MIke Whitney isn't surprised, but is disappointed in Obama

Mike Whitney in Conterpunch: Rampage in Gaza for a Bump in the Polls

Barack Obama has passed his first test with flying colors. He's made himself disappear so Israel can continue its killing spree in Gaza. The last time a president shrunk this small was when Ariel Sharon took his wrecking-ball through Jenin during the second intifada. Bush slipped down a mouse hole so Israel's "Man of Peace" could finish his dirty work unopposed. Now Obama has taken refuge in that same dark hideaway. What a relief it must be for his critics at AIPAC and the far-right think tanks to know that the next Commander in Chief will be every bit as compliant as the last. That's "continuity they can believe in".

Obama has remained serenely detached while American-made F-16's have dumped more than one hundred tons of lethal ordnance on the captive population of Gaza. In fact, the president-elect has spent more time working on his abs at the Semper Fit gym in Honolulu than trying to stop the bloody onslaught which has already resulted in the deaths of over 300 Palestinians, half of who are civilians.

When asked why he hasn't given his opinion on the conflict, Obama spokesman have blandly stated, "There's only one president at a time".

Uh-huh. So why was Obama so quick to condemn Russia's invasion of South Ossetia? Is the yardstick for measuring aggression different in the Caucasus than it is in the Middle East? Or is it because politicians are just too afraid to cross Israel?

"If somebody shot rockets at my house where my two daughters were sleeping at night, I'd do everything in my power to stop them," Obama proclaimed on a recent visit to Israel.

Right. It's too bad Palestinian parents can't claim that same right without being branded as terrorists.

[. . .]

Mike Whitney thinks we need higher wages

http://www.counterpunch.org/:

More Pay is the Only Way

By MIKE WHITNEY

Wages, wages, wages. It all gets down to wages.

A strong, resilient economy, that can withstand the periodic buffeting of cyclical downturns, must be built on a rock-solid foundation of wages that keep pace with production. If wages stagnate, as they have for the last 30 years, the only way a consumer-driven economy can grow is through the expansion of personal debt, which isn’t so hot in the long run.

Consider this: the US economy is 72 per cent consumer spending. That means the Gross Domestic Product (GDP) cannot grow if salaries don't keep up with the price of living. Low Income Families (LOF)--that is, any couple making less than $80,000--represent 50 per cent of all consumer spending. These LOF's spend everything they earn just to maintain their present standard of living. So, how can these families help to grow the economy if they're already spending every last farthing they earn?

They can't! Which is why wages have to go up, up, up. The cost to short-term profits is small potatoes compared to the turmoil created by a deep recession, which is what the world is facing right now due to misguided economic policies. The present crisis could have been averted if there was a better balance between management and labor. But the unions are weak and have little political power, so salaries have languished while Wall Street has turned the government into a revolving door for industry reps. and corporate stooges who apply their anti-labor doctrine with ruthless zeal. As a result, real wealth has been replaced by chopped up bits of mortgage paper, stitched together by Ivy League MBAs, and sold to investors as priceless gemstones.

This is the system that Bernanke seeks to resurrect with his multi-trillion dollar transfusion; a system that shifts a larger and larger amount of the nation's wealth to a smaller and smaller group of elites.

Arthur Silber: The Vampire, Struck by Sunlight

That quote from Arthur Silber in my previous post inspires me to post the whole thing. Is this a bit indulgent? Perhaps a bit redundant? I don't think so....




Arthur Silber:

