Welcome to the Crossroads of Misfortune and Oblivion.

When the United States was funding and training the Mujahadeen back in the 80s it was done with short-term goals in mind, and in the long-term the United States has come to regret that decision, for the Mujahadeen went on to become the Taliban and the people who were behind the 911 attacks.  That bit of blowback has changed our entire society, and we now are told that we must accept the increased level of government and government intrusion into our lives.  Few connect our current situation with the decisions of Reagan, but the links are easy to find.

We now find ourselves in another situation where our decisions will have long-felt ramifications.  Russia has invaded the Ukraine, a nation that gave up its nuclear weapons in return for security guarantees.  Those guarantees are not being met, and Russia is consolidating its hold over the Crimea.  If we fail to act, and act soon, we will see the rebirth of the nuclear age.  It will become painfully clear that the only true security to a nations sovereignty is their ability to completely annihilate the enemy...and nukes allow small nations that ability. 

So this is the crossroads that find ourselves at, though the media seems to largely be ignoring this issue.  Our choices are unpleasant but clear.  We either stand with the Ukraine as we promised them we would, and risk a hot war with Russia, or we allow Russia to take Crimea, with no guarantee that they will stop there (there are other European nations with ethnic Russian minorities in them), and the understanding that getting rid of the existing nukes in this world stops now, and nations that dont have it will start to seriously consider whether developing nuclear weapons will be in their best interest. 

No one wants to fight a war against Russia.  They have a lot of people and historically have shown no aversion to losing millions in battle.  No one wants a return to the nuclear arms race.  It only increased the likelihood that unstable leaders (and they do exist) will start something that we will all come to regret.   Yet those are the choices that face us.  Inaction rarely wins the day...it just delays things until the other side is ready to make their move. 

How the American People Have Lost Sovereignty Part Three

This is the final article in the series on how the sovereignty of the American people has been stripped from them.  In the first article I discussed how the Supreme Court has altered the original intent of the Founding Fathers by changing corporations from Charters, which can be undone by the government, to beings superiour to people.  In the second article I discussed how the creation of the Federal Reserve was both unconstitutional (and this has never been dealt with) and stripped the government of the ability to regulate money.  The result has been a decimation of the value of the American dollar.  In this final article I will discuss how the National Security Agency (NSA) has usurped the power to deal with foreign nations, and often has an agenda that is at odds with the elected government, as well as how NSA activities have been in violation of the Constitution.

Edward Snowden, the NSA whistle-blower who was forced into exile in Russia, continues to release bombshells, the likes of which have been devastating to the confidence of the American people.  It has become painfully clear to even the most Patriotic American that their government has been lying to them and blatantly ignoring the Constitution, which limits the powers of government.  The NSA routinely monitors phone calls and online traffic, without warrants, and it does so throughout the world.  The NSA has no official place in the Constitution; it was created in 1952, when many other changes were made to American society that went against the Constitution (adding In God We Trust to the currency in ’56, and adding Under God to the pledge of allegiance in ’54).  As such, the NSA should be merely an arm of the security apparatus, but the reality is that the NSA operates independently, with no true oversight.

As such the NSA has its own agenda, and there is nothing that says that their agenda must coincide with the elected governments’ agenda.  In fact, the Snowden files show that, quite frequently, the NSA decides that the elected government has taken an incorrect position, and take actions to counter-act what the elected government is doing.  While this does not clearly strip sovereignty from the people, since the NSA is not in control, but sometimes works against the government, it does severely limit it. 

When a foreign leader learns that the NSA has been reading their personal email, it causes a rift between that nation and the USA.  When a foreign corporation learns that the NSA has been reading their private business correspondence they must wonder if that is the reason why they lost that last bid to an American company.  The rift grows wider.  Sometimes this is just blowback (unintended consequences) from activities that the government would sanction, but others are purposeful in their attempt to create a rift.  The word treason is thrown around a little too casually, but it is clear that the NSA has absolutely engaged in treason every single time it decided to work against the policies of the elected government.  Part of the problem is that the Patriot Act gave the NSA carte blanche. 

