Bill Black: Announcing the Bank Whistleblowers’ Group’s Initial Proposals Posted on January 30, 2016 by Yves Smith (NAKED CAPITALISM)

Bill Black: Announcing the Bank Whistleblowers’ Group’s Initial Proposals
Posted on January 30, 2016 by Yves Smith
Yves here. This is an important initiative to take on fraud and other abuses by banks. It’s an effort to extend and increase the effectiveness of his work on accounting control fraud and white collar crime. I hope you’ll support it.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City.

Originally published at “http://neweconomicperspectives.org/2016/01/wall-street-declares-war-bernie-sanders.html” rel=”nofollow”>New Economic Perspectives

I am writing to announce the formation of a new group and a policy initiative that we hope many of our readers will support and help publicize. Gary Aguirre, Bill Black, Richard Bowen, and Michael Winston are the founding members of the Bank Whistleblowers’ Group. We are all from the general field of finance and we are all whistleblowers who are unemployable in finance and financial regulation because we spoke truth to power and committed the one unforgivable sin of being repeatedly proved correct.

Economists rely largely on “revealed preference” – we think what you do matters more than what you say. For nearly seven years, every financial firm has known about my three colleagues. They are famous for their skills, courage, and integrity. Every financial firm claims that it now wants to make integrity their credo. Any financial firm that actually was committed to making integrity its credo, as opposed to its spin, would have long since hired my colleagues. Similarly, any government regulator, enforcer, or prosecutor that was serious about restoring the rule of law on Wall Street would have recruited us.

Our group is releasing four documents today and they will appear here at NEP over the next couple of days. The first outlines our proposals, all but one of which could be implemented within 60 days by any newly-elected President (or President Obama) without any new legislation or rulemaking. Most of our proposals consist of the practical steps a President could implement to restore the rule of law to Wall Street. As such, we expect that candidates of every party and philosophy will find most of our proposals to be matters that they strongly support and will pledge to implement.

The second document fleshes out and explains the proposals. We ask each candidate to pledge in writing to implement the portions of our plan that they specify to be provisions they support. Again, we invite President Obama to do the same.

The third document asks each candidate to pledge not to take campaign contributions from financial felons. That group, according to the federal agencies that have investigated them, includes virtually all the largest banks.

The fourth document explains why we formed our group is and contains our bios. I am personally proud and honored to be associated with my colleagues in this endeavor. We are (and have been) actively reaching out to encourage other bank whistleblowers to join our group. The bank whistleblowers share some common traits, but are also highly diverse and we want our group to reflect that full diversity. We cannot, however, in good conscience fail to act now given the urgency of the problems caused by the collapse of personal accountability for Wall Street elites. Our economy and our democracy are both imperiled by that collapse and require urgent redress. Please help us to get our proposals to every candidate, the media, and the public.

The Bank Whistleblowers’ Group’s Plan of Urgent Financial Change

January 29, 2016

We are a newly formed organization of financial sector whistleblowers dedicated to holding the elite financial leaders who led the fraud epidemics that caused the financial crisis and the Great Recession personally accountable and to helping to implement the urgent changes necessary to prevent or at least reduce the frequency and harm of future crises. Our group has expertise in finance, banking, real estate, accounting, underwriting, economics, law, securities, criminology, regulation, and financial derivatives. We also have international expertise.

We are releasing four documents today. This first document provides the outline of our plan that would allow any newly elected President (or President Obama) to restore the rule of law and end “too big to fail” without any new legislation or rules within 60 days. The second document explains and fleshes out the outline of our 60-Day Plan. The third document is our proposal to encourage the candidates to pledge that they will not take contributions from banks (and their officers) that the federal government, after investigation, have found to have engaged in fraud or other felonies. The fourth document explains who the whistleblowers are and provides our bios and contact information.

Our group is predominately former bankers who worked at fairly senior levels for enormous financial institutions. We do not hate banks or bankers as a group. We know, however, that when elite fraud is not stopped by the regulators and the prosecutors it is likely to create a “Gresham’s” dynamic. The Nobel Laureate George Akerlof was the first economist to describe this dynamic in 1970.

[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.

We can confirm Akerlof’s warnings about fraud. Indeed, we can testify from personal knowledge that when bad ethics is encouraged it will over time tend to drive good ethics out of individual firms. Fraudulent senior bankers deliberately create a Gresham’s dynamic within the firm and in hiring “independent” professionals in order to drive honest employees out of the bank and to suborn outside professionals that are supposed to act as external “controls” to serve instead as fraud enablers. At places like Countrywide, thousands of employees left annually because they refused to abuse their customers. Only by restoring the rule of law to Wall Street can we allow honest banks and honest bankers to dominate Wall Street.

Similarly, the financial regulatory agencies are often dominated and rendered feeble by leaders who are the products of the “revolving door” or plan to use that “door” to increase their income. We have seen first-hand how that “door” can impair once great agencies.

Our goal of restoring accountability to Wall Street is not controversial. Indeed, there is unanimity among the candidates for the presidency that accountability for Wall Street elites has disappeared and urgently needs to be restored. But that same unanimity among candidates has existed for over a decade. Beginning with DOJ’s failure to prosecute the elite bankers that aided and abetted Enron’s senior managers’ looting and destruction of Enron in 2000-2001 – the consensus on the need to restore accountability has failed to produce accountability for elite bankers for over 15 years. Every political leader says they want to help honest bankers succeed. Nearly every political leader agrees that the “revolving door” corrupts Wall Street’s regulators. The movie The Big Short has a scene at a pool that is designed to be emblematic of the public perception that the SEC (and, by extension, the other federal financial regulators, the FBI, and the DOJ) is staffed by lawyers whose goal in life is to be hired by Goldman Sachs. One of our major insights is how law enforcement priorities with regard to financial elites have become sharply perverse as the financial regulatory agencies’ input to the FBI and DOJ have virtually ceased through the destruction of the agencies’ criminal referral process and been replaced by misdirected law enforcement priorities pushed by the elite bankers. We propose concrete steps to return our priorities to the most damaging financial frauds, which are always led by elites.

The public and the men and women running to be President have said that they want to hold Wall Street elites accountable. Our plan provides a practical means, designed by experts with a track record of actually holding elite bankers personally accountable for their crimes and abuses, that the next president can implement without new legislation or rules to promptly restore accountability. We hope that the candidates will treat the portions of our plan that they support, and our group, as a resource to embrace in order to achieve the goals they publicly say they share with us and the American people, starting with restoring personal accountability to Wall Street.

As whistleblowers who were the subject of retaliation we have been tested in the hottest and most brutal of business and regulatory crucibles. The warnings we gave to our superiors and politicians proved correct and we were attacked because we were correct substantively and insisted on doing the right thing. We are unemployable in banking and financial regulation precisely because of these qualities. (That fact should tell our readers a great deal about how deep and widespread the problems are in finance and financial regulation.) We have members who have led the most successful financial reregulatory efforts in the United States and helped produce the most effective investigative and prosecutorial system of elite financial criminals in our history.

We have no constraints on our ability to speak the truth and we have a history of speaking truth to power. What follows is not the product of press flacks or political spinmeisters. We have the expertise and personal knowledge to explain five key facts.

The most recent U.S. bubble and resultant financial crisis and Great Recession were driven by three epidemics of fraud led by elite bankers. The three epidemics that drove the crisis are appraisal fraud, “liar’s” loans (collectively, these were the loan origination frauds), and the resale of those fraudulently originated mortgages through fraudulent “reps and warranties” to the secondary market and the public. Banks, like fish, rot from the head – the “C Suite.” Liar’s loans is an industry term that shouts the industry’s knowledge that it was originating overwhelmingly fraudulent loans. In a liar’s loan the lender agrees not to verify data that is essential to prudent underwriting. This would be an insane practice for an honest lender – and it was practice that was always discouraged by the federal regulators – but it optimizes “accounting control fraud.”[1]
Tom Miller, the Nation’s longest serving state attorney general (for Iowa), was also a leader of key combined DOJ and state task forces on mortgage fraud. Industry spokesmen invariably try to get the public to believe that the banks were the victims of liar’s loans, but as Miller testified before the Fed, investigations prove the opposite.

“[Many originators invent] non-existent occupations or income sources, or simply inflat[e] income totals to support loan applications. Importantly, our investigations have found that most stated income fraud occurs at the suggestion and direction of the loan originator, not the consumer.”

