- Even the powerful are worried with the IMF on February
7 saying advanced economies are in "depression (and) the worst cannot
be ruled out." Forecasting a 2010 recovery is "very uncertain"
at this time as further financial turmoil may disrupt it regardless of
policies adopted, and trouble is outpacing resources to alleviate it.
-
- On March 10, its Managing Director Dominique Strauss-Kahn
forecast "below zero" 2009 global growth - what he termed "the
worst performance in most of our lifetimes."
-
- In a March 8, report, the World Bank expressed similar
gloom saying:
-
- -- "developing countries face a financing shortfall
of $270 - 700 billion this year, as private sector creditors shun emerging
markets, and only one quarter of the most vulnerable countries have the
resources to prevent a rise in poverty;"
-
- -- international financial institutions alone can't cover
the (public, private and trade deficit) shortfalls for these 129 countries,
so other help is needed - a "global solution" to prevent an
economic catastrophe;
-
- -- the global economy "is likely to shrink this
year for the first time since World War Two, with growth at least 5 percentage
points below potential;"
-
- -- by mid-2009, global industrial production may be 15%
lower than 2008 levels, a shocking differential reminiscent of the 1930s;
-
- -- 2009 "world trade is on track to record its largest
decline in 80 years, with the sharpest losses in East Asia;"
-
- -- "the financial crisis will have long-term implications
for developing countries" (and developed ones as well); they face
higher borrowing costs, lower capital flows, weaker investment, and slower
future growth at a very grim time globally.
-
- At the same time, the Asian Development Bank (ADB) reported
2008 shrinkage of over $50 trillion in investor wealth, a shocking decline
reflecting financial asset losses in stocks, bonds, currencies, real estate,
and various other investments as well as a "surprising run"
to the dollar in search of a safe-haven.
-
- ADB said world's financial markets experienced "the
most violent shock" since the Great Depression and global economies
have rapidly deteriorated. Bank president Haruhiko Kuroda stated: "I'm
afraid things may get worse before they get any better," maybe much
worse. Yet his solution (like the IMF's and World Bank) is worse than
the problem by proposing more debt on top of today's burden. He wants
a 200% ADB capitalization increase, similar to though not as extreme
as Fed policy, so instead of reducing Asian debt, he wants to increase
it, make heavily-indebted nations more indebted, and let taxes, borrowing,
and fewer social services bear the burden of a growing calamity the way
America is doing it.
-
- The solution to over-indebtedness, of course, is get
free of it, but that doesn't work well for bankers, and in the end they
generally get what they want, so the rest of us lose out and today's
crisis will continue to worsen.
-
- Warren Buffett to the Rescue - Again
-
- It's so bad that Wall Street rolled out Warren Buffett
for the second time to do what he rarely does - last October in a New
York Times op-ed to calm investors and affirm his faith in "the long-
term prosperity of the nation's many sound companies."
-
- On CNBC March 9, he wasn't as sanguine saying the economy
has "fallen off a cliff. (It's) in a shambles. Not only has (it)
slowed down, people have changed their behavior like nothing I have ever
seen (and government policy or at least its message has been) muddled."
Then commenting on the importance of personal housing wealth and how much
of it's been lost, he went the old adage one better about "the emperor
ha(ving) no clothes."
-
- "On top of that," he said, "the emperor
doesn't have any underwear either." As a result, "We are in
a very, very vicious negative feedback cycle" because people are
scared to death and with good reason.
-
- But Buffett didn't do a lengthy Q & A to scare people.
He was there as a pitchman, a hawker like in a carnival, and his product
is his own company, Berkshire-Hathaway, and America. When asked "Will
everything be all right," he responded:
-
- "Everything will be all right. We do have the greatest
economic machine that man has ever created....(It's because) we ha(ve)
a system that work(s). (It's gotten us through) six panics in the 19th
century (and) in the 20th century we had the Great Depression and World
Wars, all kinds of things. But we have a system, largely free market,
rule of law, equality of opportunity (unleashing) human potential (so)
your grandchildren will live better than your kids."
