds. (In effect
these derivative contracts for credit default swaps rewrite applicable
jurisprudence and negate existing national laws in favor of
criminal international elite's
jurisprudence.)
By the end of September of
2008 Lehman Brothers went into bankruptcy, Merrill Lynch was acquired by Bank of
America, and Morgan Stanley and
Goldman Sachs changed
their corporate structures to become bank holding companies.
"Hedge funds are now targeting each other. Morgan Stanley and
Goldman Sachs, who made
obscene profits by shorting stocks in the past, are vociferously against the
practice now that their stocks are the ones being destroyed." - Bruce
Goodman
Between March and September 2008, a seven month period, the five
largest investment bankers on Wall Street effectively went bankrupt.
Merrill Lynch was sold to Bank of America
for 0.8595 shares of Bank of America common stock for each
Merrill Lynch common share, or about $50
billion or $29 per share.The market valuation of
Merrill Lynch was about $ 100 billion one
year earlier.
In August 2008, Morgan Stanley was contracted by the
United States Department of the Treasury to advise the government on
potential rescue strategies for Fannie
Mae and Freddie Mac. On
September 21, 2008, it was reported that the
Federal Reserve
allowed Morgan Stanley to change its status from investment bank to bank
holding company in order to survive the American
economic meltdown of
2008.
In 2005, Goldman
Sachs received approximately $1.6 billion in taxpayer subsidies (mostly
through Liberty Bonds) from New York City and state taxpayers to finance the a
new headquarters near the World Financial Center in Lower Manhattan.
Some of the people with connections to
Goldman Sachs includes
George Herbert Walker Bush (managing director at Lehman Brothers), Robert
Zoellick (World Bank president), Henry Paulson (United States Treasury
Secretary), Robert Rubin (ex-United States Treasury Secretary, ex-Chairman of
Citigroup), John Thain (Chairman and CEO, Merrill Lynch, and former chairman of the
NYSE), Henry H. Fowler, (58th United States Secretary of the Treasury), Edward
Lampert (hedge fund manager), Michael Cohrs (head of Global Banking at Deutsche
Bank), Mark Carney (Current Governor of the Bank of Canada). 09/08
As
well on September 16, 2008 American International Group, Inc., an insurance
corporation received an $85 billion infusion from the Federal Reserve for an
80% equity stake. October 9, 2008 American International Group, Inc. asked for
another $36 billion. On November 10, 2008 Treasury announced it would inject an
additional $40 billion into A.I.G.
"The move highlights how little may
be left for shareholders." - Dwight Cass and Lauren Silva
"Between July
and September, American International Group, Inc. spent more than $2 million to
lobby Congress, the Treasury Department, the Federal Reserve and the White
House, records show." - Ben Protess, October 24, 2008 By the end of October
2008 American International Group, Inc. had drawn down $90 billion of the $123
billion available. American International Group, Inc. declined to provide a
detailed account of how it has used the money. American International Group,
Inc. use the money mostly as collateral for its derivatives contracts,
including credit-default swaps. American International Group, Inc. holds a $447
billion portfolio of credit-default swaps.
On September 25, 2008 the
United States Office of Thrift Supervision (OTS) seized Washington Mutual and
placed it into the receivership of the Federal Deposit Insurance Corporation
(FDIC). The FDIC sold most of the bank's assets and liabilities, including
covered bonds and other secured
debt to JPMorgan Chase
for $1.9 billion. According to Washington Mutual's 2007 SEC filing, it held
assets valued at $327.9 billion.
Christopher Cox, a longtime proponent
of deregulation and chairman of the Securities and Exchange Commission,
acknowledged on Friday September 26, 2008 that failures in a voluntary
supervision program for Wall Streets largest investment banks had
contributed to the global financial crisis.
The last six months
have made it abundantly clear that voluntary regulation does not work." -
Christopher Cox
"Once again the Fed has put the taxpayers on the hook
for billions of dollars to bail out an institution that put greed ahead of
responsibility and used their good name to take risky bets that did not pay
off," - Senator Jim Bunning, Senate Banking Committee
"We are mortgaging
the future of our children and grandchildren at record rates, and that is not
only an issue of fiscal irresponsibility, it's an issue of immorality." - David
Walker, former Comptroller General of the United States
bailout
"Under the Paulson plan, the government would
buy mortgages and mortgage-backed securities for more than they are worth,
which should make banks happy to sell.
