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Debt Ceiling Roulette


By Stephen Lendman - Posted on 29 July 2011

  Debt Ceiling Roulette - by Stephen Lendman

 

In this game, the house always wins. Bipartisan complicity stacked the deck against millions of working households, needing to know that political Washington is scamming them. 

 

The end result is the banana republicanization of America. American writer O. Henry (William Sydney Porter: 1862 - 1910) coined the term (his fictional Republic of Anchuria) in his book, "Cabbages and Kings." 

 

It refers to a country (often politically unstable and/or repressive) where a small percent of the population has a disproportionate share or wealth and power, where ordinary people are exploited, often persecuted, and where profits are privatized while working households bear the burden of debt.

 

It's also a kleptocracy run by criminals, complicit with corporate thieves who bribe them to get their way. It's corrupt, rotten to the core gangsterism, run for personal gain, both sides profiting at the public's expense.

 

It's in plain sight in Washington, the heart of darkness, where bipartisan crooks are destroying personal freedoms, democratic values, and general welfare to grab everything for themselves and their corporate partners.

 

Previous articles discussed it, accessed through the following links:

 

http://sjlendman.blogspot.com/2011/07/debt-ceiling-debate-charade-masks.html

 

http://sjlendman.blogspot.com/2011/07/fix-is-in-washingtons-planned-social.html

 

http://sjlendman.blogspot.com/2011/07/america-heading-for-tyranny-and.html

 

Read them and weep, or better still, react by refusing any longer to put up with bipartisan corruption, stealing us blind for the Big Monied interests that own them. Obama was made president to play ball, a Democrat engineering what no Republican would dare, at the same time duplicitously claiming populist credentials.

 

As president, he's been hardline and neocon, advocating Democrat Leadership Council ideology, around since the mid-1980s until operations ended early this year, perhaps because too many caught on to its scam.

 

Ralph Nader called it "corporatist (and) soulless," ideologically hardline. Obama fits the mold. He's anti-populist, anti-labor, anti-welfare, pro-business, while at the same time militaristic and pro-war for unchallengeable world dominance. Nader explained that:

 

"To the DLC mind, Democrats are catering to 'special interests' when they (pretend to) stand up for trade unions, regulatory consumer-investor protections, a preemptive peace policy overseas, pruning the bloated military budget now devouring (the federal budget), defending Social Security from Wall Street schemes, and pressing for universal health care coverage. So right-wing is the DLC....that even opposing Bush's tax cuts for the wealthy....is considered ultra-liberal and contrary to winning campaigns."

 

Its ideology is indistinguishable from Republican extremism. It opposes rights for Blacks, Hispanics, Latino immigrants, Muslims, labor, the poor, consumer protections, populism, progressivism, environmental protection, peace and those for it, prosecuting corporate criminals, honest elections, and democratic governance. 

 

It's for the privileged few at the expense of the many, the bipartisan cancer that's destroying America, Obama the point man in charge because who could imagine a Black president would dare. In fact, he was chosen for his commitment to wealth, power, global dominance, and grand theft at the expense of working Americans and ordinary people everywhere.

 

He's a fraud, a crime boss, a moral coward and serial liar, fronting for wealth, power and privilege. No wonder James Petras (weeks after his election) called him "the greatest con-man in recent history," comparing him to "Melville's Confidence Man." 

 

"He catches your eye while he picks your pocket. He gives thanks as he packs you off to fight wars in the Middle East....He solemnly mouths vacuous pieties while he empties your Social Security funds to bail out the arch financiers who swindled your pension investments. He appoints and praises the architects of collapsed pyramid schemes to high office while promising" better times ahead he won't tolerate to assure powerful interests get it all, the public crumbs at best.

 

In July 2009, Kevin Baker's Harper's article headlined, "Barack Hoover Obama: The best and brightest blow it again," saying:

 

"Three months into his presidency," it's hard imagining the unthinkable that Obama will fail because he won't "seize the radical moment" to change a broken system responsibly.

 

Even then, some observers ludicrously compared him to Franklin Roosevelt. A better comparison is Herbert Hoover who faced a similar crisis, though doing so isn't fair.

 

In early 2009, plenty of evidence showed how destructive Obama would be, unlike Hoover who at least tried some ways to confront the great crisis, if inadequately. He established national voluntary initiatives to create jobs, provide charity, and create a private banking pool, but failed.

