The Burning Platform

RON PAUL – THE OBI-WAN KENOBI & GREY CHAMPION OF THIS FOURTH TURNING

Great article on the Lew Rockwell site. This guy would fit in real well on TBP. It seems his definition of Generation X is spot on.

The X and Y Generations and Ron Paul: An Alliance for Our Age

by Donald W. Miller, Jr., MD

Members of Generation X, born 1962 to 1981, and Generation Y, 1982-2004, are rallying behind Ron Paul in his run for president. Media commentators find it odd that people under the age of 40 in the X Generation and especially voters under age 30 in the Y Generation are so taken with this unassuming, soft-spoken 76-year-old candidate. Ron Paul is in the Silent Generation, whose members are now 70 to 87 years of age (born 1925-1942).

Exit polls show that Ron Paul won the majority of voters under age 40 in the Iowa caucus and in the New Hampshire primary. He received 21.4 percent of the votes in Iowa (first-place Rick Santorum got 24.6 percent) and came in second in New Hampshire with 22.9 percent of the votes (first-place Mitt Romney got 39.3 percent). More voters under age 30 chose Ron Paul over the other candidates in the South Carolina primary and Nevada caucus. He garnered 41 percent of the under 30 vote in Nevada – Mitt Romney got 36 percent; Newt Gingrich, 16 percent; and Rick Santorum, 7 percent. But only a small minority of older people has voted for him, as was especially evident in the Florida Republican primary.

In Generations: The History of America’s Future, 1584-2069 (1991) and The Fourth Turning: An American Prophecy (1997), William Strauss and Neil Howe examine the four main generations alive today, including the Boom (“Baby Boomer”) Generation, born 1943-1961. They show how these generations mirror ones in the past. They note that a “Young Hero and Elder Prophet” pairing occurs repeatedly in history, myth, and art, as with Joshua and Moses in the Old Testament, the Gray Champion in Colonial America, King Arthur and Merlin in Celtic myth, Tolkien’s Frodo and Gandalf, and Luke Skywalker and Obi-Wan Kenobi in Star Wars. In Star Wars, Episode IV, Obi-Wan Kenobi instructs Luke in the ways of the Force and in Episode VI tells him that killing Darth Vader (his father) is the only way to destroy the evil Galactic Empire. And as Joseph Campbell, the American mythologist, notes, the young hero’s close bond with a wise elder is essential to his ultimate success.

The “Gray Champion” precipitated the Boston Revolt of April 1689, mounted to protest King James II’s increasingly autocratic rule of the British-American colonies. As Nathaniel Hawthorne describes it in his Twice-Told Tales, the King-appointed governor of New England marched British troops through Boston to intimidate the public and quell any thoughts of colonial self-rule. Hawthorne writes:

“Suddenly, there was seen the figure of an ancient man, who seemed to have emerged from among the people, and was walking by himself along the center of the street, to confront the armed band. He wore the old Puritan dress, a dark cloak and a steeple-crowned hat, in the fashion of at least fifty years before…”

This elderly champion with a manner “combining the leader and saint” commanded the soldiers to stop; and “at the old man’s word and outstretched arm, the roll of the drum was hushed at once, and the advancing line stood still.” Then, “inspired by this single act of defiance, the people of Boston roused their courage and acted. Within the day, Andros [the governor] was deposed and jailed, the liberty of Boston saved, and the corner turned on the colonial Glorious Revolution.” This revolt led to the American Revolution 85 years later.

Ron Paul is the Obi-Wan Kenobi and Gray Champion of our time, and the Darth Vader of our U.S. Empire is the Federal Reserve.

The Federal Reserve System, with its network of twelve regional private banks, was established in 1913. The Fed is the country’s third central bank (the first two, established in 1791 and 1816, each lasted for 20 years). The Fed issues token coins and paper dollars, and creates and transfers unlimited amounts of computer-generated digital money. Manufacturing money this way, during its 99-year existence the Fed has destroyed 98.8 percent of the value of the dollar, as calculated by the Shadow Government Statistics (SGS)-Alternate-Consumer Price Index (CPI). Using this measure of inflation, a basket of goods and services that cost $100 in 1913 now costs $8,204! (Even the Bureau of Labor Statistics admits that the dollar has lost 96 percent of its value since 1913, with that $100 basket of goods and services now said to cost $2303.) Using the more accurate SGS-Alternate-CPI, the greatest drop in the dollar’s value, 95.1 percent, has occurred since 1971, when president Nixon severed the dollar’s last remaining link with gold, turning it into an effortlessly issued fiat currency. (A fiat currency is one that has no hard asset backing it such as gold and derives its value from government edict.) Like a virulent virus, the Fed has infected the U.S. dollar and made it grow like a cancer.

The Spanish Flu pandemic of 1918-1921 killed somewhere between 20 to 40 million people (including my 22-year-old grandmother and my wife’s 23-year-old grandmother). What the Fed is could result in an equally dire hyperinflationary economic collapse, similar to what happened in the Weimar Republic, Austria, and Hungary in the 1920s, Argentina in 1989, and Zimbabwe. (A practical definition for hyperinflation is that the country’s largest pre-inflation bank note – for the U.S., the $100 bill. – becomes worth more as toilet paper, or for stoking a fire, than as a currency. The currency remains “current” but no longer serves as a medium of exchange.)

Dr. Paul prescribes an Austrian cure for our country’s economic problems (see below). A professor at the University of Vienna, Carl Menger (1840-1921), founded the Austrian School of Economics, which is named for its country of origin. (Government officials and economists in Austria do not follow or endorse “Austrian Economics.”) This branch of economics studies the action of individuals in the marketplace and puts forward a subjective theory of value. It explores important subjects like marginal utility (the amount of benefit derived from consuming one additional unit of a product or service, a concept that debunks the labor theory of value), moral hazard (where being covered against loss increases risk taking – executives at the leading investment banking and securities firm, Goldman Sachs, make a bad, multibillion dollar investment in AIG, and the government, i.e., U.S. taxpayers, bails them out), and malinvestments (making the wrong kind of investments, like building too many shopping malls, encouraged by Fed-set artificially low interest rates). Austrian economists don’t spin their wheels constructing mathematical models of the economy on a large, “macroeconomic” scale, something that Keynesian economists like to do and which have little bearing on the real world of human action. In contrast to pump-priming, big government Keynesianism, Austrian economics stresses the importance of free markets and a stable currency for economic calculation and setting prices.

Starting at a young age, Americans need to learn the basics of Austrian Economics and appreciate how it restores economic health. But government schools do not teach Austrian economics or the concomitant Jeffersonian vision of individual liberty. These subjects make a compelling case for limited government and are thus politically incorrect.

The primary role of government schools, where 90 percent of U.S. children are educated, is to inculcate, in the words of John Calvin, “the duty of obedience to rulers.” Government-employed bureaucratic officials determine what political and economic ideas children are to be taught. Compulsory government schooling has become a zero-tolerance, one-size-fits-all, dumbed-down operation that focuses on social engineering rather than on learning and individual achievement. James Ostrowski, in Government Schools Are Bad for Your Kids, puts it this way: “[The government school] produces barely literate, historically ignorant, uncultured lovers of big government.” Sadly, public schools have evolved into prison-like indoctrination centers that children and adolescents in the Y Generation currently endure – six and seven hours a day for thirteen years. For a sobering assessment of what our nation’s public schools have turned into, watch the online documentary on tagtele.com titled “War on Kids,” available HERE.

Nevertheless, there is reason for hope.

The outpouring of support by young people for Ron Paul is truly heartening. In Texas, for example, students at the Hudson Middle School in Hudson overwhelmingly cast ballots for Ron Paul in the school’s mock GOP primary, “after spending weeks studying the candidates’ views on the issues and watching debates among the hopefuls” according to a newspaper account, which reported: “They liked Paul’s anti-war stance, as well as his willingness to talk straight and not attack his opponents to make a point. ‘He’s just like this down-to-earth dude who just seems like he knows what he’s doing,’ seventh-grader Danielle Heidkamp said.”

Generation Y members like Danielle will carry the Ron Paul banner forward. The Y Generation is also named the “Millennial Generation,” coming of age as it is at the beginning of a new millennium. This generation must cope as young adults with the unfolding global financial crisis. When the Baby Boomer generation was growing up in the 1950s and 60s U.S. government debt increased $2.5 Billion a year. Life was good. Today, with the Millennial Generation coming of age, U.S. government debt increases by $2.5 Billion every 16 hours.

After the housing boom peaked in 2006 and foreclosures began to mount, the so-named “Millennial Crisis” began in February, 2007 when the Federal Home Loan Mortgage Corporation (Freddie Mac) announced that it would no longer buy subprime mortgages or mortgage-related securities (collateralized debt obligations). The Y Generation facing this crisis today bears some likeness to the GI Generation, born at the beginning of the last century (1901-1924), who became young adults during the last big crisis in U.S. history, the Great Depression and World War II. Strauss and Howe see the GI and Y generations as both manifesting a “Hero” archetype – can-do heroes and competent pragmatic managers who possess confidence and optimism.

Strauss and Howe name Generation X the “13^th Generation” because it is the thirteenth one to call itself “American,” beginning with the Awakening Generation born 1701-1723. The Glorious Revolution (Revolution of 1688) brought this about, which dethroned King James II and led Parliament to pass the 1869 English Bill of Rights, called “An Act declareing the Rights and Liberties of the Subject and Setleing the Succession of the Crowne.” This Act enabled people in the American colonies, emboldened by the Boston Revolt and this Bill of Rights, to see themselves as distinctly American and not servile British subjects.