The consequences of what the NSA has been caught doing are still ongoing, but they are devastating to the USA.  It is estimated that the cost of the NSA scandal to American private companies will be in the billions.  Foreign customers might decide to do business with other nations, and some might not trust the products that they receive from the USA.  http://www.zdnet.com/us-tech-firms-to-see-china-business-dip-amid-nsa-scandal-7000023250/  You never know who is allowing the NSA to do their surveillance, tacitly endorsing that activity by turning a blind eye.  http://business.time.com/2013/12/10/nsa-spying-scandal-could-cost-u-s-tech-giants-billions/

The Guardian discusses how Australia is reacting to the scandal.  Their formerly warm attitude towards the USA has chilled a great deal.  They, legitimately, are finding it difficult to trust the Americans.  If they are spying on all Australians, are they stealing industrial secrets?  Are they providing American companies with strategic information gathered by the NSA?  http://www.theguardian.com/commentisfree/2013/nov/19/the-nsa-scandal-has-detonated-in-australia-we-can-no-longer-look-away  Google actually considered moving its operations outside of the USA, but ultimately decided it was not worth it.  Let’s face it, the NSA is spying on the whole world, so just moving offshore won’t make you safe.  http://www.cnbc.com/id/101222237

Europe is seriously displeased, and are considering options on how to deal with the NSA spying.  One option on the table is to deny the USA from global financial data, which is gathered by a Belgian company called Swift.  http://www.ft.com/cms/s/0/6f4bf1a8-470b-11e3-9c1b-00144feabdc0.html#axzz2n5VpAMYu  At the very least the USA can expect data protection to be part of the trade deal talks with Europe.

The NSA has become a shadow government, unaccountable to the elected government, independent in action, and at times working against the stated policies of the elected government (aka representatives of the people).  Private American businesses will lose revenue because of the revelations, but the sovereignty was lost the moment the NSA was allowed to operate independently.  Organizations such as the NSA attract certain people, and certain other people are excluded from even being considered by those already entrenched.  In other words, the NSA represents a tiny sliver of the American population, and should be kept under tight scrutiny.  The very nature of such an organization works at odds with the idea of a free and open society.

How the American People Have Lost Sovereignty, Part Two

In the first article the gradual rise of the Corporate Personhood was detailed, showing how there is a correlation between the rights that corporations have gained over the years through Supreme Court rulings and limitations placed upon legislators when trying to create laws for the benefit of society, for fear of lawsuits by corporations.  In this article the Federal Reserve will be analyzed, showing that the federal government gave up sovereignty over money policy in a completely unconstitutional way.

The Federal Reserve was created in 1913 by Congress, and signed by Woodrow Wilson, as a way to centralize the banking system, which the Democrats had promised to do if elected.  The problem is that the Constitution puts that responsibility on Congress;

“Section. 8.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

·         To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;”

The Constitution was never amended to transfer this responsibility, let alone to a private corporation.  In all likelihood this is because there would be far too much opposition.  It was a shameful abrogation of the sovereign power of the people by those who were merely holding the reigns for a brief time.  Wilson and his Democrats decided to ignore the Constitutional implications, since they did not even attempt to amend the Constitution, and the Supreme Court has again proven to be stewards of the people in the way that a wolf is a steward of sheep.

The first thing that needs to be understood, for its importance cannot be understated, is that the Federal Reserve is a privately owned corporation that pays dividends to stockholders.  In order to be a bank in the United States, the bank must purchase stock in the Federal Reserve.  Federal Reserve stocks are not available to people, though many of the banks who own stock in the Federal Reserve are publicly traded corporations, and those stocks can be owned by people.  Although the Federal Reserve is a private corporation, it also has to deal with the government in certain ways.  The President chooses who the Federal Reserve Chairman is, though he must pick from choices provided by the Federal Reserve, and the Chairman must report to Congress and the Government Accountability Office.  Congress can advise the Chairman of the Federal Reserve, but he can ignore that advice without repercussions.