Not a single one of those elite bankers who led the fraud epidemics has been prosecuted and only one, a woman who was only moderately senior, has been held personally accountable in any meaningful way through a civil suit (made possible by a whistleblower). This is the greatest strategic failure of the DOJ in recent history.
The SEC has also proven ineffective in holding the elite Wall Street bankers who led these fraud epidemics personally accountable. As with DOJ, one of the fundamental problems that has gotten worse is the “revolving door.” We propose a practical means of reducing that problem.
Dodd-Frank has not fixed the gaping problems endemic to finance that will cause future epidemics of elite financial fraud and resultant global crises.
We know how to identify developing fraud epidemics before they hyper-inflate financial bubbles, how to prevent or at least greatly reduce such epidemics, and how to prosecute effectively the elite banksters. Our group includes former regulators who demonstrated each of these abilities. What we need is the political will to make the vital changes in the face of fierce opposition from the elite banksters. That will is sapped by the revolving door.
Our initial purpose is to get candidates on record on which portions of our plan they will pledge to implement. Our 60-day plan is the first of the initiatives we will place before the public and the candidates. It consists of measures that the new President can take immediately on his or her own initiative without legislative action. We ask every candidate for the presidency to indicate which specific proposals of the Whistleblower Plan they will pledge to implement. As a group, we will not endorse any candidate. We will simply give a public certification that a candidate has provided a written pledge to implement the portions of the Whistleblower’s Plan that the candidate chooses to support. In the detailed description of our 60-Day Plan we set out dates on which the specific could be implemented by a new President (or President Obama) without new legislation or regulation. Those dates are illustrative of how quickly a President with the will to restore the rule of law and safety to Wall Street could do so. We are not demanding that candidates certify that they would meet that exact time schedule we set out. Our Plan can be implemented in 60 days and that would be desirable, but we realize that a new President will have many priorities and could implement our 60-Day Plan over, say, 120 days.

We unanimously support the 60-Day Plan, but our Plan is not a “take it or leave it” demand. The candidates will choose which provisions of our Plan they support and will pledge to implement. In this first document we outline the substance of the Plan. We are simultaneously releasing a longer document that explains the rationale for our Plan provisions and exactly how they can be implemented without new legislation or rules. Again, the dates that the longer document provides are designed to illustrate how quickly accountability could be restored without any news laws or rules.

We are also releasing today a campaign funding pledge that the Whistleblowers’ Group supports. We will make public any pledges we receive from the candidates to implement our campaign funding pledge. The fourth document we release today explains who we are and why we came together to urge the prompt implementation of the restoration of the rule of law for Wall Street.
The Whistleblowers’ 60-Day Plan:

Restore the mandatory criminal referral process and Criminal Referral Coordinators at every financial regulatory agency
Require that all new hires agree to conditions that will end the “revolving door” – with no provision for waivers.
The FBI and the Department of Justice (DOJ) will publicly terminate their “partnership” with the Mortgage Bankers Association – the industry trade association which has a clear conflict of interest and harms prioritization by pushing solely for the prosecution of what should be far lower priority cases of crimes v. banks and never for the prosecution of what should be the highest priority cases of frauds led by banks’ senior officers
Ban DOJ from making deferred prosecution agreements with elite white-collar criminals
Reassign 500 FBI agents to the white-collar crime section
Request authority from Congress to hire 3,000 FBI agents, 250 DOJ attorneys, 250 SEC investigators and enforcers. This is the only portion of our plan requiring legislation.
Stop prosecuting the mortgage fraud “mice” and use all DOJ and FBI resources against the fraud “lions”
Rescind the FBI’s false claim on its web site that asserts:
Ethnic groups involved in mortgage loan origination fraud include North Korean, Russian, Bulgarian, Romanian, Lithuanian, Mexican, Polish, Middle Eastern, Chinese, and those from the former Republic of Yugoslavian States.

This false ethnic claim, again, leads the FBI to prioritize the fraud “mice” rather than the “lions.”

Prioritize FBI and DOJ resources by creating a “Top 100” list of the worst financial fraud schemes
Revamp the federal treatment of whistleblowers and False Claim Act complainants to encourage their efforts and use them to hold financial elites personally accountable
Make public a list of exemplary financial whistleblowers and set forth in writing what they have done for the Nation. (The President should, of course, do this for whistleblowers in each field, not just finance.)
The President should hold a public event at which he or she presents appropriate awards in person to these exemplary whistleblowers. We are not talking about financial awards and we are willing to be excluded from consideration for these Presidential awards lest we be charged with self-aggrandizement.
Review the backlog of whistleblower and False Claims Act complaints with fresh eyes committed to finding any useful source of information to assist in deciding whether to bring enforcement, civil, or criminal actions against elite financial frauds.
Make public the Clayton reports on secondary market sales. These reports document pervasive secondary mortgage market fraud.
Federal banking regulators will:
Impose individual minimum capital requirements (IMCR) for all systemically dangerous institutions (SDIs) commensurate with the risk they pose because of their size
Impose IMCRs for all SDIs commensurate with the risk they pose because of their non-commercial bank activities
Impose IMCRs for all banks commensurate with the risk posed by their executive compensation systems
Impose IMCRs for all banks commensurate with the risk posed by their hiring, retention, and compensation systems for purportedly independent professionals such as outside auditors, appraisers, and credit rating agencies
Announce that it is the policy of the United States never to engage in a regulatory “race to the bottom” with any other government
Direct each major federally regulated bank to conduct and publicly report a “Krystofiak” study on samples of “liar’s” loans that they continue to hold. Krystofiak studies quantify the extent of loan origination and secondary market fraud by lenders.
Appoint new, vigorous heads of each federal financial regulatory agency
Promptly train federal banking and securities regulators, the FBI, and DOJ on sophisticated fraud schemes, particularly fraud via accounting
End the use of deliberately unenforceable financial regulatory “guidelines”
Will You Support the Whistleblowers’ First 60-Day Pledge?

And so we ask each presidential candidate – which portions of the Whistleblowers’ 60-Day plan will you pledge to implement? We hope the candidates will commit to breaking Wall Street’s power over our economy and democracy. The Whistleblowers’ 60-Day plan provides any candidate with the practical steps necessary to make real the twin goals of restoring the rule of law to Wall Street and ending crony capitalism. Our goal is to offer constructive, realistic means by which the next President can achieve these twin goals.

[1] “Control fraud” refers to the use of the entity by the officials who control it as a “weapon” to defraud others. In finance, accounting is the fraudsters’ “weapon of choice.” Epidemics of accounting control fraud drove our three modern crises – the Savings and Loan debacle, the Enron-era scandals, and the most recent crisis.

REPOST: ON DEBT JUBILEE…

Economics

Debt Jubilee…
Debt forgiveness is the only way now. Not any other single economic “plan” or “policy” will “fix” anything in a system that is so systemically diseased as is ours.

The thorough corporate rigging of our entire political, economic, societal system has been in the works since the Industrial Revolution and it’s consequent spawning of the titans of the monopolies of industry. Lincoln said that America will never be destroyed from without, but from within. He was right: “We the people” have let this happen.

Theodore Roosevelt saw that a robust and solid middle class was an absolute key to keeping a society placated and relatively content; Plus, a large middle class is and always has been an excellent buffer between the vastly wealthy and the dirt poor.

FDR also knew this “wisdom” and sought tirelessly to create that middle class. He did it for a while, but against all odds, and with venomous opposition from those with the wealth. Surprising indeed that he got away with it AND with his life.

So, the introduction of Ronald Reagan as the new puppet-toy brought a renewed vigor to the corporate titan’s battle: Four long decades of intense propaganda to deregulate industry and privatize public assets. And all the many “Laws” written behind our backs have resulted in the legalization of outright Fraud.

The corporate henchmen, the banks, the Wall Street financiers, along with our own government, have succeeded beyond any imagining in passing all laws in their favor, which, conversely, go directly and totally Against our favor, and have, to boot, yanked and gutted any remedies or recourse that we the people once attained having fought for “rights” over many decades.

Now, a total reset is necessary. This reset will necessitate a thorough reevaluation of what is considered valuable. And NOT valuable. And then total Debt forgiveness, i.e. Debt Cancellation, Debt Jubilee. i.e., Cancel all debt.

All must say NO. We will NOT PAY.

______________

APRIL 18, 2013
On Debt Forgiveness…

An Article by Michael Hudson

WEEKEND EDITION DECEMBER 2-4, 2011
Hammurabi Knew Better
Debt Slavery – Why It Destroyed Rome, Why It Will Destroy Us Unless It’s Stopped

by MICHAEL HUDSON
Book V of Aristotle’s Politics describes the eternal transition of oligarchies making themselves into hereditary aristocracies – which end up being overthrown by tyrants or develop internal rivalries as some families decide to “take the multitude into their camp” and usher in democracy, within which an oligarchy emerges once again, followed by aristocracy, democracy, and so on throughout history.

Debt has been the main dynamic driving these shifts – always with new twists and turns. It polarizes wealth to create a creditor class, whose oligarchic rule is ended as new leaders (“tyrants” to Aristotle) win popular support by cancelling the debts and redistributing property or taking its usufruct for the state.

Since the Renaissance, however, bankers have shifted their political support to democracies. This did not reflect egalitarian or liberal political convictions as such, but rather a desire for better security for their loans. As James Steuart explained in 1767, royal borrowings remained private affairs rather than truly public debts. For a sovereign’s debts to become binding upon the entire nation, elected representatives had to enact the taxes to pay their interest charges.

By giving taxpayers this voice in government, the Dutch and British democracies provided creditors with much safer claims for payment than did kings and princes whose debts died with them. But the recent debt protests from Iceland to Greece and Spain suggest that creditors are shifting their support away from democracies. They are demanding fiscal austerity and even privatization sell-offs.