Progressives view human history as a linear process. Beginning with Theodore Roosevelt and Woodrow Wilson early in the last century, progressives have sought to expand government power and use it to effect what they consider to be beneficial social, political, and economic change. They are notable for launching the FED, an income tax, World War I, Prohibition, and the New Deal. Linear thinkers, which include politicians, the mainstream media, and CEOs of big corporations, work to maintain the status quo and their power and wealth. Rather than progress in a linear fashion, however, human history has a more seasonal, cyclical nature. As Mark Twain observed, “It is not worthwhile to try to keep history from repeating itself, for man’s character will always make the preventing of the repetitions impossible.” Twain is also alleged to have said something like, “Although history doesn’t repeat itself, it often rhymes” (source unknown). Whatever “rhyme” or “repetition” that might have helped bring about the Millennial Crisis, having a linear-thinking progressive president will only serve to make things worse. That includes President Obama and all the Republican presidential candidates except Ron Paul. He alone knows what is really going on, understands it, predicted it, and knows how best to deal with it.

Not counting the earlier crisis that caused the colonial Glorious Revolution and its Boston Revolt (1675-1704), there have been four crises in American history: the American Revolution (1773-1704), followed 66 years later by the Civil War (1860-1865), 64 years later by the Great Depression and World War II (1929-1946), and 61 years later by the current Millennial Crisis (2007-?). Each crisis has been worse than the previous one. There were 25,000 deaths in the American Revolution. Some 600,000 to 800,000 people died in the Civil War. And in World War II 50 to 70 million people died (civilian and military). In the American Revolution hyperinflation of the Continental Dollar rendered it worthless, and in the Civil War the Confederate Dollar suffered the same fate.

In The Fourth Turning, William Strauss and Neil Howe predicted, in 1997 when the book was published, that the next period of crisis in our country’s history, the “Fourth Turning” (following the first three crises) which they named the Millennial Crisis, would begin in 8 to 10 years. They were spot-on predicting when it would begin, 10 years later (in 2007), and this is what they say about its course:

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. Thus might the next Fourth Turning end in apocalypse – or glory. The nation could be ruined, its democracy destroyed, and millions of people scattered or killed. Or America could enter a new golden age, triumphantly applying shared values to improve the human condition. The rhythms of history do not reveal the outcome of the coming Crisis [the one we are experiencing now]; all they suggest is the timing and dimension.”

One thing is certain. This crisis, now in its 6^th year, will not be over anytime soon. How bad it becomes will depend on whether or not our country heeds the teachings of Ron Paul and his advocates.

Unfortunately, the establishment media tries to ignore Ron Paul and pretend he doesn’t exist. Jon Stewart, on The Daily Show, skewers the media’s talking heads on this score, asking “How did Ron Paul become the 13^th floor in a hotel?” in “John Stewart Shows How Ron Paul Is Feared By The NWO Mafia Controlled Mainstream Media,” which can be seen on YouTube HERE. But other wiser heads can see and appreciate his true worth.

Bill Buckler, Captain of the financial newsletter The Privateer, published in Australia, has this to say about Ron Paul:

“Dr. Paul’s great and merited attractiveness to a growing number of admirers has a very simple source. He is that rarest of creatures – a FREE man. He is beholden to nobody. He has developed his ideas and his convictions over a long and fruitful life of independent thinking. He does not compromise. He homes in on the fundamental issue and principle of any political issue and serves it up without salt or other ‘seasoning.’ He says what he means and he means what he says. He is the living embodiment of the ‘dream’ that most Americans have long since given up on as they saw it slip further and further beyond their grasp. He is the only prominent person who is doing everything he can to turn the non-debate which masquerades as the ‘mainstream’ in the US and global political economy into something of substance. That, far more than presidency, is his goal.”

Ron Paul wants to legalize freedom and have the government stop punishing people for using the freedom that is rightfully theirs (as long as you, of course, do not encroach on other persons and their property). All the other leading candidates who want to be elected president are pro-big government and seek power. Mitt Romney is Wall Street’s Republican candidate, with the investment banking and securities firm Goldman Sachs being his biggest contributor. There is little difference between Mitt Romney and Barack Obama, except perhaps that Romney is even more pro-war than is Obama. I highly recommend Andrew Napolitano’s YouTube video “Judge Napolitano What if the Government Has Been Lying to You” where he portrays Republicans (excluding Ron Paul) and Democrats as “two wings of the same bird of prey.”

Ron Paul is different. As the YouTube video What Is It About Ron Paul? affirms,

“Once you get hooked on Ron Paul you can no longer bear listen to a man who wants power. You become instantly disgusted whenever they begin to speak. Before they were just boring, but now they’re revolting. Listening to a Romney, or a Gingrich, or a Bush, or Obama makes you sick; and you just don’t understand how Ron Paul can get through those debates without getting nauseous. You see a political veneer in these politicians that is so transparent, like a ghost flapping its ethereal tongue at you.”

A poster shown in the video states, “Once you get hooked on Ron Paul you can no longer bear to listen to a man who wants power.”

People all over the world are getting hooked on Ron Paul. A Canadian citizen, Terry Neudorf, for example, writes this in a blog titled “Ron Paul Shakes the World”:

“When the name Ron Paul is mentioned to my grandchildren, a smile will creep across their faces, and they will recall, and speak with excited tones about a time where an idea was born, a message was spread, and a revolution took hold that shook the world. That’s the time I’m living in right now. I will treasure every moment. Thanks for all you do.”

Young Americans are joining The Ron Paul Movement, like those manning phone banks to promote and raise funds for his campaign. (Don’t expect Goldman Sachs to contribute any money to Ron Paul’s campaign.) Leaders of the X and Y Generations allied with Ron Paul are our best hope for the future – and for coming through the Millennial Crisis without war. A third world war, with nuclear weapons in play, could well prove to be even more devastating than was World War II. But even if he is not elected president, all is not lost. Like Obi-Wan Kenobi, Ron Paul’s spirit and teachings will live on and guide a new generation of Luke Skywalkers, including his son, X-Generation Rand Paul, to lead our country safely through this time of economic and social peril.

The Austrian Cure for Economic Illness

Dr. Paul’s Austrian treatment for the Millennial Crisis comprises six parts:

1) End the Fed – close down the central bank. “Unplug the machinery of the Fed,” as Ron Paul puts it in his book End the Fed (see also the other three books he has written on government and liberty in “Suggested Reading” below). The market must be free to set interest rates without a central bank artificially lowering them and inflating the money supply. Banks should once again exist as free-enterprise institutions without privileges or bailouts from the state. ATMs, Web-based systems of funds transfer like PayPal, and online trading can function perfectly well without a Fed. 2) Restore sound money to the economy – privatize the country’s monetary system, abolish legal tender laws, and allow the free market to determine the forms of money it prefers.3) Lower taxes and cut government spending – close military bases that the U.S. maintains in more than 130 countries around the world and bring the troops home; defund unconstitutional departments like Education, Housing and Urban Development, Agriculture, etc.; abolish the personal income tax. 4) No bailouts – the economy needs to liquidate all the malinvestments and mistakes made during the boom in order to be able to move on and recover from the bust.5) Allow prices and wages to fall to levels the market sets – propping up prices stifles recovery, as the Great Depression proved. 6) Regulate the government, not private property and markets – entrepreneurs and investors will only make long-term investments that spur recovery and boost employment if they feel that their property is secure. (Fifteen cabinet-level departments control different parts of the economy, along with 100 federal regulatory agencies that have produced more than 81,000 pages of regulations, not including those set by state and local governments.)

Disclosure:

Like Ron Paul, I am a member of the Silent Generation.

Suggested Reading:

Articles

Ron Paul. “Mises and Austrian Economics: A Personal View” (1984. 23 pages. Ludwig von Mises Institute)
Murray N. Rothbard. “To Save Our Economy From Destruction” (The Freeman, 1995. Reprinted on LewRockwell.com)
Llewellyn H. Rockwell, Jr. “Why Austrian Economics Matters” (1995. Ludwig von Mises Institute)
Llewellyn H. Rockwell, Jr. “Money and Our Future” (2009. LewRockwell.com)
Donald W. Miller, Jr. “A Fourteen Point Plan for a Post-Wilsonian America” (September 28, 2001. LewRockwell.com)
Donald W. Miller, Jr. “The Austrian Cure for Economic Illness” (June 2, 2008. LewRockwell.com)

Books

By Ron Paul

Pillars of Prosperity: Free Markets, Honest Money, Private Property (2008, Ludwig von Mises Institute)
The Revolution: A Manifesto (2008. Grand Central Publishing)
End the Fed (2009. Grand Central Publishing)
Liberty Defined: 50 Essential Issues That Affect Our Freedom (2012. Grand Central Publishing)

Others

F.A. Hayek. The Road to Serfdom: Text and Documents–The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) (1944, Reprinted 2007. University of Chicago Press)
Ludwig von Mises. Omnipotent Government: The Rise of the Total State and Total War (1944, Reprinted 2011. Liberty Fund, Inc.)
Murray N. Rothbard. What Has Government Done to Our Money? and The Case for a 100 Percent Gold Dollar (1963, 1962, Reprinted 2005. Ludwig von Mises Institute)
William Strauss and Neil Howe. The Fourth Turning: An American Prophecy (1997, Broadway Books)
Adam Ferguson. When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany (1975, Reprinted 2010. Public Affairs. Also available for free download from the Ludwig von Mises Institute)
Thomas E. Woods, Jr. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse 2009, Regnery Publishing)
Thomas E. Woods, Jr. Rollback: Repealing Big Government Before the Coming Fiscal Collapse (2011, Regnery Publishing)

February 9, 2012

Donald Miller (send him mail) is a cardiac surgeon and Professor of Surgery at the University of Washington School of Medicine in Seattle. He is a member of Doctors for Disaster Preparedness and writes articles on a variety of subjects for LewRockwell.com. His web site is www.donaldmiller.com

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THE SHALLOWEST GENERATION (Oldie but Goodie)

WHAT AN AWESOME THREAD. RE, SMOKEY & LLPOH (ALL BOOMERS) HAVE SINCE THROWN IN THE TOWEL AFTER BEING PULVERIZED BY ADMIN. BOOMERS DO TEND TO BE QUITTERS.

