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Forum Post: Democracy Is The Solution

Posted 9 years ago on May 18, 2014, 3:48 p.m. EST by LeoYo (5909)
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"This has been the course of England, and her examples have fearful influence on us. In copying her we do not seem to consider that like premises induce like consequences. The bank mania is one of the most threatening of these imitations. It is raising up a moneyed aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding. These have taken deep root in the hearts of that class from which our legislators are drawn, and the sop to Cerberus from fable has become history. Their principles lay hold of the good, their pelf of the bad, and thus those whom the Constitution had placed as guards to its portals, are sophisticated or suborned from their duties."

Thomas Jefferson in a letter to Josephus B. Stuart dated May 10, 1817


"We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. . . . It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, 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. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless."

Abraham Lincoln in a letter to Col. William F. Elkins dated November 21, 1864


"A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation, therefore, and all our activities are in the hands of a few men... We have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men."

Woodrow Wilson in 1916 as quoted by former Senator Robert L. Owen (the Father of the Federal Reserve Act) in "National Economy and the Banking System," Senate Documents No. 23, p. 100, 76th Congress, 1st Session, 1939. http://ia700500.us.archive.org/11/items/NationalEconomyAndTheBankingSystemOfTheUnitedStates/NationalEconomyAndTheBankingSystem.pdf


"In July 1913, Hon. Carter Glass joined me in presenting to the Senate and to the House the so-called Federal Reserve Bill which had been prepared by me the previous March, but which had been expanded, and contained provisions with which I was not entirely content. My Committee was immediately called together to take testimony on this Senate Bill, and after 3,000 pages of printed testimony had been taken, my colleagues in the Senate authorized me to write another Bill. I thereupon had the Senate strike out the Bill that had been prepared in the House and substitute the Bill which I had originally prepared. The Senate adopted the Bill written by me without a change of word. In the Bill introduced in July, in which the Hon. Carter Glass joined me, I had inserted a provision requiring that the powers of the Reserve System be employed in the service of commerce and to promote a stable price level. The meaning of this, of course, was to establish and maintain the stable value of money under mandate. This mandatory provision was stricken out in the House under the leadership of Hon. Carter Glass. I was unable to keep this mandatory provision in the Bill because of the secret hostilities developed against it, the origin of which at that time I did not fully understand."

"Under the administrations of Wilson, Harding, Coolidge and Hoover, this Act was diverted from its proper purpose on the advice of some who controlled the policies of a number of the largest banks."

"In the campaign of 1920, under the pretext of lowering the cost of living, those in charge of some of the largest banks demanded the contraction of credit and currency. This was done in spite of nine protests I had made on the floor of the Senate between January and June of 1920. Policies pursued by those in charge of the Central Federal Reserve Banks resulted in raising the value of money 80%, from an index of 60 in May 1920 to an index of 107 in June 1921."

"Again, under President Hoover, the contraction of credit took place on such a colossal scale as to force the dollar index (purchasing power) to 166. The consequence was universal bankruptcy, every bank in the United States being forced to suspend operations at the close of Hoover's services."

Robert L. Owen,

New York City,

October 29, 1934.

From the forward of "Money Creators" by Gertrude Coogan



Progressive Era


Beginning in 1878, millions of American farmers began banding together to break the post-Civil War, small-farmer enslaving crop-lien system with co-operative economics. When they were bested by corrupt and abusive practices of the national financial sector, they attempted to improve their circumstances by forming the People's Party and engaging in populist politics. Again they were bested, this time by the country's mainstream two-party system. However, the Progressive Era had just begun. Before it ended, it would become one of the greatest democracy movements in recorded history.

Fired by the efforts of millions of farmers, exposes written by investigative journalists (the famous muckrakers), and correlations between special interests' abuses of farmers and special interests' abuses of urban workers, Progressives formed nationally connected citizen organizations to extend this democracy movement. From 1898 to 1918, the Progressives, supported by tens of millions of citizens, forced direct democracy petition components into the constitutions of twenty-six states.

The constitutional placement of direct democracy petition components was seen by those citizen majorities as necessary. Given the obvious corruption in state governments, the lack of sovereign public control over the output of state legislatures was seen as "the fundamental defect" in the nation's legislative machinery. Advocates insisted that the only way to make the founding fathers' vision work was to take the "misrepresentation" out of representative government with the sovereign people's direct legislation (Special Committee of the National Economic League, 1912 https://archive.org/stream/initiativerefere00nati#page/n0/mode/2up ). Nebraska adopted the referendum for municipal governments within its boundaries in 1897. South Dakota was the first state to adopt the referendum, in 1898, patterning its system after that of Switzerland. However, it was not all successful. Most notably, residents of Texas rejected the referendum because the version put on the ballot by the legislature required 20% of the vote. Other states where the constitutional amendments to place direct democracy failed include Mississippi, Missouri, Wisconsin, and Wyoming. By 1918 enthusiasm waned and the next state to adopt the referendum was Florida 50 years later.

