REPROOF
While everyone’s noses were to the grindstone the country was sold…as were the grindstones
Vulgarity of Abuse
The Frank-Todd financial reform bill worked through the federal legislature this summer with a small fraction of the public attention health care received. The purpose of the bill was to reinstate the regulations of the Glass-Stegall Act and return financial institutions to less hazardous practices. Restore fundamentally responsible behavior to the “financial sector” - no go! Banks, mutual funds and their insurers wish to retain their right of recklessness and to sabotage the greatest economy in human history. The corporate structure, that U.S. banking supports, has effectively supplanted government and does reserve the right to suicide. The public’s lack of awareness of financial reform is the measure and proof of their structural omnipotence.
You have heard little of the attempt to re-establish standards because the insiders have pre-emptively fixed re-regulation. Debt and foreclosures are high, asset values and employment are depressed, savings and loan banks are static at exactly the time dynamism is needed and investment banks are making sure their stroke to ejaculate the last public treasure to Arabia and China remains undiminished. Their vision does not include the long term solvency of the American consumer/worker (1), only continuation as shills for the front corporations and sovereign wealth funds pulling the last wealth from the U.S. The manipulation to maintain this treachery is first; to dilute legislation at its inception and second; to further beat down the enfeebled laws at the point of codification into agency regulation.
U.S. citizens are victims to these manipulations by virtue of our debt and joblessness. Already a central tenet of reform to prohibit savings banks from speculative investing (2) has been whitewashed. Investment banking has opened by reversing the establishment of an open market for derivatives. (3) These body-blows contrive a route for small banks and investor America to continue to send savings into the next speculation abyss and finish the U.S. financial implosion. Whatever pushback against self-destruction and consumer victimization that was not beaten out of the bill, will be suppressed in the aforementioned implementation phase. Even in the face of legislation to serve the financial health of the people and the republic, the financial industry has demonstrated that government is only the funnel of working class capital to them (mortgages, retirement accounts, failed FDIC insured banks, consumer debt…(4) and no attempts to restrict the flow will be tolerated.
…more cocaine for chest pain…
The private and public status now is: supplemental war spending made U.S. debt insurmountable around 2005; one-third of the $4 trillion of consumer debt is delinquent; the basement interest rate acts as a $350 billion/year tax upon the investor /saver class; structural unemployment is up from 5 to 6½%. This means any change makes the other aspects even worse – a mutually regressive relationship. (i.e. government cannot generate more revenue without more negative impact on employment and savers, employment/production has no domestic headroom to expand, foreign / export market are cold…) The result is that both savers and investment hotshots have refined a gambler’s need to double down and bring back pre-recession balance sheets.
The delusion required to ignore, minimize, and obfuscate this financial shit storm, and throw off house limits (regulation) to go all in, is no less than belligerent. The financial industry is a distillation of the corporate construct absolutely immune to reform or civil responsibility. Citizens are caught in a vice of their compensation to arrest further financial misfortune and manipulation by the money mills to return to the speculation rave for another collapse. A citizen’s only option is survival mode adaptation to what is being termed “the new normal”; the first, forced, debilitating step in muddling toward frugality (5) as the U.S. financially convulses.
Getting used to the new normal could be a minor adjustment. If the Wall Street gamblers neuter regulation to their full discretion, a return to recklessness is imminent and the final “financial service” we experience may be national insolvency. Real culture shock will then be making wind generators and solar panels for the Arabs and Chinese from melted down U.S. warships, airplanes, trains, automobiles, derelict bridges, buildings, pipe and rail lines…and all the other detritus of a collapsed empire.
(1) – with rare exceptions of banks that participated in the 1977 Community Reinvestment Act and supported civic development consistent with their profit interests.
(2) - e.g. your local bank puts the county retirement into a mutual fund of unknown provenance.
(3) – The “open” market will be run by four investment houses, constituting an oligarchy not “open” market. They further reserve the right to declare any derivative “private” and broker it individually; off the market. Anti-trust by definition.
(4) – See Reproof 10-1 re: discussion of retracting student loans from this list, which represents the only successful financial reform known to Reproof.
