Fighting The Invisible Empire, The Political Class and The Banksters - Was Woodrow Wilson Right?

“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.” Woodrow Wilson

We have talked about this quote a few times in prior posts. These days it seems as if ordinary American citizens have very little control of their own wealth as the Washington political class has confiscated and handed out our personal wealth to large and small businesses for a variety or reasons:

• General Motors still owes the American taxpayer at least $24 billion, according to government sources, with little chance of ever repaying that debt in the near future.
• Chrysler, now owned by a foreign company, has cost the American taxpayer about $1 billion that will never be paid back.
• Hundreds of billions of dollars were dished out to small and large banks alike via the TARP program to cover for their inept and irresponsible banking practices, much of which has not been paid back.
• The Federal Reserve Board has printed well over $2.3 TRILLION and used it to buy back bad assets from major banks in the vain and unfulfilled hope that these banks would lend their newly acquired cash to businesses and Americans to jumpstart the economy.
• An article by Bloomberg on June 18, 2012 outlined how the American taxpayer, and taxpayers around the world, subsidize their countries' major banks, encouraging risky banker behavior that always seem to lead to bank bailouts. The details of the article can be read at:

http://www.bloomberg.com/news/2012-06-18/dear-mr-dimon-is-your-bank-getting-corporate-welfare-.html

• The major point made by the analysis and article was that about $76 billion of taxpayer wealth is money laundered through Washington and flowed through to the major banks every year.
• An Associated Press news report from August 9, 2012 covered the news that the Justice Department will not investigate or prosecute criminal charges against either Goldman Sachs the company nor Goldman Sachs employees related to trades they made during the financial crisis/Great Recession. These charges were developed and highlighted in a detailed 2011 U.S. Senate investigative report. Despite the Senate findings of potential criminal activity, no legal action happened.
• In a December 2, 2011 post we did on Goldman Sachs' relationship to the highest levels of the Federal government, we came to the following conclusion: “There is an obviously cozy Goldman Sachs connection between the highest levels of government and the highest levels of Goldman Sachs and those that used to work for Goldman Sachs." 

http://loathemygovernment.blogspot.com/2011/12/government-favors-and-politicians-for_02.html

These are just some of the bigger money laundering examples of recent memory, there have been so many more including the tens of billions of flushed down dozens of bad alternative energy companies, that we do not have time today to review them all.

This is not a Republican or Democrat condition, it is a politician affliction. We get very little say in how our wealth is redistributed to special political cronies and interests, often in exchange for campaign cash for politicians’ reelection efforts.

While Bush may have funneled taxpayer wealth to Haliburton, Obama funneled it to Solyndra et al. Both were intimately involved in funneling wealth to the big banks over the years. Individual taxpayers were helpless in stopping the redistribution. Seems Wilson was right, an invisible, or not so invisible, empire has been set up above the forms of democracy.

But what if we could get control of this invisible empire? Not only would it make good financial sense to control our taxpayer wealth, it would help us get additional liberty pumped into our faltering democracy, and frankly, revenge is sweet. Somebody outside of the invisible empire is actually taking on the task of breaking up this cartel:

• A Federal lawsuit seeking the return of $43 trillion and an audit of all the TARP programs by an independent receiver has been filed against senior members of the Obama administration and the New York group known as the “Banksters”.
• From what I understand about the law suit, “Banksters” is a collective term meant to include all of the big banks and those that operate them in that invisible empire.
• The Wall Street Journal has reported the Spire Law Group, LLP has moved its massive law suit/tort action into the Federal court in Brooklyn, New York.
• In this District Court lawsuit (Case No. 12-cv-04269-JBW-RML), Spire is acting on the behalf of homeowners across the country seeking to halt all foreclosures nationwide until the return of the $43 trillion.
• Note: I have not found out how they arrived at the $43 trillion number but it certainly gets attention and is probably a good opening bid.
• The lawsuit is seeking an audit of the TARP Program based on a report by the former Inspector General of the bailout program, Neil Barofsky. Barofsky has countered the claims made by President Obama, both publicly and privately to Congress, that the TARP money has been paid back.
• Mr. Barofsky asserts that none of the money advanced by the Treasury has ever been paid back by the recipients of the program.
• The lawsuit contends it has established the location of the $43 trillion of laundered money in a criminal racketeering enterprise participated in by the following individuals: Eric Holder, Tony West, Kamala Harris, Jon Corzine, Robert Rubin, Timothy Geithner, Vikram Pandit, Valerie Jarrett, Anita Dunn, and Robert Baueras
• The lawsuit alleges that the Obama administration “actively borrowed money from these “Banksters” to fund his political campaign in this 2012 election and has not pursued any criminal charges against them.” (sound familiar, see the above point about Goldman Sachs.
• The lawsuit also claims multiple violations of the United States Patriot Act have occurred, along with the Policy of Embargo Against Iran and Countries Hostile to the Foreign Policy of the United States, and the Racketeer Influenced and Corrupt Organizations Act (RICO) and other State and Federal laws by the Obama Administration. Seems like they have got all of the potential bases covered.

