Ronald Reagan and his Merrill Lynch Treasury Secretary Donald Regan

Reagan and Bush 41 quadrupled the national debt in only 12 years. Bush 43 doubled it again in only eight. It is now 10 times higher than it was in 1980 when Reagan was elected.

The hero of the conservatives, Ronald Reagan begun an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence. While the taxes on the super-rich went as high as 90 percent in the past – still leaving them more than enough for a lavish lifestyle – the so-called “trickle down Reaganomics” lowered those taxes by about two-thirds. The rhetoric of course emphasized the tax benefits for the average Americans, who were ostensibly the beneficiaries of those policies.

All of this, while the Regan administration kept preaching about “small government, free markets and democracy”.

Those who actually believed in the above Reagan TV commercial should be seriously surprised that the Federal debt as a percentage of GDP fell steadily from the end of World War II until 1980, rising for the first time in decades under Reagan and Bush 41, falling under Clinton and rising again under Bush 43.

Even though some people like to portray the Reagan legacy as an anti-communist success story, Reagan’s biggest legacy was the change in America’s financial rules.

Let’s start with the tax cuts for the rich, following with turning the federal retirement from a Civil Service Retirement System (CSRS) to the Federal Employees Retirement System (FERS). The former was (and still is for some long-time federal employees), a pension system, based on years of service and FERS consists basically of the Thrift Savings Plan (TSP), a 401k setup, in which untold billions of federal worker’s retirement funds get largely invested in various Wall Street schemes every two weeks. It was in effect an enormous gift for the Wall Street apparatus, while depriving millions of government employees of a viable retirement option.

At the same time, the Reagan administration deprived the Americans of the ability to deduct interest payments for anything not directly related to their primary real estate holdings.

This of course has started the epidemic of rising household debt.

Lets not forget the super-costly S&L crisis, brought about by Reagan’s deregulation.

Lets not blame poor Ronnie for everything. After all, he only started the ball rolling, even though it was in a very big way. As you probably realize by now he was only the front for all of the shady financial “wizards”, who relentlessly continue their lobbying and machinations to the present time.

The next really big breakthrough in their efforts came with the Commodity Futures Modernization Act of 2000 or CFMA (H.R. 5660 and S.3283), which in fact removed regulations of all kinds of financial crookery (called “products” by the industry) and which has returned the U.S. stock markets to the days before the 1907 Wall Street crash – in reality to legalized betting, which happens to be illegal outside of Wall Street. It was Bill Clinton, who towards the end of his second term signed this bill.

Let’s also not forget Enron and a whole bunch of other events, for which nobody has really gotten punished in any meaningful way.

Lets not forget Greenspan, Rubin, Summers and others, who continue to play important roles in our economy.

And don’t for a minute forget the fact that former and present Goldman Sachs executives are sprinkled throughout both the government and our financial system, continuing in their unrelenting mission.

Technorati Tags: bush, clinton, Economy, goldman sachs, greenspan, Reagan, reganomics, Rubin, summers, takeover, US, wall street

The answer is rather simple and concise:  Not even close.

We realize that the U.S., along with most of the countries of the world is struggling with the after effects of getting the worldwide finances looted during the past 25, or so years. We are still trying to dig ourselves out from under Alan Greenspan’s legacy at the Federal Reserve and the incredibly dumb and in fact criminal lack of oversight of Wall Street and the banks.

We also realize that the present administration has not started both of the “elective” wars that we are now waging overseas, and that it hasn’t arrested the hundreds of more, or less, or not at all guilty terrorism suspects, still languishing in the Guantanamo prison among other places.

The point is that despite earlier promises, we still have as many soldiers in Iraq, as we did under Bush and that we have increased our deployment in Afghanistan. Also, nobody seems to want any of the Guantanamo prisoners. We don’t believe there should be any discussion in the matter and that the solution to that particular dilemma is rather simple: send the long-suffering and often innocent prisoners to live in and get the titles to the houses and the properties of the neocons and send the latter to Guantanamo, along with many of the bankers and Wall Street thieves.

What? You don’t like that idea? What could possibly be more just under the circumstances? Building a long stretch of gallows on the National Mall?

Getting back to the financial issues. There is no doubt that the first huge bailouts, or whatever the heck they call the multi-billion-dollar giveaways started at the end of the Bush 43 presidency. Most of the money asked for and given to AIG and other financial conglomerates by Hank Paulson – a well-known Walls Street insider – is still unaccounted for. The question is why did the Obama administration hire guys like Larry Summers and Timothy Geithner, who along with Robert Rubin and Alan Greenspan were an integral part of the plan to loot our treasury and allow the bankers and Wall Street to run roughshod over everybody else? These are the very same guys who allowed the so-called Financial Services Modernization Act of 1999 to pass at the end of Clinton’s presidency. Despite earlier moves, the most obvious of which was the actual founding of the Federal Reserve and the subsequent loosening of the regulatory reins by the George W. Bush people, the Financial Services Modernization Act of 1999 was the most serious and glaring act committed against our financial well being.

