What looks suspiciously like a renewal of the British war against the Irish, in a bid to develop a renewed domestic terrorism threat, began with three murders; the circulation of a highly doctrinaire policy document to Missouri State Highway Officers, which flies in the face of the US Constitution, was thankfully brought to public attention, while the French held a bio-terror exercise with the premise that "anti-capitalist = terrorist".
Meanwhile with the focus on bonuses, and the AIG Financial Products ones in particular, are we seeing the beginnings of a manipulated class war? There's nothing like a good distraction to keep people from looking for the real bad guys.
It is proving increasingly challenging to write this column as the moment we sit down to analyse and comment on one set of events, five new events occur which add both colour and confusion to the picture. This is Disaster Capitalism, otherwise known as the Shock Doctrine, occurring in real time. We are being deliberately flooded with perpetually morphing variables amidst a sea of information that is at best sketchy and at worst plain lies. Amidst the confusion, the media and politicians pump just one or two "stories" so focusing the public mind exactly where they want it; this week it's AIG bonuses.
Behind the smokescreen of this carefully orchestrated confusion the Managers are executing their plan to the letter. The fact is, the world is managed, it is not micro-managed but it is very clearly macro-managed. It is managed with very clear aims in mind and, at this time in history, with a timetable that needs to be met. There is a destination to which the world is being taken and everything we see around us relates to the passage towards that destination.
Those that manage the world remain hidden for the most part, they are the Chess Grand Masters, the Managers. Upon the Grand Chessboard these Managers have placed an array of Puppets who do their bidding. Not all Puppets are equal; some like Tony Blair have proven their worth to the Managers through their total lack of conscience and morality and often have blood on their hands; others have yet to prove their commitment and worth. These Puppets believe themselves to be Kings, Queens, Bishops, Knights, Castles and Pawns, they believe in their own importance and will play their parts exactly as instructed by the Managers. The top Puppets are aware of the destination to which the world is being taken, they are in on the secret, while lesser Puppets remain ignorant of it believing centuries of lies; fairy tales passing as religions, bigotry and self interest passing as political creed, social programming and control passing as philosophy and personal hypocrisy passing unchecked.
The apparent confusion generated by the speed and magnitude of events is a symptom of the manipulation being perpetrated upon us, the moves upon the Grand Chessboard, the aim being to move faster than people can assimilate the changes, track the moves and analyse the variables and possible outcomes. The details of the events do, however, give the discerning the clues as to the direction in which the world is being taken through the actions of the Puppets at the command of the Managers.
Before we get to the economic events there are three recent events that merit our attention; the murder of two soldiers and a police officer in Northern Ireland, the release of a document by a branch of the Missouri Highway Patrol that flies in the face the US Constitution and a bio-terror training exercise in rural France.
Mainstream media throughout the US and Europe are busy peddling a line of propaganda which seeks to place into the common consciousness the notion that violence this summer is the inevitable consequence of the social pressures arising from the financial crisis. This is an outright lie, a lie told for a very clear and specific purpose. The Managers and the Puppets are terrified of the masses for they know that should the masses rise up against them in a coordinated, coherent and peaceful manner then the Chessboard will be overturned, they will fall and their empires, economic, financial and military, crumble into the dust. They cannot risk the rise of a genuine social movement based on coordinated action, a coherent and truthful understanding of reality and a peaceful means for political and social change.
The best way to prevent such a movement arising is to pre-empt through destruction of credibility, criminalisation and the creation of false-flag counter movements, a process otherwise known as COINTELPRO. Much of the domestic modern history of Western Europe and the US is the history of the Managers and Puppets fighting the rise of mass social movements that threatened the status quo. It is taken for granted by the ruling elites and their supporters in the US and the UK that the current forms of government and social structure are definitively the best available and that anything that even remotely challenges those structures is evil and has to be destroyed. Movements that challenge the power and privileges of the established order are then seen as threats to national security rather than for what they are - which is threats to wealth, privilege and power of long established elites.
