The resignation of Admiral Fallon will provoke renewed fighting in Iraq

Dandelion Salad

by Thierry Meyssan
Global Research, March 15, 2008

Contrary to what has been written so far in the mainstream media, Admiral William Fallon was not removed because he was opposing President Bush on an attack against Iran. He resigned from his own initiative after the agreement he had negotiated and concluded with Tehran, Moscow and Peking was sabotaged by the White House. This decision by the Bush administration will provoke renewed fighting in Iraq and exposes gravely the GI’s to a new Resistance this time supported without restraints from the outside.

It was nearly 22h GMT, on Tuesday March 11th 2008 when commander in chief of Central Command, Admiral William Fallon announced from Iraq that he was presenting his resignation. Immediately afterwards in Washington, Secretary of Defense Robert Gates, and also his friend, declared, in an improvised press conference that he accepted that decision with regrets. In fact, the resignation of the admiral was apparently demanded by the White House following the publication of an article in the monthly Esquire [1] reporting “frank” comments of the officer concerning President Bush. In the same article one could read that the removing of the Admiral would be the last signal before the war.

Yet this interpretation is erroneous. It ignores the evolution of the equilibrium of forces in Washington. To understand what is at stake, let us go back a little bit. Our readers, which have been regularly informed in our columns of the ongoing debates in Washington, will remember Fallon’s threats to resign [2], the mutiny of high level officers [3], the inside story of Annapolis [4], and the infiltration of NATO in Lebanon [5] which we reported in our columns before everybody else; revelations which were contested when first published and which later well fully confirmed. We add here unpublished information on the negotiations conducted by Fallon.

The Fallon plan

While the United States establishment had approved going to war against Iraq hoping to gain substantial economic profits, progressively it lost all such illusions. The direct and indirect costs generated by this operation are beyond measure and only profits to a very few. Since 2006, the ruling class, worried, decided to bring this adventure to an end. It contested the over-deployment of soldiers, the increasing diplomatic isolation and the financial hemorrhage This opposition expressed itself through the Baker/Hamilton report which condemned the US plan for a Greater Middle East and proposed a military withdrawal from Iraq and a diplomatic rapprochement with Teheran and Damas.

Under this amiable pressure, President Bush was forced to fire Donald Rumsfeld and replace him with Robert Gates (member himself of the Baker/Hamilton commission). A bi partisan work group – the Armitage-Nye commission – was created to define consensually a new policy. But it turned out that the Bush/Cheney tandem had not renounced its projects and used this group to allay its rivals while at the same time continuing to wield its weapons against Iran. Cutting short those maneuvers Robert Gates gave carte blanche to a group of high level officers he had frequented in the times of Bush father. On December 3rd 2007, they published a secret services report discrediting the White House lies concerning the so called Iranian threat. Beyond, they tried to impose on President Bush a rebalancing of his Middle East policy, to the detriment of Israel.

Admiral William Fallon exerts a moral authority over that group which includes Mike McConnell (National Director of Intelligence), general Michael Hyden (CIA director), general George Casey (chief of staff of the lad army), and later Mike Mullen (head of the joints chief of staff). Cold blooded, and gifted with brilliant intelligence, he is one of the last great bosses of the armed forces to have served in Vietnam. Worried by the multiplication of operation theatres, by the dispersion of forces and the usury of troops, he openly contested a civilian leadership whose policies can only lead the US to defeat.

In the continuation of that mutiny, that group of high level officers was authorized to negotiate an honorable end to the crisis with Iran and to prepare the withdrawal from Iraq. According to our sources, they conceived an agreement in three phases:

  • the US would have had the Security council to adopt a last resolution against Iran in order not to lose face. But this resolution would be empty and Teheran would accommodate to it.
  • Mahmoud Ahmadinejad would go to Iraq where he would reaffirm the regional interests of Iran. But that trip would be purely symbolic and Washington would accommodate to it.
  • Teheran would use all its influence to normalize the situation in Iraq, and to lead the groups of the armed resistance it supports towards political integration.

This stabilization would allow the Pentagon to withdraw its troops without defeat. In exchange, Washington would cease its support to armed groups of the Iranian opposition, in particular the Moudjahedine of the people.

Still according to our sources, Robert Gates and that group of officers, lead by General Brent Scowcroft (former National Security Adviser), solicited support from Russia and China for this process. In perplexity, before responding positively, Moscow and Peking first confirmed with the White House its forced agreement (to this process, noe), relieved to be able to avoid an uncontrollable conflict.