The Chairman of the Federal Reserve gets to set monetary policy, and he does this in two basic ways.  One, he sets the rate which banks must hold depositors money on hand.  In other words, if the rate is set at 10%, then a bank can lend out 90% of the money that is deposited in the bank, but must keep 10% on hand, in case depositors wish to withdraw money.  In this way banks only have to keep a percentage of their customers’ money, and the rest can be leant out for interest, which creates the illusion that there is more money in the system than there really is, because the money that is lent out eventually makes its way back into a bank, which then lends out 90%, repeating the process over and over again.  This is called fractal reserve lending, and it is, at the logical heart of it, a pyramid scheme.  It works so long as people believe it will work.  Once people lose faith it falls apart rapidly.

The second way the Federal Reserve controls monetary policy is by setting the federal funds rate, which is the rate of interest that banks who are part of the Federal Reserve can borrow money from the Federal Reserve.  When a bank needs money, it borrows it from the Federal Reserve.  The interest rate is normally ridiculously low (.25% for 2013).  Banks turn around and lend this money out to people at a much higher rate.  The money that the Federal Reserve lends to the banks is created when the banks ask for it.  When this is done the Federal Reserve tacks on a fee for the transaction (about 6%), and that accounts for the profits of the Federal Reserve.  At the end of the year all of the profits are sent back to the Treasury…except for 6%, which is paid out as dividends to the stockholders (aka the banks).  The same banks that borrowed the money from the Federal Reserve own the Federal Reserve.  So they borrowed from themselves; in reality adding more US dollars to the system, thereby lessening the value of all the dollars that were already in existence…and making six percent on the deal on top of everything else. 

If this analysis were true, we should expect that the US dollar would have lost value continuously since the creation of the Federal Reserve, as that six percent tacked on at the creation of currency slowly erodes the value of that currency.  That is indeed the case. The US dollar has lost over 60% of its value compared to the British pound since the creation of the Federal Reserve one hundred years ago. 

Unfortunately corruption is the mortar that holds the Federal Reserve System together.  Banks have manipulated their positions on the boards of the Federal Reserve to funnel money into their corporate coffers, at the expense of the American economy.  Jamie Diamond was the CEO of JP Morgan-Chase at the same time that he was on the Federal Reserve board, and while on the board of the Federal Reserve he orchestrated a bailout of JP Morgan-Chase.  There can be no clearer indication that there is a conflict of interest.  In the same time period Lehman Brothers was allowed to file chapter 11.  Of course, the CEO of Lehman Brothers, Joe Gregory, did not sit on the Federal Reserve board. 

The Constitution clearly assigns responsibility for monetary policy to Congress.  The Constitution has clearly not been amended to allow that responsibility to be transferred, in all likelihood because the American people would not stand for it if they understood what was being done.  The Federal Reserve constantly erodes the value of US currency with the six percent profit that is sent to Federal Reserve stockholders (banks), and is not bound by policy expectations of the elected government.  If Congress and the President decide on one course of action, but the Federal Reserve disagrees with that course, it can work against the intent of the elected government.  The President can remove the sitting Chairman and choose a new one…but the Federal Reserve selects the people that the President gets to choose from.   

What is interesting is that no one has challenged the legitimacy of the Federal Reserve at the Supreme Court level.  It seems highly unlikely that it could survive such a challenge…though the history of the United States Supreme Court is one of a long list of awful decisions that have eroded the power of the American democracy.  The reality is that a small cadre of insiders is calling the shots for America’s financial system.  They disguise their actions out in the open, using byzantine logic and industry-specific jargon to confuse people, all the while eroding the foundation of American society. 

 

 

How the American People Have Lost Sovereignty, Part One

This is the first in a series of three articles discussing how the American people have lost a great deal of their sovereignty, and thus their freedoms, since the creation of the Constitution.

Sovereignty is defined as having supreme authority or jurisdiction over a geographical or judicial area.  The American people, slowly over hundreds of years and three major incursions, have lost a great deal of the sovereignty that protected their freedoms.  As their areas of sovereignty have been eroded, so too have their civil rights, often without them even realizing.  This has directly correlated with a decline in the standard of living for the average American, and a widening of the wealth disparities that have caused a great deal of social chaos.

