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What you should know about America's economy

We're in for a wild ride.
In light of Congressman Ron Paul's recent article:
The Perils of Economic Ignorance

And this news item:
'Asia must prepare for dollar collapse'
 link to english.aljazeera.net

I was inspired to post some of my radio commentaries that have dealt with America's economy (namely what I think is really wrong with it). I'll be the first to admit I'm no expert in economics, but I *am* the type of person who can see when the emperor is naked, and I did do my research.

What They Don't Tell You: The Federal Reserve

Summary: How a bunch of private banks fleece the American people by printing their money and charging them interest for it.
Note: You can read Dan Benham's article "Phone Call to the Fed" here:

Unlike General Tommy Franks, who feels there exists "the potential of a ... massive casualty-producing event somewhere in the western world ... that causes our population to question our own Constitution," I feel the US Constitution is an extremely hardy document, loaded with foresight. Unfortunately in 1913 Congress trashed that foresight and ignored Thomas Jefferson who said, "If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered." Ignoring clause 5 of Section 8 of the Constitution, Congress sold out its power to coin money and regulate its value to a group of private bankers by creating the Federal Reserve.

What? The Fed isn't a public institution -- it's a bunch of private banks? That's right -- it's not owned by the Federal government or the tax payers of the United States. In fact, you could say, *they* own us, because we're in debt to them up to our eyeballs. The Fed consists of :
Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif Banks of Italy
Goldman, Sachs of New York
Chase Manhattan Bank of New York
Warburg Bank of Amsterdam

These guys print and ledger money out of nothing and loan it back to us with interest. Obviously we'll never be able to repay them. In Dan Benham's brilliant article, "A Phone Call to the Fed," we discover there are only $263 billion federal reserve notes in circulation, but we have a $4 trillion national debt, payable in federal reserve notes. How d'ya like them apples?

Congressman Ron Paul says "most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people." Here are some statistics to back that claim. In 2001, $1,780 had the same "purchase power" as $100 in the year 1913. In 1913, $113 had the same "purchase power" as $100 in 1776. Get the feeling we're being scammed? Maybe it wouldn't surprise you to know that Enron's infamous Jeff Skilling was director of the Federal Reserve Bank in Houston.

So anyway, whenever the government runs a deficit, the Fed prints money to buy the debt, and 40 percent of our income taxes pay the interest. Keep in mind the Fed's books are not open to the public. These guys possess almost unlimited resources to buy influence and power. Presidents Jackson, Lincoln and Kennedy tried wrest control of this country away from bankers by printing U.S. dollars without charging taxpayers interest. But as you can imagine, messing with the bankers can often be a dangerous move.

What They Don't Tell You: The Enthronment of Corporations
Where did America go wrong? One wrong turn, I think, was the enthronement of corporations, which now posess the same rights as "legal persons."
Credits: I gleaned much of my material from  http://www.thirdworldtraveler.com/Corporations/KnowEnemy_ITT.html

This is the state of our union: On the global front we're despised as bullies and we're mired in a middle eastern version of Vietnam. On the domestic our social programs are being gutted and 45 million Americans (including myself) have no health insurance. On the economic front we're driving at breakneck speed towards the edge of a cliff. Where did our country go wrong?

I can pinpoint two major wrong turns in the history of this government. One is the enthronement of corporations. The other is the creation of the Federal Reserve System, which I'll have to save for another commentary.

Today, the combined revenue of the top 200 corporations exceeds the GDP of all but the nine countries. Unlike you and me, they can't vote, but *also* unlike you and me, they have billions of dollars at their disposal to buy public policy. Now, in the old days, corporations had to be chartered by the state to perform specific public functions, such as digging canals, building bridges, or providing financial services. In return for this public service, the state granted corporations permanence, limited liability and the right to own property.

But of course, when manufacturing became a necessity in this country, people wanted to get rich, too. So under the leadership of Federalist John Marshall, the supreme court made a series of decisions in favor of corporate power, sanctifying the business deal by invoking the constitution's clause that says "no state shall ... pass any ... law impairing the obligation of contracts." In the 1880's and 90's, when populists wanted to regulate the robber barons and their slave-driving corporations, the Supreme court used Marshall's interpretation of the holy inviolate contract to strike them down. But the real blow, in my estimation, was when the 1886 court decision of Santa Clara County v. Southern Pacific Railroad defined corporations as "legal persons" and invoked the 14th Amendment, which states that "no state shall deprive any person of life, liberty or property, without due process of law."