-
- "The machine works (and buying) equities (is) the
way to (profit from it). If (you) buy the right businesses, (you'll) do
very well....American business will be worth more over time....Stocks
will be worth more over time. I guarantee you that the Dow will be a
lot higher."
-
- Last October in his New York Times op-ed, Buffett said
he's "buying American stocks." On March 9, he repeated the message
even though the economy "is a shambles." Serious enough to need
"the Oracle of Omaha" to save it, or at least try by making
a public spectacle of himself on TV, and it wasn't the first time although
others were more focused on his business or general view of things.
-
- This time, stressing America's long-term strength, he
ignored its fundamental weaknesses and systemic failure at the root of
today's problems:
-
- -- a system so unstable, crisis-prone, exploitive, unfair,
self- destructive, and corrupted it can't endure;
- -- Keynes warning about the consequences of "enterprise
becom(ing) the bubble on a whirlpool of speculation;"
- -- the inevitable decay that Marx and others predicted;
- -- the untenability of great wealth disparities with
few having too much and many too little - something untenable in the long
run;
- -- Lincoln's June 16, 1858 message to the Illinois Republican
State Convention - that "A house divided against itself cannot stand;"
slavery was the issue then; today it's inequality, human need, and growing
poverty under a fundamentally unworkable system favoring wealth over public
welfare.
-
- Something else bothered Buffett as well - that Berkshire
Hathaway (B-H) stock lost half its value, and the company had its worst
ever year in 2008 since Buffett took it over in 1965 when it was a family-run
textile maker. He's also not immune to credit default swap (CDS) problems,
having increased his position to $14 billion as of year end 2008, and
last year took hundreds of millions in write-offs as a result.
-
- Further, some question B-H's health going forward given
the current environment, insurance being his main business, and the worrisome
CDS spreads on his debt. According to Merrill Lynch's Michaels Hartnett
and Penn, they trade at wider spreads than those for Vietnam. They point
out that GE is no better off as their swaps are wider than Russia's at
a time its economy is reeling like many others.
-
- Through March 11, B-H and GE were two of the six remaining
companies rated AAA by S & P, according to CreditGuru.com. The others
are ExxonMobil, Toyota, J & J, and ADP. In the late 1970s, 58 companies
had the rating. That was then. This is now as two more of the mighty have
fallen.
-
- On March 12, the Wall Street Journal online reported
that "General Electric Co. and its finance arm (GE Capital) have
lost their coveted AAA long-term credit rating from Standard & Poors
Ratings Service" when the agency cut it to AA+ in a move many analysts
think was long overdue but not enough given the company's troubled state.
-
- On the same day, Bloomberg reported that Fitch Ratings
"cited concern about (B-H's) potential for losses on (its) equity
and derivatives holdings" in cutting it to AA+ and its senior unsecured
debt to AA." Bloomberg added: "Some investors (believe) the
derivatives may saddle (B-H) with billions of (future) losses."
-
- Economists and Financial Writers on The Global Research
News Hour
-
- Notable ones like F. William Engdahl, Michael Hudson,
Ellen Brown, Jack Rasmus, Richard Wolff, John Bellamy Foster, and John
Williams continue explaining the nature and consequences of the global
economic crisis, and how it affects ordinary people. For example, Rasmus
and Williams believe that the economy lost from 800,000 - 1,000,000 jobs
for the past four months (not the Labor Department's lower figures) on
top of all those lost earlier, and no end to the carnage is in sight.
-
- According to the Economic Policy Institute (EPI), over
23 million Americans were either out of work or underemployed in February,
and the numbers are growing. In addition, 60.3% of the population has
some form of employment, down from 63.4% in December 2006. EPI reported
that BLS figures show job openings fell 7.2% in January to three million,
down 32% from year end 2007. Currently there are over four unemployed
workers for every job, and seekers "are seeing their chances of finding
(employment) grow ever dimmer."