Initiative and referendum (I&R) citizen lawmaking spread across the United States because state legislatures were unresponsive in creating laws that the people needed to protect themselves from lobby groups, laissez-faire economics, and the era's robber barons. Additionally, while legislatures were quick to pass laws benefitting special interests, both legislatures and the courts were inflexible in their refusals to amend, repeal or adjudicate those laws in ways that would eliminate special interest advantages and end abuses of the majority.


Now Make Me Do It: The Mythical Apathy of the Electorate



"Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens" http://www.princeton.edu/~mgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf

"Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Our results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism."

"When a majority – even a very large majority – of the public favors change, it is not likely to get what it wants. In our 1,779 policy cases, narrow pro-change majorities of the public got the policy changes they wanted only about 30% of the time. More strikingly, even overwhelmingly large pro-change majorities, with 80% of the public favoring a policy change, got that change only about 43% of the time."

"When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it."

"If, then, control of the people over the organs of their government be the measure of their republicanism, and I confess I know no other measure, it must be agreed that our governments have much less of republicanism than ought to have been expected; in other words, that the people have less regular control over their agents, than their rights and their interests require."

Thomas Jefferson in a letter to John Taylor dated May 28, 1816.


National Democratic Congress




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[-] 7 points by LeoYo (5909) 9 years ago

Oligarchy: As American as Poisoned Apple Pie

Tuesday, 20 May 2014 10:22
By Rivera Sun, Truthout | Op-Ed


Oligarchs are as American as poisoned apple pie. Their wealth and power look mouth-wateringly good, but with every bite, democracy dies.

" . . . in so far as we make (the use of wealth in politics) hard, we are advancing the agenda of democracy and we are decreasing the power of oligarchs," said Jeffrey Winters, author of Oligarchy and professor of politics at Northwestern University, on a recent episode of Occupy Radio.

American oligarchs - wealthy elites who use money to buy power - have been around so long they're almost as traditional as apple pie. They co-opted a people's revolution, gave themselves vast acres of land in the newly formed nation and then pulled off a coup in 1787 that is commonly referred to as the US Constitution.

In the 1770s to '80s, something revolutionary was stirring in the colonies. It wasn't a war. It was a people's movement called democracy. In public meetings and town halls, ordinary citizens were gathering to discuss how to govern themselves. In the Journal of American History, Joyce Appleby wrote:

"Foreign visitors in the 18th century invariably commented on the vitality of public discussions and on the political confidence of ordinary men."

Although these ordinary men did not include African-Americans, women or indigenous tribes, these assemblies were not as divided by wealth and class as were the aristocratic governments of Europe. This gave rise to a culture that was virtually unknown at the time: that of commoners sharing the responsibility of self-government.

Yet, after the war, the revolutionary notion of democracy produced a counter-revolution. Oligarchs of that era found it difficult to conduct business among the 13 sovereign states, each of which was developing its own laws regulating commerce, taxes and tariffs. The first constitution of the United States (the Articles of Confederation) endured for 10 years, starting in 1778, before the oligarchs could find a way around it. Even then, they had to resort to extraordinary means.

In February 1787, George Washington (the richest man in the United States) proposed a convention in May in Philadelphia for the alleged purposes of revising the Articles of Confederation. Upon arrival, however, delegates to the Philadelphia Convention were dismayed to discover that Washington, Madison, Hamilton and others wanted to throw out the old Articles of Confederation. In their place, Hamilton proposed a new, second Constitution of the United States, which included a powerful federal government to rule over the state governments, a president for life, a senate appointed for life, an electoral college that elects the president and an appointed for life Supreme Court with authority over the state courts.

"Nothing but a permanent body can check the imprudence of democracy," Alexander Hamilton is quoted as saying according to the Notes of the Secret Debates of the Federal Convention of 1787 taken by Robert Yates.

Many of the delegates left in protest. Of the 62 delegates appointed, only 39 signed the new Constitution. The Philadelphia Convention, widely heralded today as the birthplace of democracy, was nothing short of an oligarchic coup. Terms for elected officials were a minor concession to the proponents of democracy. The Bill of Rights was tacked on at the insistence of outraged citizens during the process of ratification, but it narrowed the list of protected rights to 10 out of the dozens that were initially proposed.

Today, tourists can visit the sunny, open rooms of Liberty Hall, but in 1787, the Convention took place under strict secrecy. The doors were closed; the windows blacked out and security guards ringed the building. In Notes of Debates in the Federal Convention of 1787, the rules stated, "That nothing spoken in the House be printed or otherwise published or communicated." James Madison, one of the main recorders, refused to publish his notes until all of the framers were buried in the grave.

If the citizens had known what was transpiring in Philadelphia, an uprising reminiscent of the Battle of Seattle at the 1999 World Trade Organization protests might have ensued. In 1787, citizens of the 13 sovereign states considered the United States of America to be a description of a friendly alliance of nation-states similar to the United Nations. Under the new Constitution, however, the federal government of the United States of America became a new, powerful legal body that wielded supreme authority over the subordinate states.

When they found out, citizens of the day were not amused. Resistance to the new Constitution was widespread. In 1787, Washington wrote, "Commotions of this sort, like snow-balls, gather strength as they roll, if there is no opposition in the way to divide and crumble them." To ensure the states' ratification of the new Constitution, his colleagues Madison and Hamilton rolled out their propaganda machines.