September 15, 2008

Simplicity and directness would appear to be advisable, as we are all buried in a torrent of irrelevancies, self-justifications, explanations which explain nothing and serve only to confuse everyone (which is precisely their aim), and an unending stream of lies and half-truths. Perhaps it would be easier to think of it in the following terms, for vampire stories are very popular. The economy of the United States is disintegrating in the same way a vampire does when exposed to sunlight, and for the same reason. Having sucked the blood out of all the living creatures unfortunate enough to be nearby, the vampire becomes intoxicated with what he perceives as his own power. Heedless of the warnings screamed at him from the few sane voices that remain, the vampire frolics and gambols long past the appointed time for his return to the soil of reality, so drunk is he on the glory of his being. The sun has been slowly rising for quite a while. Anyone who is looking can see it. Anyone who knows the relevant facts is fully aware of what will happen when the sun's rays strike the vampire. But almost no one is looking at the sun, and anyone who states the relevant facts is ignored. Finally and now inevitably, the sun strikes the vampire. Within minutes, the vampire no longer exists. This is not a surprise. This is what happens -- this is the only thing that happens -- in these circumstances, given the nature and characteristics of the sun and the vampire. Here are a few simple principles to keep in mind. Given the propaganda spewed by the ruling class, all of which is eagerly gulped down by most Americans, I should rephrase that: here are a few simple principles to understand, perhaps for the first time. One: You can't get something from nothing. Didn't your parents teach you this when you were four or five? Did you forget it? Or perhaps you never actually believed it. After all, most people want to believe they will win the big lottery. Fools, that's what they are. If the description applies to you, put that shoe on, sister or brother.

Mike Whitney:

The funny thing about capitalism is that you need capital to play. When the bank-vault is full of nothing but worthless mortgage-backed securities (MBS) and overvalued junk bonds; the whole thing goes belly-up fast. That appears to be the case with Lehman Bros, the century-old Wall Street warhorse that has joined the long procession of underwater banking establishments now hurtling towards the cliff. Lehman had a great go of it during the boom times when all it took to make oodles of money was a predictable flood of low interest credit from the Fed and a compliant ratings agency that would stamp every crappy securitized pool of mortgages with a big Triple A before hawking it to some gullible investor in Shanghai or Heidelberg.

Lehman travails are not much different from anyone else in the banking fraternity. The problem is that the entire system is under-capitalized and over-leveraged. When Bear Stearns went down last year, it was levered at a ratio of 26 to 1. When Hedgie Carlyle Capital blew up, it was levered at 32 to 1. And when Fannie and Freddie were finally taken over by the US Treasury; the two behemoths were levered at 80 to 1, which is to say that they had a one dollar capital cushion for every $80 they had loaned out.

A major part (perhaps the major part) of the U.S. economy has treated debts as assets for a long time. The best and brightest made it appear sophisticated and smart: they took debts and securitized them, chopped them up, repackaged them, recombined them, splintered them some more, repackaged and sold those, and on and on it went. This process doesn't turn nothing into something: it spreads the nothing among more and more institutions and makes the entire system increasingly vulnerable. Everyone pretends that the nothing is backed by something, but it isn't. To be more precise, as in the case of Fannie and Freddie, for example, there is $1 of something for every $80 of nothing. In fact, there's much more nothing, when you add in the repackaging, recombining, splintering, selling and reselling. That's a lot of nothing, and almost no something. This is how con games work. Your parents probably explained this to you, many years ago. You forgot, or you didn't believe it. Believe it now. Two: You, the "ordinary" American, are the one who finally pays for all of this. You are the ultimate sucker. My only criticism of Whitney's latest article is that he buries the most critical sentence in the middle of a longer explanation:

Keep in mind, the biggest source of American power is its access to cheap capital via the US taxpayer.

Read that sentence again. Once more. Again. One more time. You pay for all the depredations of empire: for the endless criminal wars of aggression abroad, and for the feast of the vampires here at home. It's your blood that kept them going all this time -- and it's your blood that will still keep them going. The ruling class rigged the game a century ago. Short of leaving the country or dropping out of the system altogether, you can't go somewhere else. There isn't anywhere else to go. The system is designed by and for the benefit of the ruling class, and for no one else. Now look at that sentence in the context of the longer passage:

When the net foreign purchases of US financial assets begin to slow; the game is over. The Fed will be forced to raise interest rates to attract foreign capital which will put downward pressure on the economy and accelerate the housing crash. Paulson's decision to provide unlimited capital to Fannie and Freddie, will stack more and more debt atop the faltering dollar and US Treasuries. It is the equivalent of lashing the greenback to an anvil and tossing it overboard. Paulson's attempts to stave off a systemic banking crisis ensures that the federal government will undergo an unprecedented funding crisis sometime in the near future. There will be higher taxes for the battered middle class and higher interest rates for businesses and consumers. This will trigger a protracted economic slowdown and weaker growth. Credit will get tighter, banks will default, unemployment will soar and GDP will shrivel. A negative feedback loop will develop from the faltering financial system to the real economy; a vicious circle ending in massive layoffs, weakening demand, falling stock prices, and withering consumer confidence. Welcome to Soup kitchen USA.