Most people in the US and the UK erroneously believe their countries to be essentially benign powers which have had to stave off the threat of communism or other violent revolution from without and within. What they do not know is the truth, which is that under the banner of fighting communism and in the case of the British, Irish nationalism, both countries have left a trail of blood, terror and destruction across the globe and at home.
To grasp the mindset of those that manage the world the words of Britain's famous counter-insurgency specialist, General Sir Frank Kitson, are illuminating (Low Intensity Operations: Subversion, Insurgency and Peacekeeping (1971)):
Subversion....mean[s] all measures short of the use of armed force taken by one section of the people of a country to overthrow those governing the country at the time, or to force them to do things they do not want to do. It can involve the use of political and economic pressure, strikes, protest marches and propaganda....Insurgency is defined by Kitson as the same as Subversion with the addition of armed force. This is the mindset of the ruling elite throughout the world; a mindset so narrow, so parochial, that any challenge to it, even peaceful and law abiding is seen as Subversion. Add armed struggle to the attempts of people to get those governing them to take different actions or change their mode of governing, and you have Insurgency. Subversion is greatly feared by ruling elites because of its peaceful nature and because it is often widely supported. Insurgency, on the other hand, is not feared nearly so much because they have more firepower. Once the ruling elite can unleash extreme violence in real or imaginary reaction to any form of armed struggle then they have the upper hand, they have control and control is what "ruling" is all about. Insurgency is therefore preferred over Subversion by ruling elites.
Dominic: What do you think will happen?What Kitson realized very early in his (in)famous career was that in order for the established governmental power to have any chance of suppressing the deeply held desire for freedom in a people subject to colonial or any other oppression extreme violence is essential. This view was by no means unique for extreme violence had been the hallmark of colonial power since the creation of the colonies; how else could a relative handful of white men have dominated countries such as India for so long? The other plank of successful colonial power, other than a dominant navy such as that of the British, was the co-opting of the existing elite of the colony itself. As is typical of elites anywhere, the local leaders were easily brought to the service of the colonial power through the maintenance and usually substantial expansion of their own wealth and apparent power. Those that were not for sale, of which there were precious few, were simply removed.
Finch: What usually happens when people without guns stand up to people with guns? (V For Vendetta)
What we are seeing developing in the countries of the "West" is the same model. We, the subject people, are governed by a small self interested ruling elite, which answers to masters hidden from us; we are reaching the point where we will no longer tolerate exploitation by our rulers and will seek genuine freedom. In order to counter this, extreme violence is planned against us. However, that violence needs to be justified to the masses.
Colonial exploitation, or imperialism, is put into its proper perspective by Hannah Arendt in The Origins of Totalitarianism as being an inevitable part of the perpetual accumulation of property and power through perpetual expansion and consumption. In order for European capital to expand so as to gather greater property and power other countries had to be colonized. The exploitation of colonial resources, both natural and human, was an essential plank in the formation of capitalism in the "free market" form that we know it. When the colonial subjects decided that they would no longer tolerate the exploitation of the country's natural resources and their own labour they sought to gain political and economic independence. However, the colonial powers with few exceptions valued the maintenance of the status quo above the desires and wishes and even the lives and human dignity, of the people of the colonies.
When it became apparent to the colonial powers that they could not fully suppress the peoples of the colonies and that political independence would have to be granted, they ensured through abominable and shameful means, that governments loyal to the interests of the former colonial power were installed. They grudgingly granted a form of political independence but retained economic control. These 'friendly' regimes were usually horrendous dictatorships whatever the propaganda gloss that the colonial power and it's media put on it. For an excellent summary of the actions of the British government in this regard Mark Curtis' Unpeople, Britain's Hidden Human Rights Abuses is essential reading.
What was needed was a means to demonize the independence movement so as to have the raw material for a successful propaganda campaign to counter the arguments of the moralists and present a new picture of the conflict. Some elements of the independence movement had resorted to armed struggle and killed colonial farmers and committed other murders and atrocities so Kitson decided to play these up. He is on record as having gone "on patrol" with a unit of the British colonial army made up of Kenyans, himself blacked up to disguise his skin colour. The patrol attacked a white-owned farm brutalizing and murdering the occupants, leaving a trail of terror that was attributed to the Mau Mau rebels. Such were the methods used to discredit elements of the independence movement. How many of the people purportedly murdered, raped and tortured by the Mau Mau were in fact victims of the officers and men of the colonial power is not known.
