“Every state is condemned to follow a policy dictated by its geography.” — Napoleon Bonaparte (1769-1821)
[NATO’s goal is] “to keep the Russians out, the Americans in, and the Germans down.” — Lord Ismay, first NATO Secretary-General
“Of all the enemies to public liberty, war is perhaps the most to be dreaded because it comprises and develops the germ of every other.” — James Madison (1751-1836), fourth American President
by Rodrigue Tremblay
2 January, 2011
“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” – Benjamin Franklin (1706 – 1790), American inventor, journalist, printer, diplomat, and statesman (1775)
“A Party member lives from birth to death under the eye of the Thought Police. Even when he is alone he can never be sure that he is alone. …At the apex of the pyramid comes Big Brother. Big Brother is infallible and all-powerful. Every success, every achievement, every victory, every scientific discovery, all knowledge, all wisdom, all happiness, all virtue, are held to issue directly from his leadership and inspiration.” – George Orwell (1903-1950) (Eric Arthur Blair), (book: 1984)
“Since information gives power, access to personal files can lead to unreasonable pressures, even blackmail, especially against those with the least resources, people who depend upon public programs, for example. Big Brother isn’t a camera. Big Brother is a computer.” – C.J. Howard, political novel “Cybercash”
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by Rodrigue Tremblay
19 June, 2010
“If ever a time should come, when vain and aspiring men shall possess the highest seats in Government, our country will be in need of its experienced patriots to prevent its ruin.” — Samuel Adams (1722-1803), statesman, political philosopher, and one of the Founding Fathers of the United States, 1776
“America is addicted to oil.” — President George W. Bush, State of the Union address, 2006
“Let me be clear: BP is responsible for this leak; BP will be paying the bill.” — President Barack Obama, May 2, 2010
More often than not, the consequences of public policies, good or bad, are felt many years after they have been taken. The 2010 BP oil spill in the Gulf of Mexico is a good example. This disaster is, to a large extent, a consequence of the Bush-Cheney energy policy of 2001 and later.
by Rodrigue Tremblay
May 28, 2009
“I almost went down on my knees to beg [President] Herbert Hoover to veto the asinine Hawley-Smoot Tariff.”…“That Act intensified nationalism all over the world.” — Thomas Lamont, banker and economic adviser, June 1930
“Now is a time where we have to be very careful about any signals of protectionism.” –President Barack Obama, February 19, 2009
“From the purely economic point of view nothing speaks against free trade and everything against protectionism.” — Ludwig von Mises (1881-1973), Austrian economist
When the economy is booming, foreign borrowings and imports of goods and services from other countries are most welcome. They allow for more spending without inflation and they raise living standards. It is a version of having your cake and eating it too. In an economic downturn, however, the political reflex of populist politicians is to turn protectionist and to become economic isolationists by raising trade barriers. In such an environment, foreign competition becomes a convenient scapegoat for the crisis, even though the causes of such crisis are most often purely domestic in nature.
by Rodrigue Tremblay
Wednesday, April 29, 2009
“An election cannot give a country a firm sense of direction if it has two or more national parties which merely have different names but are as alike in their principles and aims as two peas in the same pod.” – Franklin D. Roosevelt, 32nd US President (1933-45)
“Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.” –Theodore Roosevelt, 26th US president (1901-1909)
“I don’t remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world.” – Paul Volcker, former U. S. Fed Chairman
“Prosperity is just around the corner.” – President Herbert Hoover, 1932
“This recession was not caused by a normal downturn in the business cycle. It was caused by a perfect storm of irresponsibility and poor decision-making that stretched from Wall Street to Washington to Main Street.” – President Barack Obama, April 14, 2009
On April 29, 2009, President Barack Obama completed his first 100 days in office, a symbolic milestone. In somewhat of a parallel to Franklin Delano Roosevelt, who succeeded the beleaguered administration of Herbert Hoover, Barack Obama took over from a most clumsy predecessor, George W. Bush.