 

He also set up a dozen Home Loan Discount Banks to help people refinance mortgages to save their homes. In 1932, he established the Reconstruction Finance Corporation (RFC), capitalized with $500 million with authorization to borrow another $1.5 billion. 

 

In its first six months, it loaned banks over $800 million to no effect. Like today, they retained reserves and shunned lending. Moreover, public trust was absent because political leadership lacked courage to do more, hidebound by ways no longer working. 

 

Roosevelt then streamlined RFC's bureaucracy,  increasing its funding to recapitalize troubled banks and corporations. Despite understanding the problem, Hoover failed because he was part of a broken system he wouldn't change.

 

In contrast, Roosevelt confronted the crisis aggressively in first 100 days, enacting 15 landmark laws, including:

 

The Bank Act of 1933 (Glass-Steagall), separating commercial from investment banks and insurance companies, among other provisions.

 

Streamlined the RFC with more capitalization and other measures to restore public trust, including by funding  agencies like the Home Owners Loan Corporation, Farm Credit Administration, Rural Electrification Administration, Public Works Administration, and others, as well as emergency relief loans to states, something Hoover never did, let alone establish New Deal policies.

 

The Securities and Exchange Act of 1933, requiring  offers and sales of securities be registered, pursuant to the Constitution's interstate commerce clause. Along with the 1934 SEC Act, it was to enforce federal securities laws, the securities industry, the nation's financial and options exchanges, and other electronic securities markets, unknown in the 1930s along with derivatives and other forms of speculation. 

 

It was also charged with uncovering wrongdoing, assuring investors weren't swindled, and keeping the nation's financial markets free from fraud. Nonetheless, its fulfillment fell short of its promise. Unlike today, however, it tried.

 

The Home Owners' Loan Corporation (HOLC) to refinance homes and prevent foreclosures.

 

The Civilian Conservation Corps (CCC) to create jobs building roads, bridges, dams, developing state parks, planting trees, and various forestry and recreational programs for the Forest Service, National Park Service, Fish and Wildlife Service, Bureau of Reclamation, Bureau of Land Management, and Soil Conservation Service. 

 

The Civilian Works Administration (CWA) to fund states to reduce unemployment.

 

The National Industrial Recovery Act (NIRA), establishing the National Recovery Administration to revive economic growth, encourage collective bargaining, set maximum work hours, minimum wages, at times prices, and forbid child labor in industry.

 

The Public Works Administration also established projects to provide jobs, increase purchasing power, improve public welfare, and help revive the economy.

 

So did the Works Progress Administration (WPA) that  became the largest New Deal agency, employing millions in every state, especially in rural and western areas.

 

The Tennessee Valley Authority (TVA), providing navigation, flood control, electricity generation, and economic development, as well as promote agriculture in the depression-impacted Tennessee Valley area, covering most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia.

 

The Agricultural Adjustment Act (AAA) that fell short by restricting production by paying farmers to reduce and/or destroy crops and kill livestock at a time millions were impoverished and hungry. The idea was to decrease supply and raise prices, at the worst possible time.

 

The Farm Credit Act of 1933 to help farmers refinance mortgages over an extended time at below-market rates, and by so doing, helped them stay solvent and survive.

 

The May 1933 Emergency Farm Mortgage Act, established during the time of the Dust Bowl, provided refinancing help for farmers facing foreclosure.

 

Despite its flaws and failures, FDR's New Deal  accomplished much, if not enough. It helped people, put millions back to work, reinvigorated the national spirit, built or renovated 700,000 miles of roads, 7,800 bridges, 45,000 schools, 2,500 hospitals, 13,000 parks and playgrounds, 1,000 airfields, and various other infrastructure, including much of Chicago's lakefront. It also cut unemployment from 25% in May 1933 to 11% in 1937. 

 

However, (because victory was declared too early), it spiked to 19% in 1938 before early war production revived economic growth and sent it lower, heading for full wartime employment.

 

Later came the Wagner Act that, for the first time, let labor bargain collectively on equal terms with management. Today it's entirely lost.

 

The 1935 Social Security Act was to this day the single most important federal program responsible for keeping seniors and others eligible out of poverty. Obama plans to destroy it, perhaps first by letting Wall Street privatize it, what Bush failed to do.

 

Unemployment insurance was instituted in partnership with the states. By 1935, nearly all the unemployed got social benefit payments.