What is known is that the use of secret Death Squads became widespread in many of the colonial disengagements of the British as the Empire shrank. In each and every case the cause of the independence movement was severely and often irreparably damaged so as to prevent a peacefully movement to independence and to ensure the conditions for the imposition of tyrannical regimes, not representative of their peoples, loyal to London and to British business interests.
Kitson was, in due course, to implement his methods in Northern Ireland in the early 1970s by which time he had coined the term 'pseudo-gangs' for groups of local paramilitaries formed under the direct control of British intelligence and often including one or more members of the British special forces, most notably the Special Air Service (SAS). The 'gangs' and units of the British special forces perpetrated numerous shootings and murders in Ireland and abroad. In the 1970's, one of the principle purposes of these shootings and murders was to create the illusion of an immense violent clash between Catholics and Protestants in Northern Ireland to enable the British Army to be seen not as an army of occupation but as neutral force of "peacekeepers", standing between two warring factions.
Other purposes included the provocation of armed clashes between two factions of the Irish Republican Army, the Provisional IRA and the Official IRA and the extra judicial killing of members of the IRA and Loyalist Paramilitary organizations. The killing of Danny McCann, Sean Savage and Mairead Farrell in Gibraltar on 6th March 1986 is perhaps the most famous example.
The murderous activities of the British special forces and the pseudo-gangs has been extensively documented by numerous journalists, including French journalist Roger Faligot in Britain's Military Strategy in Ireland, The Kitson Experiment, and a number of judicial inquiries, including the Stevens and Stalker inquiries, despite the wall of silence erected by the British government.
Faligot quotes Sean Mac Stiofain's Memoirs:
During the summer and autumn of 1972 plain-clothes squads were clearly established as being involved in shootings or killings in Ballymurphy, Andersonstown, Leeson Street, New Lodge and the Falls Road......A member of the SAS, David Seaman, called a press conference in Dublin on 23rd October 1971. He claimed that the SAS had been active in exploding bombs to destroy IRA credibility; he was found dead in a ditch a short time later.
In late 1972 and in May 1974 bombs were exploded in Dublin killing nearly 30 and injuring over 100. The SAS and Britain's Secret Service, MI6, were suspected of the 1972 bombing while it was confirmed that SAS Captain David Ash led the operation in 1974. For his work in Ireland, David Ash was awarded the Military Cross, just as Kitson has been in Kenya and Malaya.
No doubt there will be those that will seek to dismiss the idea that the British government deployed Death Squads against what it claims as its own population. Such denials are based on deeply held illusions and not on facts. The fact is that those in power will do anything to maintain their grip on power and their ability to do as they wish.
The techniques developed by Kitson and the British have their mirror in Palestine where the Israelis use extra-judicial assassination, torture and every human rights abuse known to man in their desperate bid to maintain their failed, immoral and illegal state. Similarly, the US, Britain and Israel have used the same tactics and methodologies in Iraq.
It is essential that you understand, dear reader, that the real terrorists are our own governments and the governments of our nations allies. You must also understand that you are of no value to them except as a slave; everything you hold dear, your life and the lives of those you love are an irrelevance to the Puppets and the Managers. With that understanding firmly in your mind, let us return to the recent murder of two soldiers and a police officer in Northern Ireland, the first of which occurred just two days after a relatively newly formed British special forces unit, the Special Reconnaissance Regiment, was posted to Belfast.
We are, of course, being asked to believe that after ten years of peace there are those in Ireland who would wish for a return of war and military occupation. Needless to say, a little-heard-of group called the Continuity IRA is said to have claimed responsibility for the murder of the police officer while the Real IRA claimed responsibility for the murder of the two soldiers. This should sound familiar as one recalls the media fanfares when "XYZ branch of Al Qaeda" claimed responsibility for a 'suicide' bombing or other "terrorist" act which can only harm Muslims and all freedom loving people. It really should be obvious that all these claims of responsibility have no basis in fact whatsoever.