by Rodrigue Tremblay
Thursday, March 26, 2009
“Deficits in the, let’s say, 5 percent of GDP range would lead to rising debt-to-GDP ratios that would ultimately not be sustainable.” — Peter Orszag, Obama White House budget chief
“The [US] financial system is facing possible total losses of $7 trillion. …With the banks ‘effectively insolvent’, we’ve concluded that the only viable solution is nationalization.” — Matthew Richardson and Nouriel Roubini, American economists
“China is worried that the U.S. may solve its problems by printing money, which will stoke inflation.” — Zhao Qingming, Chinese financial analyst
“Whoever controls the volume of money in any country is absolute master of all industry and commerce.” — James A. Garfield, (1831-1881) 20th President of the United States
After ten years of wholesale financial deregulation, bad policies and unsound banking practices, and facing a worsening recession, over the last year and a half the U.S. government has been pumping trillions of dollars in order to deleverage and recapitalize banks that were on the brink of insolvency. But the banking crisis is of such a magnitude, and the damage done to the financial system so widespread, that each pumping of money into the system has never seemed to be enough. This is because numerous American financial institutions, and among the largest, have suffered multibillion-dollar losses, not only with subprime mortgages, but especially with large amounts of derivative products that have turned sour. Not the least of these are the famous gambling products called credit default swaps, (CDS), [which the Bank of International Settlements is reporting to be worth some $57 trillion.
For its part, ever since the collapse of the investment bank Bear Stearns on March 15, 2008, the Fed has pumped trillions of dollars, under various forms, into sick financial institutions in order to keep them afloat, or in order to merge them with other entities.
“There are three kinds of lies: lies, damned lies, and statistics.” –Mark Twain, (1835 – 1910)
“The Cost of Living [has been] replaced by the Cost of Survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.” — John Williams, private economist
“The consumer price index is being understated by at least 1 percent per year.” — Bill Gross, professional investor
“… The development of credit derivatives has contributed to the stability of the banking system by allowing banks, especially the largest, systemically important banks, to measure and manage their credit risks more effectively. In particular, the largest banks have found single-name credit default swaps a highly attractive mechanism for reducing exposure concentrations in their loan books….” — Alan Greenspan, Fed Chairman, May 5, 2005
Last February 20th, the U.S. Department Of Labor Bureau of Labor Statistics announced that, on a seasonally adjusted basis, the U. S. Consumer Price Index (CPI) increased by 0.3 percent during the month of January. Some independent economists, however, think that the real inflation rate is much higher, possibly as high as 7.52 percent. Why is that so?
The CPI is a measure of how much the price level of a basket of representative consumer goods and services, adjusted for predictable seasonal shifts, is supposed to have varied during a month or a year. Such a measure has been provided by the Bureau of Labor Statistics since 1919, covering the period between 1913 and today.
For many people, the CPI is less a measure of inflation than an imperfect measure for adjusting cost of living allowances. It is a technique that plays a central role in computing increases in the Cost Of Living Allowances (COLAs) of various money disbursements, incomes and wages. Some incomes, for example, such as Social Security payments and other entitlements, are statutarily adjusted upwards when the CPI goes up, and such adjustments have a direct influence on one’s standard of living.
by Rodrigue Tremblay
Friday, February 13, 2009
“The [financial] crisis was not a failure of the free market system and the answer is not to try to reinvent that system. …Government intervention is not a cure-all.”
– President George W. Bush, Thursday November 13, 2008
“There is no cause to worry. The high tide of prosperity will continue.”