This is turning international finance into a new mode of warfare. Its objective is the same as military conquest in times past: to appropriate land and mineral resources, also communal infrastructure and extract tribute. In response, democracies are demanding referendums over whether to pay creditors by selling off the public domain and raising taxes to impose unemployment, falling wages and economic depression. The alternative is to write down debts or even annul them, and to re-assert regulatory control over the financial sector.

Near Eastern rulers proclaimed clean slates for debtors to preserve economic balance

Charging interest on advances of goods or money was not originally intended to polarize economies. First administered early in the third millennium BC as a contractual arrangement by Sumer’s temples and palaces with merchants and entrepreneurs who typically worked in the royal bureaucracy, interest at 20 per cent (doubling the principal in five years) was supposed to approximate a fair share of the returns from long-distance trade or leasing land and other public assets such as workshops, boats and ale houses.

As the practice was privatized by royal collectors of user fees and rents, “divine kingship” protected agrarian debtors. Hammurabi’s laws (c. 1750 BC) cancelled their debts in times of flood or drought. All the rulers of his Babylonian dynasty began their first full year on the throne by cancelling agrarian debts so as to clear out payment arrears by proclaiming a clean slate. Bondservants, land or crop rights and other pledges were returned to the debtors to “restore order” in an idealized “original” condition of balance. This practice survived in the Jubilee Year of Mosaic Law in Leviticus 25.

The logic was clear enough. Ancient societies needed to field armies to defend their land, and this required liberating indebted citizens from bondage. Hammurabi’s laws protected charioteers and other fighters from being reduced to debt bondage, and blocked creditors from taking the crops of tenants on royal and other public lands and on communal land that owed manpower and military service to the palace.

In Egypt, the pharaoh Bakenranef (c. 720-715 BC, “Bocchoris” in Greek) proclaimed a debt amnesty and abolished debt-servitude when faced with a military threat from Ethiopia. According to Diodorus of Sicily (I, 79, writing in 40-30 BC), he ruled that if a debtor contested the claim, the debt was nullified if the creditor could not back up his claim by producing a written contract. (It seems that creditors always have been prone to exaggerate the balances due.) The pharaoh reasoned that “the bodies of citizens should belong to the state, to the end that it might avail itself of the services which its citizens owed it, in times of both war and peace. For he felt that it would be absurd for a soldier … to be haled to prison by his creditor for an unpaid loan, and that the greed of private citizens should in this way endanger the safety of all.”

The fact that the main Near Eastern creditors were the palace, temples and their collectors made it politically easy to cancel the debts. It always is easy to annul debts owed to oneself. Even Roman emperors burned the tax records to prevent a crisis. But it was much harder to cancel debts owed to private creditors as the practice of charging interest spread westward to Mediterranean chiefdoms after about 750 BC. Instead of enabling families to bridge gaps between income and outgo, debt became the major lever of land expropriation, polarizing communities between creditor oligarchies and indebted clients. In Judah, the prophet Isaiah (5:8-9) decried foreclosing creditors who “add house to house and join field to field till no space is left and you live alone in the land.”

Creditor power and stable growth rarely have gone together. Most personal debts in this classical period were the product of small amounts of money lent to individuals living on the edge of subsistence and who could not make ends meet. Forfeiture of land and assets – and personal liberty – forced debtors into bondage that became irreversible. By the 7th century BC, “tyrants” (popular leaders) emerged to overthrow the aristocracies in Corinth and other wealthy Greek cities, gaining support by cancelling the debts. In a less tyrannical manner, Solon founded the Athenian democracy in 594 BC by banning debt bondage.

But oligarchies re-emerged and called in Rome when Sparta’s kings Agis, Cleomenes and their successor Nabis sought to cancel debts late in the third century BC. They were killed and their supporters driven out. It has been a political constant of history since antiquity that creditor interests opposed both popular democracy and royal power able to limit the financial conquest of society – a conquest aimed at attaching interest-bearing debt claims for payment on as much of the economic surplus as possible.

When the Gracchi brothers and their followers tried to reform the credit laws in 133 BC, the dominant Senatorial class acted with violence, killing them and inaugurating a century of Social War, resolved by the ascension of Augustus as emperor in 29 BC.

Rome’s creditor oligarchy wins the Social War, enslaves the population and brings on a Dark Age

Matters were more bloody abroad. Aristotle did not mention empire building as part of his political schema, but foreign conquest always has been a major factor in imposing debts, and war debts have been the major cause of public debt in modern times. Antiquity’s harshest debt levy was by Rome, whose creditors spread out to plague Asia Minor, its most prosperous province. The rule of law all but disappeared when publican creditor “knights” arrived. Mithridates of Pontus led three popular revolts, and local populations in Ephesus and other cities rose up and killed a reported 80,000 Romans in 88 BC. The Roman army retaliated, and Sulla imposed war tribute of 20,000 talents in 84 BC. Charges for back interest multiplied this sum six-fold by 70 BC.

Among Rome’s leading historians, Livy, Plutarch and Diodorus blamed the fall of the Republic on creditor intransigence in waging the century-long Social War marked by political murder from 133 to 29 BC. Populist leaders sought to gain a following by advocating debt cancellations (e.g., the Catiline conspiracy in 63-62 BC). They were killed. By the second century AD about a quarter of the population was reduced to bondage. By the fifth century Rome’s economy collapsed, stripped of money. Subsistence life reverted to the countryside.

Creditors find a legalistic reason to support parliamentary democracy

When banking recovered after the Crusades looted Byzantium and infused silver and gold to review Western European commerce, Christian opposition to charging interest was overcome by the combination of prestigious lenders (the Knights Templars and Hospitallers providing credit during the Crusades) and their major clients – kings, at first to pay the Church and increasingly to wage war. But royal debts went bad when kings died. The Bardi and Peruzzi went bankrupt in 1345 when Edward III repudiated his war debts. Banking families lost more on loans to the Habsburg and Bourbon despots on the thrones of Spain, Austria and France.

Matters changed with the Dutch democracy, seeking to win and secure its liberty from Habsburg Spain. The fact that their parliament was to contract permanent public debts on behalf of the state enabled the Low Countries to raise loans to employ mercenaries in an epoch when money and credit were the sinews of war. Access to credit “was accordingly their most powerful weapon in the struggle for their freedom,” Richard Ehrenberg wrote in his Capital and Finance in the Age of the Renaissance (1928): “Anyone who gave credit to a prince knew that the repayment of the debt depended only on his debtor’s capacity and will to pay. The case was very different for the cities, which had power as overlords, but were also corporations, associations of individuals held in common bond. According to the generally accepted law each individual burgher was liable for the debts of the city both with his person and his property.”

The financial achievement of parliamentary government was thus to establish debts that were not merely the personal obligations of princes, but were truly public and binding regardless of who occupied the throne. This is why the first two democratic nations, the Netherlands and Britain after its 1688 revolution, developed the most active capital markets and proceeded to become leading military powers. What is ironic is that it was the need for war financing that promoted democracy, forming a symbiotic trinity between war making, credit and parliamentary democracy which has lasted to this day.

At this time “the legal position of the King qua borrower was obscure, and it was still doubtful whether his creditors had any remedy against him in case of default.” (Charles Wilson, England’s Apprenticeship: 1603-1763: 1965.) The more despotic Spain, Austria and France became, the greater the difficulty they found in financing their military adventures. By the end of the eighteenth century Austria was left “without credit, and consequently without much debt,” the least credit-worthy and worst armed country in Europe, fully dependent on British subsidies and loan guarantees by the time of the Napoleonic Wars.

Finance accommodates itself to democracy, but then pushes for oligarchy

While the nineteenth century’s democratic reforms reduced the power of landed aristocracies to control parliaments, bankers moved flexibly to achieve a symbiotic relationship with nearly every form of government. In France, followers of Saint-Simon promoted the idea of banks acting like mutual funds, extending credit against equity shares in profit. The German state made an alliance with large banking and heavy industry. Marx wrote optimistically about how socialism would make finance productive rather than parasitic. In the United States, regulation of public utilities went hand in hand with guaranteed returns. In China, Sun-Yat-Sen wrote in 1922: “I intend to make all the national industries of China into a Great Trust owned by the Chinese people, and financed with international capital for mutual benefit.”

World War I saw the United States replace Britain as the major creditor nation, and by the end of World War II it had cornered some 80 per cent of the world’s monetary gold. Its diplomats shaped the IMF and World Bank along creditor-oriented lines that financed trade dependency, mainly on the United States. Loans to finance trade and payments deficits were subject to “conditionalities” that shifted economic planning to client oligarchies and military dictatorships. The democratic response to resulting austerity plans squeezing out debt service was unable to go much beyond “IMF riots,” until Argentina rejected its foreign debt.

A similar creditor-oriented austerity is now being imposed on Europe by the European Central Bank (ECB) and EU bureaucracy. Ostensibly social democratic governments have been directed to save the banks rather than reviving economic growth and employment. Losses on bad bank loans and speculations are taken onto the public balance sheet while scaling back public spending and even selling off infrastructure. The response of taxpayers stuck with the resulting debt has been to mount popular protests starting in Iceland and Latvia in January 2009, and more widespread demonstrations in Greece and Spain this autumn to protest their governments’ refusal to hold referendums on these fateful bailouts of foreign bondholders.

