James Clay Fuller

Things We're Not Supposed to Say

Tuesday, October 07, 2008

Fraud on a grand scale

“Fascism should more appropriately be called Corporatism, as it is the merger of corporate and government power.” -- Benito Mussolini, Italian dictator, 1922-43, creator of modern fascism.

To be fair, it should be noted that Mussolini was talking about something more than business corporations when he spoke about the merger of corporate and government power. “Corporation” in his lexicon included other centers of power, such as industry organizations, the church, all sorts of powerful, right-leaning organizations. Italian business leaders loved it anyway, since they also controlled those other organizations.

Anyway, welcome to end times – the end of American democracy, that is. Welcome, too, to American corporatism.

What we soon will have is Mussolini's dream, a dictatorship of the very few, the very rich, coordinated by a little gang of political managers who are eager to rule an empire on behalf of that tiny economic elite. Never mind that the empire is imploding; there's still plenty of money and power to be had.

Here are some observations suggesting that our democracy is, indeed, on its last legs and that it's time to start talking about how to live, or survive, under circumstances that are terribly different from what we have known all of our lives:

* The corporate media all but ignored the fact that the White House threatened martial law if Congress did not pass its bailout bill. That bill, now law, saves some of the country's richest and most powerful aristocrats from financial losses but does nothing, from the viewpoint of the vast majority of citizens, to heal the economy. Less than nothing, in fact. It will drain our purses even further, transfer much of what we have left to the super-rich.

Rep. Brad Sherman, D-Calif., stood up in the House before the second vote on the bailout bill and listed the threats made by the White House, through Treasury officials, about what would happen if the House again rejected the bill. It was fear-mongering on a scale that overshadowed even the lying threats used to get us into Iraq. A select few members of Congress, Sherman among them, were told that if the bill didn't pass, martial law might be declared. Others were merely threatened with investment market collapse (on a scale we are on the way to achieving anyway).

The rightist propaganda machines that pass for news operations declined to tell the public about the threat to stage a coup.

America no longer has a mass media dedicated to keeping it informed. It does have an executive branch that threatens, and may be ready, to throw out our form of government, to simply take over, unless all of its demands are met by our increasingly powerless Congress.

* It seems clearer with each day that we know considerably less than we may have thought we knew about the worldwide economic meltdown. We have been told that the financial collapse, the drying up of credit, the dive of the stock markets are rooted in the discovery that the value of mortgages behind a bunch of securities is considerably less than it was supposed to be.

But wait a minute.

The worst estimates predict foreclosure on about two million mortgages in the United States, and many of those, probably a majority, wouldn't be going into the tank had not the credit market dried up. And that supposedly dried up because many mortgage-backed securities were bad. It's a circular argument.

Many of the home buyers could have been rescued simply by renegotiating to more reasonable interest rates from their lenders. Of course, that assumes the lenders are/were run by intelligent, responsible human beings, an assumption we now know beyond doubt is not true.

So how did this American dive turn so quickly into a crisis involving the biggest banks around the world? France, Germany, all of Europe, in fact, have had to bail out some of their biggest banks over the past couple of weeks, apparently because all of them owned some of those mostly worthless mortgage-backed securities and/or depended on big American banks for loans. Now its spreading into Asia.


It doesn't track, unless, for example, there is some sort of gigantic Ponzi scheme underlying the crisis. Did some of the undeniably crooked subprime mortgage lenders sell the same bundles of mortgages, the same securities, to more than one buyer? Are the perpetrators more criminal and are the banks even more careless and more stupid than we think?

(Charles Ponzi, an Italian immigrant, promised a 50 percent short-term return on investments he sold. He kept the thing going for quite a long time, taking out enough money to live a lavish life, but selling more and more of the “investments” and paying off earlier investors with the proceeds from more recent sales. There were no actual investments.)

That may be wildly off-target, yet the size of the mortgage default pool doesn't seem to fit the size of the bank and investment firm collapse.

Perhaps it's more simple: The banks extended far too much credit in all directions, including to us through our credit cards, and the failure of just one base card in the house of cards was enough to bring it all down.

At any rate, I want a real explanation, plus some real answers about what can be done. Picking my pocket to keep some masters of the universe in mansions, yachts and private jets is not the right answer. Of that I am certain.

* To repeat -– and this has to be hammered at until everyone understands:

The bailout plan that was pushed through our Congress of cowards, has no purpose other than to save some very rich people some big money. See what Dennis Kucinich has to say on that score. (One report, by Chris Hedges, can be found at http://www.truthdig.com. Or simply Google “Kucinich, bailout.” In a reasonable world, Kucinich would be the Democratic nominee for president.

For thoughts on what really is needed to begin recovery, see Bob Herbert's op-ed column in the Oct. 7, 2008, New York Times (http://www.nytimes.com).

* A new plan, announced Monday (Oct. 6) will have the Federal Reserve System buy enormous amounts of unsecured short term debt, called commercial paper, that corporations use to finance their day-to-day operations. The Fed will do it because banks won't lend to those corporations any more. Never before has the Fed been involved in anything like such involvement with corporations.

That means, folks, that the Fed, which exists on our money, will loan directly to big corporations, getting unsecured -- and, in some cases, undoubtedly worthless -- notes in exchange. There is no guarantee that the Fed (we) will be paid.

Other countries, notably Sweden in recent years, have taken temporary ownership of banks and/or other corporations that had to be bailed out. The governments were then able to run the businesses efficiently, get rid of failed but hugely over-paid executives, and sell the corporations or their assets once they had returned to stability.

But the masters of the universe who own American politicians and corporations won't have that. That would be (Horrors!!!!) socialism. So government must hand the supremely rich corporate owners and executives billions of dollars of our money and hope that those dummies, who destroyed the businesses, will fix them with at least some of those dollars, not stuffing too much into their own pockets.

We cannot have a government-funded program to restore our crumbling infrastructure. We cannot treat mortgage debt as we do other debt, so that courts can restructure the terms of loans. We cannot control executive pay -- and, despite what you've been told, the bailout law doesn't limit such pay in most cases. We can't put more public money into saving our crumbling educational system. And most especially we cannot have universal health care in this country. (Just ask John McCain; he is adamantly, one might say wildly, against it. In fact, he wants to do away with Medicare.)

All of those things would be socialism, not to mention expensive.

But our government can take billions of our dollars –- we're rapidly headed toward trillions –- and put them at tremendous risk in a very dicey attempt to bail out corporations run to ruin by fantastically greedy owners and executives who will remain in power.

And let us remember that we continue to spend billions on a useless and powerfully destructive war, a fact that deeply undercut our economy long before mortgage-backed securities fell into a pit.

We are told over and over that we “must save Wall Street to save Main Street.”

It is a lie equal to “We have proof that Saddam has weapons of mass destruction.” We're not saving Wall Street, just a few of its richest denizens, and we're certainly not doing anything to save Main Street.

But taking from the millions to protect the wealth of the richest 1 percent of us -- that, apparently is not socialism.

Well, perhaps it isn't exactly socialism, since the vast majority of us pay but stand no chance of getting anything back for our contributions. So perhaps we need a different label for what's going on, something similar, but with a different meaning.

How about National Socialism? Does that work, do you think?


* We can expect major efforts at vote fraud on behalf of John McCain and other Republican candidates. The evidence that everything is in place for that effort removes any question of whether it will happen.

* One of the major forces behind the dismantling of the U.S. Constitution is, of course, big business, but smaller businesses have become active participants in the destruction of our democracy over the past two decades. The business of American business is fraud, and to get away with it, the masters of universe needed their politicians to get rid of the rule of law and to put government of, by and for the people out of the way.