Everything is too neatly scripted. Prominent serious warnings from respected establishment figures of a crash, ignored since at least 2003. Prolonged coordinated currency devaluation of the dollar and increases in money supply. That steady inflationary trend of the dollar over two years until early 2008. The sudden inflationary spike in commodities in March. The dramatic reversal in July. The apparent bewilderment in September, prompting abrupt decisive coordination in October. The sun-has-got-his-hat-on markets, all of a sudden. "Back from the brink…."
Surely all this is yet another internal struggle among the imperialist oligarchs, hopping and snapping, squabbling like rancid buzzards over what remains of democracy’s corpse in the United States and Europe. What variety of oligarchy is to run Western Bloc countries now corporate consumer capitalism’s corrupt "free market" bubble-mangle has wrung what value it can out of them? Much of what remains is in hock for an as-yet-to-become-clear slew of debt.
The G7 country oligarchs knew they were heading for a fall, because their economies since the late 1980s have been unable to sustain the required fabulous profit margins without systemic fraud and debt. From long before the LTCM failure in 1998 and the subsequent dotcom crash, a continuous power struggle has divided the oligarchic elites over their best response. The most greedy and aggressive faction ran the most profitable rackets, the financial sector.
They very obviously deliberately ran it into lucrative bankruptcy knowing governments would coerce taxpayers into bailing them out. For the moment, the elite’s power struggle has abated somewhat. Bitching and bickering over what levels of consolidation can or should be achieved, they ponder how best to maintain some kind of status differential between their Western Bloc countries and the rest.
Before saying "told you so…" and welcoming the return of the State as a primary economic player to stabilize the current apparent chaos, it might be worth noting how the current round of government financial rescues follows curtailments of civil rights unprecedented since World War 2. Current "war on terror" moves are probably the financial phase of consolidation of oligarchic corporatist government control over society. They concentrate power more tightly than ever, closing down recognizably democratic, participative options.
The oligarchic anti-democracy of the latest coordinated response to the long foreseen crisis has gone mostly unreported. There was no democratic consultation worth the name. Least of all in the European Union.The theatrical exception of the utterly predictable five-day House turnaround in the US Congress over the Paulson save-my-cronies plan hardly counts. The plan went through cliché after cliché, dog and pony shows, hoop jumping, bells and whistles, hung like a Christmas tree and all.
So there is both a financial and a political concentration of power. In the
Emblematic of the consolidation of government control over civil rights in this period has been the deployment of battle troops for duty in the US itself, as reported by Naomi Wolf and Amy Goodman. Right now, the UK House of Lords has rejected Gordon Brown’s repressive 42-day detention law. But seasoned gambler-frauds like Brown always pitch for more than they need. Even without that measure, the new counter-terrorism bill gives Brown and his fellow oligarch frontpersons more power than ever to roll back fundamental rights.
While considering that fact, it may also be worth remembering that Brown has brought back into government two of his and Tony Blair’s key supreme war crime accomplices – Peter Mandelson and Geoff Hoon – from the criminal aggression against Iraq of 2003 and earlier. One has to ask what that might prefigure. International news media recently made great play of reports that George Bush supposedly dissuaded Israel from attacking Iran earlier this year. Sounds like a good way of setting up a surprise attack.
One constantly needs to mentally track away from where the corporate media try to make one look and think. They mention institutional failures but focus away from institutional consolidation. In report after report of the bail out and rescue plans floated over the weekend, the need to stoke liquidity was repeatedly emphasised. But if one tots up what the US authorities have made available since December 2007 via their numerous liquidity creation schemes and bail out provisions, to date one is talking about nearly US$3 trillion.
In Europe, the European Central Bank began flushing liquidity into the markets back in the summer of 2007. Since then in coordination with the Bank of England, between them one way and another, they have sloshed nearly US$2 trillion into their financial markets. That is before the latest announcment from the central banks. They now still say they have to sloosh even more liquidity into the financial economies of the US and Europe. Here’s what the central banks are coordinating:
"In order to provide broad access to liquidity and funding to financial institutions, the Bank of England (BoE), the European Central Bank (ECB), the Federal Reserve, the Bank of Japan, and the Swiss National Bank (SNB) are jointly announcing further measures to improve liquidity in short-term U.S. dollar funding markets.