Originally posted on Seeking Alpha in October 2008. It received 278 comments, most of which were crying Boomers making excuses and screaming that it wasn’t their fault. Accept responsibility for your actions Boomers. Grow a pair and man up.

The Baby Boom Generation will never be mistaken for the Greatest Generation that survived the Great Depression and defeated evil in a World War that killed 72 million people. I hate to tell you Boomers, but putting a yellow ribbon on the back of your $50,000 SUV is not sacrifice.

Our claim to fame is living way beyond our means for the last three decades, to the point where we have virtually bankrupted our capitalist system. Baby Boomers have been occupying the White House for the last sixteen years. The majority of Congress is Baby Boomers. The CEOs and top executives of Wall Street firms are Baby Boomers. The media is dominated by Baby Boom executives and on-air stars. We have no one to blame but ourselves for the current predicament. Blaming Franklin Roosevelt or Lyndon Johnson for our dire situation is a cop out. Baby Boomers had the time, power, and ability to change our course. We have chosen to leave the heavy lifting to future generations in order to live the good life today.

Of course, not all Baby Boomers are shallow, greedy, and corrupt. Mostly Boomers with power and wealth fall into this category. There were 76 million Baby Boomers born between 1946 and 1963. They now make up 28% of the U.S. population. Their impact on America is undeniable. The defining events of their generation have been the Kennedy assassination, Vietnam, Kent State, Woodstock, the 1^st man on the moon, and now the collapse of our Ponzi scheme financial system. They rebelled against their parents, protested the Vietnam War, and settled down in 2,300 square foot cookie cutter McMansions with perfectly manicured lawns, in mall infested suburbia. They have raised overscheduled spoiled children, moved up the corporate ladder by pushing paper rather than making things, lived above their means in order to keep up with their neighbors, bought whatever they wanted using debt, and never worried about the future. Over optimism, unrealistic assumptions, selfishness and conspicuous consumption have been their defining characteristics.

click to enlarge images

Boomers are currently in their prime earning and spending years. A Baby Boomer turns 50 years old every 7 seconds. The older Boomers had a fantastic run from 1989 through 2004. Median net worth for those between the ages of 55 and 59 rose 97% over 15 years to $249,700 in 2004. Median income rose 52%. The younger generation between the ages of 35 and 39 saw their median net worth fall 28% to $48,940. Their median income dropped 10% over the same 15 year period. It is clear that all Baby Boomers are not created equal. Based on calculations made by the Federal Reserve, at least 50% of Boomers will not have a happy retirement. The bottom 30% will reach the age of 65 with net worth of less than $100,000. They will try to subsist in poverty, dependent upon social security and part time Wal-Mart jobs until they die penniless. The top 30% will retire to lives of luxury and leisure. The middle 40% will muddle through with social security payments the only thing keeping them from an old age in poverty.

We have become a have and have not society. Our economy favors education, entrepreneurship, and creativity. Those benefitting from a good education will make dramatically more money than the uneducated laborers. The top 20% of households make 12.5 times the lowest 20% of households. This ratio was 7 to 1 in 1982. The top 1% of households make 20% of all the income in the U.S., the highest rate since 1928. Does this statistic portend a decade long depression? The difference between now and 1928 is the huge household debt burden of Americans. This usage of debt by the poor has masked the gap between haves and have nots for the last 20 years.

As I drive to work every day in my fully paid for 2002 CRV with 110,000 miles, I have plenty of time to observe my surroundings. Sitting in traffic on the Schuylkill Expressway, I have noticed that the number of luxury Mercedes, BMW, Cadillac and Lexus vehicles seems out of proportion to the number of wealthy people in the Philadelphia population.

When I see an older gentleman, wearing a suit, driving one of these automobiles, I assume that he is a wealthy executive who has put in his time and rewarded himself with a luxury vehicle. But, most of these vehicles are being driven by Joe the Plumber types. As I take a shortcut through some of the more depressed areas of West Philadelphia, I see people talking on their Apple (AAPL) iPhones, Direct TV satellite dishes attached to dilapidated row homes, and Cadillac Escalades & Mercedes parked on the mean streets. This is not exactly the world that Henry Fonda’s character, Tom Joad, described in The Grapes of Wrath:

I’ll be all around in the dark – I’ll be everywhere. Wherever you can look – wherever there’s a fight, so hungry people can eat, I’ll be there. Wherever there’s a cop beatin’ up a guy, I’ll be there. I’ll be in the way guys yell when they’re mad. I’ll be in the way kids laugh when they’re hungry and they know supper’s ready, and when the people are eatin’ the stuff they raise and livin’ in the houses they build – I’ll be there, too.

When I see “poor” people appearing to live a more luxurious life than myself, I don’t feel jealous. The thought that goes through my head is: Which banks or finance companies were foolish enough to loan these people the money to live this lifestyle? These foolish financial institutions will never get their loans repaid. What does bother me is that the Bush-Paulson-Pelosi Bailout of Stupid Banks will use my taxes to buy these bad loans from the foolish banks.

So, who is the fool in this scenario? The “poor” person got to drive a Cadillac Escalade for a period of time, the foolish banks got bailed out, the bank CEOs took home $30 million, and I lived within my means and footed the bill for the reckless actions of others. It appears that the fools are the Americans who lived their lives according to the rules. The anger is building. I don’t think the politicians running this country realize what true anger looks like. They are used to Americans being herded along like passive sheep.

I’ve heard many Republican ideologues blame the current crisis on the people who took the subprime loans for home purchases. I’ve also heard many Democratic ideologues blame the crisis on the regulators. The ideologues are wrong, as usual. If a poor person has no home, no vehicle, and no prospects; then a bank tells them that they can buy a $300,000 home, drive a $55,000 Mercedes SUV, and live like people on TV; why wouldn’t they say yes? What is their downside? If you have nothing and “The Man” offers you the American Dream, you’d actually be foolish to say no. Now that they have lost the home in foreclosure and the repo man has taken the Mercedes, they are exactly where they were a few years ago with no home, no vehicle and no prospects.

The regulators were certainly asleep at the wheel. They did not enforce existing rules, foolishly waived leverage rules for the biggest investment banks, and believed that the banks would regulate themselves. They were wrong, but they never made a single loan. The commercial banks, investment banks, auto finance companies, and credit card companies made the ridiculous loans to people who could never pay them back in the search for short term profits. Greedy Wall Street executives created an artificial market for the loans in order to generate billions in fees so they could enrich themselves through stock options and obscene bonuses. They spent their false riches on $2 million NYC penthouses, $100,000 Porsche 911s, and $5 million beachfront estates in the Hamptons. Based on the estimated $2 trillion of losses that our banks have generated, the CEOs certainly deserved annual pay 500 times as high as the average worker. There is no way an “average” worker could possibly be talented enough to lose $2 trillion. You would need to be truly extraordinary to lose that much.

CEOs’ average pay, production workers’ average pay, the S&P 500 Index, corporate profits, and the Federal minimum wage, 1990-2005 (adjusted for inflation):

Source: Executive Excess 2006, 13^th annual CEO Compensation Survey

The brutal necessary lesson that should have been learned is that if you loan money to people who can’t pay you back, your bank will go bankrupt. The “poor” people who made a bad decision in buying homes and cars they couldn’t afford have lost those homes and cars. The banks made a bad business decision in making those loans. The taxpayer was not involved in these business transactions. This is where Hank Paulson, Ben Bernanke and George Bush, formerly free market capitalists, decided to commit our grandchildren’s money to bailing out the horribly run financial institutions.

Our government has chosen to allow these banks off the hook for their bad business decisions at the expense of taxpayers. Rewarding bad decisions and bad behavior will lead to more bad decisions and more bad behavior. The government has made a dreadful decision that will haunt our country for generations. Now the Federal Reserve has lowered interest rates to 1% again. This is where this horrible nightmare started. The massive printing of currency throughout the world will ultimately lead to a hyperinflationary bust. The law of unintended consequences can be devastating.

Early in the 1^st Reagan administration, Americans saved 12% of their income and household debt as a percentage of GDP was 63%. In 1980, the oldest Baby Boomers turned 34. They entered their prime earnings and spending years. This is when something went haywire with our great country. Deficit spending became fashionable for government, corporations and individuals. Dick “deficits don’t matter” Cheney was probably in his glory as the country ran up deficits of money, morals, and brains. The Boomers and our government chose to try and borrow and spend their way to prosperity. As we now know, Mr. Cheney’s advice about deficits not mattering was about as good as his belief that you can fire a shotgun in any direction without implications. The Boomer generation has freely made choices over the last quarter century that has brought us to the brink of a second Great Depression.

During the current Bush administration, Americans’ savings rate actually went below zero, while household debt as a percentage of GDP soared above 130%, a doubling in 25 years. These figures prove that the apparent prosperity of the last 25 years was an illusion. Beginning in 1982, Baby Boomers chose to take the easy road. Saving, investing and living within your means were cast aside as “Old School”. Boomers were handed a better future through the blood, sweat and tears of the “Greatest Generation”. Through their hubris, they’ve squandered that better future, the future of their children and imperiled our entire capitalist system. Between 1989 and 2007, credit-card debt soared from $238 billion to $937 billion, a 300% increase. Household liabilities that are in delinquency or default totaled $775 billion at the end of June, according to CreditForecast.com data. This is equal to 7.5% of all U.S. household debt, up from 3% just two years ago.

In the last five years, our live-for-today Boomers sucked over $3 trillion of equity out of their homes to fund their selfish lifestyles. At the end of June, there were 2.72 million mortgage loans in default at an annualized rate. For all of 2008, defaults will hit 3 million, up from approximately 1.5 million in 2007, and 1 million in 2006.