Vladimir Putin engaged himself not to seek advantage militarily from the US withdrawal, but demanded that the political consequences be drawn. I was agreed upon then that the Annapolis conference would lead to symbolic results, while a large conference on the Middle East would be organized in Moscow to unblock all the dossiers that the Bush administration had been poisoning. The same Putin accepted to facilitate the Iran-US compromise, but worried about a too strong Iran on its Russian borders. As guarantee, it was agreed upon that Iran would accept what it had always refused so far: not to fabricate alone its nuclear fuel.

Negotiations with Hu Jintao were more complex, the Chinese leaders being shocked to discover to what extent the Bush administration had lied a propos the so called Iranian threat. So, first, bilateral trust had to be re-established. Luckily Admiral Fallon who until recently commanded the PacCOM (pacific zone), had kept courtesy relations with the Chinese. It was decided that Peking would let a formal anti-Iranian resolution pass at the Security Council but that the formulation of that text would in no way hinder the Sino Iranian trade.

The sabotage

At first glance, all seemed to function. Moscow and Peking accepted to play roles at Annapolis and to vote resolution 1803 against Iran, while president Ahmadinejad savored his official visit to Baghdad where he secretly met US heads of the Joint Chiefs of Staff, Mike Mullen, to plan reduction of tensions in Iraq. But the Bush/Cheney tandem did not declare itself defeated. It sabotaged as soon as it could this well oiled mechanic.

Firstly, the Moscow conference disappeared in the moving sands of oriental mirages, before even having existed. Secondly, Israel launched its assault against Gaza and NATO deployed its fleet off the coast of Lebanon as a means to provoke the setting on fire of the Greater Middle East region, while Fallon was attempting to put out the fires one by one. Thirdly, the White House, usually so prompt to fire its own employees, refused to dump the People’s Mouhadjidines.

Exasperated, the Russians massed their fleet south of Cyprus to survey the NATO ships and send Sergei Lavrov on tour to the Middle East with mission to arm Syria, Hamas and the Hezbollah to reestablish the equilibrium in Levant. While the Iranians, furious of having been cheated, encouraged the Iraqi resistance to break the GIs. Seeing his efforts reduced to nothing, Admiral Fallon resigned as the only means for him to save his honor and his credibility vis a vis his interlocutors. The Esquire interview, published two weeks ago is only a pretext here.

The hour of truth

In the next three weeks, the Bush/Cheney tandem will play all its cards in Iraq in an attempt to have weapons determine the outcome of the situation. General David Petraeus, will push to the extreme his counterinsurgency program in order to be able to come up to the next US congress, beginning in April, as victorious. Simultaneously, the Iraqi resistance, now supported by Teheran, Moscow and Peking, will multiply its ambushes and seek to kill a maximum occupiers.

It will then be up to the US establishment to draw the conclusions of the situation in the battle field. Either the Petraeus’ results on the ground will be deemed acceptable and the Bush/Cheney tandem will finish its mandate without further difficulties. Or, to avoid the spectrum of defeat, it will have to condemn the White House and restart in one way or the other, the negotiations that Admiral Fallon had carried out.

Simultaneously, Ehud Olmert will interrupt the negotiations started with Hamas via Egypt. He will heat up the region up to Bush’s visit in May.

This regional fever should stimulate the Bush apparatus, either through investments in the military-industrial domain of the Carlyle fund, whose real estate branch is on the verge of bankruptcy, or via the electoral campaign of McCain.

Thierry Meyssan, Journalist and best-selling author is president of the Paris based Voltaire Network.

English translation: Christine Bierre

[1] « The Man Between War and Peace » par Thomas P.M. Barnett, Esquire, mars 2008.

[2] « The Neoconservative Agenda to Sacrifice the Fifth Fleet – The New Pearl Harbor », by Michael Salla, Voltaire Network, 19 november 2007.

[3] « Washington décrète un an de trêve globale », par Thierry Meyssan, et « Pourquoi McConnell a-t-il publié le rapport sur l’Iran ? », Réseau Voltaire, 3 et 17 décembre 2007

[4] « La ‘solution à deux États’ sera bien celle de l’apartheid », par Thierry Meyssan, Réseau Voltaire, 13 janvier 2008.