The BoE, ECB, and SNB will conduct tenders of U.S. dollar funding at 7-day, 28-day, and 84-day maturities at fixed interest rates for full allotment. Funds will be provided at a fixed interest rate, set in advance of each operation. Counterparties in these operations will be able to borrow any amount they wish against the appropriate collateral in each jurisdiction. Accordingly, sizes of the reciprocal currency arrangements (swap lines) between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The Bank of Japan will be considering the introduction of similar measures.
Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short-term funding markets."
"Any amount they wish for appropriate collateral"…."whatever quantity of U.S. dollar funding is demanded".The banks are going to accept worthless corporate debt against good thin air funny money. Taxpayers and their children and grandchildren will be paying it back for ever. This is the Procrustes’ bed foreign debt scam that has crushed developing country peoples into subservience. Now Paulson, Bernanke, Brown, Sarkozy and Merkel and their accomplices are applying it to Western Bloc electorates. The corporate media applaud.
When they talk about liquidity what they mean is debt. That and other obvious things are notably absent from mainstream corporate propaganda media coverage of the continuing economic debacle. Little if any mention is made of the role played by almost 60 fiscal paradises or tax havens around the world. Nor has any forthright analysis been made of financial institutions and their shifty Arthur Andersen-style auditors failing to come clean about massive off-balance sheet obligations.
The contrary insistence that impoverished taxpayers stump up virtually endless liquidity, means banks, insurance companies and investment outfits can keep their Enron-style off-balance sheet transactions and associated shell companies – often off-shore entities – afloat. It gives them time to work out how to magic away the losses those shell companies and subsidiaries hide. One way of doing that is to dismantle their fraud piecemeal dissolving it in a flood of liquidity, courtesy of taxpayers held hostage by the Western Bloc oligarchies.
Non-specialists can get a clear focus on those issues by stepping outside the general run of mainstream and peripheral media. If one reads principally Western Bloc media, only a handful of journalists, very late in the day, are finally currently writing honestly and critically, at least by their lights. Of that handful, hardly anyone was writing decisively, until the last month or so, on the scale of the collapse that has now arrived. All this writing and almost all financial blogging stays well within the accepted framework of oligarchic corporate capitalism.
Reading outside that framework, one ends up looking at Western Bloc imperialism’s sadism and hypocrisy as it is, rather than draped in the fairytale benevolence of corporate news media. One finds oneself reading people like the experienced and respected Arab-world analyst Rene Naba:
"The Washington Consensus has above all hidden away, note against note, a planetary system articulated around multnational criminality. Western commentators have for a long time shown discretion on this subject, more readily denouncing the Islamist Peril or the Yellow Peril, after having for so long denounced the Red Menace. According to the International Monetary Fund, quoted by Le Monde on May 23rd. 2006, between US$1.1 trillion and US$2.5 trillion flows between banks, fiscal paradises and financial markets, despite tougher legislation and greater controls."
Those trillions are the proceeds of every imaginable kind of criminal activity and corporate fraud, including the wholesale Western Bloc financial institution off-balance sheet variety. Naba notes the contagious progression from fiscal paradises through offshore zones, into money market centre cash flows, outsourcing multinational company capital and wildly imbalanced budget deficits. Even his analysis seems to leave out the way hugely expensive Western Bloc military aggression also facilitates cash flows for dominant Western Bloc financial institutions.
Among countless others, a million Iraqis have died needlessly, among other reasons, to improve Wall Street and City of London moneyness.That is why, when the next oligarch figurehead takes over at the White House in January any change will be cosmetic. The wars engaging the US and its NATO allies directly in Iraq and Afghanistan will continue. The devastating proxy war in Somalia and the conflict in Palestine threatening Lebanon and the region will continue. Colombia’s narco-terror regime and its civil war, along with destabilization of the ALBA countries will continue.
Avowing economic contraction, the European and US oligarchies may well cut back in real terms on healthcare, education and social welfare to their peoples. Pleading terror and menace, the 700-plus US military bases will not be cut back. Western Bloc governments are consolidating their system of terror-based global gangsterism abroad and repressive corporatist oligarchy in their own countries. The hypocrisy and sadism they have so cynically deployed to crush hope for peoples overseas is likely to be deployed ever more cynically against the pressing aspirations of their own peoples at home.
toni writes for tortillaconsal.com