-
- Reports are that jobs are being lost at the rate of one
every five seconds, and according to Manpower International's US employer
survey, hiring plans are the lowest since the company began polling in
1982. A slim 1% of firms expect to hire in Q 2, down from 10% in Q 1 and
off 15% from Q 2, 2008. A company official said: "That's about as
bad as it gets with our survey," but it looks like worse is still
ahead.
-
- Consider the latest initial jobless claim filings for
the week ending March 6 - a record 654,000 following the previous week's
upwardly revised 645,000. People getting benefits for more than a week
increased by 193,000 to 5.3 million, another record high, and it's the
sixth time in the past seven weeks that new records have been set. The
proportion of the work force getting unemployment benefits is the highest
since June 1983 when the economy began emerging from a deep recession.
One year ago, only 2.8 million got benefits. Today the numbers are skyrocketing
with no end of it in sight. It shows in the monthly payroll data.
-
- In his latest ShadowStats report, Williams said February's
payroll loss was 899,999 and unemployment reached 19.1%, when discouraged
and involuntary part-time workers are included. He compared it to Great
Depression 25% levels but noted then they may have been higher because
measures included only non-farm workers at a time agriculture was over
one-fourth of the economy and farm labor much greater in numbers than
today. According to the US Department of Agriculture, it's now less than
2% of all workers so its impact on employment is marginal.
-
- Challenger, Gray & Christmas (CG&C) tracks monthly
announced job cuts, now making grim reading. On February 4, it reported:
-
- "Company layoff announcements were unusually heavy
in January, indicating that the shock to the labor force is increasing
in intensity and pointing to severely depressed readings in Friday's
employment report." CG&C cited 241,749 compared to 166,348 in
December, or the highest figure since the end of the last recession.
By comparison, January layoffs a year ago were only 74,986. Of great concern
is how much higher numbers will go and for how many more months.
-
- CG&C's February total slipped to 186,350, but it
cautioned to "distinguish between layoffs scheduled for the short-term
or the long-term, or whether job cuts are handled through attrition or
actual layoffs." Most important is the trend, not monthly blips up
or down that obscure it, and the latest home foreclosure data aren't
reassuring.
-
- On March 11, Dow Jones Newswires reported that completed
US foreclosures soared 67% in February over January, putting them at
their highest since the start of the crisis, according to Foreclosures.com.
-
- Most worrisome is that they came in spite of Fannie,
Freddie, and several major banks putting a temporary halt to the process,
yet it persists at severely high levels. In addition, pre-foreclosure
filings (an indicator of future foreclosures) jumped 27% to 207,703,
topping December's highest ever number by 9%. Three of the hardest-hit
states continued impacted with California soaring 67% from January, Florida
42%, and Arizona more than doubling. The data suggest more of the same
ahead with perhaps millions more homeowners facing loss of their most
valued asset and little in the way of government help to prevent it.
-
- Citigroup on the Ropes, or Are They?
-
- Believe the former despite its CEO saying that January
and February were profitable. Take it with a grain of salt given its $37
trillion derivatives portfolio, much of it toxic, and its stock price
at a buck - until The New York Times published a "leaked" confidential
memo from Vikram Pandit to employees saying the company was on track for
its best quarter since late 2007 when the market started to implode.
-
- Left out was how numbers are calculated - based on operating,
not reported earnings, excluding lots of write-offs but mostly ones left
undeclared hoping investors won't notice and think the bank healthy again.
On March 10, the market responded positively with Citi and other financials
doing best, but for how long. Nothing changed in a very weak economy,
and Citi is among the sickest banks in it, insolvent and on the edge of
bankruptcy or being nationalized.