William Grayson of Virginia wrote, "We are now told . . . that we shall have wars and rumors of wars, that every calamity is to attend us, and that we shall be ruined and disunited forever, unless we adopt this constitution . . . and the Carolinians, from the South (mounted on alligators, I presume) are to come and destroy our cornfields, and eat up our little children! . . . These, sir are the mighty dangers which await us if we reject - dangers which are merely imaginary, and ludicrous in the extreme!"

Ultimately, the adoption of the new Constitution came down to money. Like so many of our contemporary issues, the nation divided not down left/right lines, but by monied interests (which supported the new federal government) and popular dissent (which objected to the loss of local power and the rising supremacy of the oligarchs). The Anti-Federalists were out-powered by the media apparatus and political influence of the oligarchs, who convinced commercial interests, small landowners, farmers, merchants and artisans to side with them. After the states ratified the new Constitution, the proponents of the new system embarked on a long-term effort to alter or recreate the state constitutions and legislative structure to reflect the federal government.

Know your history, goes the stern warning. Without knowledge of the past, tyranny in the present continues to oppress us all. To better understand what transpired at Liberty Hall in 1787, imagine that a group of wealthy businessmen came together in secret to draft up a new set of laws and to create a new court system that has authority over the nations of Japan, Australia, Korea, Vietnam, Canada, the United States and more. Then these wealthy elites empower themselves to regulate commerce to their own advantage.

If this sounds uncomfortably familiar, it's because the modern-day Trans-Pacific Partnership Agreement has engaged in many of the same maneuvers as the 1787 Philadelphia Convention that established the US Constitution. The Trans-Pacific Partnership Agreement (TPP) is a trade deal that is being negotiated in secret. The legislators of the affected nations are not involved - just as the delegates to the Continental Congress were not present at the Philadelphia Convention. The tribunal courts of the proposed TPP would usurp the authority of the courts of the nations, just as the Supreme Court usurped the state courts. Under the TPP, commerce falls under the jurisdiction of the trade agreement board, rather than the individual nation-states. Local laws that violate the TPP would be considered void, just as state laws were nullified if they conflicted with the new, powerful federal government. Just as the TPP was initially being fast-tracked through Congress, so did the framers of the Constitution attempt to ram it through the state ratification process.

Echoes of the past can be heard in the problems of the present. The revolutionary notion of democracy was put on hiatus in 1787 and the coup of the oligarchs continues to this day. Rule of the oligarchs under the empty rhetoric of democracy is so familiar and comfortable that to have millionaires in Congress and a ruling class of wealthy elites seems as American as apple pie. But the poisonous politics of wealth are not the homegrown democracy that was cultivated in the backyards of local communities. They are a tainted substitute peddled by wealthy elites.

Today, oligarchic rule stands poised to kill equality, justice and ordinary citizens. Our grandmothers, all unwittingly, crisscrossed the crust, brushed it with oil and baked it until it was golden. The sweet scent of liberty emits from such well-intentioned efforts, but watch out! Our forks are loaded with false democracy and poisonous apples sold by the oligarchs.

The question is . . . are you going to eat it?

Copyright, Truthout.

[-] 7 points by LeoYo (5909) 9 years ago

The Powerful Forces Shredding Our Constitution: Preface to "The Rise of the American Corporate Security State"

Tuesday, 20 May 2014 10:13
By Beatrice Edwards, Berrett-Koehler Publishers | Book Excerpt


Daniel Ellsberg writes of The American Corporate Security State: "Edwards is an extraordinary writer who brilliantly captures the essence of what whistleblowers such as Snowden have sacrificed their careers and jeopardized their personal liberties to convey." Get the book by contributing to Truthout here.

In the United States today, we have good reason to be afraid. Our democracy and our freedoms are impaired. Many Americans have lost their homes and jobs and will never get them back. Our pensions and our privacy are also gone. Most frightening of all, the Constitution that protected us for more than two hundred years from the tentacles of oppressive government and the stranglehold of private wealth is less respected every day.

After September 11, 2001, our government told us to fear foreign terrorists, so we did. To protect our national security, we submitted to unreasonable searches without protest; we surrendered our freedom of speech and association. At a staggering cost, we financed a permanent, mercenary military to patrol the world.

In September 2008, when the economy froze, the stock exchanges plunged and private firms began shedding jobs by the hundreds of thousands each week. The Treasury Department stepped in and transferred hundreds of billions of dollars in public assets to failing private financial institutions. The subsequent congressional inquiry determined that we were all responsible. We were guilty of irrational exuberance.

But now, taking stock years later, we have to recognize that no foreign terrorist shredded the Constitution. Nor did we, as citizens, bankrupt the nation. Powerful forces inside the country did. And worse than that: they intend to keep doing it. They have yet to be stopped. This is the real reason to be afraid: the rise of the Corporate Security State.