What “essentials” do the Boomers invest all this borrowed money in every year? The U.S. Census bureau provides the answers:

$200 billion on furniture, appliances ($1,900 per household annually)
$400 billion on vehicle purchases ($3,800 per household annually)
$425 billion at restaurants ($4,000 per household annually)
$9 billion at Starbucks (SBUX) ($85 per household annually)
$250 billion on clothing ($2,400 per household annually)
$100 billion on electronics ($950 per household annually)
$60 billion on lottery tickets ($600 per household annually)
$100 billion at gambling casinos ($950 per household annually)
$60 billion on alcohol ($600 per household annually)
$40 billion on smoking ($400 per household annually)
$32 billion on spectator sports ($300 per household annually)
$150 billion on entertainment ($1,400 per household annually)
$100 billion on education ($950 per household annually)
$300 billion to charity ($2,900 per household annually)

The priorities of our Boomer led society are clearly born out in the above figures. We spend more eating out than we give to charity. We spend as much on big screen TVs and stereos as we do on education. This may explain why 37 million (12.5%) of all Americans live in poverty and our high school students trail the students of 25 other countries (including Latvia) in science and math knowledge. Our school system processes many more clueless morons who don’t know the candidates for President, versus intelligent, thoughtful, hard working, driven young people. The $160 billion spent on gambling is indicative of the get rich quick without hard work attitude of the Boomer generation. Even worse, households with income under $13,000 spend, on average, $645 a year on lottery tickets, about 9 percent of all their income. Our government feeds this addiction by siphoning off billions in taxes from these gambling revenues to redistribute as they see fit.

What the data proves is that Boomers love to shop and eat, whether they have the money or not. The top 100 retailers in the U.S. have 250,000 stores that generated $1.7 trillion of sales last year. How could America function without 31,000 McDonalds, 35,000 KFCs, Taco Bells, & Pizza Huts, 15,000 Starbucks, 7,000 Wal-Marts, 2,000 Home Depots, 4,000 K-Marts/Sears, and 8,000 Blockbusters? There are 91,000 shopping centers in the United States. The Advertising industry spends $275 billion per year to convince you to spend money you don’t have for things you don’t need. This generation lacks self control, morals, a work ethic, and savings ethic. Based on the recent actions of our government and corporate leaders, we seem to lack any ethics at all. It is immoral for the Boomer generation to run up $53 trillion in unfunded future liabilities in Social Security, Medicare and Medicaid to leave as our gift to future generations, while we live it up today. Optimists like to point out that Europe and Japan have much worse unfunded liability problems than the U.S. That is like taking pride in being the best looking horse at the glue factory. In the end, we’ll all still be glue.

The 25 year Boomer borrowing and spending binge is coming to an end. The hangover will be really bad. The Federal Reserve and Treasury are trying to keep the frat party going, but everyone is passed out on the floor. The Case Shiller housing data shows that the 20 largest cities have experienced an average 20% decline in price from their peaks. The futures index predicts a further 10% to 15% loss in value. There are 75 million owned homes in the U.S. One in six, or 12 million homeowners, owe more than the house is worth. With further expected losses, 20 million homeowners will eventually be underwater on their mortgage. In California, where home price declines will be 40% to 50%, half the homeowners in the State will owe more than the house is worth.

If you are one of these homeowners and can afford the mortgage payment, time will eventually bail you out. If you can’t afford the mortgage payment, you should lose the house to someone who can make the payment. This is the failure side of the creative destruction that is true capitalism. If the government steps in to subsidize and eliminate failure, the system will ultimately collapse.

Part two of the great Boomer credit contraction will be the collapse of credit card companies who have mailed out 27 billion credit card offers in the last five years. They are now reaping what they have sown. As Boomers could no longer borrow from their homes, they switched to credit cards to make mortgage payments and car payments. That well is running dry. The losses to card companies will make the losses in 2000 to 2002 seem like good times. Losses in the 1^st half of 2008 soared to $21 billion. Losses are expected to total $55 billion in the next year and a half. This brings me to the latest outrage perpetrated upon the U.S. citizens by Hank Paulson and his Treasury cronies.

The credit card industry, which collects 23% interest and $12 billion in late fees from consumers, is lining up to get their piece of the $700 billion bank handout. Capital One (COF) has just received a $3.6 billion injection from the American taxpayer, one week after projecting that their write-offs will be $7.2 billion in the next twelve months. This will allow them to send another million offers to more people who shouldn’t have a credit card. Why not? The taxpayer will pay, if the losses are too high. Why aren’t the pundits on CNBC outraged at this misuse of taxpayer money? Would the bankruptcy of Capital One hurt our country in any way?

The Great American Empire has begun its long slow decline. It may take a few generations to reach its nadir, but the poor decisions already made and crucial decisions postponed in the last 25 years by our Boomer dominated leadership has put our country on a path to a declining standard of living. The U.S. is like a punch drunk ex-champion boxer who still thinks he has what it takes, but is living off his old press clippings. He lived the good life, got fat and didn’t do the hard work required of a champion. A slew of young brash fighters are itching to take him down. It is just a matter of time.

In our heyday during the 1950s, manufacturing accounted for 25% of GDP. In 1980 it was still 22% of GDP. Today it is 12% of GDP. By 2010 it will be under 10% of GDP. Our Government bureaucracy, which contributes nothing to the advancement of our society, now is a larger portion of GDP than manufacturing. Services such as banking, retail sales, transportation, and health care now account for two-thirds of the value of U.S. GDP. We have become a nation of bureaucratic paper pushers. Past U.S. generations invented the airplane; invented the automobile; discovered penicillin; and built the Interstate highway system. The Baby Boom generation has invented credit default swaps; mortgage backed securities; the fast food drive thru window; discovered the cure for erectile dysfunction; and built bridges to nowhere. No wonder we’re in so much trouble.

Now that I have laid out our bleak future, I can tell you that, like Dickens’ Christmas Carol, this is only a vision of what might be. There is time to change our course before our ship wrecks on a jagged reef. David M. Walker, former Comptroller of the United States, at a recent Fiscal Wake Up Tour at the University of Pennsylvania, described what has been happening in this country for the last 25 years in one word – laggardship. The last six months have been a perfect example of laggardship. Our leaders have floundered from crisis to crisis, overreacting and blustering rather than leading. True leaders are proactive, not reactive. After not addressing our energy policy for decades, as soon as oil reached $140 a barrel, Congress lurched into action so their constituents would think they were leading. As our financial system has imploded, government “leaders” have flailed about with one rescue package after another and Congress looks for scapegoats. Meddling, tinkering, and non-enforcement of rules by Congress and other government bureaucracies caused the crisis that they are reacting to. Government creates the problems and then assumes even more power over our lives with their ridiculous “solutions”.

No one in Washington has shown an ounce of leadership in decades. True leadership requires strength of character, clear vision to see the future as it is, the bravery to make unpopular decisions, and the honesty to tell the public the unvarnished truth based on the facts.

The facts are: we have a $10.5 trillion national debt; $53 trillion of unfunded liabilities; a military empire that has U.S. troops in 117 countries and has spent $700 billion on a pre-emptive war that has killed over 4,000 Americans; a $60 billion trade deficit; an annual budget deficit that will exceed $1 trillion in the next year; a crumbling infrastructure with 156,000 structurally deficient bridges; almost total dependence on foreign oil; and an educational system that is failing miserably. We can not fund guns, butter, banks and now car companies without collapsing our system.

I truly hope that President Obama can rise to the occasion and become a true statesman and leader. David Walker lays out our dilemma:

The regular order in Washington is broken. We must move beyond crisis management approaches and start to address some of the key fiscal and other challenges facing this country if we want our future to be better than our past. Our fiscal time bomb is ticking, and the time for action is now!

Ultimately, it is up to the Baby Boom generation to change our country’s course. The oldest Boomer is 62 years old and the youngest 45 years old. It is time for Boomers to take a hard look in the mirror and rethink their priorities. It is time to cast aside the $88,000 Range Rovers, $1,200 Jimmy Choo boots, $5,000 Rolex watches and daily double lattes at Starbucks. It is time to live within your means, distinguish between needs and wants, reduce debt, save 10% of your income, make sure your kids get a good education, not try and keep up with the Joneses, show compassion for your fellow man, and possibly pay more taxes and get less benefits, for the good of the country. We must support true leaders like [former Comptroller General] David Walker and get rid of the old time corrupted politicians who want to keep the status quo. Texas Congressman Ron Paul gives the blunt truth that a true leader is willing to give:

Our government has lived beyond its means for decades. We now face a crucial juncture, at which we determine whether to continue down the path of debt, inflation, and government intervention or choose to return to the economics of the free market, which have been ignored for almost a century. Increased debt leads to higher taxes on future generations, while increased inflation diminishes the purchasing power of American families and destroys the dollar. No society has ever been achieved prosperity through indebtedness or inflation, and the United States is no exception. We cannot afford to continue our current policies of monetary expansion and unending bailouts. Unless we return to sound monetary policy, sharply reduce government expenditures, and realize that the government cannot act as a lender of last resort, we will drive our economy to ruin.

The Baby Boom generation has one last chance to change the course of U.S. history, keep us from wrecking in a storm of debt on the approaching jagged reef and shed the title of “Shallowest Generation”.

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ILLUSION OF RECOVERY – FEELINGS VERSUS FACTS

“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.” – Ludwig von Mises

The last week has offered an amusing display of the difference between the cheerleading corporate mainstream media, lying Wall Street shills and the critical thinking analysts like Zero Hedge, Mike Shedlock, Jesse, and John Hussman. What passes for journalism at CNBC and the rest of the mainstream print and TV media is beyond laughable. Their America is all about feelings. Are we confident? Are we bullish? Are we optimistic about the future? America has turned into a giant confidence game. The governing elite spend their time spinning stories about recovery and manipulating public opinion so people will feel good and spend money. Facts are inconvenient to their storyline. The truth is for suckers. They know what is best for us and will tell us what to do and when to do it.