Shifting planning away from elected public representatives to bankers

Every economy is planned. This traditionally has been the function of government. Relinquishing this role under the slogan of “free markets” leaves it in the hands of banks. Yet the planning privilege of credit creation and allocation turns out to be even more centralized than that of elected public officials. And to make matters worse, the financial time frame is short-term hit-and-run, ending up as asset stripping. By seeking their own gains, the banks tend to destroy the economy. The surplus ends up being consumed by interest and other financial charges, leaving no revenue for new capital investment or basic social spending.

This is why relinquishing policy control to a creditor class rarely has gone together with economic growth and rising living standards. The tendency for debts to grow faster than the population’s ability to pay has been a basic constant throughout all recorded history. Debts mount up exponentially, absorbing the surplus and reducing much of the population to the equivalent of debt peonage. To restore economic balance, antiquity’s cry for debt cancellation sought what the Bronze Age Near East achieved by royal fiat: to cancel the overgrowth of debts.

In more modern times, democracies have urged a strong state to taxrentier income and wealth, and when called for, to write down debts. This is done most readily when the state itself creates money and credit. It is done least easily when banks translate their gains into political power. When banks are permitted to be self-regulating and given veto power over government regulators, the economy is distorted to permit creditors to indulge in the speculative gambles and outright fraud that have marked the past decade. The fall of the Roman Empire demonstrates what happens when creditor demands are unchecked. Under these conditions the alternative to government planning and regulation of the financial sector becomes a road to debt peonage.

Finance vs. government; oligarchy vs. democracy

Democracy involves subordinating financial dynamics to serve economic balance and growth – and taxing rentier income or keeping basic monopolies in the public domain. Untaxing or privatizing property income “frees” it to be pledged to the banks, to be capitalized into larger loans. Financed by debt leveraging, asset-price inflation increases rentier wealth while indebting the economy at large. The economy shrinks, falling into negative equity.

The financial sector has gained sufficient influence to use such emergencies as an opportunity to convince governments that that the economy will collapse they it do not “save the banks.” In practice this means consolidating their control over policy, which they use in ways that further polarize economies. The basic model is what occurred in ancient Rome, moving from democracy to oligarchy. In fact, giving priority to bankers and leaving economic planning to be dictated by the EU, ECB and IMF threatens to strip the nation-state of the power to coin or print money and levy taxes.

The resulting conflict is pitting financial interests against national self-determination. The idea of an independent central bank being “the hallmark of democracy” is a euphemism for relinquishing the most important policy decision – the ability to create money and credit – to the financial sector. Rather than leaving the policy choice to popular referendums, the rescue of banks organized by the EU and ECB now represents the largest category of rising national debt. The private bank debts taken onto government balance sheets in Ireland and Greece have been turned into taxpayer obligations. The same is true for America’s $13 trillion added since September 2008 (including $5.3 trillion in Fannie Mae and Freddie Mac bad mortgages taken onto the government’s balance sheet, and $2 trillion of Federal Reserve “cash-for-trash” swaps).

This is being dictated by financial proxies euphemized as technocrats. Designated by creditor lobbyists, their role is to calculate just how much unemployment and depression is needed to squeeze out a surplus to pay creditors for debts now on the books. What makes this calculation self-defeating is the fact that economic shrinkage – debt deflation – makes the debt burden even more unpayable.

Neither banks nor public authorities (or mainstream academics, for that matter) calculated the economy’s realistic ability to pay – that is, to pay without shrinking the economy. Through their media and think tanks, they have convinced populations that the way to get rich most rapidly is to borrow money to buy real estate, stocks and bonds rising in price – being inflated by bank credit – and to reverse the past century’s progressive taxation of wealth.

To put matters bluntly, the result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation. Government planning and taxation is accused of being “the road to serfdom,” as if “free markets” controlled by bankers given leeway to act recklessly is not planned by special interests in ways that are oligarchic, not democratic. Governments are told to pay bailout debts taken on not to defend countries in military warfare as in times past, but to benefit the wealthiest layer of the population by shifting its losses onto taxpayers.

The failure to take the wishes of voters into consideration leaves the resulting national debts on shaky ground politically and even legally. Debts imposed by fiat, by governments or foreign financial agencies in the face of strong popular opposition may be as tenuous as those of the Habsburgs and other despots in past epochs. Lacking popular validation, they may die with the regime that contracted them. New governments may act democratically to subordinate the banking and financial sector to serve the economy, not the other way around.

At the very least, they may seek to pay by re-introducing progressive taxation of wealth and income, shifting the fiscal burden onto rentierwealth and property. Re-regulation of banking and providing a public option for credit and banking services would renew the social democratic program that seemed well underway a century ago.

Iceland and Argentina are most recent examples, but one may look back to the moratorium on Inter-Ally arms debts and German reparations in 1931.A basic mathematical as well as political principle is at work: Debts that can’t be paid, won’t be.

This article appears in the Frankfurter Algemeine Zeitung on December 5, 2011.

MICHAEL HUDSON is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. He can be reached via his website, mh@michael-hudson.com

Not Going to Take it Anymore – Doctors in the Pacific Northwest Unionize Posted on January 19, 2016 by Yves Smith (NAKED CAPITALISM)

Not Going to Take it Anymore – Doctors in the Pacific Northwest Unionize
Posted on January 19, 2016 by Yves Smith
Yves here. This development is very important. Nurses’ unions are effective and well respected. Doctors’ unions should be even more so, particularly since their big grievance is corporatized medicine requiring them to spend less time with patients and reducing their autonomy. As this post explains, they are at odds with management because management cares only about profit while they prioritize the quality of care. And the managers are all MBAs, so it is not as if the effort to routinize care is driven by people who in theory might have ideas about how to achieve better medical outcomes.

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Cross posted from the Health Care Renewal website

We have posted about the plight of the corporate physician. In the US, home of the most commercialized health care system among developed countries, physicians increasingly practice as employees of large organizations, usually hospitals and hospital systems, sometimes for-profit. The leaders of such systems meanwhile are now often generic managers, people trained as managers without specific training or experience in medicine or health care, and “managerialists” who apply generic management theory and dogma to medicine and health care just as it might be applied to building widgets or selling soap.

We have also frequently posted about what we have called generic management, the manager’s coup d’etat, and mission-hostile management.
Managerialism wraps these concepts up into a single package. The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations’ areas of operation. Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts

Furthermore, all organizations ought to be run according to the same basic principles of business management. These principles in turn ought to be based on current neoliberal dogma, with the prime directive that short-term revenue is the primary goal.

Now there are a few signs that the physicians are getting fed up with having to answer to generic management and managerialism.

I found two stories, perhaps somewhat related, about physicians unionizing to stand up to their new often managerialist overseers. The most prominent was in the New York Times on January 9, 2016, provocatively titled “Doctors Unionize to Resist the Medical Machine.” It tells the story of how the hospitalists at PeaceHealth Sacred Heart Medical Center in Springfield, Oregon, formed a union de novo. The second started with a brief article in the Seattle Times on December 27, 2015, about how housestaff at the University of Washington (UW) revived a housestaff association and turned it into a union.

Managerialism as the Stimulus at PeaceHealth

The long article about PeaceHealth showed that managerialist leadership of the hospital system was the chief stimulus for unionization.

Managerialist Tactics: Outsourcing

The NYT article opened with

in the spring of 2014, when the administration announced it would seek bids to outsource its 36 hospitalists, the hospital doctors who supervise patients’ care, to a management company that would become their employer.

The outsourcing of hospitalists became relatively common in the last decade, driven by a combination of factors. There is the obvious hunger for efficiency gains. But there is also growing pressure on hospitals to measure quality and keep people healthy after they are discharged. This can be a complicated data collection and management challenge that many hospitals, especially smaller ones, are not set up for and that some outsourcing companies excel in.

Outsourcing is a now familiar entry in the managerialists’ playbook. It is seen more in manufacturing than in health care. Although touted as improving economic “efficiency,” it also may reduce the accountability of the managers of the organization that does the outsourcing.

Pursuit of Economic Efficiency

In this case,

Outsourced hospitalists tend to make as much or more money than those that hospitals employ directly, typically in excess of $200,000 a year. But the catch is that their compensation is often tied more directly to the number of patients they see in a day — which the hospitalists at Sacred Heart worried could be as many as 18 or 20, versus the 15 that they and many other hospitalists contend should be the maximum.

It was the idea that they could end up seeing more patients that prompted outrage among the hospitalists at Sacred Heart, which has two facilities in the area, with a total of nearly 450 beds. ‘We’re doctors, we’re professionals,’ Dr. [Rajeev] Alexander said. ‘Giving me a bonus for seeing two more patients — I’m not sure I should be doing that. It’s not safe.’ (A hospital representative said patient safety was ‘inviolate.’)

A constant theme of managerialism, and the neoliberalism that underlies it, is economic efficiency. The usual narrative is that efficiency means providing better goods and services at lower costs. Instead, managerialism and neliberalism may mean decontenting goods and services so as to lower costs to the organizations providing them, but not necessarily providing more value to consumers. In health care terms, managerialism and neliberalism may lead to less accessible, more mediocre health care that increase revenue to the organizations providing it, as implied by the physicians’ comments above. Making the US the most commercialized, managerialist run, and arguably neoliberal health care system among the developed countries has not led to lower costs, better access, or better health care
quality.