– Andrew W. Mellon, Hoover’s Secretary of the Treasury. September 1929
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”
– President Herbert Hoover, May 1, 1930
Tuesday, February 10, may be the date when the U.S. economy officially entered into an economic depression. This was when President Obama’s Treasury Secretary, Timothy Geithner, announced that the Obama administration was about to expand Bush’s Secretary Paulson’s $700-billion plan to rescue large U.S. banks from insolvency, euphemistically called the Troubled Assets Relief Program (TARP). The purpose now, as it was previously, is to use public capital, loans and guarantees to remove toxic financial assets from private banks’ balance sheets and to transfer them to the Government and/or to willing private investors (hedge funds, private equity firms and other investors). One must keep in mind that Mr. Paulson and Mr. Geithner were the principal architects of last October’s original plan. This was then, and it is now, a plan designed primarily to use hundreds of billions of taxpayer dollars to prevent banks from declaring bankruptcy, while in fact doing little to accomplish its presumed primary objective of getting banks to resume normal lending. Such a cure has failed in the past and is likely to fail now. Saving insolvent banks is not the same as fixing them and making them viable.
by Prof. Rodrigue Tremblay
Global Research, December 31, 2008
“The liberty we prize is not America’s gift to the world, it is God’s gift to humanity.” — George W. Bush, State of the Union speech, January 28, 2003 (N.B.: Bush’s primary speechwriter at the time was a theologian: Michael Gerson.)
“When it comes to the Israeli-Arab conflict, the terms of debate are so influenced by organized Jewish groups like AIPAC that to be critical of Israel is to deny oneself the ability to succeed in American politics.” — Henry Siegman, former head of the American Jewish Congress
“I don’t think there is such a thing as an independent Israel doing anything, because I think no matter what they do its our [American] money, its our weapons, and they’re not going to do it without us approving it and if they get into trouble we’re going to bail them out, so there is no separation between the two.” — Congressman Ron Paul (R-TX), Dec. 28, 2008
“The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing.” — Albert Einstein (1879-1955) Physicist and Professor, Nobel Prize 1921
The year 2008 was not a very good year by any account, either financially or politically. Chaos and immorality have prevailed.
Indeed, this was a year when fools and criminals in power proved again that we live in a very immoral world. First case in point: the insane Georgia-Russia war in which hundreds of people died because of the decisions of a few hotheads. Second case in point: the savage bombing of the Gaza Strip by Israeli warplanes, after the government of Israel had imposed a military blockade of the Palestinian territory. Here again, the world more or less stood still as fools, criminals and accomplices allowed for the killing of people on both sides.
“In a crisis, discount and discount heavily.” — Walter Bagehot (1826-1877), British economist
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” — Thomas Jefferson (1743-1826), 3rd U.S. President.
“By this means [printing money] government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.” — John Maynard Keynes (1883-1946), British economist
On December 16 (2008), the Bernanke Fed took the most unusual step of lowering the overnight inter-bank lending rate, the federal funds rate, to a level never reached before, i.e. zero percent with an upside limit of 0.25 percent. It also announced that it will buy “large quantities of” mortgage-backed securities and is considering doing the same thing with Treasury bonds of longer maturities, in order to lower the entire yield curve. What it did not say explicitly is that the Fed is ready to debase the U.S. dollar to artificially low levels in order to reflate the U.S. economy. What the Fed wants is to trigger monetary inflation and change deflation expectations at all costs through large-scale debt monetisation and thus floating excess debts in a sea of newly created money.
by Prof. Rodrigue Tremblay
October 25, 2008
“Greed is good. Greed is right. Greed Works.” — Gordon Gekko, corporate raider (played by Michael Douglas) in the movie Wall St.
“President [George W.] Bush will be remembered as the most fiscally irresponsible president in our nation’s history.” — Sen. Kent Conrad, Chairman of the Senate Budget Committee
[The government’s decision to buy shares in the nation’s leading banks] “is not intended to take over the free market, but to preserve it.” — President George W. Bush, October 14, 2008
“Our country for the first time in my life time has abandoned the basic principle of human rights. …We’ve said that the Geneva Conventions do not apply to those people in Abu Ghraib prison and Guantanamo, and we’ve said we can torture prisoners and deprive them of an accusation of a crime to which they are accused.” — Jimmy Carter, former American president
“After [this] war [against Iraq] has ended, the United States will have to rebuild much more than the country of Iraq. We will have to rebuild America’s image around the globe.” — Sen. Robert Byrd, (D-W.Va), March 19, 2003
Economically, the Bush-Cheney administration is leaving behind a big financial and economic mess. In fact, this is an administration that has brought misery upon America by its misguided economic policies that have built a mountain of shaky debt and rendered dysfunctional large segments of the American banking industry and large sectors of the U.S. economy, through inappropriate deregulation to enrich greedy special interest characters, wheeler-dealers, corporate con men, professional short-sellers and other scam artists and swindlers. In so doing, it has empowered rich parasitic speculators and turned the financial sector into a giant casino, thus risking the health of the entire economy.