The false storyline last week was the dramatic surge in new jobs. This fantastic news was utilized by the six banks that account for 80% of the stock market trading to propel the NASDAQ to an eleven year high and the Dow Jones to a four year high. The compliant corporate press did their part with blaring headlines of good cheer. The entire sham was designed to make Joe the Plumber pull out one of his 15 credit cards and buy a new 72 inch 3D HDTV for this weekend’s Super Bowl. When you watch a CNBC talking head interviewing a Wall Street shyster realize you have the 1% interviewing the .01% about how great things are.

What you most certainly did not hear from the MSM is that the NASDAQ is still down 42% from its 2000 high of 5,048. None of the brain dead twits on CNBC pointed out the S&P 500 is trading at the exact same level it reached on April 8, 1999. Twelve or thirteen years of zero or negative returns are meaningless when a story needs to be sold. On Friday the hyperbole utilized by the media mouthpieces was off the charts, leading to an all-out brawl between the critical thinking blogosphere and the non-thinking “professionals” spouting the government sanctioned propaganda. Accusations flew back and forth about who was misinterpreting the data. I found it hysterical that anyone would debate the accuracy of BLS (Bureau of Lies & Swindles) data.

The drones at this government propaganda agency relentlessly massage the data until they achieve a happy ending. They use a birth/death model to create jobs out of thin air, later adjusting those phantom jobs away in a press release on a Friday night. They create new categories of Americans to pretend they aren’t really unemployed. They use more models to make adjustments for seasonality. Then they make massive one-time adjustments for the Census. Essentially, you can conclude that anything the BLS reports on a monthly basis is a wild ass guess, massaged to present the most optimistic view of the world. The government preferred unemployment rate of 8.3% is a terrible joke and the MSM dutifully spouts this drivel to a zombie-like public. If the governing elite were to report the truth, the public would realize we are in the midst of a 2nd Great Depression.

The unemployment rate during the Great Depression reached 25%. Without the BLS “adjustments” the real unemployment rate in this country is 23%. Cheerleading and packaging the data in a way to mislead the public does not change the facts:

There are 242 million working age Americans. Only 142 million Americans are working. For the math challenged, such as CNBC analysts, that means 100 million working age Americans (41.5%) are not working. But don’t worry, the BLS says the unemployment rate is only 8.3%. Things are going so swimmingly well in this country the other 33.2% are kicking back enjoying the good life.
The labor force participation rate and employment to population ratio are at 30 year lows. The number of Americans supposedly not in the labor force is at an all-time record of 87.9 million. A corporate MSM pundit like Steve Liesman would explain this away as the Baby Boomers beginning to retire. Great storyline, but the facts prove that old timers are so desperate for cash they have dramatically increased their participation in the labor market.

The data being dished out by the government on a daily basis does not pass the smell test. The working age population since 2000 has grown by 30 million people. The number of people working has grown by only 4.7 million. A critical thinker would conclude the unemployment rate should be dramatically higher than the reported 8.3%. But the government falsely reports the labor force has only increased by 11.8 million in the last eleven years. They have the gall to report that 17.9 million Americans just decided to leave the workforce. The economy was booming in 2000. It sucks today. Don’t more people need jobs when times are tougher? The Boomers retiring storyline has already proven to be false. The fact that 46 million (15% of total population) people are on food stamps is a testament to the BLS lie. A look at history proves how badly the current figures reek to high heaven:

2000 to 2011 – Not in Labor Force increased by 17.9 million.
1990’s – Not in Labor Force increased by 5 million.
1980’s – Not in Labor Force increased by 1.7 million.

The Not in the Labor Force category is utilized to hide how bad the employment situation in this country really is. They conclude that 17 million out of 38 million Americans between the ages of 16 and 24 are not in the labor force. That is complete bullshit. From the time I turned 16, I worked. Everyone I knew worked. I worked through high school and college. It is a lie that 45% of these people don’t want a job. If you dig into their data, you realize the horrific state of employment in this country:

74% of 16 to 19 year olds are not employed
85% of black 16 to 19 year olds are not employed
31% of black 25 to 54 year old men are not employed
40% of 20 to 24 year olds are not employed
22% of 25 to 29 year old males are not employed
22% of 50 to 54 year old males are not employed
According to the BLS, 11% of men between 25 and 54 are not in the labor force

Not only is real unemployment at Depressionary levels, but those that do have jobs are falling further and further behind. Wages have gone up less than 2% in the last year and have been rising at an annual rate below 3% for the last four years. According to our friends at the BLS, inflation has risen 3% in the last year. This is almost as ludicrous as their unemployment rate. Anyone living in the real world, as opposed to the BLS model world, knows that inflation on the things we need to live has been rising in excess of 10%. It is a fact that if you measure CPI exactly as it was measured in 1980, at the outset of our great debt inflation, it exceeds 10% versus the fake 3% reported without question by the MSM to a non-thinking public. A poor schmuck making the median salary of $25,000 who gets a 2% raise thinks he has $500 more to spend when in reality he has lost $2,000 of purchasing power. Federal Reserve created inflation is an insidious hidden tax that destroys the 99%, while enriching the 1%.

Until Debt Do Us Part

“Insanity is doing the same thing, over and over again, but expecting different results.” – Albert Einstein

The recovery storyline being touted by the oligarchy of politicians, bankers and media is designed to make consumers feel better. This is a key part of their master plan. Any honest assessment of the financial disaster that struck in 2008 would conclude it was caused by too much debt peddled to too many people incapable of paying it back, too few banks having too much power, the Federal Reserve keeping interest rates too low for too long, and that same Federal Reserve doing too little regulating of the Too Big To Fail Wall Street mega-banks. I wonder what Albert Einstein would think about the “solutions” rolled out to fix our debt problem. Would he find it insane that total credit market debt has actually risen to an all-time high of $53.8 trillion, up $533 billion from the previous 2008 peak? Our leaders have added $6.1 trillion to our National Debt in the last four years, a mere 66% increase. This unprecedented level of borrowing certainly did not benefit the American people, as real GDP has risen by $96 billion, or 0.7%, over the last four years.

Would Einstein find it insane that the governing elite would encourage the 4 biggest banks, that were the main culprits in creating a worldwide financial collapse, to actually get bigger? The largest banks in the U.S. now control 72% of all the deposits in the country versus 68.5% in 2008. The Too Big To Fail are now Too Bigger To Fail. Rather than liquidating the bad debts, breaking up the insolvent banks, selling off the good assets to well run banks, firing the executives, and wiping out the shareholders & bondholders foolish enough to invest in these badly run casinos, the powers that be chose to protect their fellow .01% brethren and throw the 99% under the bus.

Ben Bernanke, in conjunction with Tim Geithner and his masters on Wall Street, implemented a zero interest rate policy designed to enrich the Wall Street banks, force investors into the stock market, and encourage Americans to borrow and spend like it was 2005 again. Rather than accepting that our economy has been warped for decades, with over-consumption utilizing debt as the driving force, and allowing a reset, the Federal Reserve insanely encouraging banks and consumers to do the same thing again. We do know Bernanke has stolen $450 billion of interest income going to savers and senior citizens and handed it to Jamie Dimon, Vikrim Pandit, Lloyd Blankfein and the rest of the Wall Street cabal. The “austerity is bad” storyline is pounded home on a daily basis by the politicians, corporate chieftains, Wall Street billionaires, and MSM pundits. The definition of austere is “practicing great self-denial”. Did you see the mob scenes on Black Friday? Americans are incapable of any self-denial, let alone great self-denial, and the masters of our country will not allow it to happen. One look at our GDP figures confirms the non-austerity occurring in this country. In 2007, prior to the collapse, consumer spending accounted for 69.7% of GDP. Today, consumer spending accounts for 71% of GDP, with investment accounting for 12.7% of GDP. In the good old days of 1979 prior to the epic debt bubble, when the financial industry do not run this country, consumer spending accounted for 62% of GDP and investment accounted for 19% of GDP. What an insane concept. You spend less than you make and save the difference. You then invest that money where you can get a reasonable return (.15% in a money market account is not exactly reasonable).

As Ludwig von Mises pointed out, a false boom created by credit expansion will ultimately collapse. We had the chance in 2008 – 2009 to voluntarily abandon the Wall Street induced credit expansion and allow our country to reset. The pain and misery would have been great, especially for the 1% who own most of the stocks, bonds and peddle the debt to the ignorant masses. As you can see in the chart below, the powers that be need debt per employed American to grow at an ever increasing rate to maintain their power and wealth. The miniscule reduction in debt from 2009 to 2011 was unacceptable. The governing powers will not be satisfied until von Mises’ final currency catastrophe is achieved.

Bernanke and his Wall Street puppet masters’ plan is actually quite simple. It’s essentially a confidence game. A confidence game (also known as a con, flim flam, gaffle, grift, hustle, scam, scheme, or swindle) is an attempt to defraud a group by gaining their confidence. The people who commit such tricks are often known as con men, con artists, or grifters. The con man often works with one or more accomplices called shills, who help manipulate the mark into accepting the con man’s plan. In a traditional confidence game, the mark is led to believe that he will be able to win money or some other prize by doing some task. The accomplices may pretend to be random strangers who have benefited from successfully performing the task. Bernanke and the 1% are the con men. They are attempting to defraud the 99% by convincing them their “solutions” will benefit them. The shills acting as accomplices are Wall Street bankers, bought off economists, politicians, journalists, and mainstream media pundits. You are the mark. The game has multiple facets but is based on more freely flowing low interest easy debt. The con man has reduced interest rates to zero at the behest of his puppet masters. The Wall Street accomplices offer enticing financing to the marks for big ticket items like automobiles, furniture and electronics. As the marks go further into debt, the Wall Street shills report record earnings ($26 billion from loan loss reserve accounting entries), consumer spending rises and GDP goes higher. The mainstream media accomplices dutifully report an improving economy. The government accomplices massage the employment and inflation data and declare a jobs recovery with no inflation. The marks are supposed to feel better about the future and spend even more borrowed money. This is what is considered a self-sustaining recovery by the psychopaths running this country.