The three major areas that the American people have essentially lost control over are; their monetary system, their security apparatus, and corporations.  The monetary system was taken from the people when the Federal Reserve became the de facto authority on currency creation, thereby giving control over monetary policy to a privately owned corporation.  Recent revelations that the NSA keeps secrets from the elected government show that the NSA is autonomous and unaccountable.  This has resulted in a loss of diplomatic and foreign policy sovereignty.  Finally corporations have gained many of the rights of people, allowing them to sue governments for creating laws that reduce profits, including future profits.  This has resulted in local and state governments fearful to legislate in the best in interests of their people, for fear of lawsuits from affected corporations.  This loss of judicial power is debilitating to governments, preventing them from reacting to changing situations. 

Working chronologically it makes sense to start with the gradual rise of the Corporate Personhood.  In 1819 the United States Supreme Court (USSC) ruled in Dartmouth College versus Woodward that a charter was a contract.  This was exactly the opposite of the original intent of the Founding Fathers, who had conceived them as charters only, not contracts, and certainly not protected by the same constitutional protections that guaranteed the freedoms of the people.  The early corporations were typically municipalities, not businesses, because the Revolution was fought not only against Britain, but against the British East India Company, the Hudson Bay Company, and the Massachusetts Bay Company.  Large corporate businesses were not seen to be compatible with freedom by the Founding Fathers.

In 1886 the USSC case of Santa Clara County versus Southern Pacific Railroad, it was established that corporations have 14^th amendment constitutional protections, which gave the right to due process and equal protection under the law.  Thus corporations could now sue other corporations, people, and governments.  It was cited as a precedent for the Citizens United ruling.  The next year the USSC ruled in Mugler versus Kansas against Mugler, who claimed that the outlawing of the sale of alcohol by the state of Kansas had destroyed the value of the brewery that he had built only a few years earlier, at considerable expense.  He wanted compensation for the lost value of the brewery (which could not easily be converted to another use), but the court ruled that the state had the right to create laws that sought to protect the health, welfare, safety or morals of the people. 

In 1919 Dodge versus Ford Motor Company the Michigan Supreme Court ruled that the purpose of a corporation was to maximize profits for its shareholders, rather than serve in the best interests of society, as businesses had been viewed previously.  The case involved the inventor of the assembly line, Henry Ford, who was sued by the Dodge brothers, who together owned 10% of the company.  Ford wanted to provide excellent salaries and expand the business with new factories in lieu of giving out dividends, and the Dodge brothers were unhappy with his charitable nature.  The courts ruled with greed over social well-being, and corporations grew immensely because of it.

In 1922 Pennsylvania Coal Company versus Mahon the USSC gave corporations the right to sue governments for compensation for lost profits (called takings) that resulted from new laws, including future profits.  Mugler vs Kansas had settled the issue about whether the government could be sued for takings, ruling that they could only be sued if the state physically seized property, and that any regulations regarding the land was seen as the responsibility of government to protect the health, safety, welfare and morals of the people.  This new ruling completely contradicted the ruling made thirty-five years earlier.  It not only gave the green light to businesses that they could ignore the public interest, but it also put pressure on legislators to ignore the public good for fear of deep pocketed lawsuits. 

In 1976 Buckley versus Valeo rules that the right to donate to political causes is the same as speech, and therefore protected under the first amendment.  It also protected the idea of limits to donations given, but not on how much a campaign can spend, or whether there are limits to how much an individual can spend in support of a candidate (no limits).  This brings us to Citizens United versus the Federal Election Commision in 2010, the case that ruled that money is speech, for all intents and purposes.  Does that make bribery conversation?

Each of these cases has slowly eroded the sovereignty of the American people, whose representatives fear to act in the interest of their constituents because powerful corporate interests threaten them with lawsuits for doing anything that hurts their bottom line, be it laws intent on reducing pollution, tougher immigration enforcement, improving worker standards as new data comes in, tightening restrictions on gun sales, and a host of other issues that governments seem paralyzed in dealing with.

Learning to Understand the Language of Politics

Frank Lutz is a major strategist for the Republicans, and he recently met with supporters to discuss the dangers of the occupy wall street movement. To quote Frank "I'm so scared of this anti-Wall Street effort. I'm frightened to death." It warms my heart, I have to admit. The point of his statement was that conservatives need to alter the language they use in order to neutralize the effects of OWS, which are, and I quote again, "They're having an impact on what the American people think of capitalism." Apparently it is not that popular anymore.