-
- The McKinsey & Company consulting firm may agree
in its recent bank profitability forecast. It states "2009 will be
unprofitable (and) net investment income "drops dramatically in 2009
as deposit spreads compress (reflecting consumer and commercial), then
(begin to recover) going forward. Yet by 2013, McKinsey sees revenues
at $142 - 153 billion compared to $156 billion in 2008 with profits beginning
to pick up after up after $53 billion in 2009 operating losses. For 2008,
McKinsey said banks posted a $1 billion profit, excluding all taken and
untaken write-offs. It affirms a very sick industry with no prospect of
profits if they're included.
-
- Institutional Risk Analytics co-founder and managing
director Chris Whalen agrees in his March 13 analysis titled: "Stress
Test Zombies - Not Too Big to Fail? Tough Tootsies Little Banks!"
He refers to Bernanke and Geithner "cowardly feed(ing) the zombies."
It's "not sustainable financially" nor workable politically
and must eventually be changed. At some point, "the Obama administration
may need to choose between our (banks and) foreign creditors and American
voters."
-
- "The Bernanke/Geithner approach to not dealing with
the financial crisis amounts to a hideous public subsidy, a transfer of
wealth from American taxpayers to the institutional investors who hold
the bonds and derivative obligations tied to the zombie banks, AIG and
the GSEs." All these companies will need continued cash subsidies
in the trillions of dollars to keep them out of bankruptcy.
-
- Yet imagine, Bernanke and Geithner are proceeding on
their own. "No legislation has been passed and no meaningful debate
has occurred. The biggest danger facing the markets is that Ben and Tim
still do not seem to have a clue what to do about the big banks -- other
than to write more checks against the public trust. The conflict over
this decision to pass the cost to the taxpayer, between the Fed, Treasury
and the Congress, on the one hand, and the Wall Street dealer banks is
staggering, yet nothing is said in the Big Media."
-
- The fact is that "bailing out toxic waste sites....could
cost trillions of dollars....The only issue is whether we recognize it
directly, via a public resolution, or hide (it) via public subsidies
and future inflation."
-
- The right strategy is to break up or close down zombie
banks, keep taxpayers out of it, and let bond and equity holders absorb
the cost of "marking (their) assets to market" and ending the
charade that they're profitable or heading toward it.
-
- On March 10, the Wall Street Journal's front page reported
that repeated Citi bailouts haven't helped so "US officials are
examining what fresh steps they might need to take to stabilize the bank
if its problems mount, according to people familiar with the matter....(called)
'contingency planning.' " Weekend discussions were held with Citi
officials downplaying their seriousness. But given the bank's condition,
profitability claims (the next day) are deceptive, so how long can the
charade continue.
-
- Further, on March 12 according to Bloomberg.com, there's
more. "Four Citigroup Inc. executives who bought the bank's stock
last week have already generated a $2.2 million paper profit, regulatory
filings show." Insiders included:
-
- -- director Roberto Hernandez bought six million shares
on March 2 at an average $1.25 price; after briefly dipping below $1,
it closed on March 5 at $1.52 for a paper profit of $1.7 million;
-
- -- Latin America CEO Manuel Medina-Mora bought 1.5 million
shares on March 3 at an average $1.24; and
-
- -- other buyers included vice-chairman Lewis Kaden buying
100,000 shares and controller and chief accounting officer John Gerspach
65,000 shares - in each case ahead of Pandit's profitability claim and
the day earlier Wall Street Journal front page story saying Citi is in
trouble.
-
- Another key point is that the US Securities Exchange
Act of 1934 "prohibit(s) the making of false or misleading statements
to a public company's auditors." It's also "a crime to knowingly
and willfully make a false or fraudulent statement in any matter within
the jurisdiction of the executive, legislative, or judicial branch of
the US government" (18 U.S.C. 1001, January 2007). Further, it's
unlawful to mislead investors or violate any provision of the 1934 act.
True or false, Pandit's memo was internal and only covered a two-month
period, not the full Q 1 filing for after March 31, so likely no violation
occurred.