[5] « La discrète arrivée de l’OTAN au Liban », par Thierry Meyssan, Réseau Voltaire, 10 mars 2008.

The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author’s copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.

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Fallon falls: Iran should worry by Gareth Porter

Disagreements by Top Military Brass regarding Bush-Cheney War Plans by Michel Chossudovsky

Threat of Iran War More Real: End the World for What? By Liam Bailey

New UN Sanctions Make US-Iran War More Likely

‘Fox’ Fallon Fired – And we’re f*cked… By Justin Raimondo

Defense Sec Gates Announces Resignation of Admiral Fallon + More on Fallon’s Resignation

Massive Debt Default by Mike Whitney

Dandelion Salad

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The latest from Mike Whitney: The Fed is just an Extension of the Banking Establishment; The Bear bailout proves it 03.19.08

by Mike Whitney
Global Research, March 15, 2008

Bearly Alive, Wall Street Investment Giant Rushed to “Intensive Care” by Panicky Fed-Chief

On Friday, Bear Stearns blew up. It was the worst possible news at the worst possible time. A day earlier, the politically-connected Carlyle Capital hedge fund defaulted on $16.6 billion of its debt. Carlyle boasted a $21.7 billion portfolio of AAA-rated residential mortgage-backed securities, but was unable to make a margin call of just $400 million. (Where did the $21.7 billion go?) The news on Bear was the last straw. The stock market started reeling immediately; shedding 300 points in less than an hour. Then, miraculously, the tide shifted and the market began to rebound. If there was ever a time for Paulson’s Plunge Protection Team to come to the rescue; this was it. For weeks, the markets have been battered with bad news. Retail sales are down, unemployment is up, consumer confidence is in the tank, inflation is rising, the dollar is on the ropes, and the credit crunch has spread to even the safest corners of the market. Facing fierce headwinds, Washington mandarins and financial heavyweights had to decide whether to sit back and let one small investment bank take down the whole equities market in an afternoon or stealthily buy a few futures and live to fight another day? Tough choice, eh?

We’ll never know for sure, but that’s probably what happened.

We’ll also never know if Bernanke’s real purpose in setting up his new $200 billion auction facility was to provide the cash-strapped banks with a place where they could off-load the mortgage-backed junk that Carlyle dumped on the market when they went belly-up. That worked out well, didn’t it? Now the banks can trade these worthless MBS bonds with the Fed for US Treasuries at nearly full value. What a deal! That must have been the plan from the get-go.

The Bear Stearns bailout has ignited a firestorm of controversy about moral hazard and whether the Fed should be in the business of spreading its largess to profligate investment banks. But the Fed had no choice. This isn’t about one bank caving in from its bad bets. The entire financial system is teetering and a failure at Bear would have taken a wrecking ball to the equities market and sent stocks around the world into a violent death-spiral. The New York Times summed it up like this in Saturday’s edition:

“If the Fed hadn’t acted this morning and Bear did default on its obligations, then that could have triggered a widespread panic and potentially a collapse of the financial system”.


So, what makes Bear so special? How is it that one of the smallest investment banks can pose such a threat to the whole system?

That’s the question that will be addressed in the next couple weeks and people are not going to like the answer. For the last decade or so the markets have been reconfigured according to a new “structured finance” model which has transformed the interactions between institutions and investors. The focus has been on maximizing profit by creating a vast galaxy of exotic debt-instruments which increase overall risk and volatility in slumping market conditions. Derivatives trading which, according to the Bank of International Settlements, now exceeds $500 trillion, has sewn together the various lending and investment institutions in a way that one failure can set the derivatives dominoes in motion and bring down the entire financial scaffolding in a heap. That’s why the Fed got involved and (I believe) approached Congress in a closed-door session (which was supposed to be about FISA legislation) to inform lawmakers about the growing possibly of a major economic meltdown if conditions in the credit markets were not stabilized quickly.

The troubles at Bear and the danger they pose to the overall system were articulated in an article by Counterpunch editor, Alexander Cockburn in a November, 2006 article “Lame Duck: The Downside of Capitalism”:

“In a briefing paper under the chaste title, ‘Private Equity: A discussion of Risk and Regulatory Engagement’, the FSA raises the alarm.