Interesting, somebody outside of the cozy Washington club is trying to break through the invisible empire. Obviously, the $43 trillion figure is for attention and public relations. The Federal government’s annual budget is only about a tenth or so of this figure so I doubt that even the largest bank have anything close to $43 trillion in assets. In fact, $43 TRILLION is about three times the size of the nation’s GDP so it is indeed a large number.

I wish them luck in both recovering ill gotten gains from both politicians and the Banksters and more importantly, uncovering the invisible empire that Wilson warned us about. Given that we have allowed the political class to take over and abuse our political processes in so many ways:

• Gerrymandering of Congressional districts
• Earmark funding for political cronies in exchange for campaign funding and support
• The obscene amount of organizational (corporations, PACs, unions) money that drowns out citizens’ voices, needs, and priorities
• The absence of term limits that produces non-productive, self satisfied, and self enriched members of the political establishment,
• Insider trading by politicians for their own financial good,

this avenue of approaching the misuse of political power is a unique, welcome respite from the continual degradation of our political processes and democracy.

Many of these political abuses were discussed in “Love My Country, Loathe My Government” along with some suggested ways to fix the situation. I did not think of going the legal route like Spire is doing, but good luck to them in their quest to squash the undue influence of “The Invisible Empire.”

Note: We will take Spire's approach a step further over the few posts so stayed tuned.

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

Shaky Economic Times Ahead, Lessons Learned From the Past

A bunch of economic news has occurred recently so I thought it might be a good idea to take a look ahead into 2011 and try to predict how well the year might shape up from an economic perspective. You might question my ability to do that since I have very little economic training. However, given that the best economic and political minds in the world did not foresee the coming of the Great Recession, the biggest economic downturn in about eighty years, I would humbly state that I cannot do any worse then the experts in predicting what will happen in 2011.

At the same time, we will try and take away some lessons from what is happening in the economy in order to not repeat the major missteps that the political class has done over the past few years. A person should always look at their own errors in order to not repeat those errors in the future, a life lesson that always seems to get lost on our politicians.

The basic prediction I would make for 2011 is that it is going to be a very rocky and difficult year for American households in 2011, worse than in 2010. Yes, the stock market has improved considerably over the past year or so. Yes, holiday spending was up considerably on a year over year basis. Ford said it would hire up to 7,000 more workers. Many in the political class are already trumpeting the coming good times. I would say not so fast, considering:

- Yesterday's unemployment report on initial unemployment claims was not good, rising 35,000 to 445,000 people compared to the previous week. Thus, for a very long time, we have seen almost half a million Americans a week file for first time unemployment benefits. The job market cannot be strong if that many Americans continue to seek relief from the loss of their jobs.

And although the unemployment rate recently dropped to 9.4%, that was due to the many Americans in despair who have actively stopped looking for work rather than growth in the available number of jobs. With many Americans losing their jobs every week and many others stopping their job searches out of frustration, tight consumer spending will result in low economic growth and continue to depress sales tax and income tax revenue streams for government operations, resulting in even more government budget tightening.

- The Associated Press reported on January 13, 2011 that 2011 will be the peak in home foreclosures for American families struggling with unemployment and plummeting housing prices coupled with weak housing demand. The foreclosure tracker Realty Trac Inc. predicts that 1.2 million American homes will be repossessed in 2011, up from one million homes in 2010. One out of every 45 homes in the country, more than 2%, received a foreclosure notice just in 2010. Thus, one of the previous drivers of economic growth, the housing industry, is unlikely to help the economy or homeowners that owe more to the bank than what their home is worth.