The Constitution gave us three branches of government to ensure that no one small faction could control the state. Each of them is failing us. The agencies of the executive branch appear to be helpless before the rise of the Corporate Security State. According to the attorney general, the Justice Department cannot prosecute corporations that usurp our rights and rob us of economic security, and the Treasury Department is forced to protect these financial forces from the consequences of their own reckless "trades." The president, whoever he happens to be, releases triumphant photographs of himself saluting in a flight suit or watching a live feed of SEAL Team Six killing Osama Bin Laden. He gives speeches about America and its greatness and periodically runs for re-election in what is now a grotesque pageant of clowns.

The Congress is paralyzed by squabbles over the debt, much of it occasioned by endless, off-the-books warfare. In the fall of 2013, the whole thing shuts itself down, along with the rest of the government, for lack of funding, flounders toward the next political showdown, and finally produces a meaningless agreement with itself about the national budget. Increasingly, the American public despises the entire body, and one poll taken during the 2013 government shutdown showed that we preferred cockroaches, zombies, and dog doo to Congress.

The judiciary, which is the last to go, blesses the increasing intrusion of money in politics, and stands down before the revelations of a secret court operating behind a veil of national security.

The Corporate Security State is tipping the balance between the self-interest of a governing corporate elite and the rights of the rest of us to freedom, privacy, safety, and fairness. We can see the power shift manifest in six clear and evolving trends since 2001:

Average citizens are subject to ever-expanding surveillance by the government-corporate complex.

Intelligence agencies, working with private corporations, gather extensive private data on everyone. Outsourced government has created a complex of private national security contractors who capture approximately 70 percent of the bloated national budget for intelligence and surveillance.

Control of information by the government-corporate complex is expanding.

The Obama administration continues to overclassify information. In 2009 and 2010, the number of classification decisions exploded. Among the documents deemed secret is the one setting out the cost of our national surveillance system and its unconstitutional domestic intelligence gathering capabilities. We are obliged to pay for it, but we have no right to know how much it costs or what it does.

The separation of powers established by the Constitution is eroding. Rights guaranteed by constitutional amendments are becoming irrelevant. Reporting a crime may be a crime, and informing the public of the truth is treason.

Since June 2013, we've discovered that the National Security Agency (NSA) has been routinely violating the First, Fourth, and Fifth Amendment rights of American citizens. The NSA has been doing this secretly for years, while the Justice Department uses the Espionage Act to prosecute national security whistleblowers as traitors when they try expose it.

The government-corporate surveillance complex is consolidating. What has been a confidential but informal collaboration now seeks to legalize its special status.

Legislation permitting the fluid exchange of information about citizens between the national intelligence apparatus and private financial and infrastructural institutions is moving through the Congress.

Financial reforms enacted after the crisis are inoperable and ineffective because of inadequate investigations and intensive corporate lobbying.

The major financial institutions, well-connected to the Congress, the Treasury Department, and the Justice Department, ensure that key regulations implementing reforms are either unfinished or ineffective.

Systemic corruption and a fundamental conflict of interest are driving us toward the precipice of new economic crises.

After the financial cataclysm of September 2008, the Justice Department's refusal to prosecute senior officials of the corporations that failed due to systemic fraud eliminated any deterrent. The deceptive practices continue, and the next collapse is only a matter of time.

The consequences of these trends and conditions are moving us toward a world like the one portrayed in the dismal post-apocalyptic movies churned out by Hollywood. We are submerged in wars that never end, and the wealth produced by and in the United States skews upward in ever greater concentrations. We await the emergence of the world's first trillionaire and look forward to the fawning portrait of him in a glossy business magazine.

Such a country can only be maintained with greater repression of dissent and suppression of the truth. This is why the government is into deeper and broader surveillance. Instead of funding education and health care, clean air, and water, our taxes are paying for intrusive electronic monitoring - of us.

But the battle for equality and fairness is not yet over. Many of the laws that prohibit surveillance and unreasonable search and seizure are still in place. Although they are under attack, and they erode incrementally if we are not paying attention, we still have recourse to them. And they still protect us from domination by a faction - the danger most dreaded by the framers of the Constitution. We must aggressively defend them, and we must promote peace for the United States and the rest of the world. For the war we think we are fighting abroad is also being waged against us. If we deprive others of their rights in an effort to protect ourselves, step-by-step we forfeit our own rights, too. That's just how it works.

Copyright (2014) by Beatrice Edwards.


[-] 5 points by LeoYo (5909) 9 years ago

I'm tempted but I wouldn't want to spam the forum by posting the same article more than once but anyone else should certainly feel free to post anything I post as a main topic.

[-] 1 points by LeoYo (5909) 9 years ago

The Government-Corporate Complex: Surveillance for the Money

Tuesday, 27 May 2014 13:39
By Beatrice Edwards, Berrett-Koehler Publishers | Book Excerpt

The Government-Corporate Complex: What It Knows about You

Chapter 1: The Rise of the American Corporate Security State

Reason to be afraid #1:

Average citizens are subject to ever-expanding surveillance and data collection by the government-corporate complex.

Halfway across the ornate sitting room, Julian Assange stands with his back to the door, drinking a bottle of beer. It is early on a summer evening, June 22, 2013, and the Embassy of Ecuador in London is hosting a small party to acknowledge the one-year anniversary of his arrival in need of asylum. While Assange stands chatting calmly about the future of his anti-secrecy enterprise, Wikileaks, few people in the room know that he is worried. Sarah Harrison, his principal researcher and confidant, is only hours away from slipping out of Hong Kong with Edward Snowden, who, at that moment, is fast becoming the most hunted man in the world.

Close friends and supporters of Assange mill around the room, helping themselves to the buffet and arguing about software and the state of the world - in that order. Assange himself, with his longish white hair and black jeans, looks slightly out of place in the scene, bordered as it is by stiff-legged, gilt-painted settees. After a year, however, he's completely at home here, laughing and joking with the security guys, lawyers, and hacker guests, talking thoughtfully about the escalating struggle for control of electronic information.

"There's a completely new creation in the world," he says. "And the battle is on for access to it."

He's talking about the electronic "pocket litter" that each of us collects as we cruise the Internet and use our cell phones each day. Behind us, we leave a digital trail that reveals our interests, our politics, our friends, their friends, our health worries, our finances and fears. As he speaks, Assange is thinking of Snowden and what he had recently revealed about the practices of the National Security Agency (NSA) in the United States.

The White House, the NSA, and the FBI closed in, and as a Chinese diplomat later confided, "You don't know what pressure is until you have those sons-of-bitches breathing down your neck."

In the course of his highly classified contract work for the NSA, the US intelligence agency, Snowden uncovered unconstitutional surveillance programs that trace and store the electronic pathways etched across the Internet by hundreds of millions of Americans. NSA surveillance also sweeps up and archives the metadata associated with phone calls. Snowden discovered that Americans are subject to dragnet electronic domestic surveillance and have been for years.

His disclosure of NSA domestic surveillance caused a Washington tailspin, and the search for the source was on. After he identified himself in a video filmed in a nondescript Hong Kong hotel room, US political pressure ramped up on the Chinese government. The White House, the NSA, and the FBI closed in, and as a Chinese diplomat later confided, "You don't know what pressure is until you have those sons-of-bitches breathing down your neck."

Even if everything else the Chinese government said about its role in the Snowden affair was calculated, that statement was unquestionably spontaneous and true. Snowden had the secrets to the Corporate Security State that was quietly metastasizing through US federal agencies and corporate management suites after 9/11, and he was telling them to the world. He had to be stopped.

In the world of national security and surveillance, the evening of June 5, 2013, two weeks earlier, was frankly horrible. At about 9:30 Eastern Daylight Time, a story by Glenn Greenwald appeared on the Guardian website, linked to an order from the Foreign Intelligence Surveillance Court (FISC) of the United States. In black and white, the document showed that, at the request of the FBI, the FISC ordered Verizon Business Network Services to submit all telephony metadata in its systems to the NSA. Only the data for calls originating and terminating abroad were exempted from the order, which, until the Guardian posted it, was secret. The order would not declassify until April 2038, twenty-five years in the future.

Telephony metadata, an unknown phrase for many of us until that night, includes the phone number called, number calling, routing of call, phone number identifiers, time of call, and duration. Subsequently, we learned that the FBI gave similar orders to Sprint Nextel and AT&T. Through a secret and tortured interpretation of the Patriot Act, Section 215, the court allowed this data collection.

Moreover, Greenwald wrote the next day that the NSA used a program called PRISM to collect customers' data from Microsoft, Yahoo, Google, Facebook, and other online corporations.

Two months later, a new Greenwald article appeared, also on the Guardian website: "XKeyscore - NSA tool collects 'nearly everything a user does on the Internet.'" The article explained that the XKeyscore program sucks into its maw almost every electronic datum on the Internet about everyone in the United States. And more than that: analysts need no prior authorization to inspect the emails, Facebook pages and postings, tweets, and Internet browsing history of ordinary citizens suspected of nothing. Via XKeycore, analysts at the NSA:

[L]isten to whatever emails they want, whatever telephone calls, browsing histories, Microsoft Word documents. And it's all done with no need to go to a court, with no need to even get supervisor approval on the part of the analyst."

Imagine that.


[-] 5 points by LeoYo (5909) 9 years ago

Democracy is the solution but the People have to be willing to organize it. It will never come about from wishful thinking or petitioning the public officials of the corporate aristocracy.

[-] 2 points by BradB (2693) from Washington, DC 9 years ago

I agree... it's the only real solution

[-] 3 points by IndigoRed (87) 9 years ago

I didn't know corporations existed way back then! This completely changes my perspective of history! I had this strong belief that corporations started with the Rockefeller--

Just googled it, the oil men were major players during the civil war and John D. Rockefeller rose to his position and fame during that era (not the industrial era like I believed). How interesting! I wonder how far back corporations existed? When did it change from company to corporation? Having a paranoid moment that somehow, while no one was paying attention, history was rewritten so that corporations existed since the middle ages.

[-] 3 points by LeoYo (5909) 9 years ago

The first corporation was the East India Company established in 1600. The bank of JPMorgan has had a major influence upon the financial affairs of the US since 1863 when, as Peabody, Morgan & Co., it was the financial representative of the US in Britain.

[-] 4 points by Nevada1 (5843) 9 years ago

The British East India Company, started the international narcotics trade in the 1690s with opium from Afghanistan. It all continues on today.

[-] 5 points by LeoYo (5909) 9 years ago

Mayer Amschel Rothschild, the patriarch of the Rothschild dynasty, had been born in 1744 so there couldn't have been any affiliation between the Rothschilds and the British East India Company in the 1690s.

[-] 2 points by Nevada1 (5843) 9 years ago

Thank you Leo, for correct info.


[-] 4 points by LeoYo (5909) 9 years ago

Democracy didn't get much attention in the past either except briefly at the end of the 1800s. People today would much rather criticize and promote their corporate-owned parties and politicians instead of solving the problems themselves through the means already available to them.

[-] 1 points by LeoYo (5909) 9 years ago

The Financialization of Big Business

Monday, 26 May 2014 12:59
By Paul Jay, The Real News Network | Video Interview


More at The Real News



PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay in Baltimore. And this is Reality Asserts Itself with our guest Costas Lapavitsas, who now joins us in the studio.

Thanks for joining us again.


JAY: So, just quickly one more time, Costas is a professor of economics at the School of Oriental and African Studies, University of London. And his most recent book that just hit the shelves is Profiting without Producing: How Finance Exploits Us All.

This graph shows the percentage of GDP, American GDP, and the percentage which is finance. And you can see in the graph that it goes--from the time of industrialization it goes up, up, up, and then just before the crash of '29-30 it's at this enormous peak. In the Depression it comes down some, and then in World War II it comes down significantly, it's about the '70s and about 1980 that that percentage of finance of overall GDP reaches the same level as it was in 1929-30, just before the crash, except instead of it going down or being mitigated, it actually takes off like a rocket ship.

LAPAVITSAS: And that's when I would say the second bout of the rise of finance takes place, the financialization of capitalism really happens in full earnest, because what happens from the '70s onwards, I would argue, for about four decades, is that big business itself is now transformed. It becomes financialized. Big business begins to find--has the capacity to finance its investment increasingly from retained profits. It has a lot of liquidity and cash. It begins to play financial games itself for financial profit, acquires financial capacity, and begins to draw financial profits.

JAY: General Motors has its own way to lend money to buy cars and so on.


JAY: Everybody's got their own credit card these days.

LAPAVITSAS: Yeah, that kind of thing. So we have a process of financialization of, certainly, U.S. big business, but also other countries' big business. And that transforms the way in which large enterprises operate. It changes the hierarchy, the way in which command works within big business. It changes their outlook. It changes their investment practices. It changes the horizons that they use for organizing their production. It changes everything. Big U.S. business has become financialized in a very profound way because it looks at the stock market all the time and it looks to financial transactions and--.

JAY: Its own bond issues and so on.

LAPAVITSAS: And all that.

JAY: Yeah. But even though big business is perhaps less reliant on the old-style just go to the banks and get a loan (although certainly that still happens, but the biggest monopolies are less reliant), that sure doesn't mean that the financial sector's getting any smaller.

LAPAVITSAS: Far from it.

JAY: In fact, as you said, like you point out in your book--you'll have to remind me of the year, but it wasn't very long ago. Was it '09 or '10 the number comes from? Forty percent of all profits are actually in the finance sector.

LAPAVITSAS: Oh-three, actually, 2003.

JAY: Two thousand and three.

LAPAVITSAS: What--I mean, as this happens in the real sector (let's call it that), as this happens in the real economy, finance then enters a period of extraordinary growth, extraordinary growth.

JAY: Well, let's just quickly say, when we say finance, what are we talking about? Which institutions are we talking about?

LAPAVITSAS: What's the world of finance? The world of finance is in a sense hard to pin down, because it's like--it's a world that changes all the time.

JAY: I mean, most people think of Wall Street.

LAPAVITSAS: Yeah, but Wall Street is just one aspect of it. Obviously we're talking about big banks. We're also talking about big investment banks, not necessarily--.

JAY: Goldman Sachs.

LAPAVITSAS: Yeah, these kind of banks. We're also talking about institutions that, you know, to some extent they can do commodity trading. [crosstalk]

JAY: Yeah, I mean, the Koch brothers, which are one of the richest corporate entities in the world, mostly in oil, but they're also one of the biggest finance companies,--

LAPAVITSAS: That's right.

JAY: --they're very involved in lending money and all kinds of derivative plays and such.

LAPAVITSAS: That's right.

And then there's a whole--I mean, if you look at banks, there's the whole--there's a raft of other types of banks going down, all the way down to, you know, what used to be called thrifts and so on in this country. And these are all parts of the world of finance. Finance is a huge structure, and we put it all in there when we discuss about the growth of finance. So there's obviously high finance, the big barons and the great buccaneers of the global market, the ones that we like to see in the newspapers and we read about their speculations.

[-] 1 points by LeoYo (5909) 9 years ago

JAY: The Jamie Dimons [incompr.]

LAPAVITSAS: And so on. But it goes all the way down to smaller financial institutions in local areas.

It goes down to smaller financial institutions in local areas and neighborhoods, you know, which wouldn't be able to compete with the Goldman Sachs of this world, but they belong to the world of finance.

So finance itself begins to change. And we can talk about financialization and transformation of banks. It rises very powerfully, becomes, again, an incredibly powerful part of the capitalist economy, the mature capitalist economy. And it does so by relating to the economy in a different way to before, because big business has financialized itself. Banks do other things. Banks now begin to play games and to draw profits out of financial transaction, out of trading financial instruments, out of intervening in big markets. Fees, commissions, and profit made on [an account] from trading becomes a very, very important part of what banks do, banks remaining the biggest part of the financial system. So the banking firm is changed. The banking firm is not a static thing. Banks today are very different to banks 150 years ago, and the change is partly in the way in which I've indicated.

JAY: I mean, one of the changes is the development of the whole derivatives markets,--

LAPAVITSAS: Absolutely.

JAY: --where they--. So explain that, because my understanding is the global derivative market is something like six times the global GDP or some crazy number like this.

LAPAVITSAS: Those markets, derivatives markets in particular, are very much a product of the financialization period. But we've got to be careful when we look at them. Why do we have them? Because financial markets explode during this period, not just derivatives markets or financial markets. Why the derivatives markets? Because basically that period of financialization is a period of unstable interest rates and unstable exchange rates. The derivatives markets pivot on these two key prices. You can have a derivative on anything, but interest rates and exchange rates are key areas for derivatives. So these 40 years have been years of highly unstable interest rates, highly unstable exchange rates, and therefore growth of derivatives.

Derivatives, then, are basically bets; essentially they're bets through which you can take positions on these highly changeable magnitudes, interest rates.

JAY: Yeah, you can bet a certain certain currency will go up, someone else is going to bid it's going to go down. There's going to be a winner and a loser.

LAPAVITSAS: That's it, and what's going to happen on interest rates and so on, and there's going to be a winner and a loser.

JAY: I mean, it gets crazy. There's a derivatives exchange in Chicago just, I think, about a year ago had an application: there's a group wanted to do bets on whether movies would make money or not--not investments in the movie; they just want to gamble. And, of course, the movie industry was outraged, because some of the people betting controlled media. So now you could have people give bad reviews to a movie, and they're betting your movie's going to lose money. But they accepted it. There is now a derivatives play on whether a movie's going to make money or not. I mean, this is craziness. This is where it gets--.

LAPAVITSAS: But think about it. You see, a derivative is a bet. So, therefore, you can have a derivative on anything. There are derivatives on the weather, there are derivatives on whatever you care to think.

JAY: But isn't part of this--I guess there's two parts to this. One is there is a need, you could say, within a capitalist economy to mitigate risk. So you could say, if you want to have affordable mortgages, and not subprime but affordable, it's easier for banks to give more affordable mortgages if it can spread the risk out amongst seven other banks and package them and share the risk.

But there's another part of it, which is these things which are just pure bets. It's 'cause there's not enough good productive places to put your money. So you gamble with it.

LAPAVITSAS: Let's think about that a little bit more, because obviously there's an element of that in it. The first thing you've got to say is that these instruments which are characteristic of financialization grow because of the instability of these key variables. Now, if you really want to do something about the risk that comes from that, you try and create some stability in the variables rather than play with derivatives. If you really want to do something about it, you do something about more stable interest rates.

JAY: But then you have to change capitalism.

LAPAVITSAS: I know. But if we're going to argue about stability and so on, let's start from where the instability comes from. But let's suppose you don't have that. Let's suppose you got unstable interest rates.

JAY: Okay. Now, let's just make this really clear, what you're saying, 'cause I think it's very important. Part of the growth of this mitigation of risk is 'cause the system itself is so fragile, so volatile, that you have to do these risk-mitigation plays 'cause nobody actually believes that the economy can do--banks don't even believe each other's books anymore.

LAPAVITSAS: That's correct. And why didn't you have derivatives in the '50s and the '60s on the same scale? Because during that time of controlling finance and different type of capitalism, as we discussed it, exchange rates were fixed, or certainly they were more stable, and interest rates were under control. And therefore the scope of derivatives was much, much less. When you decontrol the system and you go into financialization, you create automatically the need and the scope for that.

JAY: And here's where you get this relationship between sort of the spontaneous processes and policy. There's kind of inherently spontaneously unstable processes in capitalism. But when you change the policies to deregulate, it makes it way more volatile. But that's in the interests of the financial institutions, 'cause they make a killing out of volatility.

LAPAVITSAS: That's it. That's it. Then they move into that and they begin to make a profit out of the volatility.

Now, let's push that a little bit further on the derivatives front now. So you get derivatives that do that kind of thing, and some people come out and say, that's a good thing, because derivatives are basically a hedge--they allow you to handle risk. And you read the textbooks and you get all these essentially fairy stories about farmers that might protect their crops because of the weather and they'll buy derivatives, forwards, futures, and so on, and they're very happy because they've locked in the value of their stock, and it's a very nice story. And then you look at these figures that you just outlined and mentioned, because the figure is actually a bit misleading, because these sums are vast, because it's the size of the bet rather than the money you actually pay. You look at these figures more closely and you look at what proportion of those vast volumes actually involve producers, it's less than 10 percent. The rest is basically finance. In other words, these--has finance somewhere. In other words, these derivatives markets are actually markets that the financial system has created, and it plays itself in there.

Now, who runs the derivatives markets and how? Each derivative that you get, each so-called over-the-counter derivative (in other words, a derivative between two specific parties, but even some of the exchange rate derivatives), if you look at who trades mostly them--these are derivatives traded in open markets, but certainly for over-the-counter derivatives, each one of those must have a bank there. So there is a bank in each transaction. Who is behind the bulk of this stuff, then? About 65, 70 dealer banks across the world. How many of these banks are the biggest and therefore pretty much control it? Fifteen to 20. The derivatives markets is essentially 15 to 20 banks. That's basically what it is.

JAY: And I'm not far off from my six times global GDP on the size [crosstalk]

LAPAVITSAS: In terms of the size of the bet.

JAY: The size, the whole size of the global derivatives market.

LAPAVITSAS: Yeah, it's misleading, because it's the size of the bet rather than the money that actually changes hands.

JAY: Right. That's right.

LAPAVITSAS: You've got to bear that in mind. But nonetheless, it's a huge market. Right?

But who is behind it? Fifteen to 20 dealer banks control the bulk of this over-the-counter derivatives market.

JAY: Okay. In the next segment of the interview, we're going to talk a little bit about, well, what's wrong with that? Because, I mean, frankly, if you didn't have some of this, you wouldn't be able to buy a house. You do need mortgages.

So, in the next segment of the interview, I'm going to ask, well, okay, so finance is big, a few banks control it. Well, so what's wrong with that? Please join us for the next segment of our interview on Reality Asserts Itself on The Real News Network.

This piece was reprinted by Truthout with permission or license.

[-] 1 points by LeoYo (5909) 9 years ago

An American Banking Revolution Awaits

Sunday, 25 May 2014 12:21
By William A Collins, OtherWords | Op-Ed


These tough economic times require creative alternatives to Wall Street, including more state banks.

Vermonters aren’t like the rest of us: They live in a small state with a flinty history and a legendary suspicion of outsiders.

That independent streak gained luster when 15 Vermont towns voted earlier this year to reinforce this independent tradition by approving a proposal to create a state bank.

The Vermont Economic Development Authority would get a license to do what private banks normally do — only with a mandate to serve the public interest no matter what.

This isn’t unprecedented. North Dakota has enjoyed a flourishing state banking system for nearly a century.

Costa Rica set another good precedent. Its public banking dates back to 1949. As of a decade ago, its four state banks held 75 percent or more of all individual deposits.

All this is quite vexing to the World Bank and the International Monetary Fund. As elsewhere, they have muscled Costa Rica to privatize its government-owned businesses. Costa Rica has largely done this, but it won’t let go of its state-owned banks. For some reason, Costa Ricans don’t trust the commercial ones.

No, Americans don’t trust our banks either. But only North Dakota’s state bank remains under public control.

Everywhere else, banking laws have made it very profitable for old-fashioned mutual (non-profit) savings banks, once popular, to sell out their depositors and turn commercial. The executives who accomplish this switch all do very nicely for themselves.

Luckily, credit unions carry on from bygone times as a thorn in the side of the industry, but Wall Street is working hard to extinguish them too. Credit unions depend heavily on their non-profit status to protect them against taxes, so conservative outfits like the Tax Foundation are trying mightily to squash that exemption.

Theoretically, the government is our protector from the avaricious cartel of private banks. Both state and federal laws ostensibly provide us with banking watchdogs which safeguard the honesty and fairness of our saving and borrowing.

That’s really just in theory. Unfortunately, a cynical revolving door regularly sends regulators wheeling into bank jobs and bankers hot-footing it over to regulation. At the same time, lobbyists sap the rectitude of those lawmakers and oversight agencies who you might have thought had our best interests at heart.

Hence, banks feel unrestricted to manipulate credit cards, student loans, mortgages, securitizations, hedge funds, credit default swaps, currency exchanges, and all manner of rigged financial transactions. Our regulators rein them in sometimes, but in many cases not until after the damage is done.

As a result, when mortgages default, neighborhoods collapse, families are ruined, and the economy tanks, the banks go right on — perhaps with their wrists slapped.

One other savings alternative does exist: the Post Office. In years gone by, the U.S. Postal Service doubled as a bank that had lots of branches and no securitized mortgages.

But given the general lack of trust most people have with banks, some lawmakers are looking to bring the Post Office back into banking. That would be a new American Revolution.

This piece was reprinted by Truthout with permission or license.

[-] 1 points by MattLHolck (16833) from San Diego, CA 9 years ago

every citizen should have access to cast their vote in congress

a citizen can give his/her vote to another as a representative of their vote

a citizen can retract his/her vote from the representative at anytime