The Paulson plan returns to the
wondrous fiction that assets are worth what someone says they are worth, rather
than what someone will actually pay.
Financial companies have been
saying for months now that market prices for mortgage securities were
unreasonably low, although none of them seemed eager to buy at those prices.
Among the companies that most vigorously pushed the
idea were the American International Group and
Freddie Mac.
The Federal Reserve and the
Treasury think that the prices have fallen too far.
The plan proposed
by the Bush administration did not call for buying such securities at "current
low prices."
Ben Bernanke, the
Federal Reserve
chairman, explained to legislators this week, the price the government would
pay is to be the "hold-to-maturity price" of these securities, not the
"fire-sale price" they would now fetch in an open free market.
The goal is to recapitalize the banking
system by placing a floor under the prices of securities that never should have
been issued." - Floyd Norris
"The
Federal Reserve is
buying an insurance company?
Where exactly is that covered in the
Federal Reserve Act?
The Associated Press calls it a government takeover, but
this is not your ordinary nationalization like the purchase of
Fannie/Freddie stock by the U.S. Treasury. The
Federal Reserve has
the power to print the national
money supply, but it is not actually a
part of the American government. It is a
private banking corporation
owned by a consortium of
private banks. The banking
industry just bought the worlds largest insurance company, and they
used taxpayer money to do it.
The
bank bailout bill that just passed the Senate and is being deliberated in the
House would turn the banks' worst
assets into good U.S. dollars. The covered instruments eligible for
conversion include the black hole of derivatives. Derivatives held by
American banks are now estimated at $180
trillion.
How will the Treasury acquire the dollars to buy all these
disastrously bad bank assets?
The money will no doubt come from an issue of
U.S. securities, or debt; but who will lend
to a nation that already has the highest federal
debt in
the world, one that is growing exponentially?
The likely answer is the
Federal Reserve, the
bankers' bank that
acts as "lender of last resort" when there are no other takers. The
Federal Reserve is a
private banking corporation
owned by its member banks. The
Federal Reserve
returns the interest on
the bonds it "monetizes" to the government, but only after deducting its
operating costs and a 6% guaranteed return for each of its many bank
shareholders. The upshot is that we the American people
will be paying interest to the banks
to bail out the banks from their own follies!" - Ellen Hodgson
Brown
I was telling a friend, this must have been how the
Politburo felt." - Jeb Mason, the Treasurys liaison to businesses
commenting on the deluge of requests from lobbyists for money.
"Some
lobbyists, Mr. Mason said, had called him even though they did not have any
clients looking to get into the program or worried about its restrictions. They
were merely seeking intelligence on which industries would be deemed eligible
for assistance. He suspects they were representing hedge funds that wanted to
trade on that information." - Mark Landler & David D. Kirkpatrick November
11, 2008
In America the
average weekly earnings in 2007 were 15% below the 1972 peak in relative
terms according to the Bureau of Labor Statistics.Even with better
than expected job growth, 373,000
individuals with college
degrees quit job hunting and dropped out of the employed labor
force in February 2005, the
Labor Department reported. The number of long term
unemployed who are college graduates has nearly tripled since the bursting of
the tech bubble in 2000. Nearly 1 in 5 of the long term jobless are college
graduates. If a degree holder loses a job, that
worker is now more likely than a high
school dropout to be
chronically unemployed.
"Most
working
mothers work
because their families cannot
survive without their paychecks. Therefore, by
definition, families in which the wife is not required to
work are families
feeling a little less crushed by the new economy. Lucky them. The high number
of married women and mothers in the
workforce is not a feminist triumph; it is merely the result of
economic pressures
that have reshaped the American
family since the 1980s. I don't
know any working mothers who wouldn't be
happier if their husbands could support the
family by themselves."- Renee Leask
"The average American family
head will be forced to do twenty years' labor to pay taxes in his or her
lifetime." James Bovard
living and dying through
cooperation
"We disassociated the source of our financial benefits from what we saw
happening around us that we knew was wrong."
- Catherine Austin Fitts
"Society itself may
be defined as nothing else but the combination of individuals for cooperative
effort. Without social cooperation man could not achieve the barest fraction of
the ends and satisfactions that he has achieved with it. The realm of
economic cooperation
occupies a far larger part of our daily lives than most of us are commonly
aware of, or even willing to admit. Marriage and family are, among other
things, a form not only of biological but of
economic
cooperation." - Henry Hazlitt
"Man has almost constant occasion for the help of
his brethren, and it is vain for him to expect it from their benevolence only.