- An Associated Press article from January 14, 2011 reported that consumer prices rose in December by the largest amount since June, 2009. The primary cause for the jump was the continuing rise in gasoline prices. For some perverted twist of logic, many economists think this is a good thing since there was only one driver of the higher prices, gasoline. What I never understood is who cares what drove the higher prices, everyone needs to drive, that is the basis for much of our economy and country, so excluding the price of gasoline from the inflation measure and being happy never made any sense. In the real world, we cannot take gasoline out of the equation and look at "core inflation," we still have to drive and driving got more expensive.

- Unhappy about rising gas prices? Well, get ready for rising food prices also. According to a Wall Street Journal report from January 13, 2011, prices of all types of food are likely to continue going higher in 2011. After jumps in farm staple products this week, corn future contracts are up 94% from June, soybeans are up 51%, and wheat is up 80%. Three factors are driving the rising prices, according to the United States Agriculture Department:

1. Dry weather and floods in various countries around the world have suppressed world wide crop production.
2. There is basic rising demand for food around the world.
3. Corn and other crops are being diverted for ethanol production.

The situation has gotten so bad that many are starting to worry that food supplies might be a source of "social and political instability, geopolitical conflict and irreparable environment damage," according to the World Economic Forum.

 On expert cited in the article expects commodity food prices to rise between 3.5% and 4.5% in the United States this year compared to only 1.5% in 2010. Even worse, the same expert said that beef and pork could rise as much as 10% in 2011. All good news for America's farmers as China and other emerging markets buy up American farm output, bad news for American consumers who, in addition to higher gas prices, are likely to be paying more for higher food prices.

- More proof that the economy is in for a rough ride in 2011? The Associated Press reported yesterday that the price of gold surged above $1,400 an ounce this past Tuesday as a result of a weaker dollar. In times of economic stability, the price of gold usually goes down significantly as other investment options provide a better potential for investment returns. As long as gold stays high I always assume that some very smart people are out there with serious and probably accurate doubts about whether the world's economies are really that strong and growing.



The panel also concluded that while the company is on the path to stability, its future plans "raise concerns" due to a lackluster product array, a faltering restructuring in Europe and increased competition around the world. Looks like $53 a share is not going to arrive anytime soon.

- Remember all those dire bank failure stories and hysteria from just a couple of years ago? How the American taxpayer had to step in and prevent all of these banks from collapsing and taking the entire world economy with them? Well, according to an Associated Press report this week, it does not look like that fate awaits JP Morgan. They announced this week that their fourth quarter profit jumped a whopping 47% over the same quarter the year before. The bank earned $4.83 billion in one quarter.

So while many Americans struggle with long hours, no jobs, higher gas prices, and potentially higher food prices, JP Morgan, and I would bet most other banks, are getting along quite comfortably, in part due to the bank bailout debacle that cost the American taxpayer billions and billions of dollars for no reason whatsoever.

- Staying in the bank bailout arena, a report issued this week by the office of Neil Barofsky,who is the special inspector general for the entire bank bailout TARP fund, found that the decisions to save Citi Bank "wasn't made coherently, and seemed to be based on "gut instinct" and "fear of the unknown" rather than objective criteria.  In other realms of life, this kind of decision making is called Amateur Hour. How can a politician or government official give out tens of billions of taxpayer dollars based on nothing but gut and fear?

The fact that the Treasury Department claims to have made money on the Citi Bank bailout does not erase the fact that they got lucky. You cannot expect to do much in life as clueless as Mr. Barofsky claims the Treasury department and the government was and always be so plain lucky. Especially when billions and billions of dollars in taxpayer money are involved.

And the worst part of the whole deal, worse than the basic roulette bet that was made with billions of dollars? The article raises new concerns that despite all of the posturing of the political class, many U.S. banks are bigger than the were just a few years ago, making them still "too big to fail." Barofsky claims Treasury secretary Geithner stated that "while the government now has better tools to cope with future financial crises, in the future, we may have to do exceptional things again." This is basically code words for some of these banks, like Citi, are still too big to fail and we will have to bet huge amounts of taxpayer money again to save them from themselves. Thus, we have risked hundreds of billions of dollars of taxpayer money, for no reason, under no logical processes and we are likely right back where we started prior to the Great Recession.