Indeed, and to complete the picture, the Bush-Cheney administration has emptied the public treasury, debased the U.S. currency and fueled deflation, inflation and, in the end, produced stagflation and what can turn out to be a very serious recession.
This is understandable. Over the last eight years, the Bush-Cheney administration has adopted a laissez-faire policy based on a let-them-eat-cake ideology. It has pushed for economic deregulation throughout the government, beginning with the de-fanging of the Securities and Exchange Commission. It has pursued an aggressive policy of deregulation of the large global investment banks, which were basically left to self-regulate themselves and allowed to build up the largest mountain of flimsy backed debt instruments and risky financial derivative products ever seen in history. It did the same thing for other regulatory agencies such as the Consumer Product Safety Commission, the Environmental Protection Agency, worker safety and transportation agencies.
by Prof. Rodrigue Tremblay
Global Research, October 18, 2008
Author’s Website: www.thenewamericanempire.com
“The price of apathy towards public affairs is to be ruled by evil men.”Plato (427-347 B.C.)
“We hang the petty thieves and appoint the great ones to public office.” Aesop (620–560 B.C.)
“When fanatics are on top there is no limit to oppression.” H.L. Mencken (1880-1956), American author
“We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, ‘Stay the course.’ Stay the course? … I’ll give you a sound bite: Throw all the bums out!” Lee Iacocca, former CEO of Chrysler Corporation (book: Where Have All the Leaders Gone?)
Whoever is elected president in the coming November 4 American election will inherit a most miserable situation on nearly all fronts. This is because George W. Bush has been one of the worst presidents the U.S. has ever had, if not the worst. It is widely recognized that he was a below average politician who led his country on the wrong track, both domestically and internationally. Today, only a meager 9 percent of Americans dare to say that their country is moving in the right direction.
As a matter of fact, a very large majority of Americans— both Democrats and Republicans, men and women, residents of cities and of rural areas, high school graduates and college-educated— all say that the United States has been headed in the wrong direction under George W. Bush’s stewardship. Bush’s approval rating reflects the lack of confidence that Americans have in him and his administration. In fact, George W. Bush has recorded the lowest approval rating of any president in the 70-year history of the Gallup Poll. And, around the world, the United States has never had a leader who commands so little respect and confidence. Most people in the U.S. and abroad will find satisfaction in seeing his term come to an end.
This is a terrible indictment of the Bush Administration that has presided over America’s destinies for the last eight years. What is more disconcerting, this all came after George W. Bush won the presidential election in 2000, with fewer popular votes than Democratic candidate Al Gore, after a one-judge-majority decision of the Supreme Court, in effect, gave him the presidency. Therefore, this is an administration that had no widespread democratic mandate to do what it has done. And it has done a lot of things wrong. In fact, many people think this has been a morally bankrupt administration.
by Prof. Rodrigue Tremblay
Global Research, October 12, 2008
“The basis for optimism is sheer terror.” — Oscar Wilde [After the March 2008 Bear Stears bailout]
“As more firms lost access to funding, the vicious circle of forced selling, increased volatility, and higher haircuts and margin calls that was already well advanced at the time would likely have intensified. The broader economy could hardly have remained immune from such severe financial disruptions.” — Ben Bernanke, Fed Chairman (March 2008)
“In accounting 101 we learn that high yields equal high risk. We know the CEOs had an incentive to disregard this because they were getting huge bonuses.” — David Hartzell, dean of the University of Delaware’s business college and a former vice-president of Salomon Brothers
“Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown.” — Dominique Strauss-Kahn, Head of the IMF (October 11, 2008)
The Bush administration’s way of dealing with the ongoing financial crisis has been frantic, but probably less than adequate. In fact, tragic errors may have been made that must be remedied as quickly as possible.