The backstory for the outsourcing emphasizes that managerialism, and the resulting economic efficiency was indeed the goal of PeaceHealth…

In 2012, Sacred Heart’s parent, PeaceHealth, a nonprofit health care system, installed an executive named John Hill to adapt its Oregon hospitals to the latest trends in health care. Mr. Hill, in an effort to rein in the budget and improve the efficiency of a hospital that administrators said was lagging in key respects, including how long the typical patient stayed, eventually concluded that the hospitalists at Sacred Heart should be outsourced.

Centralization of Control

Furthermore,

The hospitalists also chafe at the way the administration has tried to centralize decisions they used to make for themselves. This might include hiring fellow doctors or the order in which they see patients on any day. They also complain of being loaded down with administrative tasks.

‘We’re trained to be leaders, but they treat us like assembly line workers,’ said Dr. Brittany Ellison, a hospitalist in the group. ‘You need that time with the patient,…’

A major feature of managerialism is the concentration of power within (generic) management. To quote Komesaroff(1),

In the workplace, the authority of management is intensified, and behaviour that previously might have been regarded as bullying becomes accepted good practice. The autonomous discretion of the professional is undermined, and cuts in staff and increases in caseload occur without democratic consultation of staff. Loyal long-term staff are dismissed and often humiliated, and rigorous monitoring of the performance of the remaining employees focuses on narrowly defined criteria relating to attainment of financial targets, efficiency and effectiveness.

We’re Only In It for the Money

Also, the negotiations that started once the PeaceHealth physicians formed their union demonstrated a central tenet of managerialism

Even starker than the divide over these questions are the differences in worldview represented on opposite sides of the table. During a bargaining session last fall, the administration proposed increasing the number of shifts a year. Hospitalists now earn about $223,000 a year for 173 shifts and are paid extra for working more. The hospital offered $260,000 for a mandatory 182 shifts, and up to $20,000 in bonus pay for hitting certain medical performance targets. The hospitalists work seven days on and seven days off, so this would have effectively eliminated any time off for sick days or vacation.

When the doctors pointed this out, the administration responded that if they missed a few days, it would make sure they got extra days to hit the required number of shifts for full pay.

The hospitalists assured the administration negotiators that their concern had nothing to do with money — that none of this had ever been about money. They preferred to work less and make less to avoid burnout, which was bad for them and worse for patients. At which point the administration responded that money was always the issue, according to several people in the room. (The hospital declined to comment.)

Suddenly it dawned on the doctors why they had failed to break through, Dr. Alexander said. ‘Imagine Mr. Burns,’ the cartoonishly evil capitalist from ‘The Simpsons,’ ‘sitting across the table,’ he said. ‘There’s no way we can say, ‘This isn’t what we’re talking about. We’re not trying to get the bonus.”

Again, managerialism is based on neoliberalism, and neoliberal view is that the market rules. The market is the arbiter of success, and money is the only outcome that matters. As Komesaroff put it(1),

The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market.

Mission-Hostile Management

Never mind that the centrality of money seems entirely inconsistent with the stated mission of PeaceHealth,

We carry on the healing mission of Jesus Christ by promoting personal and community health, relieving pain and suffering, and treating each person in a loving and caring way.

Ostensibly, this is accompanied by core values, such as,

Stewardship
We choose to serve the community and hold ourselves accountable to exercise ethical and responsible stewardship in the allocation and utilization of human, financial, and environmental resources.
and,

Social Justice
We build and evaluate the structures of our organization and those of society to promote the just distribution of health care resources.

We have frequently discussed how leadership of contemporary health care organizations often seem to act contrary to the organizations’ stated mission, that is, mission-hostile management.

Value Extraction

Finally, while managerialism is ostensibly concerned with economic efficiency, whose efficiency matters. When managers address physicians’ efficiency, they seem to look at amount of work done divided by the cost to the hospital of paying
physicians. However, they never seem to look at their own costs, the costs of management, as being a negative.

The PeaceHealth 2014 form 990, the latest available, states that the then CEO, Mr Alan Yordy (whose highest academic degree was an MBA, according to his LinkedIn page) had total compensation in 2013 of $1,366,742, and 11 other managers had total compensation greater than $250,000, with 9 having total compensation greater than $500,000. Those figures should be compared to the highest compensation offered the hospitalists, a maximum of $280,000 for 182 shifts a year, eliminating all vacation and sick leave. So if it is all about the money, the managers are making the most of it.

We have discussed ad nauseum the ridiculous compensation of the leaders of health care organization, even non-profit organizations. Value extraction by top management has become a central feature of the US and global economy (look here).

The NYT article did not discuss whether the upset hospitalists knew about their bosses’ compensation. I suspect they did.

Forming a Functioning Union at the University of Washington

The media coverage of the UW housestaff unionization was less detailed. It does appear, though, that a stimulus was the pursuit of economic efficiency by UW management through squeezing the pay of housestaff, as described in the December article in the Seattle Times. In it the house staff said,

they account for about one-fifth of King County’s doctors and they want higher pay, new child-care benefits and free parking. Some UW residents and fellows earn so little that they qualify for welfare programs like Temporary Assistance for Needy Families and the Seattle City Light Utility Discount Program, according to the UWHA [University of Washington Housestaff Association.]

Another article in early January, 2016 in the Seattle Times added,

The association has proposed that residents and fellows earn at least the same salary as the UW’s lowest-paid physician assistants. Because the doctors in training work very long hours, they sometimes earn less than Seattle’s minimum hourly wage, the UWHA has said.

The council members, in their letter to Cauce, called the situation shocking. And based on information from the UWHA, they wrote that some residents and fellows qualify for welfare programs like Temporary Assistance for Needy Families (TANF).

The Seattle articles noted that the UW housestaff may earn from just over $53,000 to just under $70,000 a year. Keep in mind, however, that under current rules, house staff may work up to 80 hours a week. So $53,000 for someone working those hours translates into $13.25/ hour, under what many people now claim is the living wage. That could be considered exploitation of workers with doctoral degrees working in often highly stressful situations where lives may be on the line. Whether there were issues other than money (and the respect it implies) involved at UW was not apparent based on the minimal press coverage.

So it appeared that the hospitalist physicians working for PeaceHealth, and most likely the housestaff of the University of Washington were pushed to unionize to counteract the managerialism of their hospital leaders.

The Results of Unionization So Far

In my humble opinion, similar stories to those at the PeaceHealth hospital about managers pushing physicians to increase productivity and efficiency, seemingly with little regard for the effect that might have on patient care and physicians’ professionalism can be found at many hospitals and health systems. Housestaff may be paid at little more than minimum wage rates at many training institutions. However, employed physicians have rarely effectively resisted up to now. Perhaps one reason is that at many institutions, each employed physician has his or her own contract, and may feel little power to negotiate his or her working conditions independently. Housestaff physicians obviously might feel they have even less leverage. But at PeaceHealth Sacred Heart, the physicians had other ideas:

Amid the groaning, a relatively new member of the group named Dr. David Schwartz observed, ‘They can’t fire all of us — there are unions.’ This was a bit of a stretch: While there are hospitals around the country whose doctors are unionized, there did not appear to be a union anywhere composed of a single group of specialists. But Dr. Schwartz, a barrel-chested man with close-cropped hair and a bushy beard who would not look out of place at a graduate English seminar, thought unionizing might be worth a try.

At the time, it was only one of several options the doctors considered. They talked of forming an independent hospitalists group, of forming an alliance with an outsourcing firm of their choosing. But the alternatives gradually fell away for a variety of practical reasons, and the doctors were growing increasingly bitter.

Dr. Littell developed a riff, which the other hospitalists appropriated, about how the situation was like having your spouse of several decades announce he or she was going to play the field. ‘You’ve been great, you’ve always been there,’ he would joke. ‘I just heard there could be better spouses out there.’ The kicker: ‘The good news is, you’re in the running, too!’

Amazingly, the unionization at PeaceHealth Sacred Heart was at least partially successful,

By March 2015, the PeaceHealth leadership, whatever its interest in efficiency gains, was apparently not pleased that one of its hospitals had a white-collar labor insurrection on its hands. The company announced that it would not outsource the hospitalists, a move it later said was always a possibility. Mr. Hill, who declined to comment, left in May.

The union did defeat the outsourcing tactic. But otherwise results have not been so quick to appear,

Noting that the negotiations with the hospital administration have dragged on for roughly a year, Dr. Schwartz said, ‘It’s pretty obvious that they don’t want to get a contract done.’ He says the administration worries that if it essentially rewards the hospitalists with a contract, it encourages other hospital workers to unionize too.

The housestaff at UW used a slightly different set of tactics, but still managed to form a real union. Per the earlier Seattle Times article,

Established in 1964, the UWHA was mostly dormant during the 1980s and 1990s, according to the association’s website. It became active again starting in 1999. In 2013, members proposed making it a state-recognized collective-bargaining unit.