“Excessive leverage: The amount of credit that lenders are willing to extend on private equity transactions has risen substantially. This lending may not, in some circumstances, be entirely prudent. Given current leverage levels and recent developments in the economic/credit cycle, the default of a large private equity backed company or a cluster of smaller private equity backed companies seems inevitable. This has negative implications for lenders, purchasers of the debt, orderly markets and conceivably, in extreme circumstances, financial stability and elements of the UK economy.”

Translation: It’s about to blow!

“The duration and potential impact of any credit event may be exacerbated by operational issues which make it difficult to identify who ultimately owns the economic risk associated with a leveraged buy out and how these owners will react in a crisis. These operational issues arise out of the extensive use of opaque, complex and time consuming risk transfer practices such as assignment and sub-participation, together with the increased use of credit derivatives. These credit derivatives may not be confirmed in a timely manner and the amount traded may substantially exceed the amount of the underlying assets.”(snip)

Translation: “The world’s credit system is a vast recycling bin of untraceable transactions of wildly inflated value.

The problem is that the oversight and stability of the world credit system is no longer within the purview of familiar international institutions like the International Monetary Fund or the Bank of International Settlements. Private traders are now installed at all the strategic nodes, gambling with stratospheric sums in such speculative pyramids as the credit derivative market which was almost nonexistent in 2001, yet which reached $17.3 trillion by the end of 2005. Warren Buffett, America’s most famous investor, has called credit derivatives “financial weapons of mass destruction.” ( Alexander Cockburn, “Lame Duck: The Downside of Capitalism”

Cockburn’s article anticipates the current problems at Bear and shows why the Fed cannot allow them to fester and spread throughout the system. The investment banks and brokerages all do business with each other, taking sides in trades as counterparties. If one player goes down it increases the likelihood of more failures. So the problem has to be contained.

The volume of derivatives contracts, that are not traded publicly on any of the major exchanges, has exploded in the last few years. These unregulated transactions, what Pimco’s Bill Gross calls the shadow banking system, have taken center-stage as market conditions continue to deteriorate and the downward-cycle of deleveraging begins to accelerate. The ongoing massacre in real estate has left the structured investment market frozen, which means that the foundation blocks (ie mortgage-backed securities) upon which all this excessive leveraging rests; is starting to crumble. It’s a real mess.

Derivatives trading, particularly in credit default swaps, is oftentimes exceeds the value of the underlying asset many times over. Credit Default Swaps are financial instruments that are based on loans and bonds that speculate on a company’s ability to repay debt. (a type of unregulated insurance) The CDS market is roughly $45 trillion, whereas, the aggregate value of the US mortgage market is only $11 trillion; four times smaller. That’s a lot of leverage and it can have a snowball effect when the CDSs trades begin to unwind.

In truth, the biggest risk to the financial system is counterparty risk; the possibility that some large investment bank, like Bear, goes under and sucks the rest of the market with it from the magnitude of its losses. Last year, Bear was the 12th largest counterparty to CDS trades according to Fitch ratings. If they were to suddenly disappear, the effects to the rest of the system would be catastrophic.

Fed Chairman Bernanke sat on the board of the FOMC when the investment gurus and brokerage sharpies customized the markets in a way that enhanced their own personal fortunes while increasing the risks of systemic failure. The SIVs, the conduits, the opaque derivatives, the off-balance sheets operations, the dark pools, the massive leverage, and the reckless expansion of credit; all emerged during his (and Greenspan’s) tenure. The Federal Reserve is largely responsible for the brushfire they are presently trying to put out.

Now, once again, Bernanke is acting beyond his mandate and invoking a law that hasn’t been used since the 1960s so the Fed can become the creditor for an institution that attempted to enrich itself through wild speculative bets on dubious toxic investments which are now utterly worthless. If that isn’t a good enough reason for abolishing the Federal Reserve; then what is?

The world’s most transparent and profitable markets have been transformed into a carnival sideshow managed by hucksters, flim-flam men, and rip off artists. The Bear bailout is yet another glaring example of a system that lacks all credibility and is quickly self-destructing.

The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author’s copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.