Now that with the addition of Al Franken the Democrats have finally achieved the coveted filibuster-proof majority in the Senate, can we really expect some long-awaited and long-overdue reforms to get enacted? Don’t hold your breath. The thousands of lobbyists, representing all kinds of special interests are swarming all over Capitol Hill, often dwarfing our elected representatives and their staffs, not only by sheer numbers, but also with money, favors and special deals. After all, we are not only talking about reforming health care, or enacting a truly meaningful climate legislation, but also about the main event, which is really a fight about preserving and if possible increasing corporate profits. And that of course is the real name of the game, as it always has been.

It doesn’t really matter that the majority of Americans want a public health plan in addition to the private ones and that most are truly concerned about the state of the environment. Most politicians do not really represent the rank and file citizens, or the country at large, but rather corporate interests. The situation is no different in the case of many government agencies, which despite popular perception are less concerned with protecting our interests, health and safety, but largely act in the corporate interest.

Going back to the Federal Reserve, which has failed abominably, particularly in the last 25 years to perform its main and most important mission, namely, to protect the public against the banking system. Just as in the case of the other agencies, unfortunately one cannot expect the Fed to fulfill its officially stated mission, if it is in reality a front for the banking industry. In fact, according to many experts, the Federal Reserve was the principal cause of the financial disaster that we have experienced and giving it even more oversight power seems by far more dangerous and foolhardy than playing Russian roulette. Doing so is simply another example of rewarding failure, just as the government has rewarded the banks with the bailouts for their failure.

It is therefore regrettable that President Obama has gone along with the advice of his flock of financial advisers and although we hope that by some as yet unknown miracle things will work out somehow, many feel that the president, along with the rest of the country may actually have cause to regret taking that road.

The economic recovery will not happen any time soon, despite the predictions of forecasters in the government and other places. What the financial “gurus” are touting is a recovery, but the bailouts will not really create that at all and the economy is not going to magically spring back to life as they keep telling us. They are simply propping up the industry, which has actually caused the disaster.

The drop in employment, productivity, wages and consumption might slow down a bit, but it is going to be a long time, before the economy actually recovers. And it is probably the hope of the industry insiders that by that time the public might actually be fooled into believing that the trillions of dollars doled out to the financial industry had the desired effect, when in fact it is simply another chapter in the unprecedented looting of our national financial resources.

In other words, it appears that the Democrats are just as proficient at looting the U.S. treasury as the Republicans, but that is frankly no surprise at all.

Technorati Tags: Bailouts, banks, democrats, Economy, federal reserve, greenspan, looting, majority, republicans, summers, wall street

There is no doubt that the U.S. and many other economies are facing a downturn. Some blame the huge expenditures for the Iraq war, others the decades of Alan Greenspan’s failed policies.

It appears that at least some of the blame can be laid here, but that cannot be all.

The sub-prime mortgage crisis, and the resultant crash in real estate prices are reminiscent of the S&L crisis of the 1980s and’90s. The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government. Doesn’t that remind you of the bailout of Bear Stearns? At least the feds declined to bail out Lehman Brothers and Merrill Lynch was taken over by the Bank of America. Why is the U.S. government so directly involved in bailing out corporations, which have in fact contributed to the crisis in the first place?

Frankly, seeing the Wall Street crooks -who have been robbing everybody in sight for a very long time – take the deep plunge into nowhere is somewhat satisfying. Unfortunately, their demise – along with too frequent “golden parachute” multi-million dollar payoffs to the top executives – have caused and continue to cause problems, pain and difficulties not only for their rank and file employees, but also to all of those, who have intentionally, or unknowingly gotten involved with these corporations. The latest news is of course the Fed’s $85-billion loan to AIG, the world’s largest insurer – a company of which few people have ever heard about, but which instantly made the news two days ago, when it announced that it was seeking bankruptcy protection.

For the last six, or so years the lending practices and in particular the sub-prime mortgage industry have been running rampant. Some 60 percent of house loans have been given to people, who’s ability to repay the loans was not even properly checked. I remember distinctly that just a few years ago the applicant’s ability to repay was quite thoroughly vetted. No wonder that an insurer, such as AIG was going under, since practically all lenders insure themselves against the possibility of losses in that regard.

This is not to say that the millions of totally irresponsible people, who have taken out loans that they cannot repay are not complicit in this whole mess as well. To make a long story short, the “free market” and the practically unregulated financial industry have not only buried themselves, but also a great many innocent people, along with our economy, which for some strange reason is so dependent on corporations, which deal almost exclusively in buying, selling and repackaging debt in its many forms. Something is definitely wrong with this picture.