(5) – See Reproof 10-2 book review: “Muddling Toward Frugality.”
Afterward from The Economist, Sept. 11, 2010; Buttonwood The Cycle Lane – “…several long-term cycles seem to be moving in a hostile direction for western economies, with commodity prices rising, populations ageing and debt spree unwinding. That is not necessarily bad news for financial markets… but does suggest that a very awkward decade lies ahead.”
How Much Working Class Blues?
“I could pay one half of the working class to shoot the other half.”-Stephan Gould, railroad financier.
Labor has always been subject to the whims of capital, and pays a terrible price when capital stops flowing. The financiers cash in and wait for their market segment (commodities, public/private banking/finance, insurance, currency exchange…) to de-constipate; then go back to trading paper for a bank balance that looks more like a government budget line item.
Bonds for unemployment are big during this waiting period (which is turning into a permanent condition; see above article re: the “new normal”). Increasing public debt and a depressed working class should make all the structural faults against the general public and biased to the financial manipulators- manifestly obvious. Then, in a society of democracy and liberty, corrections would be made to restore earned living conditions and jobs security to the public; for the overall social security that government is responsible for. This would be true for a citizen concentric government, not the U.S. corporcentric government. For this reason the U.S. is the 11th best country for a working class citizen to live in. (1)
One must wonder if Gould is correct, in that the organs controlling capital (the corporate construct) could induce enough desperation for the working class to thin their own herd by ½ - then, of course, not collect double the wage for their efforts. Trend indicates this to be so: increases in xenophobia, incarceration, expectations of law enforcement and courts, continuously maintained and more robust infrastructure..; and willingness to subcontract to the corporate construct for perceived quality. Reproof asserts that as few as 10% of “elites” in a population would willingly physically incarcerate the 90% (2) before a tipping point, and a complete restructuring of the degenerate society, were reached. We currently exist with about 2% of the U.S. population financially incarcerating the remainder, in which pension fund profits and all industry capitalization is dependent upon them. Further we are held hostage (confined to our cells in the incarceration analogy) when our labor capital is insufficient for their profit margins. Then abuse kicks in and defect of pseudo- democracy subjugated to capitalism shows through.
The need for regulation becomes apparent and the purpose of revolution should become viscerally understood.
A dramatic movie based upon the Stanford prison experiment is coming out Sept. 2010. The experiment was aborted after only an alarmingly short two days, due to abuse by the unregulated guard actors. The movie extrapolates past this safety cut-off to explore revolution and vengeance.
This is a microcosmic analogy to the sociologic whirlpool the U.S. has churned up over the past decade and starkly presents the questions of: What are the limits of fundamental unfairness? What response will be forthcoming?
If you see the literal expose of extravagance, abuse and possible retaliation; Wall Street II: Money Never Sleeps; seek out this metaphorical treatise, to really understand how fundamentally fucked we may be.
What % of citizens alive now do you speculate will see the end of the U.S. republic?
(1) – NY Times, Sept.12, 2010, Thomas Friedman
(2) – Given unlimited resources and money.
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Correction: Lead article. Total U.S. consumer debt is $11.7 trillion, not $4 trillion. Thus only approx. 10%, not one-third, is delinquent. It is noteworthy that this total debt is down by almost $900 Billion from mid-2008 due almost entirely to bank write-downs.
Book Suggestions
Between Two Worlds, My Life and Captivity in Iran by Roxanna Saberi – As discussed in Reproof 09-1, Ms. Saberi was detained in Iran for reporting on civil rights. She chronicles that experience here, with the alarming realization that arrestees are prohibited a defense by the same rules of western judiciary!
The Seeds of Destruction; Why the Path to Economic Ruin Runs Through Washington and How to Re-Claim American Prosperity by former GWB White House economic advisor Glenn Hubbard – like tobacco lobbyist dying of lung cancer Mr. Hubbard conducts a repentant exposé.
Movie: Casino Jack and the U.S. of Money – also exposes how the malfeasance of business via politics really works!!
Copyright Reproof pamphlet, 2010 Issue 3/copy and distribute freely
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