 

The so-called "Soak the Rich" Revenue Acts of 1934 and 1935 made high income earners pay their fair share. In contrast, Obama favors the rich over working Americans and the poor.

 

The Revenue Act of 1936 established an "undistributed profits tax" on corporations. Today, profitable corporations pay minimal taxes. Many get large rebates. Yet Obama wants even lower taxes, perhaps  eliminating them for business altogether, so only the little people pay them.

 

The Revenue Act of 1937 cracked down on tax evasion. Today, it's practically de rigueur along with sanctioned speculative excesses and grand theft.

 

A minimum wage, 40-hour week, and time-and-a-half for overtime was guaranteed under the 1938 Fair Labor Standards Act (FLSA). Labor rights today are being eviscerated and lost, Obama as committed to do it as Bush.

 

Roosevelt also established other initiatives to reform a broken system, put people back to work, and revive the sick economy. Nonetheless, it didn't happen until WW II because much more was needed, including incentives for business to invest. 

 

Under Obama, however, corporate crooks take the money and run, rewarding themselves with generous bonuses, stock options and benefits, investing some abroad, and stashing the rest in offshore tax havens.

 

Moreover, Obama wants all New Deal/Great Society programs ended, returning America to 19th century or earlier harshness. George Bernard Shaw might have had him in mind when he said:

 

"Democracy (especially American-style) is a form of government that substitutes election by the incompetent many for the appointment of the corrupt few." 

 

Promising change, he broke every key pledge he made, conspiring with Wall Street, war profiteers, and other corporate crooks to loot the nation's wealth, wreck the economy, and consign growing millions to impoverishment without jobs, homes, savings, social services, or futures.

 

His legacy is already written, explaining how he betrayed the public trust, looted the nation's wealth, waged war on the world, presided over a bogus democracy under a homeland security police state apparatus, and initiated the destruction of America's social contract, governing to the right of George Bush.

 

In his latest article headlined, "Obama's Ambush on Entitlements," Michael Hudson explained, saying:

 

He's scamming old people to believe his budget deal will save them. "It is a con. Obama has come to bury Social Security, Medicare and Medicaid, not to save but kill them."

 

It was clear before he took office. His economic dream team appointees told all, including Trilateralist Paul Volker, Geitner at Treasury, Fed chairman Bernanke assured of reappointment in 2010, and Larry Summers responsible for financial market deregulation and massive fraud under Clinton, as well as others chosen for their fealty to wealth and power.

 

At the time, Hudson compared him to Boris Yeltsin - a giver who kept giving to "kleptocrats to whom the public domain and decades of wealth were given with no quid pro quo." In other words, a license to loot until they've got it all, hollowing out America in the process.

 

In his latest article headlined, "The Political Theater and the Debt Ceiling Crisis: Are We Being Had?" Paul Craig Roberts suggest a possible political theater/charade end game, saying:

 

If August 2 (the nominal deadline) brings no resolution, Obama may accept Boehner's plan he already favors but won't admit it publicly to hold his weakening base. 

 

Why? To assure "the troops are not cut off from supplies, Social Security checks can continue to go out, and the dollar (is) saved. Having (rhetorically) opposed Republicans to the last minute," he can do what he does best - lie, saying "he had no other recourse."

 

In other word, who "wants the troops deserted on the field of battle and the elderly without groceries? Who other than the rich can stand the higher prices from dollar devaluation?"

 

It's the perfect scam "for getting rid of the New Deal and the Great Society, (using) money (wanted for) wars and bailouts and tax cuts for the rich." 

 

Instead of using existing presidential directives and executive orders to declare a national emergency, suspend the debt ceiling limit, and keep issuing it to avoid default (perhaps Plan B), he can use his preferred option (Plan A), gutting America's social contract for the corporate bosses who own him. 

 

Perhaps he'll do it by "cut(ting) Social Security, Medicare....education (and other social programs) loose from the federal budget, (so his) Wall Street (friends) can privatize them," ripping off recipients like they scam investors. 

 

In fact, the entire scheme may have been cooked up in Wall Street board rooms years ago, awaiting the right time under the right president to spring it on millions unsuspecting beneficiaries and future ones, unaware of the subterfuge planned to defraud them.

 

Before he took office, Petras nailed Obama cold, calling him "the greatest con-man in recent history." Perhaps the greatest ever, given the stakes.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. 

 

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

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