It is clear to us that the British government was behind at least the first if not both sets of murders in Northern Ireland. With a propaganda campaign in full swing telling us how violent the summer is going to be, a newly ignited terror threat from Northern Ireland will be a very useful tool in the hands of those that will go to any lengths necessary to prevent the formation of a viable, coherent and peaceful body of protest which seeks change to the rapacious system in which we find ourselves and halt the daylight robbery taking place under the guise of banking rescue.
In the US, the release of instructions to Missouri State Highway Patrol officers which equate freedom of political thought with the activities of armed militias, on top of all that has transpired in the US under the Bush administration, makes for very worrying reading. Just as in the UK, the US media is seeking to programme people to expect civil unrest and violence in reaction to the financial crisis and that people with views other than right wing Christian fundamentalist orthodoxy are members of armed militias and threaten the safety of police officers. This development is highly disturbing.
In France, the traditional subtlety has been washed away under the regime of Nicholas Sarkozy where in Montauban, a large rural town, a bio-terror training exercise was held in February the scenario for which was that "anti-capitalists" set off a biological weapon in the town; that is "anti-capitalist" = "terrorist".
These are just three examples of how the drift from "Muslim Terror" threat to domestic terror threat, a change that Sott.net has been warning about for years, is now taking place. The laws to treat you and me as terrorists are now firmly in place because people were too stupid and too scared to resist them, preferring to trade all our freedoms for their national security.
We have warned repeatedly that the laws enacted against Muslims were really being put in place to be used against YOU, the public! These laws are being used against ordinary citizens as they seek to exercise their freedoms and their disgust with the way our countries are being run, with the wars, with the banking bailouts and the general inequality. There has never been a real Muslim terror threat - that was fabricated to get the Police State and laws of repression in place, a system that is now ready and waiting for the next phase in the plan which clearly envisages the need for extreme political and social controls in all the developed nations of the world. As the greatest purveyors of violence in history our governments clearly have no qualms about using extreme force to maintain themselves and the privileges of the elite. It seems that this violence is destined to be brought to bear against us, but first they have to justify it to the sleeping masses, hence Ireland, Missouri and France.
Whatever the Managers have planned you can be sure that every action that you see our political leaders and our governments take is a part of that plan. You should know that whatever they tell us is lies, we cannot rely on anything they tell us - we have to work it out ourselves.
This last week or so has been busy with key events in the Puppets implementation of the Managers plans upon the Grand Chessboard.
The Swiss, a nation long famous for their devotion to banking secrecy, have decided to do away with all that and open the books of UBS to the US government; AIG bonuses are in the spotlight while in fact there is much more to AIG than meets the eye, hence the focus on bonuses; Babcock & Brown went into receivership; GE had its credit rating downgraded; and the G20 Finance Ministers met in Horsham (UK) of all places.
In the confusion surrounding the financial crisis and the resentment generated in the public mind against the rich and particularly the wealthy bankers, governments have been quick to implement long held agendas that could not be forced upon people in better times. The matter of banking secrecy is one such item on the agenda of the US, UK, France and Germany in particular.
These countries have been the driving force behind the Financial Actions Task Force whose 40 Recommendations (FATF) and 9 Special Recommendations are a precis in the totalitarian control of all money in the world. Needless to say, the pretext for these draconian Recommendations which, by the way, are now law in most countries, is money laundering and the financing of terrorism.
Under this umbrella of the G15, nations have for years been mounting a sustained attack on the right of smaller nations to have their own independent banking and financial systems and most particularly to have low taxes and banking secrecy. Banking secrecy is the new pejorative term used for financial privacy, a right long gone in the G15 countries themselves.