All you have to do is open your daily paper to see the confidence game in full display. Last week the MSM reported another surge in automobile sales. Our beloved American automobile manufacturers are back baby!!! Automobile sales are now pacing above 14 million on an annual basis. This is up from the depths of the recession in 2009 when the annual rate was below 10 million. We’ve breached the Cash For Clunkers level and there is nowhere to go but up. The storyline is that Obama was right to save GM and Chrysler with your tax dollars. They are now making splendid vehicles (except for the exploding Chevy Volts) and employing millions of Americans. This is a true American comeback success story. Clint Eastwood should do a commercial about it.

There is one little problem with this storyline. It’s bullshit. Remember GMAC? You bailed them out when all their subprime auto and mortgage loans went bad in 2009. They have a brand new business plan. Change your name to Ally Bank and start making as many subprime auto loans as possible. You will be happy to know that according to Experian, 45% of all auto loans being made today are to subprime borrowers. What could possibly go wrong? In addition, the average loan term has grown to almost 6 years. Executives at Ally Financial said that subprime car lending had become “very attractive” because profit margins on the loans more than cover the cost of expected losses from borrowers who fail to repay what they owe. I’m sure they have everything completely under control. Gina Proia, a company spokeswoman, said the company places “greater emphasis on the higher end of the nonprime spectrum” and only lends to people who show they can pay. I can’t believe they are restricting their loans to only people who they think can pay. I’m surprised Obama isn’t condemning them for such restrictive loan terms. If you open your paper to the auto section you will see financing offers of $0 down-payment, and 0% interest for 7 years across the board on most models. But why buy, when you can lease a luxury automobile for $300 per month? It is simply amazing how many vehicles you can “sell” when “credit challenged” Americans can rent them for seven years. I wonder if this explains why I see dozens of $40,000 luxury autos parked in front of $25,000 dilapidated hovels during my daily commute through West Philadelphia. It also seems the Big Three are “selling” a few extra vehicles to their dealers in January as pointed out by Zero Hedge. No need to let a few facts get in the way of a feel good story.

Ford month-end inventory 86-day supply at end of Jan. (492k vehicles) vs 60-day supply (466k) as of Dec. 31
Chrysler had 83-day supply (349k units) end of Jan. vs 64-day (326k units) as of Dec. 31
GM month-end inventory 89-day supply (619k units) vs 67-day supply (583k) Dec. 31

The facts prove the issuance of billions in easy credit is creating the illusion of recovery. Non- revolving (auto & student loans) consumer credit outstanding is now at an all-time high of $1.7 trillion. Even with billions in bad debt write-offs since 2009 the amount outstanding has risen by $100 billion. Does this sound like austerity is gripping the nation? The Federal government is dishing out student loans like candy, as hundreds of thousands of students get worthless degrees from for-profit diploma mills like the University of Phoenix and its ilk. By keeping them occupied in school, the government is able to keep them in the Not in the Labor Force category. Not to be outdone, our friends at GE Capital, Wells Fargo and the other too big to fail entities have been doing their part on the revolving credit side of the scam. I’ve recently been seeing an ad by the largest U.S. furniture retailer, Ashley Furniture, offering 0% interest with no payments for 7 years. I don’t know about you, but my kids destroy a couch in less than 7 years. Wells Fargo Credit doesn’t seem too worried. A critical thinker might ask, how can Wells Fargo possibly make money offering these terms? But there is the rub. Ben Bernanke is loaning Wells Fargo money at 0% so they can perpetuate the confidence game. These insane bankers truly believe they can kick start this moribund debt saturated economy by issuing billions more in debt to people incapable of repaying them. Einstein would be amused.

The McKinsey Group put out a report a couple weeks ago analyzing the amount of American household debt and optimistically concluding that it could be back on a sustainable path by 2013. Mike Shedlock pointed out that sustainable is in the eye of the beholder. It seems the bright fellows at McKinsey haven’t grasped the concept of regression to the mean. First of all their analysis is flawed because real disposable personal income is actually declining and Ben Bernanke’s master scam is working and Americans are now adding to their household debt. The little blue line has turned upwards since they gathered their data. Secondly, as Mish so accurately points out, the sustainable level of household debt is really at the levels prior to the debt bubble that began in the early 1980s. That is a debt level of approximately 70% of disposable personal income, as opposed to the current level of 110%.

The implications of household debt levels regressing to their long-term mean would be catastrophic to the 1%. Their kingdom of debt would come crashing down. Their power and wealth would be swept away. This is why it is so vital for them to create the illusion of recovery. Their confidence game is built upon an ever increasing flow of credit expansion. It will not work. There is no avoiding the final collapse of a boom created solely by credit expansion. Those in power will never voluntarily relinquish their grand game of pillaging the wealth of the nation, so economic collapse will be the ultimate result. They will continue to use propaganda, printing presses, and half-truths to further their agenda. But those who examine the facts will come to a logical conclusion that we are being sold a great lie.

“Half the truth is often a great lie.” – Benjamin Franklin

ENGINEERING CONSENT – BERNAYS & CIA KILL 200,000 INNOCENT PEOPLE

It is good to see SSS being so proud of his fine organization and his favorite President. The 200,000 Mayans sacrificed so the CIA and the U.S. could expand their Empire was worth it. There was a Cold War to be won.

It looks like Dwight Eisenhower and our patriots in the CIA liked Eddie Bernays and his propaganda methods. The long-term impact on the people of Guatemala was devastating. It seems self interest and crony capitalism existed in the 1950s too. Alan Dulles, the head of the CIA, and his brother were major shareholders in the United Fruit Company. I wonder if the CIA coup gave them a good ROI.

The operation, known by the code name Operation PBSUCCESS, lasted from late 1953 to 1954. The CIA armed and trained an ad-hoc “Liberation Army” of about 400 fighters under the command of a then-exiled Guatemalan army officer, Colonel Carlos Castillo Armas, and used them in conjunction with a complex and largely experimental diplomatic, economic, and propaganda campaign. The CIA established the Voice of Liberation radio station, located across the border in Honduras relaying programming originating in Miami, and pretended to be the spontaneous voice of patriots opposed to the elected government. The operation effectively ended the experimental period of representative democracy in Guatemala known as the “Ten Years of Spring”, which ended with Árbenz’s official resignation. Following the coup, the Guatemalan Civil War began, a civil war involving some of the most brutal counterinsurgency of its time (including years of massacres of Maya Native Americans, since characterized by Historical Clarification Commission as genocide). 40,000 to 50,000 people were disappeared during the war and approximately 200,000 were killed.

Upon deposing the Árbenz Guzmán government, Castillo Armas began to dissolve a decade of social and economic reform and legislative progress, and banned labor unions and left-wing political parties, a disenfranchisement that radicalized left-wing Guatemalans. If you’d like to read up on the thirty six years of CIA created horror, click this link:

http://en.wikipedia.org/wiki/Guatemalan_Civil_War

Guatemala ended up being in a 36 year civil war and it was the result of our CIA working in conjunction with the Father of Propaganda and Corporate America for the benefit of the few. I believe this is what they call corporate fascism.

OAKLAND POLICE USE TEAR GAS & FLASH GRENADES ON PROTESTORS

The protests in this country will grow increasingly violent. The establishment has already shown they will use brutal tactics in supressing dissent. The protestors know what to expect. They will begin to arm themselves. There will be blood. Producing molotov cocktails may be the new growth business. It doesn’t matter whether you agree or don’t agree with violence. It is going to happen. The scenes from Greece, Egypt and Syria will play out in our cities over the next few years. This is what happens when none of the Wall Street criminals are prosecuted and the corrupt politicians in Washington DC do nothing to address the issues affecting the average American.

http://www.ustream.tv/occupyoakland

Occupy Oakland: Police Teargas Protestors, Use Flash Grenades

OAKLAND, Calif. — Oakland police used tear gas and “flash” grenades Saturday to break up hundreds of Occupy protesters after some demonstrators started throwing rocks and flares at officers and tearing down fencing.

Three officers were hurt and 19 people were arrested, the Oakland Police Department said in a release. No details on the officers’ injuries were released.

Police said the group started assembling at a downtown plaza Saturday morning, with demonstrators threatening to take over the vacant Henry Kaiser Convention Center. The group then marched through the streets, disrupting traffic.

The crowd grew as the day wore on, with afternoon estimates ranging from about 1,000 to 2,000 people.

The protesters walked to the vacant convention center, where some started tearing down perimeter fencing and “destroying construction equipment” shortly before 3 p.m., the release said.

Police said they issued a dispersal order and used smoke and tear gas after some protesters pelted them with bottles, rocks, burning flares and other objects.

Most of the arrests were made when protesters ignored orders to leave and assaulted officers, the release said. By 4 p.m., the bulk of the crowd had left the convention center and headed back downtown.

The demonstration comes after Occupy protesters said earlier this week that they planned to move into a vacant building and turn it into a social center and political hub. They also threatened to try to shut down the port, occupy the airport and take over City Hall.

In a statement Friday, Oakland City Administrator Deanna Santana said the city would not be “bullied by threats of violence or illegal activity.”

Interim police Chief Howard Jordan also warned that officers would arrest those carrying out illegal actions.