For media inquiries:
© Copyright Mike Whitney, Global Research, 2008
The url address of this article is:


“Bernankerupted”: Bear Stearns Fire-sale sends Global Markets Plunging; Dollar Routed

Three Easy Pieces: The Dollar, Paulson & Carlyle Capital By Mike Whitney

The $200 billion bail-out for predator banks & Spitzer charges are intimately linked By Greg Palast

Roubini’s Nightmare Scenario; A Vicious Circle Ending In A Systemic Financial Meltdown By Mike Whitney

The Total Collapse Of The Global Economy (video)


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The 2008 Presidential Election: A Revolution or A Bust? by Richard C. Cook

Dandelion Salad

by Richard C. Cook
Global Research, March 15, 2008

What should be the real issue of the 2008 presidential election is being lost in the noise of the Hillary Clinton-Barack Obama fracas. According to polls, three-fourths of Americans say the country is headed in the wrong direction. This is an astounding statistic. At other times and in other places, revolution would be in the air.

But is there any indication that something truly substantial might change starting with the election of a new president eight months from now? Something that would take the U.S. in a radically new direction?

Of course Obama has taken the word “change” as a mantra. Hillary Clinton still promotes herself as the candidate of “experience,” though after seeing her status as front-runner collapse in the face of Obama’s string of primary victories after Super Tuesday, she has also recast herself as the one who will fight for the livelihoods of workers and the middle class.

What often happens is that when faced with a problem, politicians immediately jump to solutions that would seem to garner votes without having conducted a thorough analysis of what the causes of the problem really are. The voters today know that much is wrong. The Democratic Party candidates say they can fix it. But let’s focus a bit on what really might be the matter.

The nightmare administration of President George W. Bush and Vice-President Richard Cheney began with the electoral coup of November-December 2000. Four factors, three involving the state of Florida, cost Democrat Al Gore the election despite a national plurality of popular votes.

One was the simple fact of the archaic and anti-democratic institution of the Electoral College. The second was the disenfranchisement of substantial numbers of African-American voters by Florida election officials. The third was the presence on the ballot of third-party candidate Ralph Nader who siphoned off voters in Florida that might have supported Gore and given him the state’s electoral votes without a recount. The fourth came when the Supreme Court blocked a recount and declared Bush the winner.

Once Bush assumed power, two crimes on a historic scale ensued.

One was the invasion of Iraq. Bush lied about the reasons the U.S. went to war, though it was obvious the invasion was a step in a pre-existing plan for military conquest of the Middle East. While the plan reflected the historic ambitions of the Anglo-American imperium, this latest phase stemmed from the epochal decision made during the Nixon/Kissinger years to tie America’s fate irrevocably to control of Middle Eastern oil.

The second crime was the housing bubble which was deliberately created by the financial industry, the Federal Reserve, and agencies of the U.S. government—certainly with White House approval—to float the U.S. economy following the stock market crash of 2000-2001.

The political objective of the housing bubble was to buoy an economy whose productive capacity had been stripped since the time of the “Reagan Revolution” by export of American jobs, closure of factories, sale of U.S. companies to overseas investors, and deterioration of public infrastructure.

How the bubble came about was simple. Once George W. Bush became president, Federal Reserve Chairman Alan Greenspan went to work through interest rate cuts that would encourage a huge inflation of housing costs. The federal government looked the other way as fraud became routine in enticing consumers to overspend their income. Also playing a part in getting consumer buy-in was the federal mortgage interest tax deduction.

The windfalls from the inflation of home prices resulted only from borrowed money, not any productive enhancement of the economy. The largesse enriched financial institutions and the stock market and gave a temporary boost to consumer spending which propped up the economy for a few years. That bubble has burst, and a recession is hitting whose destructive effects are just starting. Housing values are plummeting with nothing to replace the ephemeral “wealth” now being lost by tens of millions of homeowners. Despite repeated Federal Reserve bailouts of the large financial institutions, the impact on the consumer economy is starting to be devastating.

The Iraq War, whose multi-trillion dollar price tag threatens the federal government with bankruptcy, and the collapsing housing bubble, which threatens the rest of the economy with the same, are sufficient in their ramifications to delineate the current crisis.

What, however, are the causes, and are Clinton and Obama identifying those causes?

Hillary Clinton has pointed to U.S. dependence on Middle Eastern oil as a cause of the war and predatory lending as a cause of the housing crisis, and she is correct as far as she goes. She sees the cause of the recession primarily in the disappearance of decent jobs. Obama’s diagnosis is similar, though he adds that it was a strategic error to invade Iraq while the real terrorists supposedly responsible for 9-11 are still loose in Afghanistan. He also advocates a substantial extension of the social safety net to protect Americans whose jobs are vulnerable and who are losing their homes to foreclosure.