-
- That aside, there's the issue of stock manipulation and
insider trading with the above-cited evidence casting suspicion. It's
illegal for anyone to buy or sell securities based on non-public information,
and those doing it face prosecution if caught. A high- profile case was
against former Qwest CEO Joseph Nacchio - indicted in December 2005 on
42 insider trading counts involving $100 million worth of his company's
stock, then convicted on 19 counts in April 2007. He was sentenced to
six years in prison and ordered to forfeit $52 million in fraudulently
earned profits plus a $19 million fine, $1 million for each count.
-
- The Wages of Reckless Spending
-
- They're painful, costly and, according to Michel Chossudovsky,
heading the country for "fiscal collapse" in an analysis that's
stunning but unsurprising. A "Second New Deal?" Quite the contrary
to:
-
- -- continue the most massive wealth transfer in history;
- -- achieve it by looting the Treasury;
-
- -- build a crushing debt burden;
-
- -- undertake "the most drastic curtailment in public
spending in American history;"
-
- -- govern under a war budget directing most revenues
for defense, militarism, and foreign wars; trillions for "the Wall
Street bank bailout;" and servicing the enormous public debt - in
2008 an astonishing $451 billion;
-
- -- provide no fiscal stimulus for the economy; in fact,
do the opposite by requiring no mandate that banks lend; instead, let
them speculate and use hundreds of billions to buy real assets (the "real
economy") on the cheap after their stock prices have been manipulated
to crash;
- -- impoverish tens of millions of Americans through
reduced social services when they're losing jobs, homes, savings, pensions
and futures; and at the same time
-
- -- privatize America to pay for reckless spending - everything:
"public services," infrastructure, highways, national parks,
various other state assets, the entire State sold on the cheap to plunderers
for profit - "the State is being taken over by the banks, the State
is being privatized;" the public has no idea what's happening or
that their government is betraying them.
-
- America is for sale as a commodity. Serfdom is planned
for most people, and Obama is as much at fault as Bush so let's be clear.
He's either a consenting co-conspirator in the looting of the country
or a willing dupe letting it happen in his name. Either way, he's part
of a crime syndicate driving world economies and most people everywhere
to ruin to enrich and further empower a select Wall Street elite - the
same ones and their lobbyists that provided millions for his campaign.
-
- On March 12 at the Business Roundtable, Obama assured
attending CEOs that serving corporate America is Priority One, especially
the financial elite with as much of the nation's resources as they need.
He said that the "only way we can truly unlock credit and heal our
financial system for good is to address the state of our banking system.
And I know that this crisis is at the top of your immediate concerns -
and I promise you, it is at the top of mine as well." He means that
he'll continue to:
-
- -- stiff-arm the public with empty rhetoric, hollow promises,
and little in the way of real help;
-
- -- strip-mine the nation's wealth for Wall Street and
the rest of the FIRE sector (finance, insurance and real estate); and
-
- -- provide smaller amounts for other business sectors
at his discretion but not enough to keep bankers and vulture investors
from buying much of it on the cheap.
-
- Follow the data as the plot unfolds. On March 12, the
Fed reported that American household net worth plunged by the largest
amount in over half a century during 2008 Q 4 - a record 9% from Q 3 and
the sixth quarterly drop in a row. Net worth represents total consumer
wealth - homes, savings, pensions, investments, and other material assets
minus liabilities.
-
- It hit an all-time high of $64.36 trillion in 2007 Q
2, then fell every quarter ever since. Through 2008 Q 4, it's at $51.48,
or a drop of 20% from its peak and declining. At the same time, US credit
quality is deteriorating as measured by the cost of buying default insurance
(CDSs) on government debt - it's soaring as it is for private companies
like GE and Berkshire-Hathaway.