While the political realities of the 1930's prompted courts to begin allowing public regulation of big business, their legal interpretation as a "person" exists today. They have all your rights to freedom of speech, as well as the freedom to lie -- in February 2003, a Florida Court of Appeals unanimously agreed with an assertion by FOX News that there is no rule against distorting or falsifying the news in the United States. But as pointed out by Joel Bleifuss in "Know Thine Enemy: A Brief History of Corporations," we might want to consider granting these behemoths the same rights as people, considering the fact that they wield far more economic and political power, they can live forever, they feel no pain and they do not need clean air to breathe, potable water to drink or healthy food to eat. "Their only goal is to grow bigger and more powerful."

I'd like to end with a quote from Abraham Lincoln, which seems all the more prescient today:

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

What They Don't Tell You: Dollar Hegemony
Summary: What's currently holding up the US economy

Hi, this is Jody Paulson from Moscow, ID with what they don't tell you.

One thing they're not telling you is what's holding up the US economy right now, as Bush slashes taxes for millionaires and corporations, tosses billions of dollars towards flattening cities in Iraq, and does nothing to stop the wholesale outsourcing of US manufacturing jobs. What's keeping us afloat?

Open up your wallet and see if you can find a paper rectangle with a bunch of masonic symbols on it. What's holding our economy up is the belief of the power of that green piece of paper. Before 1971, you could actually exchange this piece of paper for a set amount of gold. But these days, the value of this paper is propped up by nothing more than convention and the threat of military might.

Today, international finance uses the US dollar as the dominant reserve currency, instead of gold, which is intrinsically worth more than kindling and/or toilet paper. Yet our fiat money is still treated like the world's gold standard: in order to prevent an attack on its currency, a country's central bank must have dollar reserves corresponding to its currency in circulation. The dollar now accounts for 68 percent of global currency reserves, up from 51 percent a decade ago. However, at the same time, we sell only 12.3 percent of the world's goods, but we buy 18.9 percent. That's like spending 150% of your paycheck every week. Yet the rest of the world keeps producing things in exchange for a bunch of green paper printed in the USA. Why?

The answer is that the world's most essential commodities, including oil, are denominated in dollars. Everyone accepts dollars because you need dollars to buy oil. This all came about in 1974, when Saudi oil cartels agreed to dollar hegemony in exchange for American arms. Think about this for a minute, won't you? It costs the FED around 4 cents to print a hundred dollar bill. Foreign countries have to buy this money in order to buy the oil they need. Essentially, we're getting our oil for free.

That's been fine and dandy for decades -- but now, look out! There's a new currency vying for hegemony -- the euro. Today European banks are seeking to have the euro accepted as the new world reserve currency.

In November 2000 Saddam Hussein moved to sell Iraq's oil directly for euros. You can imagine the panic this caused at the FED. All that oil that gets bought with its 4 cent pieces of paper would be lost -- and worse -- it set an unacceptable example for other OPEC members. Saddam had to be stopped! Enter the war on terrorism and weapons of mass destruction.

Today fourteen permanent military bases are being built in Iraq, along with the world's biggest embassy in Baghdad. The US needs a huge permanent presence in the region to protect its dollar hegemony. But Iran is seriously talking about ditching the dollar for the euro, and so are the Saudis. Judging from their past behavior, the current administration won't let these rumblings go unanswered.

I'm Jody Paulson, and I just thought you should know.
not meant to be snide or rhetorical 29.Mar.2006 23:19

just a drunk question

has anyone coined the term "deconomy" yet? I think its time may have come.

Vivan los looters en la casa blanca. ... or not.