But neither Clinton nor Obama nor their respective armies of policy advisers have dug deep enough to get to the next layer of causality. And neither has addressed the philosophical issue of whether the solution is really a list of new government “programs” along with the elimination of the Bush tax cuts for the rich.

So let’s reflect on the possibility that maybe the George W. Bush presidency wasn’t just an unpleasant accident from which the country needs to rebound but that it may reflect a deeper malaise that suggests the world’s “only remaining superpower” has entered a steep decline.

This malaise might be defined as the condition whereby the power of a great nation no longer works from the bottom up, through the character, work, and creativity of its people, but from the top down via: a) an increasingly all-powerful oligarchy of the rich; and b) bureaucracies that have so stifled people with taxes, laws, rules, and regulations that the average person can scarcely breathe without being written up, fined, investigated, spied on, or imprisoned.

Life in these United States is increasingly becoming a purgatory where the average person pays almost half his or her income in federal, state, or local taxes; is swamped at his job or profession by government rules and paperwork, especially if he works in such fields as health care or education; has seen the costs of housing, gasoline, insurance, medical treatment, and now even food, skyrocket; must borrow huge amounts of money to educate his children, buy a home, or even pay for necessities like groceries; and where families must work at several jobs just to break even. And all this was before the recession with home foreclosures and more job loss picking up steam.

But again, why is it happening and could either Clinton or Obama—or any president—do anything about it?

The times are reminiscent of the run-up to the Great Depression, where buying of stocks on margin was rampant, there were real estate bubbles similar to the one today, and the financial oligarchy, holding onto power through its association with the Republican Party, was the dominant force in society.

Today it’s again the financial oligarchy which rules.

During recent decades, particularly since the presidency of Ronald Reagan, it’s been these oligarchs, presiding from a financial industry that was drastically deregulated, who have wrecked America’s manufacturing economy, exported millions of our best jobs, and ruined small business and family farming by turning over huge segments of the economy to the globalist corporations they control, even as our own domestic economy continues to crumble.

The oligarchs are in charge of the large oil companies and have influenced the mortgaging of our nation’s foreign policy to a permanent alliance with the nation of Israel and to the monumentally destructive and expensive attempt to conquer the Middle East by force of arms.

The oligarchs make fabulous sums of money through control of the military industrial complex, by encouraging war as the chief instrument of foreign policy, and by acting as the world’s leading weapons developer and exporter.

Meanwhile they dodge taxes and ignore their own financial responsibilities for the welfare of the nation while prevailing on the Bush administration to send the sons and daughters of the poor abroad to die for their profits.

The oligarchs are in charge of the big banks. They act through the system of lending overseen by the Federal Reserve and control our lending-based monetary system which has plunged the nation into debt to the tune of almost fifty trillion dollars.

It’s been these same oligarchs who have abused the privilege of fractional reserve banking by creating such huge credit fiascos as the housing bubble, and by funding asset inflation and speculation through leveraging of equity, hedge, and derivative funds. The destructive nature of this speculation was shown in recent days by the insolvency of Carlyle Capital. J.P. Morgan and other huge banks created loans “out of thin air” to allow Carlyle to buy up businesses. Now that Carlyle has defaulted the banks have become the owners of these businesses. It’s theft on a grand scale with the victims being the people who work for the companies which are the pawns in the financiers’ game.

Finally, since World War II it’s been the oligarchs, acting through such institutions as the International Monetary Fund or through currency speculation, who have subverted the economies of a legion of other nations in order to generate profits for themselves.

The rule of the oligarchs has relied on a string of weak presidents. Every president since John F. Kennedy, who was assassinated in 1963, has acquiesced in his own way. Johnson and Nixon appeased the investment bankers who were behind the military-industrial complex by waging the Vietnam War. Jimmy Carter was hand-picked by the Rockefeller-backed Trilateral Commission and began the deregulation of the financial industry which Reagan, Bush I, and Clinton carried forward. While Reagan was allowed to enjoy his movie star persona, he slashed taxes for the rich, ran up the largest federal deficits in history, and eliminated the government’s regulatory restraints on business consolidation and monopoly. Clinton, the pro-business Democrat, signed on to NAFTA and gave the financiers free rein while keeping the federal budget under control through reducing the government payroll. Today, George W. Bush, while priding himself on his determination and toughness as a “war president,” has been a total nonentity in the face of the lobbyists, corporate magnates, and bankers who have completed their takeover of the economy in a manner reminiscent of the division of rackets among Mafia crime families.