Switzerland has been under international attack [and here] for a long time for defending it's financial privacy laws while UBS, one of its principal banks, was initially forced to disclose details of a small number of clients to US authorities and subsequently to disclose the details of over fifty thousand clients. Now the Swiss government has caved in to the pressure under threat of being made an outcast in the world of international finance. Clearly even the famously neutral Swiss cannot resist the Empire. In reality, the issue is quite different than that presented by the mainstream media.
The mainstream media, and their political bedfellows: the power elites of the US and the European Union, are justifying their assault on Swiss secrecy on the basis that privacy in finance is akin to tax evasion. Similar charges have been made against Luxembourg where banking secrecy is credited with underpinning the growth of the entire financial sector. The equating of banking secrecy with tax evasion is a lie that goes to the very heart of the relationship between the citizen and the state. Yet such is the pressure in the these times of crisis that neither nation felt able to stand its ground; this is the effect of empire.
As if to dispel any doubt that this is a concerted and organised attack on banking privacy we see that France and Germany, with US support, are seeking to blame small countries with banking secrecy laws and low or no taxes for the global financial crisis! The absolutely blatantly false nature of these accusations is beyond belief.
Similar issues in relation to the citizen/state relationship that have been in the media recently include:
- The UK government's Banking Bill under which it will be able to pump money into the UK financial system without public disclosure.These are but a few of the recent incidents where the state seeks to prevent us, its citizens, from knowing what it is up to while taking upon itself unlimited powers to know what we are up to. This is not only fundamentally wrong, it serves an agenda which has to be resisted. In a free society, and we would argue that all societies should be free, the state is the servant of the people and the people have an absolute right of privacy.
- The admission that the UK government is spying on the entire population through the use of data-mining techniques.
- The UK government vetoing the Freedom of Information Act request for the Cabinet papers regarding the Iraq war.
- The requirement in the US that Pentagon officials sign a secrecy pledge in relation to Pentagon budgetary matters.
- The Obama administration fought in court to justify the use of secret wiretaps and deny citizens the right of Habeas Corpus.
- The Obama administration fought in court to deny a British victim of US rendition and torture the right to a fair trial on the grounds of "US national security".
The immense breadth and depth of the assault by the state on the privacy of citizens has been excellently encapsulated in the recent Big Brother Digests (here and here) on Sott.net. It is staggering to behold the assault on our privacy and even more staggering when one remembers that it is based on a wholly fictitious "War-on-Terror".
The fact that in the UK the biggest debate on the matter in the mainstream media is whether the government has the ability to keep the data it gathers secure, something that it has proven extremely inept at so far, perhaps purposefully, is a sign of the pathology of what passes today for British political discourse. Yet again we see the debate, framed by the ruling elite, not addressing the wholly inappropriate nature of their behaviour but the details of how they implement their dastardly plans.
In the absence of the people of a nation having a deeply rooted and fundamental understanding of their rights to freedom from interference from the state and an absolute right to privacy there is little hope that they will understand the magnitude of the events around them as the state seeks to usurp those rights. We can see now why the educational system of the US and the UK has been under sustained attack since the mid-1960's and why Nicolas Sarkozy is seeking a radical agenda to dismantle and control the French educational system. Education is the basis of sound citizenship; pathological education has produced passive and ignorant masses that have no idea of their rights and responsibilities as citizens.
So it is with the issue of state secrecy. People have been fed an unending diet of lies of the need for national security based on a picture of the world in which swarm hoards of secret agents, nefarious criminals bent on world domination, evil foreigners of various hues and one bogeyman after another each having to be battled and defeated in order to preserve "freedom". In this battle for "freedom" it has been presented that secrecy is the key to victory. With the introduction into the public mind of the shadowy superman terrorist came the need for even greater state secrecy for reasons never explained but consumed without hesitation by the mass of people out of fear and lack of thought. So successful has this mind programming been that to challenge this underlying assertion of the absolute need for secrecy, as we are doing now, exposes one to ridicule. For most people state secrecy is a fait accompli, a necessity, an immoveable and essential fact of modern life. We will say it here loud and clear for the avoidance of doubt, there is no need for such state secrecy as we see it today, it is a lie.