The UW petitioned the state Public Employment Relations Commissionto block the move, arguing that the residents and fellows were students paid stipends rather than employees paid salaries. But the commission sided with the residents and fellows, who last year voted to unionize.

The housestaff association has succeeded in negotiating. But as did the PeaceHealth doctors, they have not yet been able to secure their positions, per the later article.

University of Washington brass say they’re committed to providing the UW’s medical residents and fellows with decent compensation and benefits, but they insist the newly unionized doctors in training are asking too much in contract negotiations.

So,

Talks have been stalled for some time but are set to resume this month with a mediator assigned by the state Public Employment Relations Commission.

The two sides ‘remain far apart in the area of compensation,’ Joyner wrote in his letter.

Parenthetically, unexplored in any of the press coverage is whether the parallels between what is going on at PeaceHealth and the University of Washington have to do with explicit ties between the organizations. In 2013, per Beckers’ Hospital Review, the news broke that the two institutions signed a letter of intent to create a “strategic alliance.” In 2014, an article in the Seattle Times noted the ongoing concerns of housestaff and students at UW that the alliance could be diminishing their educational opportunities.

Summary

In one sense, it is amazing that physicians are now starting to unionize as a response to the managerialism of their leaders. It was not all that long ago when the majority of physicians worked as solo practitioners or in small group practices, and fiercely defended their autonomy. The last thing they would have thought about was unionization. Since physicians were their own bosses, with whom could their unions have negotiated? In addition, in the US, independent physicians and physician practices could not legally unionize. Practices that discussed such issues as fees were liable to anti-trust prosecution. And with what bosses could they have conceivably negotiated.

Yet now physicians are increasingly corporate employees, hence corporate physicians. At the moment, unionizing may be one of the few effective tactics health care professionals can use to halt the march of managerialism/ generic management and partially relieve the plight of the corporate physician (and health care professional.) However, in the long run, as long as people who care more about money than about patients’ and the public’s health run health care, even unions will not be able to make that much progress, and not without adverse effects.

It would take true health care reform to address the larger problems with health care and society that is now leading to physicians unionizing. In my humble opinion, hospitals, health care systems, and other “provider organizations” should seek better patient care, not growth. Should they not voluntarily downsize (an almost comical idea in the current context), anti-trust enforcement, and probably new legislation would be needed to stop their pursuit of market dominance and return them to responsible community organizations. The now much smaller hospitals, and provider organizations should not be run for profit, and the commercial practice of medicine should again be illegal. Most physicians should go back to being private practitioners as individuals or within small groups. Leaders of hospitals and provider organizations should be accountable for putting patients’ and the public’s health first, upholding professional values, and should not expect to get rich doing so. But I dream on….

Corporate Fascism: Nazi Families in America who supported Hitler and Fascism

WAR

World War II

Who really “won?”  THE NAZIS!!

America and it’s Allies won NOTHING AT ALL in World War II.
The American Fascist Nazi’s were here all along. And at the War’s end, America brought all the Nazi scientists and the like HERE…Where they would feel right at home.

And for those of you who would actually scoff, there is so much documentary evidence of this…READ. “WE” did NOT “WIN” ANYTHING or ANY WAR. The entire BUSH Clan have been and are the same Fascist little Nazi people to the core and, according to the Guardian newspaper,

“George Bush’s grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.

The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.

His business dealings, which continued until his company’s assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.

The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator’s action should have been grounds for prosecution for giving aid and comfort to the enemy.”

Henry FORD was a Fascist and a Nazi sympathizer, the Koch Brothers, the list goes on and on and we’ve been fighting the same damned enemies for centuries: CORPORATIONS!!!

By the way, BANKS ARE CORPORATIONS TOO.

So!!  Let’s have a little history lesson, shall we?:

On Continual Deregulation and Privatization…

A few essential facts:

First, A historic context:

In the 1950’s, the U.S. corporate tax rate under President Eisenhower was over 50 percent… And much different in every other way than today.

Over the ensuing decades, the titans of industry, those that had amassed great sums of wealth during the industrial revolution and after, had all incorporated in order to avoid, for one thing, paying taxes.

Each corporate entity, (see Corporate PERSONHOOD) has doggedly pursued the same exact agenda for decades:

1. Lowering Corporate Tax Rates

2. Deregulation of industry

3. Privatization of public goods and assets

Success for the corporate person does translate to…what we see TODAY.
Piggish, obscene wealth for “THEM;” Poverty, slave wages and Peonage for US.

HELL.

Today, the wealthiest corporations pay ZERO in taxes. AND each corporation enjoys TENS of BILLIONS of dollars in TAX REFUNDS each year. Who pays that? WE DO.

Also, ZERO in taxes means that, while these same corporations have amassed great fortunes, by use of every single American tax-payer funded resource, such as the use of infrastructure, research and development grants, US, i.e. human labor resources and countless other funding programs and benefits;

There is so much in the way of documentation of what I write here.

Google this, a yearly list, to begin:

Top 100 Corporate Criminals of the Decade by Russell Mokhiber

Now a Quote:

What a majority of the electorate, including supporters of corporations/capitalism fails to understand is where we really are: owned and operated by multinational corporations that hold absolutely no allegiance to any nation, Constitution or system of moral authority. Corporations who pick our leaders, buy our representatives, count our votes without oversight or confirmation, taint our food and foul our water and air, sicken our workers and benefit from their deaths. The corporations’ allegiance is to only money; nothing else. They pay little or no taxes, yet they impose policy and write laws to limit our power and unleash theirs.” ~Griffon Avatar

THAT is a FACT.

And HERE is just A Bit of History on Corporations:

Both Theodore and Franklin D. Roosevelt knew the disastrous dangers of [allowing] concentrated wealth to grow unchecked; And both consequently fought tooth and nail against it; Both fought the constant threat of corporate dominance knowing that, once the toe is over the threshold, easily leads to total Corporate takeover; Corporate governance, also known as Corporatism, also known as Fascism.

The end result is the thorough and total destruction of the Republic, along with the entire notion of a “free” Democratic state; Which, in turn becomes another tyranny.

Of course, the J.P. Morgans of the Corporate Cabals, bitterly opposed the likes of the Roosevelts and were positively ruthless in their own smear campaigns to discredit and ultimately unseat them.

FDR knew them very well and I’ll quote him now: “Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.”

Theodore Roosevelt was a wise and prescient man; He said the following inspiring words: “Corporation cunning has developed faster than the law of nation or state. Corporations have found ways to steal long before we have found that they were susceptible to punishment for theft. But sooner or later, unless there is a season of readjustment, there will come a riotous, wicked, murderous day of atonement…. These fools on Wall Street think that they can go on forever! They can’t!”

Both Theodore Roosevelt and Franklin D. Roosevelt succeeded in breaking the stranglehold of Corporate Monopolies, first through Theodore’s aggressive anti-monopoly and anti-trust legislation;

And later by Franklin D. Roosevelt’s responsive counter to the big banks’ destruction, the Depression-era Glass-Steagal Act, among other critical Regulatory reforms.

They were both aware and Altruistic and Decent enough to take these critical measures and more, all directly against the bitter opposition and the fervent protests by the Ruling Industry tycoons of the day, who are, incidentally, still the ruling tycoons, the main difference being that these Tycoons have indeed purchased our entire government.

So it is that today, everything, every single issue, every one of OUR RIGHTS; Rights for which so many people in this country were willing to die; Rights which were struggled for and fought for HARD; Everything that has been fought for long and hard over many years, Voting Rights for Black men and Women’s Suffrage, the Civil Rights movement, Worker’s Rights, Unions; all of these “basic” and “fundamental” Rights, brutally and violently opposed by the Ruling Classes, were fought for to produce and ensure a robust middle class; and to create and maintain a rudimentary measure of a more Fair and Just system for all, Rich and Poor alike.

Today, every organized effort, every life lost in pursuit of Fairness and Justice for all, has been thoroughly erased and intentionally destroyed. And WE the people, the hoodwinked, the lulled, the complacent, the lazy, have let it all happen. And now the Corporate takeover of the United States and of the entire world is complete.

Reagan’s policies continued this deregulation exponentially; and each administration since has followed, in lock-step, the ongoing and thorough DEREGULATION of each and every other industry; along with the ongoing Privatization of ALL previously public sectors, lands, etc. Today, the only real requisite for political candidates is an unshakeable agenda; A corporate agenda of More Deregulation and Privatization.

It truly does not matter who is installed in this U.S. government. Every Puppet-Administration—Democrat and Republican alike—are used as a mere distraction; An intentional diversion away from the ongoing and highly successful collaboration among thieves to continue their goals to commit Mass Fraud and to freely Plunder any place on earth, extracting by theft anything of value—even if it belongs to another “sovereign” nation.

A reality check is long overdue. Candidates of this two-party system each have a political platform to draw votes. Both parties run their [never-ending] campaigns on any issue that will please their voting base, all the while blatantly patronizing, impudently lying, telling us that 1. they CARE and, 2. they represent OUR interests. In reality, politicians do not know of any such concept as civic duty, moral obligation, the common good; Indeed, most politicians, if not altogether illiterate; If not totally uneducated in all topics, most curiously perhaps, U.S. HISTORY; Politicians, by and large, do not even know the basics of the U.S. Constitution.