-
- It costs US bond investors 98 basis points for protection,
up from 7 basis points in late 2007, or a 14-fold increase, and it's no
surprise why. Debt creation has skyrocketed to unimaginable levels raising
the specter that today's deflation will become tomorrow's inflation, perhaps
hyperinflation, and that's bearish for bonds, stocks, the economy, and
ordinary people losing purchasing power.
-
- It's got China worried according to a March 13 New York
Times report. As the largest US debt holder, Premier Wen Jiabao wants
assurance that the investment is safe at a time he has reason to have
doubts. "To be honest," he said, "I am definitely a little
worried," and why not. Money creation has been excessive. Interest
rates are rock bottom, and America is reeling under a mountain of unsustainable
debt as it continues to add more of it. According to some, interest rates
have only one way to go - up, although it's likely to be a while before
it happens.
-
- Bond expert Henry Kaufman (the original "Dr. Doom"
for his 1970s and early 1980s bearish bond forecasts) believes the secular
bond bull market is over. In a February 14 Wall Street Journal op-ed,
he tracked the rise in the cost of long-term government debt from 1946
to its 1981 peak, then down to around 2.5% early this year, "which
probably marks the end of this extended wave." Yet conditions today
compared to 1946 are "strikingly different" and very worrisome
given the private sector debt overload, the federal government issuing
an unprecedented volume of new obligations, and the Fed printing money
like confetti.
-
- In 1946, "the nation stood on the brink of an unprecedented
boom (whereas) today wealth is contracting massively and the economy"
teeters on the edge of depression. "Which raises (serious) questions:
Why are we so poor at managing our key economic institutions while at
the same time so accomplished in medicine, engineering and telecommunications?
Why can we land men on the moon with pinpoint accuracy, yet fail to steer
our economy away from the rocks? Why do our computers work so well - except
when we use them to manage derivatives and hedge funds?"
-
- Securitization, globalization and the explosion of debt
changed everything for the worst and "altered financial behavior
in ways that econometric models miss....Let's hope that is about to change.
A central goal of new financial legislation should be to rein in extreme
financial behavior."
-
- What Kaufman left out is that none of this was happenstance.
It could never go on without high-level government-institutional complicity,
so a good place to start would be to clean out the corruption in Washington.
Fire and punish those in charge of running it, and establish a legislative
mandate henceforth to serve all Americans, not just Wall Street's criminal
class.
-
- For the latter, Philip Stephens, in a March 9 Financial
Times op- ed, proposed: "Fix the banks first - and then shoot the
bankers" in commenting on the collapsed UK banking system and lack
of decisive action to correct it. Sounds like a sensible way to address
America's problems as well.
-
- The Thud of More Shoes Dropping
-
- Deteriorating commercial real estate is another with
experts saying it resembles the housing decline with about a one-year
lag, so right now it's increasingly apparent. Look at the signs.
-
- On January 12, Financial Week headlined: "Banks
gird for commercial property collapse (as a) spike in loan defaults batter
balance sheets," and it's just beginning. According to Fitch Ratings
managing director Eric Rothfeld:
-
- "Loans originated at market peaks experienced from
2005 - 2007 will face increasing defaults as real estate performance declines
during the stressed economic climate of 2009 and beyond." More defaults
mean greater losses for exposed banks, already reeling from the housing
collapse and trillions of toxic debt on their books.
-
- Developers are also hard hit given empty buildings, vacant
shopping malls, and for-sale signs everywhere. On March 5, the Washington
Post said "Not a single office building has been started in (D.C)
since October, a sign that the slowdown that began in the far-out suburbs
has now reached prime city locations." According to Gerry Widdicombe,
director of economic development for the city's Downtown D.C. Business
Improvement District, "Things are frozen. Nobody's doing anything."
It's the same most everywhere across the country except for occasional
small deals that are owner and investor-financed.
-
- More signs include idle cranes, empty lots, few new tenants,
rising evictions, falling rents, a 95% year-over-year drop in commercial
mortgage backed securities (CMBS) issuance, and soaring CMBS delinquencies.