Oakland officials said Friday that since the Occupy Oakland encampment was first established in late October, police have arrested about 300 people.

The national Occupy Wall Street movement, which denounces corporate excess and economic inequality, began in New York City in the fall but has been largely dormant lately.

Oakland, New York and Los Angeles were among the cities with the largest and most vocal Occupy protests early on. The demonstrations ebbed after those cities used force to move out hundreds of demonstrators who had set up tent cities.

In Oakland, the police department received heavy criticism for using force to break up earlier protests. Among the critics was the mayor, who said she wasn’t briefed on the department’s plans. Earlier this month, a court-appointed monitor submitted a report to a federal judge that included “serious concerns” about the department’s handling of the Occupy protests.

JOHN REED ADMITS THAT WALL STREET IS A CORRUPT CESSPOOL FILLED WITH MAGGOTS

Bill Moyers with an excellent hour of truth about how and why Wall Street was permitted to destroy the world. It simply comes down to greed. The powerful and wealthy use their power and wealth to gain even more power and wealth until they destroy the world. The repeal of Glass Steagall allowed the 2008 collapse to occur. This was bipartisanship at its best. If you ever needed proof that it doesn’t matter which party is in power, the repeal of this law proves that Wall Street and the Federal Reserve run this country.

John Reed, the former CEO of Citicorp, admits to being guilty of setting the whole disaster in motion. Moyers is too easy on him. Reed’s honesty was refreshing until the segment where he declares that the banks had to be bailed out. He said there was no other choice. There was. The Wall Street banks should have been nationalized (like Sweden did in 1990), all top executives should have been fired, all stockholders and bondholders wiped out, all bad debt should have been liquidated, and good assets should have been sold off to well run banks. It is a Big Lie propagated by the governing elite and the corporate MSM that bailing out the banks saved the country from financial collapse. It saved a few wealthy men from financial collapse.

The most despicable fact is that the very banks that destroyed the world and impoverished the middle class are much bigger today than they were in 2007. And people wonder why the Occupy Movement is growing more violent. Senator Byron Dorgan proves to be one of the few who saw what would happen. He goes on my good guy list.

This is a must watch video.

ROMNEY TWICE AS RICH AS THE LAST 8 PRESIDENTS COMBINED

The last 8 presidents of the United States were wealthy men. If you added up all their wealth, it still pales in comparison to Mittens Romney’s vast wealth. This is the guy we want as President of the United States. Do you really think he will be looking out for the interests of the average American that makes $25,000? This guy breaks out in hives when he has to mingle with the little people. He is a representative of the .06%. He doesn’t care about you. He doesn’t care about your interests. He cares about protecting the interests of the ruling elite. He is a leader of the ruling elite. They know what is best for America – what is best for them and their cronies. Here is George Carlin describing Mitt Romney and his ilk.

How rich is Mitt Romney? Add up the wealth of the last 8 presidents…then DOUBLE that number

WASHINGTON (AP) – Just how rich is Mitt Romney? Add up the wealth of the last eight presidents, from Richard Nixon to Barack Obama. Then double that number. Now you’re in Romney territory.

Republican presidential candidate and former Massachusetts Governor Mitt Romney campaigns at the Fish House in Pensacola, Fla., on Saturday.

He would be among the richest presidents in American history if elected — probably in the top four.

He couldn’t top George Washington who, with nearly 60,000 acres and more than 300 slaves, is considered the big daddy of presidential wealth. After that, it gets complicated, depending how you rate Thomas Jefferson‘s plantation, Herbert Hoover‘s millions from mining or John F. Kennedy‘s share of the vast family fortune, as well as the finer points of factors like inflation adjustment.

But it’s safe to say the Roosevelts had nothing on Romney, and the Bushes are nowhere close.

The former Massachusetts governor has disclosed only the broad outlines of his wealth, putting it somewhere from $190 million to $250 million. That easily could make him 50 times richer than Obama, who falls in the still-impressive-to-most-of-us range of $2.2 million to $7.5 million.

“I think it’s almost hard to conceptualize what $250 million means,” said Shamus Khan, a Columbia University sociologist who studies the wealthy. “People say Romney made $50,000 a day while not working last year. What do you do with all that money? I can’t even imagine spending it. Well, maybe …”

Of course, an unbelievable boatload of bucks is just one way to think of Romney’s net worth, and the 44 U.S. presidents make up a pretty small pond for him to swim in. Put alongside America’s 400 or so billionaires, Romney wouldn’t make a ripple.

So here’s a look where Romney’s riches rank — among the most flush Americans, the White House contenders, and the rest of us:

—Within the 1 percent:

“Romney is small potatoes compared with the ultra-wealthy,” said Jeffrey Winters, a political scientist at Northwestern University who studies the nation’s elites.

After all, even in the rarefied world of the top 1 percent, there’s a big difference between life at the top and at the bottom.

A household needs to bring in roughly $400,000 per year to make the cut. Romney and his wife, Ann, have been making 50 times that — more than $20 million a year. In 2009, only 8,274 federal tax filers had income above $10 million. Romney is solidly within that elite 0.006 percent of all U.S. taxpayers.

Congress is flush with millionaires. Only a few are in the Romney realm, including Rep. Darrell Issa, R-Calif., and Massachusetts Sen. John Kerry, who was the Democratic presidential nominee in 2004. Kerry’s ranking would climb much higher if the fortune of his wife, Teresa Heinz, were counted. She is the widow of Sen. John Heinz, heir to the Heinz ketchup fortune.

Further up the ladder, top hedge fund managers can pocket $1 billion or more in a single year.

At the top of the wealth pile sits Bill Gates, worth $59 billion, according to Forbes magazine’s estimates.

—As a potential president:

Romney clearly stands out here. America’s super rich generally don’t jockey to live in the White House. A few have toyed with the idea, most notably New York Mayor Michael Bloomberg, whom Forbes ranks as the 12th richest American, worth $19.5 billion. A lesser billionaire, Ross Perot, bankrolled his own third-party campaigns in 1992 and 1996.

Many presidents weren’t particularly well-off, especially 19th century leaders such as Abraham Lincoln, James Buchanan and Ulysses S. Grant. Nor was the 33rd president, Harry Truman.

“These things ebb and flow,” said sociologist Khan. “It’s not the case that all presidents were always rich.”

A few former chief executives died in debt, including Thomas Jefferson, ranked in a Forbes study as the third-wealthiest president.

Comparing the landlocked wealth of early Americans such as Washington, Jefferson and James Madison, with today’s millionaires is tricky, even setting aside the lack of documentation and economic changes over two centuries.

Research by 24/7 Wall St., a news and analysis website, estimated Washington’s wealth at the equivalent of $525 million in 2010 dollars.

Yet Washington had to borrow money to pay for his trip to New York for his inauguration in 1789, according to Dennis Pogue, vice president for preservation at Mount Vernon, Washington’s Virginia estate. His money was tied up in land, reaping only a modest cash income after farm expenses.

“He was a wealthy guy, there’s no doubt about it,” Pogue said, and probably among the dozen richest Virginians of his time. But, “the wealthiest person in America then was nothing in comparison to what these folks are today.”

—How does Romney stand next to a regular Joe?

He’s roughly 1,800 times richer.

The typical U.S. household was worth $120,300 in 2007, according to the Census Bureau‘s most recent data, although that number is sure to have dropped since the recession. A typical family’s income is $50,000.

Calculations from 24/7 Wall St. of the peak lifetime wealth (or peak so far) of Nixon, Gerald Ford, Jimmy Carter, Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush and Obama add up to a total $128 million — while Romney reports assets of up to $250 million.

If you consider only those presidents’ assets while in office, without millions earned later from speeches and books, their combined total would be substantially lower, and Romney’s riches would leave the pack even further behind.

Money in America, Part Four

Previously,we saw the holy Grail of banking reform was actually a hidden agenda of politics, banking, and big business.The seeds were planted in Indianapolis and now, the game is surely afoot.

The National Monetary Commission in 1908

Informing the public via a predetermined public relation campaign, with surveys and solutions of a predetermined outcome worked well. Keeping the scheme going for a decade took time, effort, and investment.

With the passage of the Aldrich-Vreeland Act in 1908 contained two important but little-known provisions: the emergency currency potential and the establishment of the NMC. The former provision would have expired in 1914 but curiously, was used for the one and only time that year.

However, Aldrich had packed his commission in June of 1908 with senators and representatives but, more significantly, powerful banking leaders.

This junket headed for Europe in the fall, studying and gather information with heads of private European banks and central banks. They concluded European banking was more efficient and the European currencies had more gravitas compared to the dollar. By December,, back in the U.S., Aldrich added Paul Warburg and others to the inner circle. Charles A. Conant was chosen for ‘research and public relations’. Warburg consulted with many academic economists at top-tier universities.

The American Bankers Association recommended a U.S. Central bank along the lines of the German Reichsbank. Hesitant heads of national banks were assured the business model would not be adversely affected by the origin of a U.S. Central bank.

Regional banking districts in the country, under control of a central board, was a recommentation in November, 1909. Throughout this whole era, the Morgan and Rockefeller banking interests had agreed to agree on a central bank. Yes.

Incidentally, William Howard Taft was elected president, a friend of Aldrich and others since 1900. On September 14, 1909, President Taft spoke in Boston and gave a big boost to the notion of a central bank. Wow. And a week later, The Wall Street Journal gave space to various op-eds, unsigned, praising that great idea of ‘elastic currency’ and other benefits. Actually, these letters were crafted by Charles Conant. He also recommended the regulation of interest rates by the central bank as a useful tool. The Washington Bureau of the Associate Press was also co-opted.

Another significant speech by Paul Warburg in New York on March 23, 1910 impressed the Merchants’ Association of New York. They had printed 30,000 copies of the transcript and distributed these far and wide.