He will be more likely to prevail if he can interest their self-love in his
favor, and show them that it is for their own advantage to do for him what he
requires of them." - Adam SmithIs the modern
Earth becoming an ever more
violent place?
With daily
warfare on our
television screens,
images of brutality to
prisoners in our newspapers and
widespread
fear of
imminent
terrorist
assaults on London, Paris and New
York, it may seem a strange time to point out that
the simple answer is no. Or rather, no, not
yet.
Recent evidence about violence among
animal species, such
as the chimpanzee, and among hunter-gatherer
and early agricultural societies shows that
mankind has undergone a remarkable pacifist
revolution in the last 10 millenniums.
Humans are unique among
species in their elaborate spreading of labor
among strangers. Unlike that other
uniquely human attribute,
language, our ability to cooperate with strangers did not
evolve gradually during
prehistory. Only 10,000 years ago - a blink of an
eye in evolutionary time -
humans still hunted in
family bands and were suspicious of strangers,
fighting those they could not flee. They were
only cautiously beginning to accept the
rudiments of trade.
Yet today,
we live
and work among strangers and depend upon millions
more.
What has made this possible?
The
answer is both
institutional and
psychological. Once
human beings
settled down to agricultural and could no longer
flee unwelcome strangers, human
beings were forced to develop the
institutions that now
sustain cooperation between strangers -
cities, markets and the law.
Humans
could do so because of two psychological
mechanisms:
First, a capacity for
rational calculation of the costs and benefits of
cooperation and,
Second, a tendency for
reciprocity, the willingness to
repay kindness with kindness and betrayal
with revenge.
Although neither
emotional condition initially came into being
to help individuals deal
with strangers both allowed us to do so, once
strangers became an inescapable fact of
life.
In many hunter-gatherer and early
agricultural societies archeological evidence suggest that up to
40% of deaths may have been because of
violence.
The worldwide average rate of
violent death (a
little over 1% of all deaths) is almost
certainly as low as it has ever been.
The achievement is
real, but fragile, for three
reasons.
First, the deadliest
violence is perpetrated not by
individuals but by
groups - gangs, armies, terrorist networks. Human cooperation is double-edged. Not only is it
the foundation of social
trust, it also makes for the most
successful acts of aggression between groups.
Like chimpanzees, though with more lethal refinement,
human beings harness
altruism, solidarity and the skills
of rational
reflection in pursuit of
warfare. Industrialization, networking,
information
technology and
human capital dramatically increase
our efficiency at making
war.
Second, the help
we give our
friends to make them more effective fighters
often outlasts our alliances with them, as
America has
discovered in the case of its
former protégée, Osama bin Laden.
Even former U.S. counterterrorist czar
Richard Clarke has not learned this lesson: In his recent
book, one of the means he urges to
fight
al-Qa`ida is to "train and
arm it's enemies." When will
al-Qa`ida's
enemies become ours as Osama bin
Laden did?
Third, suicide
bombers are here to stay. About 1 million
people a year commit suicide - more
than are killed by violent acts of other
individuals. The rate has been
climbing steadily in the half a century that internationally comparable records
have been kept. Television and the
Internet, those two great weapons of mass distraction,
now offer a tempting platform for a more expressive
form of
suicide than the
depressive
phenomenon it has mainly been up
to now.
This tiny desperate self-annihilating minority assures us that
terrorist groups will never lack foot
soldiers.
What makes
terrorism deadly is not its supply of foot
soldiers but its logistics of networking.
Even terrorist networking needs its
receptive business environment.
Our ancestors' violence was tamed by a subtle and mutually
reinforcing mixture of calculation and
reciprocity. To create an
environment in which
terrorism is unproductive requires the same
mixture.
We must reinforce those
law-abiding
institutions and networks that
have restrained the violence to which
our adrenaline and testosterone dispose
us and that have built the
peace and prosperity of modern
society.
adapted from Paul Seabright,
economist
"Executives are in the business world for
themselves first, and public trading of companies' stocks is mostly a thinly
disguised mechanism to allow executives
and directors to
profit from inside knowledge and favors." - Danila Oder
"We've known forever that
idiots and greedy individuals are in
control. Just look at the George W. Bush administration. More and more mergers,
selling American companies and jobs to
foreigners, corporations running
our government, transferring the
wealth of the many to the few, the dumbing down
and muting of the press and on and
on.