Remember Enron, the havoc and expenses it created with the phony California energy crisis? When that criminal enterprise finally collapsed, the damage was mainly restricted to their employees, investors and ordinary people, who were counting on the artificially inflated Enron stock to fund their retirement. Very few Enron executives were ever properly punished.

We seem to have the same situation with the present banking, investment and Wall Street meltdown. It hasn’t happened because of “bad luck”, or some catastrophic event, but it was engineered, caused and executed by a whole slew of white collar financial criminals, with either an active, or at least a passive assistance of the Bush administration. How can you then expect the U.S. Justice Department to go after the crooks, who after all were playing along with the rules set by the feds? In the meantime, you can be very sure that certain – obviously unspecified people – have gotten very, very rich along the way. The really serious problems started with the Commodity Futures Modernization Act of 2000 or CFMA (H.R. 5660 and S.3283), which in fact removed regulations of all kinds of financial crookery (called “products” by the industry) and which has returned the U.S. stock markets to the days before the 1907 Wall Street crash – in reality to legalized betting, which happens to be illegal outside of Wall Street.

Let’s not forget that over the past few decades, the United States has transformed itself from a manufacturing giant, which dwarfed not only particular countries with its output, but which was the biggest, single manufacturing entity in the entire world, to a client state of China, which manufactures practically everything that we buy here, in the U.S.- on credit, of course.

America is being transformed from an industrial colossus to a tired, post-industrial society. A nation of the rich and super-rich at the top, a mass of poor people on the bottom, and a powerless middle class squeezed in between.

The unhealthy emphasis on the stock market, as if it had any real value, rather than in reality being still another virtual tool for corporations to make money, the lack of concrete foundations of our economy, meaning actual, real, tangible assets – all of these factors, with the added “benefit” of wasting hundreds of billions of dollars so far on the senseless war in Iraq, have contributed to our economic downfall.

Having an economy, which seems so heavily dependent on “housing starts”, consumer confidence index, so-called durable goods purchases, the “success” of Christmas shopping and on the whims of the stock market is not only shaky, but downright unhealthy.

Globalization has not produced the benefits that its proponents have so forcefully shoved down our throats, but a whole slew of new problems and even more money for the few, who are “in the know” and who are often so ineptly and callously manipulating the world’s economy.

Transferring millions of federal government retirements from the Civil Service Retirement System (CSRS), to the Federal Employees Retirement System (FERS) was another criminal move. This switch has deprived the federal employees of a viable retirement option, putting their hard-earned money instead into the highly unstable stock market. Why? That’s kind of obvious. The feds have once again subsidized Wall Street to the tune of many trillions, or even quadrillions of dollars, while screwing everybody else. No surprise there, of course. And the Republicans have tried to convince us that Wall Street should be the trustee of our Social Security system. A trustee?! I’d rather trust a venomous snake, I think.

As of Thursday, September 18, 2008 the Feds, along with Congress are preparing another “rescue” package for banks, brokers and other financial moguls. What does it mean to you? Most likely another subsidy to the tune of hundreds of billions of dollars, in addition to all the other subsidies and gifts that the American taxpayers have been forced by the government to pay to save the fat cat’s asses.

But there are other links too, between the war and US economic crisis and decline.

One is the misdirection of much of the nation’s remaining industrial strength into war production. The late industrial engineer Seymour Melman some time ago demonstrated how the military-industrial complex, by producing things not on a competitive but rather a cost-plus basis, destroys economic competitiveness, sucks up research and development talent and resources, and investment capital, and ends up producing nothing of use either for society or for the national trade account.

In addition, everyone seems so preoccupied with the ever-rising price of energy, oil in particular, but as of late also coal, as if that was the only problem we were facing. Oil has of course been always traded in dollars, which partly because of the never-ending lowering of the prime interest rates by the Fed kept dropping in value. No surprise there, of course. Add the roughly 50 percent markup, caused by speculators and the subsidies for the oil companies and all of a sudden, everybody pays for energy through the nose. In addition, I got news for you: for years the Europeans have been paying as much for gas, as we have been paying lately and their economies aren’t collapsing the way ours is. Could it be that the price of oil is not the real culprit, but rather another convenient way of diverting our attention from the actual problems?

Considering all of the above, I would like to once again offer a simplified definition of fascism, which is simply corporate control of the government. Need I say more? Draw your own conclusions and if you love your country, do something about it.

Technorati Tags: bush, control, corporate, Economy, fascism, greenspan, loans, morgrages, problems, solutions, US, US Economic Problems; Are There Solutions?, wall street.banks