The vast majority of state secrecy does not protect the citizen nor the nation, it protects the perpetrators of crimes, moral and legal, from exposure of those crimes; it protects those that usurp power for their own benefit and the benefit of a small ruling elite. Respected British journalist Mark Curtis has spent thousands of hours sifting through British Foreign Office files released after 30 years of absolute secrecy. He has revealed his findings in his numerous works, including Unpeople, which clearly show that our assertion is correct.
On the flip side of the coin people have been fed another web of lies in which the story goes that in order to protect them against the secret agents, nefarious criminals, foreigners and bogeymen and now of course the ubiquitous terrorist, they must have no privacy, no personal secrecy, from the state.
Underlying most people's acquiescence to the removal of their personal secrecy, their privacy, lie two beliefs; that they do not have the power to resist and that the state is essentially benign and is genuinely seeking to protect them. Once again it cannot be stated more clearly - these are lies.
The purpose of this combined assault on banking secrecy is based at one level on banking competition and taxation but ultimately on control.
The banks of the US, UK, France and Germany lose vast amounts of business to the banks from small countries where clients still have the traditional protection of privacy. These countries include Switzerland, Luxembourg, Andorra, Monaco and Lichtenstein.
We are told that in order to stop tax evasion there can be no financial privacy. This is, of course, complete rubbish. The desire of those that represent the state to have access to all our financial affairs has very little to do with taxation and everything to do with sheer power. Think about it, in a world where interest rates have barely kept pace with real, as opposed to statistical, inflation the amount of interest earned in bank accounts is a drop in the ocean compared to the perfectly legal ways for wealthy people to reduce their taxes. Even if every cent of the interest earned in such accounts were not declared for tax purposes it wouldn't compare with the tax revenue lost through the clever and perfectly legal means through which the rich, and particularly the super-rich, avoid paying taxes, let alone the taxes avoided by banks and large corporations for which a huge tax avoidance industry exists; one that looks likely to be exposed if the Guardian newspaper's challenge of Barclays Bank is successful.
One commentator made an interesting observation:
The UK is responsible for more tax havens than any other country: The Caymans, the Channel Islands, the Isle of Man, and Gibraltar. For 10 years, Prime Minister Gordon Brown was finance minister; he did nothing to change the rules. Now there is a crisis, it is different.If the issue was really taxation then the US and its partners in crime could simply change their tax laws to prevent countless loopholes being exploited by the rich, as they seem more than happy to do at the drop of a hat to try to claw back AIG bonuses. But as we all know, this is simply not going to happen. The issue is that the Puppets, at the behest of the Managers, want a world where government in one form or another has immediate access to the finances of every person on the planet. Once they have that access they will use it to destroy those who oppose them including those of us who seek peaceful change or simply express our views in articles such as this.
Take a look at the 9 Special Recommendations of the Financial Action Task Force and Recommendations VIII and IX on Non-Profits and Cash movements. Countless charities (ie. "non-profits") that have no connection with armed struggle in Palestine, other than the fact they give medical and other assistance to the victims of Israel's genocide, have been cut off from their donors by governments enforcing provision VIII. This is the fate that will befall all those who seek to support or offer succour to those that resist the Puppets and the Managers. If you thought you might get around such totalitarian control and try to move cash then Recommendation IX gets you. Remember that these Recommendations are now law in almost every country, you cannot escape them.
We have the state seeking ever greater secrecy while dismantling the last vestiges of our privacy. Both sets of actions are under the guise of seemingly reasonable necessity, the War-on-Terror and evasion of taxation. Yet with just a modicum of rational thought and research both are easily able to be seen for what they are, mere illusions conjured by the Puppets at the behest of the Managers for the simple purpose of total control.
On every possible occasion, the recent G20 Finance Ministers and Central Bankers meeting being one, political and economic leaders espouse their commitment to "free markets" yet these same people are removing financial freedom at a terrifying pace. It does not take a great leap of imagination to see how the lack of financial privacy and financial freedom will be used against us. Social conditions will be created with sufficient violence, blamed, of course, on "anti-capitalists" or Irish terrorists or similar, such that it will become easy for governments to simply label those that they fear as terrorists. Once labeled a terrorist we lose what few remaining rights we have, all our possessions and all our money, we will cease to be able to live or function in the society being created around us; a society where IDs and electronic money dominate.