Update for "The Federal Reserve" ... 30.Mar.2006 11:02

Jody Paulson

The national debt now stands at $8.2 trillion. I got the 4 trillion dollar figure from Benham, who appearantly updated his article in '02. A lot can happen in 4 years, no?

gold silver at highs, oil in euros...dollar marginalized 30.Mar.2006 16:17

econ reader

thanks for passing on the ever righteous Ron Paul. He is too far from the progressives reading list, and that is a sad comment on the readings of "true believers."which is a sad comment on insularity.

Anyway- gold at near 600$ silver over11.50$ these are decades highs. Voices of the wilderness (www.copvcia.com run by mike rupert) reports that the recent dealings with Iran had the outcome of halting that country converting holdings from dollar denominated to euro denominated instruments. This has developed and been ignored in our press for months while we've been fed pablum and b.s.

And again thanks for a progressive crossing into alarm at an internationalist conspiracy. Another link to the true conservative (pre-Neo Con) right wing, with which anti-capitalists do truly share many concerns, if not many agreements on the solutions. We should at least come togather on a recognition of where the enemy lies and where its powers operate.

You're on the right track 31.Mar.2006 20:03

Dr. Know

You should throw J Shroeder Bank in there as well. Actually, there was a time even after the creation of the Fed when the government was still investigating this stuff. Research the US Senate's Money Trust Investigation of 1922. It's all right there for any American to see (at least until it gets classified for "national security" reasons, which wouldn't surprise me, but so long as THEY control the left and the right, it won't really matter).

To dispell some myths... There is no such thing as "corporate personhood." Some corporations have argued for it, outrageously, based on the 14th Amendment, but to date no precedent-setting ruling has ever put this concept into law. Also the international banking community has no interest whatsoever in true to theory capitalism. This is an example of how THEY control debate on the right and the left. So long as progressives are kept chasing shadows like this, we're not harming them.

Capitalism in theory absolutely demands government regulation. Adam Smith himself stated this quite clearly in ...The Wealth of Nations. If these corporations really wanted capitalism, the US economy would have substituted toward alternative energy sources 20-30 years ago and we would be well on our way to energy independence. Biomass, co-firing of coal, wind, solar, etc would be much more a part of our national energy. R&D spending would probably have boosted the 35% yeild from oil fields (the rest sits there as not economically recoverable) to a higher percentage. It would have to be, because the true cost of the petroleum model is too expensive for any company to obtain on the level the US currently is. The real cost we are paying for a gallon of gas includes, among other things, the cost of the war in Iraq. Divide that $400 billion by gallons consumed in the US, add it to the $2.50 you are paying at the pump, and voila, you start to get the picture. Capitalism, properly regulated and left to its natural movements, would have deemed our current oil dependence too expensive.

The international bankers have no interest in capitalism at all. They fought the Sherman Act and Clayton Act tooth and nail. As ol' John D Rockefeller said, "Competition is a sin." That sums up what they think about capitalism. What we really have can be called "monopoly capitalism" or more appropriately "cartel capitalism," which isn't the type of capitalist theory Adam Smith wrote about at all. Cartel capitalism is a recipe for fascism and that is what America really is. It started with the creation of the Fed, but its getting worse. Prescott Bush and George Walker, W's grandpas, were associates of Percy Rockefeller (Skull & Bones).

You're on the right track. Most of the books that expose all this are fairly difficult to find. One that is easily had and offers some keen insights is American Dynasty and deals with the Bush family history and connection to international banking. The whole thing is interesting, but there are a few chapters that really expose Bush's connections to this cartel capitalist system. It's currently in paperback form at Powell's for $8. If you get hooked you can hunt down "Tragedy and Hope," "The Invisible Government," "The Rich and Super Rich," "The Rockefeller Files," "The Committee of 300." Just hunting for those books is a hobby itself. There's more, but that will keep you busy for a few years. I'd also recommend reading an abridged version of Adam Smith's "The Wealth of Nations."

One more thing Jody 31.Mar.2006 20:12

Dr. Know

Oil is not the only commodity that supports the US$ fiat. The global drug trade is also underwritten in dollars. The US military-intelligence-industrial complex is the strong arm that makes sure the drug trade continues to be done in USD. This is why the CIA has been so connected to drug running over the years. The War On Drugs is really the war on drug production that isn't friendly to the USD.