So in the coming weeks people should pay particular attention to how Republicans are speaking, which words they are avoiding and which they are using instead. Here are some specific ones to watch out for. Such a fun game!

1) Capitalism is out. Economic Freedom is in!

2) The middle class are now hardworking taxpayers.

3) Few people want jobs. Most people want CAREERS.

4) Government spending = waste (though I assume this does not include the military)

5) Real men don't compromise. They cooperate.

6) We no longer have innovators or entrepeneurs. We have small businesses and job creators.

7) Forget taxing the rich, everyone is for that. Government is taking from the rich. Ah, it's a longshot.

8) And if approached by an occupier, say "I get it." That will shut them up.

That ends this lesson on Orwellian Doublespeak. Until next time.

Extremism is Taking Over

No matter where I go it seems I am assaulted by extremism. Just the other day I was at the grocery store, and when I went to get some hamburger buns, the only choices I had were Mega-Burgers or Sliders. I went to get some basic, standard Cheerios, but all I could choose from were Chocolate Cheerios or Apple & Cinnamon Cheerios. I tried to find a standard crust pizza, but all they had to offer were Deep Dish or Thin Crust. There were plenty of different types of thin crust and deep dish, just no regular pizza. No regular Cheerios. No regular hamburger buns.

What has happened to the world? Like it or not we are getting fewer and fewer choices to pick from, though the opposite appears to be true. In the past I could pick from about four or five flavours of pizza, but only in the regular crust option. Today I can pick from over a dozen flavours in either thin crust or deep dish, but the regular crust seems to have vanished. The choice is still binary, though it has been disguised as versions 1.1, 1.2, 1.3, etc... Moderation is being squeezed out so that we can all feel like we are actually choosing.

The problem is that moderates are moderate, and it is the squeaky wheel that gets the grease. In the United States it is the Tea Party that seems to get the most media attention, even though they only represent a relatively small percentage of the American people. The art of compromise is dead, and we are all being pressured to take a side, side A or side B...and that is it! I think it is time we all saw through the false dichotemy and stopped falling for the two choice fallacy.

I say take the third path. The one you can barely see, but just feels right.

Toadying to the Rich Caused Obama to Drop the Ball

Either the realities are more complex than I realize, or the people in charge of the government and big business are there because of nepotism and not merit. At the time that it was happening I railed against the idea of giving the banks money, no strings attached but hoping they would start lending again. Hundreds of billions of taxpayer dollars (well, new debt actually) given at 0% interest to the banks, the same banks that are charging most credit card holders near 30% interest. Or perhaps it is the American people who are the stupid ones to put up with this criminal behaviour.

I think the government should have skipped the middle man entirely. The government should have opened up loan offices, charging somewhere around 5% interest. People would flock to pay such low interest, and the big banks would have to lower their rates or lose business. Clearly none of these banks were in any serious danger of going out of business if they are all declaring record profits a year later. Those that do and will fail probably should fail.

So what we have is hundreds of billions of dollars lent to the banks at 0%, which they then refused to lend to people. My solution would have made the taxpayers 5%, opened up credit, and forced the big banks to also lower their rates (or lose business). It seems pretty simple to me, but of course the biggest difference in the two scenarios is WHO benefits. In the current system the big banks got free money to do what they wanted with, to be paid back at some point in the uncertain future, and the American people got deeper in debt as a nation (12 million is the current tally...imagine how much those interest payments are, and how they could be better spent on THE PEOPLE). In my scenario the American people make money and liquidity opens up.

Obama is part of the problem, because he is a much better talker than a doer. He compromises too much and too soon. He telegraphs how the opposition can manipulate his priorities until there is only a muddied mess. But a bigger problem than Obama is clearly the Senate. The very nature of the Senate is conservative in nature. It takes 60% to get legislation passed. That is a very conservative requirement. On top of that the nature of the Senate is disproportionate, so that smaller states have a greater say than their population would warrant. An analysis of the smaller states in the Union shows that they are, generally speaking, conservative in nature.

My conclusion is that progressives have no place in the United States. The system is designed to slow down all efforts at change to the point where the system in place is generations behind where the people are at. Personally, I'd scrap the system, but I am Canadian so it is not my place to do so.