The question of whether anything can be done to avert the drift leaves us with the question of exactly where Hillary Clinton and Barack Obama now stand.

Certainly the fact that the two leading contenders for the Democratic Party nomination are a woman and an African-American is something historic in American politics. No one can doubt that. But is this relevant to the real issues?

While Obama leads in the delegate count, Clinton seems to be doing all she can to drag him down through what is appearing to be almost a “smear-and-fear” campaign. Still, supposing for a moment that the Clinton-Obama stalemate will not negate what should be the Democrats’ golden opportunity to retake the White House, let us ask how much of a difference would the election of either of them make?

Would we see just tinkering around the edges where the oligarchs continue to rule while a slightly more compassionate government tries a little harder to ease the plight of the common man?

Or would we see a fundamental difference that would move the nation back in the direction of its democratic roots?

Would we see a transformation on the order, say, of Franklin D. Roosevelt’s New Deal?

Anything like Abraham Lincoln’s determination to preserve government “by, of, and for the people”?

Something similar to what was called the “Revolution of 1800,” when Thomas Jefferson took the government back from the Federalists who had compromised the ideals of 1776 by turning over so much power to the financiers who were working behind the scenes to control economic matters through Alexander Hamilton’s First Bank of the United States?

Or even an upheaval like the American Revolution itself where a new nation was created in the face of oppression by a London-based financial, economic, military, and political tyranny which today’s oligarchs who work out of the gigantic banking conglomerates and Wall Street investment houses are coming to resemble more and more all the time?

Anyone who runs for president and actually wishes to accomplish something must realize that under our constitutional system of government, the only individual who can bring about change is a strong president acting on behalf of “We the People.” The enemy of such a president would be the oligarchs, elitists, and “Robber Barons” who have subverted democracy repeatedly throughout American history but particularly over the past quarter century.

Of course in recent years the oligarchs, acting as what President Martin Van Buren once called the Money Power, have become more deeply entrenched than ever before, with many layers and complexities added since the times of Jefferson, Lincoln, and Roosevelt. The problem today is exponentially worse as the power of the oligarchs touches every aspect of life. This has everything to do with the initiating of the Federal Reserve in 1913 which was the oligarchs’ pathway to power.

The waters today are far murkier than ever. The complexity mirrors and in large part is a result of the debt-based monetary system which the oligarchs not only run but own. So the big question is will any president be able to disentangle him/herself from the myriad of tentacles that have grown over the years and that have the effect of binding the president to the oligarchy’s system. This system since 1913 has gained momentum and absolute power and credibility even in the face of its fatal design flaws.

The next president will be defined by whether she or he is willing to bite the hand that has fed her/him by taking on the oligarchy and acting on behalf of the people. The two candidates who most emphatically would have done this—Ron Paul for the Republicans and Dennis Kucinich for the Democrats, both members of the House of Representatives, not the more elitist Senate—are out of the picture. Ralph Nader is back on the scene but is so late in arriving that his impact will likely be negligible. Of course we know where John McCain stands in making himself increasingly a clone of George W. Bush.

Meanwhile, Hillary Clinton has seriously compromised herself by accepting donations from so many members of the financial oligarchy and corporate elite. Obama has been the more populist of the two in raising funds from over a million individual donors. Whether this is indicative of the likelihood that he would govern in a more independent fashion is far from clear.

What is clear is that from this point on, the voters in the remaining Democratic primaries, as well as the super-delegates, should have only one question in mind. Not whether Clinton or Obama has the more persuasive slogans or slings the most mud or is the most “ready” to lead. Not the side-issue of whether history will be made by the election of a woman or an African-American.

Instead we should be asking whether either will fight against the oligarchs on behalf of the people.

Given the rush of events, 2008 should be a major turning point in American history. If three-fourths of the population believes the country is moving in the wrong direction, can we count on a new president genuinely to represent this majority? Or will we simply get another version of “more of the same”?

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Promise of Monetary Reform is in preparation. He is the author of Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age, called by one reviewer, “the most important spaceflight book of the last twenty years.” His website is at
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Economic Democracy & a Guide to the 2008 Presidential Election by Richard C. Cook

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