The American Institute of Architects reported that its Architecture Billings
Index (ABI) hit a historic 33.3 low in January, reflecting the worst conditions
seen since the index's 1995 inception.
-
- On March 10, Moody's reported that corporate bond defaults
will triple their 2008 level, be 15 times more than in 2007, and said
bankruptcies usually follow. They placed 283 companies on its bottom-rung
listing, up from 157 last year, and added 73 companies since last reporting.
-
- Well-known companies made the list, including General
Motors, Chrysler, Eastman-Kodak, AMR (parent of American Airlines), UAL
(parent of United Airlines), AirTran, Advanced Micro Devices, R.H. Donnelly,
Rite-Aid, Reader's Digest Association, and numerous top retailers because
of reduced consumer spending.
-
- According to experts, many, perhaps all, large US banks
are zombies. They're insolvent "dead men walking" and should
be on the list as well. So is the US economy suggests Nouriel Roubini
in a March 5 Forbes.com article headlined: "The US Financial System
is Effectively Insolvent." In it he explains the "grave risk
of a global L-shaped depression, (much) worse than the current, painful
U-shaped global recession" that's deepening as conditions continue
to deteriorate. "Shoot(ing) the bankers" may indeed be a good
start to fix it.
-
- Perhaps also help the "1 in 50 children in America
(who) are homeless each year" also, according to a new National Center
on Family Homelessness report titled: "America's Youngest Outcasts
- State Report Card on Child Homelessness." It calls it "unacceptable
for one child in the United States to be homeless for even one day, (and
says) children without homes are on the frontline of the nation's economic
crisis." The problem continues to worsen as foreclosures increase,
yet the administration and Congress aren't helping.
-
- "The year 2008 will long be remembered....as a time
when grossly overpaid bankers (and) captains of industry....hobbled to
Washington (asking) for bailouts (in the billions of dollars). Ignored
by....Congress and the media were (many thousands) of children - many
still infants and toddlers - who were (and still are) homeless in the
midst of this economic (calamity). Without a voice, more than 1.5 million
(of them) go to sleep (each night) without a home each year....they endure
(too little food), a lack of safety, comfort, privacy....adequate health
care, uninterrupted schooling, sustaining relationships, and a sense of
community." Their deprivation is inflicting "profound and lasting
scars," yet public discourse excludes them from consideration and
consigns them to be another lost generation - unwanted, unnoticed and
ignored by an uncaring government.
-
- Militarizing America for Business and All Contingencies
-
- Since WW II, America has had contingency plans in case
of large- scale disasters or attacks. However, since the late 1960s, at
the height of anti-Vietnam war protests, focus has been mainly on controlling
dissent.
-
- On October 30, 1969, Richard Nixon signed Executive Order
(EO) 11490, "Assigning Emergency Preparedness Functions to Federal
Departments and Agencies." It consolidated 21 previous emergency
preparedness EOs and two Defense Mobilization Orders issued between 1951
- 1966.
-
- In 1976, Gerald Ford signed EO 11921 ordering the Federal
Emergency Preparedness Agency (FEPA) to let government take over all
essential functions in case of an undefined "national emergency."
In other words, to give government dictatorial powers by simply seizing
them.
-
- In 1979, Jimmie Carter signed EO 12148 establishing the
Federal Emergency Management Agency (FEMA) to replace FEPA. Clinton later
made its director a cabinet position, and Bush gave DHS control under
its Emergency Preparedness and Response Directorate.
-
- On inception, FEMA mandated an interface with the Defense
Department (DOD), appointed an "emergency czar," and authorized
the strategic relocation of industries, services, government, and other
essential economic activities should conditions warrant. Little known
is that FEMA spends most of its budget for "black operations,"
not disaster relief, although the latter makes headlines. Further, the
president has emergency powers to declare martial law, activate FEMA's
extraordinary powers, and run the country with other agencies like a police
state for no other reason than to quell legitimate dissent - against war,
abusive federal power, or an economic depression.