Politicians, like many people, are simply rapacious; Forever pushing and flailing to get to the slop trough so that they too can roll around in filthy lucre, disgracefully spoilt, grotesque and bloated, brimming with privilege so often undeserved and that uniquely American trait the enormous sense of entitlement.mounds of filthy lucre. They are nothing if not scabby and greasy, always on the prowl, skulking around from town to town in cheap flimsy and ill-fitting sheep costumes.

So, are we expected to see this, um, spectacle, as a “real” option? I mean, at this point, stop making excuses. Any attempt to differentiate in any way between Democrat and Republican is to prop up and perpetuate outright LIES. Democrats and Republicans are two selfsame, identical parties with identical interests and identical agendas, both willing collaborators and quislings for the Corporate money interests and the furtherance thereof.

So, with ALL of the stark and obvious warnings over the last four decades, all having been totally IGNORED by most of the citizenry, THIS is the FINAL wake up call. If and ONLY if an Enormous Realization, a TRUE AWAKENING, occurs, I guess that this neo-feudal system of Peonage and debt-servitude will remain in place; BUT, the longer the denial stays in place, the stronger the eventual revolt, which may result in the worst possible scenario: Full Scale Revolution and simultaneous Civil War.

CM

Quotes for Good Measure:

“The death-knell of the republic had rung as soon as the active power
became lodged in the hands of those who sought, not to do justice to
all citizens, rich and poor alike, but to stand for one special class
and for its interests as opposed to the interests of others.”

– Theodore Roosevelt

“Behind the ostensible government sits enthroned an invisible
government owing no allegiance and acknowledging no responsibility to
the people.”

Franklin Delano Roosevelt

“Corporation cunning has developed faster than the law of nation or
state. Corporations have found ways to steal long before we have found
that they were susceptible to punishment for theft. But sooner or
later, unless there is a season of readjustment, there will come a
riotous, wicked, murderous day of atonement…. These fools on Wall
Street think that they can go on forever! They can’t!”

Theodore Roosevelt

“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.”

~ Abraham Lincoln, Nov. 21, 1864

“I believe that banking institutions are more dangerous to our
liberties than standing armies. If the American people ever allow
private banks to control the issue of their currency, first by
inflation, then by deflation, the banks and corporations that will
grow up around the banks will deprive the people of all property until
their children wake-up homeless on the continent their fathers
conquered..’”

~ Thomas Jefferson, 1802

“There are plenty of ugly things about wealth and its possessors in
the present age, and I suppose there have been in all ages. There are
many rich people who so utterly lack patriotism, or show such sordid
and selfish traits of character, or lead such mean and vacuous lives,
that all right-minded men must look upon them with angry contempt…

~Theodore Roosevelt

“When fascism comes to America, it will be wrapped in the flag and
carrying a cross.”

~Sinclair Lewis

“In a time of universal deceit, telling the truth is a revolutionary
act.”

– George Orwell

“When fascism comes to America, it will come in the form of democracy.”

~Huey Long

CM

 

Report: Koch Brothers’ Father Helped Nazis Build Oil Refinery New York Times reveals blockbuster about the rightwing oligarchs. By Adam Johnson / AlterNet January 11, 2016

BUSH NAZI

Report: Koch Brothers’ Father Helped Nazis Build Oil Refinery
New York Times reveals blockbuster about the rightwing oligarchs.
By Adam Johnson / AlterNet January 11, 2016
A new book by New Yorker writer Jane Mayer about the history of far-right financing of elections has quite a revelation: the Koch Brothers father, and patriarch of their fortune, Fred Koch, built an oil refinery for Nazi Germany that was overseen by Hitler himself. The New York Times, which had received an advance copy of the book, “Dark Money,” reported:

But the book is largely focused on the Koch family, stretching back to its involvement in the far-right John Birch Society and the political and business activities of the father, Fred C. Koch, who found some of his earliest business success overseas in the years leading up to World War II. One venture was a partnership with the American Nazi sympathizer William Rhodes Davis, who, according to Ms. Mayer, hired Mr. Koch to help build the third-largest oil refinery in the Third Reich, a critical industrial cog in Hitler’s war machine.

Koch Industries spokesman Ken Spain told the Times, “If the content of the book is reflective of Ms. Mayer’s previous reporting of the Koch family, Koch Industries or Charles’s and David’s political involvement, then we expect to have deep disagreements and strong objections to her interpretation of the facts and their sourcing,”

The Koch brothers are major players in U.S. politics, having donated to a number of far-right causes including deregulation, climate change denial, anti-tax groups and, most famously, the nominally grassroots right-wing movement generally known as the Tea Party. The Kochs’ father founded Tea Party predecessor the John Birch Society that dealt in similar themes of anti-government paranoia that dovetailed nicely with the Kochs’ financial interests in pro-corporate deregulation efforts.

In 1934, Mayer details for the first time, Fred Koch’s firm provided engineering plans and began construction on an oil refinery near Hamburg which help fuel the war machine including the Nazis infamous Luftwaffe air fleet. The Washington Post reports that the Kochs links to Nazi Germany went beyond mere business:

For example, Mayer writes that the family patriarch, Fred Koch, admired German discipline so much in the 1930s that he hired a fervent Nazi as a governess for his eldest boys. “Dark Money” suggests that the experience of being toilet trained by a Nazi may have contributed to Charles Koch’s antipathy toward government today.

Mayer’s book also deals generally with the relationship between right-wing oligarchs and U.S. policies. It includes accounts of the Bradleys, DeVoses, the Scaifes, and other families who have used their great wealth to influence the Republican party and conservative and libertarian media. The hardcover of “Dark Money” is out January 19th.

Adam Johnson is an associate editor at AlterNet. Follow him on Twitter at @adamjohnsonnyc.

A Nazi in the (pocket) is worth four in the Bush (family) Part One – Part II ‘Frauds-R-Us’ By William Bowles

Nazi Prescott Bush

A Nazi in the (pocket) is worth four in the Bush (family)

Part One – Part II ‘Frauds-R-Us’

Prescott Bush, granpa of Dubya Bush

The Nazi’s American Banker

What is interesting about the history of the Bush family are the connections; Avril Harriman, Allen Dulles, the Rockefellers (the start of the oil connection), James Baker III, Gulf Oil, Pennzoil, Osama bin Laden…on and on it goes.

A lapse of memory?

 05/07/03: (Information Clearing House) It’s as well to remember that the Web never forgets, at least the US pres should take note of this fact and be careful of his utterances and how they can come back to haunt him. In fact four generations of Bush family history and too many skeletons in too many closets to count are to be found on the Web.

And given all the ‘pullpit pounding’ (more of which below) by ol’ Duyba and his minions, over the dubious moral character of Saddam and his cronies, much of which has underpinned the justification for the invasion and occupation of Iraq, it’s as well to compare the two sets of rogues. Not surprisingly, there’s little to choose between the two except that, in the case of the Bush gang, they have a ‘pedigree’ in perfidy which extends back almost a century and four generations that makes Saddam look positively angelic by comparison.

Prescott Bush – setting a family example

In a previous piece (http://www.informationclearinghouse.info/article3243.htm) a quote I used mentioned Prescott Bush the present pres’s granpa (http://www.americanpolitics.com/20030210Koop.html) so I decided to do a little researching to see what other dirty little secrets the Bush family have hidden in the dark recesses of the WWW and lo and behold, there’s a load of stuff out there (7,630 links to be precise, according to good ol’ google just on granpa Prescott Bush).

Geronimo!

It’s 1918 and, well you know students, they’re always up to innocent pranks. It seems Grandpa Bush set his grandson some fine family precedents starting with digging up Geronimo’s skull,

“In 1918, Prescott Bush and two companions crept into the cemetery near Fort Sill and pried open the grave of Geronimo.

The head was taken out, spiffed up and forwarded to New Haven, where it was given pride of place for goofy rituals that have been attended by generations of Bushes and a veritable army of powerful types.”

http://www.post-gazette.com/columnists/20000923roddy.asp

The Apache nation (what was left of it anyway) was not amused. Okay, we’ll forgive granpa Bush his ‘juvenile pranks’ but it seems that this set the scene for the rest of his miserable life until his death in 1972 from carcinoma of the lung.

From skulls to Zyklon B (and back again)

But it seems that great-granpa George Walker was also in on the business of making money out of death (like great-granpa like great grand-son),

“George Walker, GW’s great-grandfather, also set up the takeover of the Hamburg-America Line, a cover for I.G. Farben’s Nazi espionage unit in the United States. In Germany, I.G. Farben was most famous for putting the gas in gas chambers; it was the producer of Zyklon B and other gasses used on victims of the Holocaust. The Bush family was not unaware of the nature of their investment partners. They hired Allen Dulles, the future head of the CIA, to hide the funds they were making from Nazi investments and the funds they were sending to Nazi Germany, rather than divest.”