Where is the outrage in this nation? Will it all end, finally, when
there is only Wal-Mart and
McDonald's left and there is no
one who can afford its product except those who
stole all the money? These plutocrats
should all be known for what they are -
traitors. "- Michael Boshears, March 2005
"In regards to the reorganization of the
bankruptcy law
I have to confess when the guy with the Indian accent
called to sign up my 13-year-old son for a Visa
credit card, I was somewhat
annoyed. When I called my congressman's office and spoke
to someone who didn't give a you-know-what,
I was more than somewhat annoyed, I
was angry. I guess
we have the best government that credit card
companies can buy." - Karen Weston
"One day after George W. Bush took the nation's
middle class to task for its
free-wheeling ways by signing the bankruptcy reform bill, the
Republican
controlled House votes to give away billions in
tax breaks and incentives to those stalwarts of
fiscal responsibility - the energy
industry. It's so comforting to know
our government has its priorities in order." -David
Silva
"Congress made it more difficult for the common
person to file bankruptcy, the president signed it into law and now the high court has made it much more
difficult for the common person to sue corporations and big business for
wrongdoing. That proves that the old adage, "money returning to its rightful
owners, the rich," is
working." - Kenneth Tuxford
"With the national
debt at $8 trillion
and growing daily, and a trade deficit of more than $700 billion,
George W. Bush's desire to take $39
million from programs for the poor and give
the rich a $70 million
tax cut, while asking $70 billion more
for Iraq, is not just abject fiscal
irresponsibility. It's totally insane. If a business
operated this way, it would be
bankrupt. If a person
operated this way, he would be homeless. If
a country operates this way, it's on the
path to
self-destruction." - Tim
Noworyta, 02/2006
Each individual
human has the basic
human
right to the basic necessities
of life but no one has the
right to more
resorces than he or she can use. The
man or woman that controls an inordinate amount of
resources has become
corrupt and has very little
chance of finding
God and living life in God.
"A
wealthy man has as much chance of reaching
heaven as a camel has in passing through the eye
of a needle"- Jesus.
Those that accept and support tyranny over the lives
of others are as much to blame as
those that commit tyrannical
acts.
See Adam
Smith
See John Maynard
Keynes
See John Kenneth
Galbraith
See Social Control
See
The Global Economy
See
The Evil of Banality
See
American aristocracy
See
The Corruption of the American Dream
See
The Subversion of American Democracy |
|
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contents
 |
This web site is not a commercial web site and
is presented for educational purposes only.
This website defines a new religious
ideology to which its author adheres. The author feels that the falsification
of reality outside personal experience has created a populace unable to discern
propaganda from reality and that this has been done purposefully by an
international corporate cartel through their agents who wish to foist a corrupt
version of reality on the human race. Religious intolerance occurs when any
group refuses to tolerate religious practices, religious beliefs or persons due
to their religious ideology. This web site marks the founding of the religion
aptly named The Truth of the Way of Life - a rational religion based on reason
which requires no leap of faith, accepts no tithes, has no supreme leader, no
church buildings and in which each and every individual is encouraged to
develop a personal relation with God through the pursuit of the knowledge of
reality in the hope of curing the spiritual corruption that has enveloped the
human spirit. The tenets of The Truth of the Way of Life are spelled out in
detail on this web site by the author. Violent acts against individuals due to
their religious beliefs in America is considered a hate
crime.
This web site in no way condones violence. To the contrary
the intent here is to reduce the violence that is already occurring due to the
international corporate cartels desire to control the human race. The
international corporate cartel already controls the world central banking
system, mass media worldwide, the industrial military complex of America and is
responsible for the collapse of morals, the elevation of self-centered behavior
and the destruction of global ecosystems. Civilization is based on cooperation.
Cooperation does not occur at the point of a gun.
American social mores
and values have declined precipitously over the last century as the corrupt
international cartel has garnered more and more power. This power rests in the
ability to deceive the populace in general through mass media by pressing
emotional buttons which have been preprogrammed into the population through
prior mass media psychological operations. The results have been the
destruction of the family and the destruction of social structures that do not
adhere to the corrupt international elites vision of a perfect world. Through
distraction and coercion the direction of thought of the bulk of the population
has been directed toward solutions proposed by the corrupt international elite
that further consolidates their power and which further their purposes.
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