In accepting these lies, acting like little children with no knowledge of the world and the need for a loving protector, the masses have subjected themselves to slavery, a slavery so profound that many will fight to maintain it, simply because to see the truth of their predicament is beyond their comprehension; it challenges the entire edifice upon which they have built their lives. To see that edifice challenged risks seeing it fall with the inevitable consequence that severely uncomfortable truths would have to be faced. At some level many people know this so they struggle and fight to maintain the illusion; they continually try to rationalize the events around them in a manner that is not collinear with reality, the resulting confusion leaves them lost and fearful. How many people have you seen recently who could reasonably be described as 'lost and fearful'? Hundreds, thousands, hundreds of thousands, millions .....everybody?
US Treasury Secretary Timothy Geithner's prepared statement at the end of the G20 meeting is obviously that of a servant reading his master's script. It does, however, provide us with a few clues as to what is in store.
The big message is that the G20 is essentially acting as one, or as the rhetoric goes is "globally coordinated", with "reform" being high on the agenda as are "macroeconomic stimulus and pro-growth policies on a scale commensurate with the severity of the problem".
By "reform" Geithner and the G20 do not mean the implementation of laws that will break up the financial empires that sit astride the globe so that we can never again hear the phase "systemically important" used to justify the saving of insolvent banks. They no doubt mean measures that will act to constrain ordinary citizens, remove all privacy in their financial affairs and otherwise do detrimental things to them while the people and institutions responsible for the theft of the wealth of the planet will remain protected behind walls of impenetrable regulation weaving a web so complex that none will ever escape it or fathom its depths.
One feature of this crisis is that at least we can trace what happened and how it happened. It is complex but it can be done. The reforms that will be introduced in the next few years will ensure that no such transparency exists for those who seek to peer into the murky depths of the world economy in the future.
Remember the "reforms" that led to the freewheeling casino that has been the financial markets these last ten or so years. Just as the reforms of the future will be based upon an adherence to the "free market" so too were the deregulatory steps that resulted in this crisis. Reforms that were shaped by the banking industry for the banking industry and eased through the US legislative process with $5 billion dollars of campaign contributions and lobbying expenditures; the same banking industry that is receiving the immense largesse of the American people, the same banks that still control Congress and the same banks whose 'former' members are now the government of the US.
The key reforms that the banks managed to have passed through the US legal and regulatory system were: the Financial Services Modernization Act of 1999 formally repealed the Glass-Steagall Act of 1933 which prevented investment banking, commercial banking and insurance being offered by the same firm; off balance sheet accounting for derivatives and structured securitization vehicles such as Structured Investment Companies, SICs; the Commodity Futures Trading Commission (CFTC) sought to exert regulatory control over financial derivatives, but the agency was quashed by opposition from Robert Rubin and Fed Chairman Alan Greenspan, their actions were confirmed in law by the Commodities Futures Modernization Act 2000; the removal by the SEC of 15:1 capital limits on investment banks and the voluntary regulation regime such that investment bank capital ratios left to 40:1 and the almost total absence between 2002 and 2007 of action against predatory lending abuses.
Predatory lending is when a lender lends to people who cannot afford the loan or who do not have the educational wherewithal to fully understand the loan and its terms; many sub-prime loans are considered to fall into this category. When local regulators sought to take action in this area they were blocked by Federal regulators, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
In the world of banking, as with far too many businesses based on the exploitative free market model honed to perfection by the US, the inevitable consequence of the economic emperor of the world opening the flood gates of financial deregulation was that others had to follow; for in finance there is always a race to the bottom in ethics and business culture in order be in the race for profits. Put simply the system is entropic and by its very nature will ultimately drift to chaos. The model that best encapsulates this system is Game Theory.
[to be continued....]