The most damaging error may have been to let the global investment bank Lehman Brothers fail ($691 billion of assets at the end of 2007), on Monday September 15. This fateful date may have to be remembered in the future. This was the largest failure of an investment bank since the collapse of Drexel Burnham Lambert in 1990. In contrast, the Fed and the U.S. Treasury moved quickly in mid-March (2008) to save a similar global investment bank in distress (but half the size of Lehman), Bear Stearns, by quickly lending and guaranteeing $29 billion to the large universal J. P. Morgan Chase bank in order to absorb it. —(N.B.: Let us keep in mind that it was the collapse in June 2007 of two internal Bear Stearns hedge funds that had been heavily invested in mortgage securities that kicked off the full-fledged market panic that unfolded in August 2007, and which today has turned into a full-fledged international financial crisis).
Why was the same treatment not offered to Lehman? Possibly because of a personal lack of empathy between Treasury Secretary Henry M. Paulson Jr. (a former chief executive of rival investment bank Goldman Sacks) and Lehman’s CEO Mr. Richard S. Fuld Jr., or possibly because the Bush administration wanted to make an example that all investment banks, no matter how large, could not count on being rescued by the government. The Bush administration did not even bother to appoint a trustee to supervise Lehman’s liquidation in order to make it orderly.
Such a liquidation of a large international bank, known for its worldwide interconnections and unsound banking practices, was nearly a repeat of the mistake made in letting the large Vienna-based Creditanstalt bank fail, on May 13, 1931. This was a bank that had borrowed large amount of money in London and in New York to finance its activities. Its failure created a domino effect among other international banks that had lent to each other in the international credit chain. So much so that the failure of the Creditanstalt forced them to severely tighten their lending to absorb their sudden losses.
“When troubles come, they come not single spies, but in battalions.” – Shakespeare (1564-1616)
“The liberty of a democracy is not safe if the people tolerate the growth of private power to the point where it becomes stronger than the democratic state itself. That in its essence is fascism — ownership of government by an individual, by a group or any controlling private power.” – Franklin D. Roosevelt (1882-1945), 32nd US president
“Our economy is facing a moment of great challenge. … We’re in the midst of a serious financial crisis.” – George W. Bush, September 24, 2008
The Washington gridlock about finding a solution to the subprime financial crisis in the United States is turning into a tragedy, seemingly because of a fundamental lack of understanding and communication about the causes of this financial crisis and the most efficient way to solve it. The nature of the crisis, the economic consequences if it is not solved, and how it could be solved without costing the government and U.S. taxpayers a single penny has not been properly explained to Congress and to the U.S. population. Continue reading
by Rodrigue Tremblay
Global Research, September 23, 2008
“Those who cannot remember the past are condemned to repeat it.” George Santayana
“The bill gives [Sec.] Paulson the ability to nationalize an unlimited amount of private debt and force you and your children to pay for it…. I predict that if this passes it will precipitate the mother and father of all financial panics.” Karl Denninger (Market Ticker)
“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” Section 8, Bush’s administration proposed legislation to bailout U.S. banks [Legislative Proposal for Treasury Authority to Purchase Mortgage-Related Assets].
“The Fed is merely trying to inject money to keep prices not supported by fundamentals from falling. It is a prescription for hyperinflation. The only way to keep prices of worthless assets high is to lower the value of money. And that appears to be the Fed unspoken strategy.” Henry Liu, economist
If I may simplify somewhat the situation, (but only slightly) we can say that over the last quarter of century, Wall Street firms bought out Congress and the White House (and paid at wholesale prices). Now, they want the U.S. government to buy them back (and they want to sell at retail prices). Continue reading