Yesterday, we reviewed the disgrace of the Washington political class asking for/demanding citizens and businesses contribute to Obama’s inauguration festivities and parties and how taxpayers will likely pay over $150 million to support the inauguration parties for the politicians in D.C.
Today’s examples come from a new book written by Jeffrey Sachs, a highly respected economist from Columbia University. The book is titled "The Price of Civilisation" and Mr. Sachs says the US economy is caught in a feedback loop: ''Corporate wealth translates into political power through campaign financing, corporate lobbying and the revolving door of jobs between government and industry; and political power translates into further wealth through tax cuts, deregulation and sweetheart contracts between government and industry. Wealth begets power, and power begets wealth,''
Well said. In about fifty words Mr. Sachs has summarized how the buying and selling of America works. We no longer live in a democracy, we live below a tier of elitists that trade taxpayer wealth and freedoms for their own reward, greed, and enrichment. That is why no major issue ever gets resolved in this country. There are powers and “gangs” that do not want them solved, it would upset the cozy arrangements that these elitists have established.
I use the word “gangs” because that is what Mr. Sachs calls them, as outlined in an article by Ross Gittins of The Sydney Morning Herald. Mr. Sachs categorizes the gangs as follows:
1) The first gang is the military-industrial complex, i.e. the relationship between the Pentagon and the private businesses and contractors that live off of its massive annual budget. Here are is a famous quote from President Eisenhower from over fifty years ago: "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist."
As a result, Sachs concludes that “America has been condemned to militarization, useless wars and fiscal waste on a scale of many tens of trillions of dollars since then.'' I would say he has gotten that right:
- Useless wars: Vietnam, Granada, Yugoslovia, Lebanon, Iraq I, Iraq, II, Afghanistan, and probably a few I have forgotten.
- Fiscal waste: you cannot spend over $600 billion a year on a world wide operation and not have fiscal waste. Rather than run down the many examples that we could list, let me refer to our most popular blog post ever regarding the Navy nonchalantly wasting over $300 million of taxpayer wealth:
Additionally, if you go to the website www.simplywired.com you will find that the average salary for an individual defense contractor is about $64,000. Since the average American household annual income is just under $50,000, you begin to see why defense contractors want the status quo to be maintained.
2) The second gang, according to Sachs, the Wall Street-Washington complex, a complex which has steered the nation’s financial system towards monopoly control by just a handful of politically connected Wall Street firms including Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley and a few other financial firms. Despite the financial meltdown of the Great Recession, despite the useless, but long and cumbersome, Dodd-Frank financial industry reform legislation, despite the public’s disgust with the banking industry in general, these few banks control as much or more of the financial industry than they did five years ago. These few banks control over 50% of banking deposits, banking assets, and just about any other measure of banking value.
How were they able to do this? Let’s look at just two examples of how the “gang” works:
- Congressman Barney Frank used to be a powerful chairman of a House banking committee. His committee was supposed to oversee and make sure banks did not get out of control. But how motivated was he in this role when:
- According to an October 22, 2010 article in the Boston Herald by Dave Wedge, Massachusetts Congressman, Barney Frank, accepted $40,000 in reelection campaign donations from financial institutions that received bailout/TARP from the government. Two things make this action so despicable. First, Congressman Frank was at the center of the whole taxpayer bank bailout activity since he was chairman of the lead House of Representatives committee that was determining which institutions got how much taxpayer money, if any.
- Second, in 2009, Mr. Frank told the Washington publication, Roll Call, that he "won't take any PAC money from banks that took TARP funds, nor would I take it from the top executive." However, according to Mr. Wedge's research he did not fulfill this statement.
- According to Mr Frank's own campaign disclosure reports, he accepted a campaign donation of $7,000 from top executives from Bank Of America. Bank of America received $45 billion in taxpayer bailout funds."
- He received $5,000 for Bank Of America's Federal PAC fund.
- He received $10,000 from the Bank Of New York Mellon Corporation which received $3 billion from the bailout fund.
- He received $2,000 from the Financial Services Roundtable PAC that includes representatives from TARP recipients Bank of America, JP Morgan, Chase, and Wells Fargo.
- He received $1,000 from U.S. Bancorp's PAC which received $6 billion in bailout funds.
- These details and further discussion of “gangster politics” can be found at:
Let’s move on to another example, this one where Congressional members got sweetheart mortgage deals from Countrywide Financial, the poster child for the bad mortgageloans that were the underlying cause of the Great Recession. The following members of Congress and their senior staffs received this preferential treatment, as outlined in an Associated Press report:
- Former Senate Banking Committee Chairman Christopher Dodd, D-Conn.
- Senate Budget Committee Chairman Kent Conrad, D-N.D.
- Mary Jane Collipriest, who was communications director for former Sen. Robert Bennett, R-Utah, then a member of the Banking Committee.
- The AP report said Dodd referred Collipriest to Countrywide's VIP unit. Dodd, when commenting on his own loans, has said he was unaware of the discount program.
- Rep. Howard "Buck" McKeon, R-Calif., chairman of the House Armed Services Committee.
- Rep. Edolphus Towns, D-N.Y., former chairman of the Oversight Committee. Towns issued the first subpoena to Bank of America for Countrywide documents, and current Chairman Darrell Issa, R-Calif., subpoenaed more documents. The committee said that in responding to the Towns subpoena, Bank of America left out documents related to Towns' loan.
- Rep. Elton Gallegly, R-Calif.
- Top staff members of the House Financial Services Committee.
- A staff member of Rep. Ruben Hinojosa, D-Texas, a member of the Financial Services Committee.
- Former Rep. Tom Campbell, R-Calif.
- Former Housing and Urban Development SecretariesAlphonso Jackson and Henry Cisneros; and former Health and Human Services Secretary Donna Shalala. The VIP unit processed Cisneros' loan after he joined Fannie's board of directors
- Former Fannie Mae heads James Johnson, Daniel Mudd and Franklin Raines. Countrywide took a loss on Mudd's loan. Fannie employees were the most frequent recipients of VIP loans. Johnson received a discount after Mozilo waived problems with his credit rating.
http://loathemygovernment.blogspot.com/2012/07/washington-corruption-train-keeps-on.html
Still do not believe the Wall Street/Washington gang exists? Consider the following graphic that shows the incest that exists between the Federal government and Wall Street banks (double click on the picture for a larger view):
The overlap is the incest of the government/Wall Street gang.
Maybe President Wilson had it right about a hundred years ago when he said: "The government, which was designed for the people, has got into the hands of the bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy."
Are you beginning to see how the feedback loop works? Corporations support incumbent politicians via financial donations and once back in office, incumbent politicians cut special deals for those same donors and their businesses and interests. Everybody gets wealthy and secure, the gang and their loop keeps rolling along, an invisible empire above the forms of democracy.
Unfortunately, it is all subsidized by American taxpayers, who are not getting wealthy and secure. In fact, if anything, they are getting less secure (high, chronic unemployment) and declining household income and wealth (less secure). That is why there is no urgency on any politicians to upset the process since they do not pay for the process, we do. And that is why our national debt is $16.4 TRILLION and climbing, and cuts in government spending would make the gang members less wealthy and less secure even if it helped save the country’s economy and democracy.
That’s enough bad news for today. We will continue with the selling and buying of America tomorrow when we reveal the identities of the last two gangs and provide some common sense suggestions on how to bring the gangs down, restore our freedom and bring some sanity to our out-of-control government spending and get it under control. In the meantime, see if you can name the other two gangs.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and
others everyday.
Please visit the following sites for freedom:
http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w
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