-
- In 1988, Ronald Regan signed EO 12656 empowering the
National Security Council as the principal body in charge of emergency
powers and let the government increase domestic intelligence and surveillance
of US citizens. It also restricted free movement, authorized the seizure
of property, construction of detention camps, and isolation of US civilians
in them.
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- Numerous other EOs followed to let government control:
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- -- all forms of transportation, including highways, airports,
rail, seaports, inland waterways, and more;
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- -- the media and all forms of communication;
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- -- all forms of energy;
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- -- food and farms;
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- -- brigades in which civilians would be placed under
government supervision;
- -- health, education, and welfare functions;
-
- -- the registration of all persons into a national database;
-
- -- the relocation of communities, areas to be abandoned,
and building of new housing in designated places;
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- -- implementation of all emergency measures in times
of international tensions and economic or financial crises; and
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- -- empowering the Justice Department (DOJ) to operate
penal and correctional institutions along with FEMA for its own camps.
-
- The Bush administration funded FEMA with hundreds of
millions of dollars to retrofit former military bases and construct other
facilities as detention camps. According to a November 2008 Wall Street
Journal article, "Intelligence Policy (will) Stay Largely Intact"
under Obama who recognized and legitimized its existence for use in case
of a "national emergency" declarable for any reason, real or
contrived.
-
- Currently, over 800 camps are in every state, ready for
use if ordered, with enough capacity for many tens of thousands of internees.
They're not ordinary in any sense. They're concentration prison camps
in the true sense of the term for dissidents or whomever is to be interned
for whatever reason, at any time, and for any designated period on command
of the president, others he directs, and FEMA as a police state operational
arm. Some may turn into Guantanamo on the Mississippi, the Chesapeake
Bay, the Lake Michigan lakefront outside Chicago, or neighborhoods anywhere
or close by.
-
- Local police have been militarized to help and much more,
according to a March 13 Paul Joseph Watson Prison Planet.com article
headlined: "Police Trained Nationwide That Informed Americans Are
Domestic Terrorists." In other words, enemies of the state are people
who know their rights and demand them, who support progressive issues,
who want more from government than betrayal, and who believe democracy
and the rule of law are sacred and must be defended.
-
- Prison Planet got a copy of a Missouri Information Analysis
Center (MIAC) report it described as "outlandish (and) shocking,"
and most likely it's replicated throughout the country. It concentrated
mostly on a so-called "militia movement" but "conflate(d)
it with supporters of Ron Paul, Constitution Party presidential nominee
Chuck Baldwin, and former congressman Bob Barr as 'militia' influenced
terrorists and instructs the Missouri police to be on the lookout for
supporters" of libertarian parties, issues, and people opposed to
the North American Union and New World Order.
-
- The MIAC report is similar to a Phoenix FBI and Joint
Terrorism Task Force one under Clinton that designated constitutional
defenders as "right-wing extremists." The MIAC document "expands
significantly on the earlier" one and represents the latest example
of police state plans under Democrat as well as Republican administrations
- a very disturbing prospect at a very grim time for most people.
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- A Final Comment
-
- Everything discussed above is real and worrisome at a
time the greatest ever economic crisis is deepening, government policies
are corrupted, broken, and uncaring for deprived millions, so sooner or
later public anger will erupt, but when it does severe crackdowns await
it.
-
- Obama promised change. Few understood that he meant abandoning
the millions who elected him, looting the national wealth for fraudsters,
and crushing public dissent should it erupt. Given growing impoverishment
and pain, it's hard imagining it won't. It's only a matter of when and
how much - but then what.
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- Stephen Lendman is a Research Associate of the Centre
for Research on Globalization. He lives in Chicago and can be reached
at lendmanstephen@sbcglobal.net.
-
- Also visit his blog site at sjlendman.blogspot.com
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