Presently, Paulson and New York Fed chief Timothy Geithner are pressing Wall Street banking elites to pony-up enough money to buy up Lehman's devalued real estate assets. The Fed's proposal is similar to Greenspan's rescue of Long-Term Management LP (LTCM) which roiled financial markets in the late 1990s. Paulson has signaled that there be NO government bailout like Bear Stearns when the Fed bought up $29 billion in mortgage-related assets. The Fed is tapped out, having already committed half of its balance sheet -- nearly $500 billion -- in repos through its "auction facilities" which have recently skyrocketed to record highs of $19 billion per week for the last 3 weeks. The crisis is deepening by the day. Similarly, the Treasury has hitched its wagon to Fannie and Freddie which expands the National Debt by another $5.2 trillion and seriously undermines the "full faith and credit" of the US in the process. Keep in mind, the biggest source of American power is its access to cheap capital via the US taxpayer. Paulson has now put that source of revenue at risk by nationalizing the housing industry and burdening the taxpayer with (potentially) astronomical future obligations, even though he knows full-well that the market could drop another 15 to 20 per cent before the end of 2010. Paulson's recklessness has doomed the country to years of struggle

You've been conned, and the con is killing you and everyone you know. Whatcha gonna do about it? Not a damned thing, that's what. Three: As with every other crisis, the ruling class, which created the crisis in the first place, will tell us how to "solve" it. As I wrote in, "Psst -- While You Were Gibbering, the Ruling Class Rigged the Game and Won Everything":

This election campaign will be especially awful for anyone still capable of the most minimal kind of rigorous thought, in significant part because we have the triple- or quadruple-twist of the Obama lies on top of all the lies that are regularly trotted out every four years (and on a lesser scale, every two). We are told about how "important" it is that we vote -- although for many of us (including me, since I live in California), our votes are altogether meaningless on the presidential level, to say nothing of newer voting methods, which make one wonder if all of this is nothing but a charade for idiots -- and we are told of the glories of "participatory democracy" and how splendiferous it is to hear "the people's voice."

These are the idiotically empty cliches and slogans of our civic religion, which serve to drug "the people" into apathy, into granting the ruling class still more power, into taking part in these vacuous exercises in "democracy," and into colluding in a massive coverup of the truth of what has transpired over more than a century and is now set in stone: this is government of the ruling class, by the ruling class, and for the ruling class. Barring severe economic collapse (more than possible), widespread global war (also more than possible), repeated natural catastrophes (similarly more than possible), it shall not perish from the earth -- until it implodes as the result of its own rot and corruption, as have all similar systems in the past. Assuming disasters on a massive scale don't occur, it's probably here for your lifetime at least.

...

This amalgamation of major business interests with state power, this system of oligopoly and governance of, by and for the ruling class, has metastasized beyond imagining since the Progressive era. It has expanded in every direction and subsumed virtually every industry and business in America, large and small. It is this system of "political capitalism" that dictates domestic and foreign policy, including a foreign policy of endless war, preparation for war, and various forms of "cleaning up" after war. You the ordinary citizen, you "the people," figure nowhere in this -- except to provide the necessary labor and, when required, your blood and your life.

...

[T]his "transformation of the American political narrative" was essentially completed during and immediately following the Progressive era, and then enshrined by the New Deal and World War II. We were fucked a very long time ago. What's tragic is that it is only now that a few more people are beginning to notice -- and even now, it is still only a very few additional people. These are truths that no politician will tell you, and that almost no commentators or bloggers will mention. Lies are what sustain you, lies are what you live on, lies are what you demand, and lies are what you'll get and all you'll get. If you keep this up, the lies without end will kill you, and a lot of other people as well.

Those people who have followed the foreign policy catastrophes of recent years are repeatedly struck by this phenomenon: all the "experts" who are supposedly so knowledgeable in this area -- that is, all the "experts" who led us into the catastrophes and who were grievously, bloodily, murderously wrong about every significant matter -- remain entrenched in the foreign policy establishment. Moreover, they are precisely the people to whom everyone turns for the "solution" to the disasters that engulf us, both now and the disasters likely to come. This is what it means to have a ruling class. As I have said, the ruling class rules. The ruling class exercises a lethal monopoly on the terms of public debate, just as it exercises a lethal monopoly on the uses of state power. What you have seen over the last six months and more, and what you will see in the coming months and years, is the same phenomenon in the realm of economic policy. All of the solons who led us into this abyss of mounting debt, worthless securities, failing financial institutions, economic contraction and collapse, rising taxation, and all the rest, will now instruct us as to how we should "solve" the crisis that they have created. The crisis may be ameliorated to a degree, and the worst of the consequences may be postponed for a while. But whatever "solutions" are implemented, whatever reorganization and reregulation is imposed, it will all be done in accordance with the ruling class's desires and goals. It will all be to protect their own wealth and power to whatever extent is possible, and to expand their wealth and power still more, if that remains at all feasible. And it probably will be feasible: your taxes can increase. They can increase a lot. You still have some blood that can be drained. And/or, if Obama is elected, you can look for his adoration of "voluntary" service to switch seamlessly to mandatory service very quickly, especially if the crisis deepens sufficiently. Almost no one will complain. Almost no one will remember the bloody history of those past regimes, of both left and right, that relied on mandatory national service. The ruling class is the state. The state exists to serve the interests of the ruling class, and only the interests of the ruling class. They may promise you greater unemployment benefits, better health care, and a host of other government benefits -- all benefits also paid for by you, please note (the ruling class does have a sense of humor, after all; vampires are often crudely funny creatures) -- and those promises will cause most Americans to fall for the con still one more time. Whatcha gonna do? Not a goddamned thing. Vote for McCain! Vote for Obama! It doesn't matter. The ruling class wins either way. The ruling class always wins. That's how the system was designed, and that's how it works. For the ruling class, it works very admirably. Whatcha gonna do? Laugh. Laugh a lot. Fuck the bastards.

Is this the week the US economy melts down?

There are so many interesting articles that I can't seem to stop reading. It's like watching a trainwreck in slow motion.

Or it's like this. I've thought for years that having George Bush and Company, Inc., running things was like having a drunken underage frat boy driving the bus with all your loved ones aboard, veering off the road, and nearing the edge of a precipice. Well, now we've officially driven off the edge. The wheels have left the ground. The bus is hurtling through space. What will happen when it hits bottom? I can't help but watch.

According to all the folk I can find who seem to know what's happening, every Fed bailout of crooks and theives just digs the chasm the bus is falling into that much deeper. Here's a selection of excerpts from astoundingly dismal and horrific posts for your entertainment:

First, a gaggle of links from today's Online Journal—

The Final Meltdown Explained:

Today’s banking crisis is the THIRD trillion dollar plus US-caused financial meltdown in the last 20 years. Each one of these crises came into being through the same basic mechanism . . . the fraudulent over-valuing of financial assets by Wall Street -- with a “wink and a nod” (and sometimes a lot more) from the White House and Congress.

The fraudulently valued assets stimulate the economy, impart the illusion of health and then, inevitably, the fraud goes too far and the whole house of card comes painfully crashing back to earth.

The three trillion dollar plus frauds were:

Fraud #1: The so-called “Savings and Loan Crisis” of the late ’80s

Fraud #2: The so-called “Tech Bubble” of the late ’90s

Fraud #3: The so-called “Credit Crisis” of today

How the scam works

The mechanism of these frauds is simplicity itself. Take a shaky financial asset and blow up its value and then sell as much of it as you can. In the “Savings and Loan Crisis,” the instrument was junk bonds. In the “Tech Bubble” it was Internet stocks. In the “Credit Crisis” it was individual mortgages collected into pools and then resold to investors.

In each case, normal, well established “bread and butter” financial principles were consciously thrown away by Wall Street with no hint of protest from federal regulators.

[detailed descriptions of the three trillion dollar scams follow...]

Mike Whitney : Grasping at Straws—

On Friday morning, Senator Christopher Dodd, the head of the Senate Banking Committee, was interviewed on ABC’s “Good Morning America.” Dodd revealed that just hours earlier at an emergency meeting convened by Secretary of the Treasury Henry Paulson and Federal Reserve chairman Ben Bernanke, lawmakers were told that “We’re literally maybe days away from a complete meltdown of our financial system.” Dodd added somberly, that in his three decades of serving in public office, he had “never heard language like this.”

The system is at the breaking point, and despite Wall Street’s elation over the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks’ balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future.

[. . .]

The malfunctioning of the markets and the freeze-over in the banking system are the outcome of a massive credit unwind instigated by trillions of dollars of low interest credit from the Federal Reserve, which was magnified many times over via complex derivatives contracts and extreme leveraging by speculative investment bankers. This has generated the biggest equity bubble in history. That bubble is now set for a ”hard-landing” which is the predictable result of an unsupervised marketplace where individual players are allowed to create as much credit as they choose.

If Paulson is not removed and his rescue plan scrapped altogether; the dollar will lose its position as the world’s reserve currency and the US government will face a historic funding crisis as foreign sources of capital dry up. That will thrust the country into a hyper-inflationary depression.

Jerry Mazza: Financial terrorism: US taxpayers bail out Wall Street criminals—

“If you want to know who to blame for the past 5 years of naked shorting, you only have two places to look: the financial brokers themselves, and the nonfeasance of a feckless SEC.” And so what goes around comes around.

But now you know. We’re under attack. Even my conservative broker said, “Somebody is making money on this.” That is just the way certain individuals made millions on 9/11, having foreknowledge of the coming event, by betting on Morgan Stanley (located in the North Tower), United and American Airlines’ stock to tank, and by betting on defense industry stocks to zoom up. The real revelation here is that the market and its so-called protective systems are offering us about as much protection from foreign and domestic attack as NORAD’s air-defense system did on 9/11. America once more is under fire.

As on that day, Cheney was in the White House bunker directing activities, and Bush was stranded somewhere listening to some school children read a goat story. And above them, some financial elites were pulling the strings to pull down the American economy and make us less than a banana republic for their continued picking. Seven years later, hardly anything has changed.

Why Elliot Spitzer was Assassinated:

The US news media failed to draw the obvious connection between the bizarre federal law enforcement investigation and leak campaign about the private life of New York Governor Spitzer and Spitzer's all out attack on the Bush administration for its collusion with predatory lenders.

While the international credit system grinds to a halt because of a superabundance of bad mortgage loans made in the US, the news media failed to cover the details of Spitzer's public charges against the White House.

Yet when salacious details were leaked about alleged details of Spitzer's private life, they took that information and made it the front page news for days.

Then some links from what have become some of my other favorite sites...

Elaine Supkis: Bailout Bill Hitting Congress September 26!

Financial Armageddon will cause the Apocalypse if the US follows Germany and Japan's examples from the Great Depression. The US is going bankrupt. Our banking system is now officially bankrupt. The rescue scheme whereby a deep in debt government bails out a deep in debt banking system always fails. The coup is not complete. We have time to argue with our rulers. I hope people are truly interested in going to DC to lobby against this bail out. Even if no one listens to us. We have to speak out. About going to DC: I now have learned that the deadline for this bail out bill is Sept. 26. If anyone wants to lobby, don't try this unless you are within 250 miles of DC. I just got a donation to help defray my own train ticket there.

IOZ: Gladitorial Combat and Other Entertainments—

400 point daily swings aren't indicative of, whadayacallit, a functioning market, but of a gang of panicked, headless chickens reacting to any bit of data with no holistic, synthetic, systemic analysis of just what the fuck is going on. Traders have absolutely no idea what they're doing, thus the wild gyrations. The notion that this is a "liquidity crisis" spurred on by sad-sack psychology, that the solution consists of a billion here, a trillion there in public-sector capital, is only that much more indicative that the geniuses running the store can't even read a balance sheet. I mean, the largest single financial entity in the world, which is the United States Federal Government is trying to rescue the so-called private economy by a.) absorbing trillions of dollars in debt obligations and b.) making multi-billion-dollar, off-the-books cash payouts from its own treasury. That ain't psychology; it's catastrophe.

I suppose this is all bad for my retirment account, but damned if I'm not enjoying it. Watching market apologists who believe that the storm is going to blow over and the ship right itself sometime in the next forty-odd days get swept overboard, food for crabs, is going to be even better. I caught a brief snippet of Kudlow the other day and thought to myself, Now there is a man with blood in his stool. At this point, these motherfuckers better hope the Large Hadron Collider swallows the fucking world. It's their only hope.