Thus, from all of this current and somewhat pessimistic news what should we have learned:

• We should have learned that government does not create jobs, the private sector creates jobs. After hundreds of billions of dollars wasted in so-called stimulus programs, unemployment is still very strong and very vibrant, not a good thing. All of the failed government-centric economic policies, Cash For Clunkers, Cash For Appliances, etc. have been utter failures except for their success in spending taxpayer dollars. In the future, find ways to let the market cure itself, not the government and the political class. These last two entities have proven beyond a doubt that they are useless in this area.
• We should have learned that the economy is always stronger than any government incentive program, it has to work its way back to health, the best thing that the government can do is let nature take its course and get out of the way. All of the government programs to help the housing market, foreclosure relief, first time home buyer rebate program, low interest rates, etc., have been total failures and have just wasted more taxpayer dollars while delaying the eventual cleansing of the market of excess inventory and bad credit risks.
• We should have learned, something our politicians never learn, that just about everything in the world is connected to everything else. Thus, by trying to fix the energy problem with a poorly thought out and failing corn ethanol program we not only fail to fix that energy program but we also cause economic troubles in food market. To solve any problem in life, one must understand the root causes and the interconnections within each problem. Our politicians have a very difficult time with that concept.
• We should have learned that it is never a good idea to step into the private sector to protect stupid executives and failing companies from themselves. General Motors never should have received any bailout money. They could have gone through bankruptcy proceedings like most other companies without government help, they would have emerged from bankruptcy and still have been a viable business without taxpayer help. Now, the American taxpayer will never see a positive return on that money, the Chinese government now owns more than 10% of the company as a result of how well the American taxpayer backed the company, and the company itself is on the verge of making more cars outside of the United States than within the country so we do not even get the benefit of more U.S. jobs for out taxpayer dollars. No company should ever be too big to fail. Let them fail, its called the free enterprise system.
• We should have learned, based on the GM example and the bank bailouts, that government should end all corporate welfare practices. GM's focus will not be on the American taxpayer in the future, it will be on the Chinese consumer. The major banks focus will not be on customer service and making loans to grow the economy, it will be on how to leverage interest rates and other exotic financial arrangements to make profits. American farms are swimming in profit potential, given tight world food supplies, wouldn't this be a good time to cut government farm subsidies to the large farm conglomerates in the country? Cut the corporate welfare practice, it perverts the true marketplace while it perverts the election process via campaign fund donations from corporate welfare recipients.

Some steps from "Love My Country, Loathe My Government" would help to implement these lessons:

• Step 6 would allow only individual citizens to contribute to election campaigns, eliminating the incentive for corporate welfare since the ability to reward welfare with campaign donations goes away.
• Step 23 provides a process to finally solve our energy crisis without screwing up the environment or food prices in the process.
• Step 34 provides a process to replace members of Congressional committees when the fail to perform to satisfactory levels, hopefully replacing them with people that can solve the problems facing the committees.
• Step 36 would require all elected officials to take and pass a course on basic economic theory so that they can understand how to solve some basic economic problems without making them worse, hopefully preventing us from reliving the nightmares of Cash For Clunkers, First Time Home Buyer Rebates, etc. in the future.
• Step 47 would eliminate farm subsidies, just one form of corporate welfare.

In summary, I predict we will pay more for gas in 2011 (given current gas rends), we will pay more for food in 2011 (given the three factors listed above), we will not see much price appreciation of our homes in 2011 (with all of these foreclosed coming on the market, the glut will suppress prices), we will not see a burst of job growth (not at the current high level of initial unemployment claims every week), we will not see any more tax breaks in 2011 (given the poor financial conditions of the Federal government and the states), we will not see any reduction in our national debt in 2011 (given that Pelosi, Reid, and Obama have already torpedoed the Deficit Reduction Commission without debate), we will not see GM repay its debt to the American taxpayer while it focuses overseas, and the banks are still too big to fail, probably taking too many risks but confident their friends in Washington will bail them out. Have a nice day! 



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.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment