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Forum Post: Obama and the Bank Protection Racket

Posted 8 years ago on July 25, 2012, 7:21 p.m. EST by PeterKropotkin (1050) from Oakland, CA
This content is user submitted and not an official statement

Many of the people that read this magazine and other Left publications believe that President Obama’s preventive detention legislation, his recent executive order authorizing the federal takeover of all U.S. communications media in an “emergency,” and the rest of the ever-growing police state infrastructure are primarily designed to silence domestic opposition to U.S. war policies, or to facilitate the suppression of urban (i.e., Black and brown) rebellions. From an historical perspective, our readers are certainly correct: Black people and anti-war folk have been viewed as the top domestic national security threats for the past 60 years. However, times change, and the powers-that-be are motivated by their own hierarchy of fears. The nightmare that most terrifies the finance capitalists who rule this country is not populated by aging Black revolutionaries and peaceniks, but by masses of “ordinary” (meaning, mostly white) Americans in open revolt against the banks.

Wall Street knows, with great intimacy, that it is perched on the lip of the abyss, that the next crash can come from any number of directions, that all its faults are active and all its contradictions, acute. Global capital and its servants in government are haunted by the memory of their own near-death experience: the meltdown four years ago, when they were compelled by cascading events to share with the public the specter of financial Armageddon. The fascist cat has been out of the bag from the moment in September, 2008, when Treasury Secretary Henry Paulson issued not-so-veiled threats of martial law, should the Congress not accede to the bankers’ demands for a blank check.

Once revealed, the repulsive corpus of depraved capital is seared into the public brain, indelibly. Three Septembers after the meltdown, it took only a few amateurish but determined white kids (and some cooperative New York City cops with mace) to refocus revulsion against Wall Street, even as both corporate parties roared “Austerity!” in unison. How easy it was to return the conversation to the central contradiction: that the system is decayed, infinitely corrupt, a cancer on the society, run for the benefit of a tiny minority. Even overt white racists get it – although their Black-hate, as always, prevents them from properly acting upon that knowledge.

Capitalism’s irreversible nakedness means permanent crisis for those whose job it is to protect Wall Street. The beast survives only by ever more blatant theft and manipulation. Whatever corporate political party is in charge must, somehow, assure the public that the rule of law still exists, while protecting their Wall Street masters. Ultimately, this becomes impossible, since the task requires more than mere impunity for the criminals. The banksters must also be allowed to continue looting and rigging the system, since they cannot survive, otherwise.

It’s a helluva job, but somebody – like Attorney General Eric Holder and his Justice Department – has to do it.

Only in this context do Holder’s grants of immunity to Barclay’s Bank (British) and UBS (Swiss) in the LIBOR scandal make sense. Immunities are traditionally granted to smaller fry in order to indict bigger fish, but all sixteen of the banks potentially involved are huge (too-big-to-fail), and Barclay’s beat UBS to the punch in admitting wrongdoing and consenting to be fined $450 million. UBS, as New York Times financial columnist James B. Stewart reports, “is in a league of its own given its track record for scandals,” having been fined over a billion dollars by the feds in recent years. The bank was also forced to reimburse $22.7 billion defrauded from customers in a toxic securities scheme. If UBS gets immunity, then so will U.S. megabanks JP Morgan Chase and Citigroup. (One cannot imagine a prosecution of President Obama’s friend Robert Wolf, the outgoing chairman of UBS’s American operations, who vacations, golfs and plays basketball with the president, and has bundled $500,000 towards his re-election campaign.)

The U.S. Justice Department’s job, as Eric Holder sees it, is to immunize the criminals from prison time, and then fine their companies to preserve the illusion of justice. As we discussed in these pages two weeks ago, Holder successfully contained the national bankster robo-signing scandal, earlier this year, by brow-beating state attorneys general into dropping their suits and investigations, and forcing an affordable monetary settlement – most of which will never reach actual homeowners.

Holder cannot pursue the normal prosecutorial strategy, immunizing low-level LIBOR fixers and collaborators in order to get indictments of the higher-ups, because his real mission is to hide the facts of the scheme: its long duration and centrality to global capital’s criminal enterprise. A successful immunity strategy requires scaring the small fry to death with threats of imprisonment, so that they will rat out their superiors and divulge detailed information on possible additional criminality. Years of Barclay’s Bank emails show how casually the LIBOR rate was manipulated by guys way below the top offices. But it is precisely that level of bankster that Wall Street’s protectors in government don’t want to spook: there are too many of them, and they are apt to tell too much. Instead, Holder and his British counterparts give blanket, institutional immunities, and extract a fine. The crimes, in all their variations, continue – as they must.

Although the LIBOR rate has some impact on every conceivable financial transaction, it is clear that derivatives lie at the heart of the crime. With $600 to $1,000 trillion in derivatives floating around, most of them held by too-big-to-fail banks, the movement up or down of a basis-point (100th of a percent) puts billions in motion. Global banking invented derivatives to create their own speculators’ economy, much larger than – but acting as a great weight upon, and holding as hostage – the mere $75 trillion real world economy.

(The idea that LIBOR manipulation is key to keeping “free” Federal Reserve money flowing to the banksters also appears sound. There are many uses for rigging the world’s interest rate benchmark.) It is far too late to “unwind” the derivatives monster, to disassemble it, like a bankrupt bank. No one would know where to start in shrinking hundreds of trillions in derivatives down to a size that was no longer a lethal threat to the real economy – and no Wall Street institution would survive the transition. Thus, finance capital lives daily with existential threats: first, from its own inventions and contradictions; and second, from a public that would tear them limb from limb if the people understood the true depth of Wall Street’s crimes and how much danger the rich pigs have put the rest of us in. Wall Street’s protectors must prepare for a State of Emergency, a great imposition of silence, and the possibility of a great lockup – because the crash is coming, and they know it




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[-] 1 points by shadz66 (19985) 8 years ago

"The Rise of the Police State and the Absence of Mass Opposition", by James Petras and Robin Eastman Abaya :

" One of the most significant political developments in recent US history has been the virtually unchallenged rise of the police state. Despite the vast expansion of the police powers of the Executive Branch of government, the extraordinary growth of an entire panoply of repressive agencies, with hundreds of thousands of personnel, and enormous public and secret budgets and the vast scope of police state surveillance, including the acknowledged monitoring of over 40 million US citizens and residents, no mass pro-democracy movement has emerged to confront the powers and prerogatives or even protest the investigations of the police state."

"Historical experience teaches us that a successful struggle against an emerging police state depends on the linking of the socio-economic struggles that engage the attention of the masses of citizens with the pro-democracy, pro-civil liberty, ‘free speech’ movements of the middle classes. The deepening economic crisis, the savage cuts in living standards and working conditions and the fight to save ‘sacred’ social programs (like Social Security and Medicare) have to be tied in with the expansion of the police state. A mass social justice movement, which brings together thousands of anti-Wall Streeters, millions of pro-Medicare, Social Security and Medicaid recipients with hundreds of thousands of workers will inevitably clash with the bloated police-state apparatus. Freedom is essential to the struggle for social justice and the mass struggle for social justice is the only basis for rolling back the police state. The hope is that mass economic pain will ignite mass activity, which, in turn, will make people aware of the dangerous growth of the police state. A mass understanding of this link will be essential to any advance in the movement for democracy and people’s welfare at home and peace abroad."

Also pertinent to the subject matter of this thread, I append :

per ardua ad astra ...

[-] -3 points by freakyfriday (179) 8 years ago

Sure he does. You cannot build a Marxist state without deadly force!

[-] 1 points by shadz66 (19985) 8 years ago

Are you really trying to suggest that Obomber is some kind of "Marxist" ?!!!

ad iudicium ...

[-] -2 points by freakyfriday (179) 8 years ago

Suggest? It's a stone cold fact. But you would have to read up on it on non liberal/MSM websites. I read stuff from all points of view and the truth is somewhere in between., Our Potemkim President, Choomer in Chief would really "transform" AMerica if weren't for that pesty Constitution and damned checks and balances of 3 branches of Govt. He'd have been much more happy/effective if he had been elected KING,

His heart is Marxist but he has found out that the monied powers that REALLY be will only give him so much rope.

Forward! That's a Stalinism. You didn't build that? Oh, I dunno, the whole schmere of Karl, Leon, Vladimir, Mao?

He's a lazy bastard (and I use that word in it's historical meaning) that has been toned down by the comforts of wealth he never imagined in his Indonesian days.

[-] 1 points by shadz66 (19985) 8 years ago

I really honestly think that you are rather strange --- to say the least !!!

You obviously know little about "Marxism" ( http://www.marxists.org/ ) and even less about US 'Politics' with its Corporate Captured, 'Two Faux Wings' ; ONE Party - system !!

IF you had any kind of link whatsoever - that wasn't laughable, then you'd have posted it. You may hate 'Obummer' but it really has NOTHING at all to do with "Marxism" .. lol !

ad iudicium ...

[-] 1 points by freakyfriday (179) 8 years ago

Here are some articles, since you asked.


[-] 1 points by freakyfriday (179) 8 years ago

You are kind of right. I DO not think Obama should ever have been elected.....his Marxist leanings just reinforce my original opinion. Hate is a wasted emotion. He is just unqualified and incompetent.

Has he spent any time in Congress to push tax reform or (supposed) jobs bills? (I have my doubts about what the govt can do to CREATE jobs, but DO believe needless laws and regs can HAMPER the economy).

That said, he needed to take a page out of LBJ's playbook and work the legislature to get things done. Instead, he takes what he considers the moral high road as he golfs and vacations and just blames Congress for all our problems.

Are you familiar with the writings of Drew? He knew Obama during his Occidental days since they belonged to the same leftist clubs and cliches?

[-] 0 points by Porkie (-255) 8 years ago

Actions sometimes speak louder than words and if we follow Obama's actions I think he's been pretty consistent - golf, vacation, golf vacation - so I don't think he's really insane; I just think he's infected with intellectual schizophrenia of the party.

[-] 1 points by TitusMoans (2451) from Boulder City, NV 8 years ago

If you mention to someone that 150 years ago Marx had this economic system, its evolution, and its end plotted almost to perfection, they'll probably argue, but here are few choice quotations from the first chapter of The Communist Manisfesto. Read them and compare them to to the original post.

"...the bourgeousie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the affairs of the whole bourgeousie."

"The bourgeousie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society... Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones... All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind."

"The need for a constantly expanding market for its product chases the bourgeousie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere."

The whole of Marx's description may be construed as some apocalyptic fantasy, but the historical facts and the events of our time clearly indicate that Marx hit the nail squarely on the head.