Jonathan Schwarz at A Tiny Revolution: Upside To The Bailout—

With all the gloom and doom about giving Hank Paulson $700 billion to hand out to his friends, with no oversight of any kind, it's easy to miss the upside to the bailout.

For instance:

1. An early proposal that would have allowed Wall Street executives to literally eat 100 million Americans has been discarded as "politically unfeasible."

Michael Hudson explains to Mike Whitney how the economy works

The end of a long Online Journal interview:

MW: The housing market is freefalling, setting new records every day for foreclosures, inventory, and declining prices. The banking system is in even worse shape, undercapitalized and buried under a mountain of downgraded assets. There seems to be growing consensus that these problems are not just part of a normal economic downturn, but the direct result of the Fed’s monetary policies. Are we seeing the collapse of the Central banking model as a way of regulating the markets? Do you think the present crisis will strengthen the existing system or make it easier for the American people to assert greater control over monetary policy?

Michael Hudson: What do you mean “failure”? Your perspective is from the bottom looking up. But the financial model has been a great success from the vantage point of the top of the economic pyramid looking down? The economy has polarized to the point where the wealthiest 10 percent now own 85 percent of the nation’s wealth. Never before have the bottom 90 percent been so highly indebted, so dependent on the wealthy. From their point of view, their power has exceeded that of any time in which economic statistics have been kept.

You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.

The former Soviet Union provides a model of what the neoliberals would like to create. Not only in Russia but also in the Baltic States and other former Soviet republics, they created local kleptocracies, Pinochet-style. In Russia, the kleptocrats founded an explicitly Pinochetista party, the Party of Right Forces (“Right” as in right wing).

In order for the American people or any other people to assert greater control over monetary policy, they need to have a doctrine of just what a good monetary policy would be. Early in the 19th century, the followers of St. Simon in France began to develop such a policy. By the end of that century, Central Europe implemented this policy, mobilizing the banking and financial system to promote industrialization, in consultation with the government (and catalyzed by military and naval spending, to be sure). But all this has disappeared from the history of economic thought, which no longer is even taught to economics students. The Chicago Boys have succeeded in censoring any alternative to their free-market rationalization of asset stripping and economic polarization.

My own model would be to make central banks part of the Treasury, not simply the board of directors of the rapacious commercial banking system. You mentioned Henry Liu’s writings earlier, and I think he has come to the same conclusion in his Asia Times articles.

MW: Do you see the Federal Reserve as an economic organization designed primarily to maintain order in the markets via interest rates and regulation or a political institution whose objectives are to impose an American-dominated model of capitalism on the rest of the world?

Michael Hudson: Surely, you jest! The Fed has turned “maintaining order” into a euphemism for consolidating power by the financial sector and the FIRE sector generally (Finance, Insurance and Real Estate) over the “real” economy of production and consumption. Its leaders see their job as being to act on behalf of the commercial banking system to enable it to make money off the rest of the economy. It acts as the Board of Directors to fight regulation, to support Wall Street, to block any revival of anti-usury laws, to promote “free markets” almost indistinguishable from outright financial fraud, to decriminalize bad behavior -- and most of all to inflate the price of property relative to the wages of labor and even relative to the profits of industry.

The Fed’s job is not really to impose the Washington Consensus on the rest of the world. That’s the job of the World Bank and IMF, coordinated via the Treasury (viz. Robert Rubin under Clinton most notoriously) and AID, along with the covert actions of the CIA and the National Endowment for Democracy. You don’t need monetary policy to do this -- only massive bribery. Only call it “lobbying” and the promotion of democratic values -- values to fight government power to regulate or control finance across the world. Financial power is inherently cosmopolitan and, as such, antagonistic to the power of national governments.

The Fed and other government agencies, Wall Street and the rest of the economy form part of an overall system. Each agency must be viewed in the context of this system and its dynamics -- and these dynamics are polarizing, above all from financial causes. So we are back to the “magic of compound interest,” now expanded to include “free” credit creation and arbitraging.

The problem is that none of this appears in the academic curriculum. And the silence of the major media to address it or even to acknowledge it means that it is invisible except to the beneficiaries who are running the system.