Source: http://www.disinfo.com/pages/dossier/id195/pg1/

Banking on Fascism

It just doesn’t stop does it, as Prescott Bush, son of George continued in the ‘grand tradition’ of skullduggery by also doing deals with the Nazis,

“On October 20, 1942, the US Alien Property Custodian, under the “Trading With the Enemy Act,” seized the shares of the Union Banking Corporation (UBC), of which Prescott Bush was a director and shareholder. The largest shareholder was E. Roland Harriman. (Bush was also the managing partner of Brown Brothers Harriman, a leading Wall Street investment firm.)

“The UBC was established to send American capital to Germany to finance the reorganization of its industry under the Nazis. Their leading German partner was the notorious Nazi industrialist Fritz Thyssen, who wrote a book admitting much of this called “I Paid Hitler.”

“Among the companies financed was the Silesian-American Corporation, which was also managed by Prescott Bush, and by his father-in-law George Herbert Walker, who supplied Dub-a-Ya with his name. The company was vital in supplying coal to the Nazi war industry. It too was seized as a Nazi-front on November 17, 1942. The largest company Bush’s UBC helped finance was the German Steel Trust, responsible for between one-third and one-half of Nazi iron and explosives.

“Prescott Bush was also a director of the Harriman Fifteen Corporation, (this one owned largely by Roland’s brother, Averell Harriman), which owned about a third of the Consolidated Silesian Steel Corporation, the rest owned by Friedrich Flick, (a member of Himmler’s “Circle of Friends” who donated to the S.S.).”

Source: http://www.lpdallas.org/features/draheim/dr991216.htm

What is interesting about the history of the Bush family are the connections; Avril Harriman, Allen Dulles, the Rockefellers (the start of the oil connection), James Baker III, Gulf Oil, Pennzoil, Osama bin Laden…on and on it goes. It looks like this’ll have to be part one of an on-going series on the Bush dynasty and their dirty dealings.

Double Dutch?

The story of steel magnate and billionaire bankroller of the Nazis, Fritz Thyssen and his Bush family connection is so incredible, that it deserves to be turned into a movie (obviously not by Hollywood). It all starts with John Loftus, a former U.S.Department of Justice Nazi War Crimes prosecutor who is the source of the following,

“From 1945 until 1949, one of the lengthiest and, it now appears, most futile interrogations of a Nazi war crimes suspect began in the American Zone of Occupied Germany…. [The interrogation of] [m]ultibillionaire steel magnate Fritz Thyssen-the man whose steel combine was the cold heart of the Nazi war machine.”

They were trying to find out what had happened to Thyssen’s billions but without success. Why?

“What the Allied investigators never understood was that they were not asking Thyssen the right question. Thyssen did not need any foreign bank accounts because his family secretly owned an entire chain of banks. He did not have to transfer his Nazi assets at the end of World War II, all he had to do was transfer the ownership documents – stocks, bonds, deeds and trusts–from his bank in Berlin through his bank in Holland to his American friends in New York City, Prescott Bush and Herbert Walker. Thyssen’s partners in crime were the father and father-in-law of a future President of the United States [my emph. WB].

“The British and American interrogators may have gravely underestimated Thyssen but they nonetheless knew they were being lied to. Their suspicions focused on one Dutch Bank in particular, the Bank voor Handel enScheepvaart, in Rotterdam. This bank did a lot of business with the Thyssens over the years. In 1923, as a favor to him, the Rotterdam bank loaned the money to build the very first Nazi party headquarters in Munich.

“If the investigators realized that the US intelligence chief in postwar Germany, Allen Dulles, was also the Rotterdam bank’s lawyer, they might have asked some very interesting questions. They did not know that Thyssen was Dulles’ client [my emph. WB] as well. Nor did they ever realize that it was Allen Dulles’s other client, Baron Kurt Von Schroeder who was the Nazi trustee for the Thyssen companies which now claimed to be owned by the Dutch [my emph. WB]. The Rotterdam Bank was at the heart of Dulles’ cloaking scheme, and he guarded its secrets jealously.

“[T]he Dutch connection remained unexplored until 1994 when I published the book “The Secret War Against the Jews.” As a matter of historical curiosity, I mentioned that Fritz Thyssen (and indirectly, the Nazi Party) had obtained their early financing from Brown Brothers Harriman [my emph. WB], and its affiliate, the Union Banking Corporation. Union Bank, in turn, was the Bush family’s holding company for a number of other entities, including the “Holland American Trading Company.”

Source: http://www.baltech.org/lederman/bush-nazi-fortune-2-09-02.html

There are so many twists and turns to this story, that this is not the place to to go into all the labyrinthine links between the Nazis, the Bush Family and the CIA (via Allen Dulles) or indeed, a host of other corporate connections. But this final quote from the same source, gives you an idea of just how much money is involved,

“The enormous sums of money deposited into the Union Bank prior to 1942 is the best evidence that Prescott Bush knowingly served as a money launderer for the Nazis. Remember that Union Banks’ books and accounts were frozen by the U.S. Alien Property Custodian in 1942 and not released back to the Bush family until 1951. At that time, Union Bank shares representing hundreds of millions of dollars worth of industrial stocks and bonds were unblocked for distribution. Did the Bush family really believe that such enormous sums came from Dutch enterprises? One could sell tulip bulbs and wooden shoes for centuries and not achieve those sums. A fortune this size could only have come from the Thyssen profits made from rearming the Third Reich, and then hidden, first from the Nazi tax auditors, and then from the Allies.”

For the full story please go to the link above.

Crocodile tears

All of which makes the following quote from Dubya all the more sickening,

“In April 1999, [then] Texas Governor George W. Bush proclaimed a week of remembrance for the Holocaust. He said, “I urge Texans to never forget the inhumanity of those who perpetrated the Holocaust, and reflect upon our own humanity and our responsibility to respect all peoples.”

Source: http://www.disinfo.com/pages/dossier/id195/pg1/

Like granpa like grand-son? Well given where Dubya got his money from, and his continuing in the ‘grand tradition of the Bush gang, I’m feeling quite biblical about things, so I thought following,

Short diversion

Would be useful. I know there will be some among you who think I’ve just got it in for the Bushes, so in my wanderings over the Web, I came across this little gem from http://www.townhall.com/bookclub/herskowitz.html

“Duty, Honor, Country

The Life and Legacy of Prescott Bush

By Mickey Herskowitz

This paean to the life of Prescott Bush, by a conservative writer is a salutory warning to us all. I quote,

“He [Prescott Bush] was a unifier, not a divider. And he was of such high integrity [sic] that behind the scenes was where he was at his best. He was a man of great faith. His grandfather was a minister whose faith and integrity were fully ingrained in the Bush family. Prescott always emphasized honesty, charity, fairness and proactive dedication to God, family and country.”

From a review by Susan Kurz.

I could go on quoting, but I’m afraid I’ll throw up. Check it out for yourself at http://www.townhall.com/bookclub/herskowitz.html. Townhall.com is, by the way, “the first truly interactive community on the Internet to bring Internet users, conservative public policy organizations, congressional staff, and political activists together under the broad umbrella of “conservative” thoughts, ideas and actions.”

There’s none so blind as those that refuse to see.

From Eugenicist to anti-abortionist

Not content with digging up the ancestors, supporting Fascism,laundering Nazi money through a Dutch-based bank, selling weapons to the mullahs of Iran, trading guns for drugs, doing business deals with Osama bin Laden, the Bush family in the form of ol’ granpa Prescott was an early supporter of the Eugenics movement (or racial purity, to give it its real name). And a rather embarassing connection it is too, as Bush Snr discovered,

“…And the Birth Control League was there, which had long trumpeted the need for eugenical births–fewer births for parents with “inferior” bloodlines. Prescott [Bush’s] partner Tighe was a Connecticut director of the league, and the Connecticut league’s medical advisor was eugenics advocate Dr. Winternitz of Yale Medical School.

Now in 1950, people who knew something about Prescott Bush knew that he had very unsavory roots in the eugenics movement. There were then, just after the anti-Hitler war, few open advocates of sterilization of “unfit” or “unnecessary” people. (That would be revived later, with the help of General Draper and his friend George Bush

Then, very late in the 1950 senatorial campaign, Prescott Bush was publicly exposed for being an activist in that section of the old fascist eugenics movement. Prescott Bush lost the election by about 1,000 out of 862,000 votes

In his foreword to a population control propaganda book, George Bush wrote about that 1950 election: “My own first awareness of birth control as a public policy issue came with a jolt in 1950 when my father was running for United States Senate in Connecticut. Drew Pearson, on the Sunday before Election day, ‘revealed’ that my father was involved with Planned Parenthood…. Many political observers felt a sufficient number of voters were swayed by his alleged contacts with the birth controllers to cost him the election….”

Source: http://www.geocities.com/SoHo/Exhibit/2412/eugenics/Bush.html

The Bush story is such a fascinating history of capitalist corruption and power that it needs to be presented to a public that is consistently lied to, not only by the corporate media but by our so-called leaders. In Part Two, I’m going to give you the low-down on the Bush family’s involvement in the scams and dealings of the Reagan years, the Iran-Contra scandal and one of the biggest rip-offs in history, the savings and loan scandal, which cost the US taxpayer literally trillions of dollars. Yeah, you read right, trillions!

Part II ‘Frauds-R-Us’

Copyright © 2003, William Bowles.