For public consumption, a monetary conference in New York in November 1910 presented a specific recommendations for a central bank and an appeal for all part of the country to support the Bill that Alrich would soon craft.
The Private Railroad Car

G. Edward Griffin [1] sets the scene at a New Jersey railroad station like the opening of a thriller movie: it’s 10 p.m. on November 22, 1910 as a handful of important men board a private car. Unlike the numbered cars of the rest of this train, this one has no number, only a small plaque with the inscription “Aldrich”.

The senator greets his guests by first name only – and this rule is adhered throughout the trip and the week at Jekyll Island, Georgia. The private club on the island is part-owned by J.P. Morgan.

The personnel lineup:

Senator Nelson P.Aldrich
Paul Warburg, various banking connections
Abraham Andrew, Assistant Secretary of the U.S. Treasury
Henry P. Davison, senior partner, J.P. Morgan Co.
Frank A. Vanderlip, president, National City Bank of New York
Charles D. Norton, president, First National Bank of New York
Benjamin Strong, head of Bankers Trust Co.

(The last two are questionable due to differing accounts in the ‘historical record’ but both were in the Morgan camp. Aldrich, incidentally, was a financial partner of J.P. Morgan, and also father-in-law of John D. Rockefeller, Jr.)

If Strong wasn’t there, he surely knew about it – we will hear more of him.

The public did indeed hear something of this secret meeting, but it was in 1935. The Saturday Evening Post carried an article by Vanderlip and the key takeaway was:

If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have had no chance whatever of passage by Congress.

Warburg led the argument for a regional structure, presumably cognizant of public mistrust of too much power located in one area. Aldrich wanted an overt central bank with no political meddling. The compromise that was reached became the Aldrich Plan, introduced in Congress in 1912 and 1913.

(On November 5–6, 2010, Ben Bernanke stayed on Jekyll Island to commemorate the 100-year anniversary of the original meeting.)

Alas, the Democrats won the 1912 elections resoundingly. The Republican Aldrich Plan seemed to fall by the wayside.

Shiny new President Woodrow summoned a special session of Congress in April 1913. To seal the importance, he appeared in person, the first president since John Adams to do so. Wilson’s address outlined various approaches to economic policies, banking and currency reform, tariffs, and the income tax.

The 16^th Amendment had been ratified on February 3, 1913. Wilson needed that tax to support lower tariffs. A little bit of patronage pressure, and the Revenue Act of 1913 was passed by the House on May 8, 1913; finally it went through the Senate on September 9, 1913.

Meanwhile, the Aldrich Plan was not dead, though that hated Republican name vanished. Representative Carter Glass, chairman of the House Banking and Currency Committee, and Senator Robert Owen, chairman of the Senate’s did a little tinkering here and there. Wilson mandated a central Federal reserve board be appointed by the president – with the consent of the Senate.

There was one thorn in Wilson’s side, his Secretary of State, William Jennings Bryan. The “Cross of Gold” person was still a power in the Democratic Party. The sop to Bryan was that Federal Reserve currency would be a liability of the government – and also, provision for federal loans to farmers.

All this horse trading took time, though, and Wilson had other fish to fry during 1913.

The 17^th Amendment (Direct Election of U.S. Senators), ratified and declared, became part of the Constitution on May 31, 1913..

Finally, months in the making, what started as the Glass-Owen bill became the Federal Reserve Act of 1913. It passed the House on December 13 and the Senate, after an all nighter, on December 23. Wilson signed it that morning.

A great year for the Populists, remember they wanted:

a graduated income tax, direct election of senators

and before long, they got women’s suffrage (19^th Amendment), the eight-hour work day, and restricted immigration.
The Federal Reserve System, 1914 and Beyond

Aldrich had convened the Jekyll Island cabal but Warburg was the only expert on the European central bank model. Galbraith asserted that “Warburg has, with some justice, been called the father of the system.”

In the end, everybody won something. Aldrich’s ‘decentralization’ became the regional banks and avoidance of the term ‘bank’ itself inevitably led to the Federal Reserve System nomenclature. And having the Federal Reserve Board in Washington, D.C. implied ‘government’. Smoke & mirrors.

A decade later, the little Orphan Annie comic strip appeared. Did anyone recognize Daddy Warbucks, the self-made billionaire doing good works with his wealth as an avatar of Paul Warburg? Anyway …

Back in the day, the public story was that the Federal Reserve System would stabilize the economy. We’ll see how that worked out.

The real power of the System was – and is – the Federal Reserve Bank of New York. And who was offered the post of governor there? Benjamin Strong. Whether or not he was at Jekyll Island, there is no doubt he had influence, having been the personal auditor for J. P. Morgan, Sr. during the Panic of 1907, and also a long-time friend of Henry Davidson.

Paul Warburg became one of the seven members of the Federal Reserve Board in Washington.

History has a droll way of throwing some unexpected crises – who would have imagined the assassination of an obscure archduke would lead to a worldwide conflagration? Well, that’s the myth, anyhow. That the British mercantilist system might have been under threat from a foreign export power is unthinkiable as a cause for war. Isn’t it?

The outbreak of World War One had one immediate financial side effect: the New York Stock Market closed. Public anxiety was dispelled by the Secretary of the Treasury, using that dormant part of the Aldrich-Vreeland Act. Emergency currency was available, by October 23, 1914, $368,616,990.

In November, the 12 regional banks of the Federal Reserve System had opened and the emergency currency was withdrawn. The FRS was open for business!

England and various European countries had been preparing for war for years. Armies were trained, alliances arranged. But when war occurred, England found itself fiscally bereft. John Pierpoint “Jack” Morgan, Jr. ruled the House of Morgan, his father having died in March, 1913. Jack became the sales representative of British bonds and also the procurement officer for their needed war material. Nice profit on money going and coming!

In 1915, President Wilson removed the ban on private bank lending to foreign allies. The House of Morgan immediately loaned $12,000,000 to Russia and $50,000,000 to France. Meanwhile, the first $12,000,000 British contract arrived, the first of many. The final total would be $3,000,000,000.

Author John Moody, writing in 1919 summed it up:

Not only did Britain and France pay for their supplies with money furnished by Wall Street, but they made their purchases through the same medium … Inevitably the House of Morgan was selected for this important task. Thus the war had given Wall Street an entirely new role. Hitherto it had been exclusively the headquarters of finance; now it became the greatest industrial mart the world had ever known. In addition to selling stock and bonds, financing railroads, and performing other tasks of a great banking centre, Wall Street began to deal in shells, cannon, submarines, blankets, clothing, shoes, canned meats, wheat, and the thousands of other articles needed for the prosecution of a great war.

Large profits and small. A commission for selling $2 billion of Allied stock holdings to buy munitions. The sale of 4,400,000 rifles for $194,000,000. The House of Morgan was both buyer and seller, and no surprise that many of the purchase contracts went to businesses where Morgan was a shareholder.

A reputation as war profiteer does attract some resentment. On July 3, 1915 an intruder stole into Jack’s Long Island mansion and shot him twice in the groin. Jack, however, survived.

Great Britain, having burned through the Australian gold, from the 19^th century gold rush there, found itself short of money to fund a war. It did the thing that is obvious to every politician: achieve fiat money by golng off the gold standard. Every other country in Europe did also. America maintained a gold standard but not redemption for foreign held dollars.

By the end of the war, every country had inflated its money supply; Germany went eight times the pre-war amount. This explains much of things to come.

The Cunard Lines had turned over their record-breaking Lusitania over to the Admiralty. The speedy ocean lined proved inadvisable to refit into an auxiliary cruiser due to operational expense (910 tons of coal a day!), so it was ordered to continue passenger (and mail) service. On April, 22 1915, the German embassy ordered advertisements in 50 U.S. newspapers, advising prospective passengers that an Atlantic crossing went through a war zone, the seas around the British Isles.. Many of these advertisements were never published …

On May 1, 1915, the Lusitania set out on its final voyage to Liverpool, England. Little did the passengers know there was a hidden cargo of munitions and other material for the British war effort.

At this point in time, the German navy followed the code of limited submarine warfare. Neutral vessels were off limits.

At 1420 hours on May 6, the commander of the U-20, Walther Schwieger, fires one torpedo at a target:

Torpedo hits starboard side right behind the bridge. An unusually heavy detonation takes place with a very strong explosive cloud. The explosion of the torpedo must have been followed by a second one [boiler or coal or powder?]… The ship stops immediately and heels over to starboard very quickly, immersing simultaneously at the bow… the name Lusitania becomes visible in golden letters.

U20 log

The Lusitania sank in only 18 minutes. Few lifeboats were properly launched due to the extreme starboard list.

Of 1,959 passengers and crew, 1,195 perish, including 128 Americans.

Several official inquiries were convened that created enough obfuscation to keep tinfoil hat manufacturers busy to this very day. Prevented testimony, state secrets, crew statements in identical handwriting with similar phrasing; definitely one, no, two, or was it three torpedos. Some closed hearings, other open with no access to some evidence. Two sets of Admiralty papers, depending on the type of hearing. Perjury.

At any rate, Wilson’s immediate response was three diplomatic notes to Germany: strong, stronger, ultimatum. After the second, Secretary of State William Jennings Bryan resigned in protest.

Nonetheless, the American public had been fired up, just not enough for war.

The British were already hinting that, should they lose the war, they would never be able to repay their debt to America. In early 1916, President Wilson sent his personal adviser, “Colonel” Edward Mandell House to London. And why not – House was the shadow power that had arranged Wilson’s nomination for president. House even had two rooms at the White House. And while Wilson sought re-election on the slogan “he kept American out of war”, his adviser consulted with British foreign office officials, notably Sir Edward Grey. Secretary of State William Jennings Bryan had not be told of this unofficial arrangement, nonetheless, he was not stupid.

Mary Baird Bryan, co-author, The Memoris of William Jennings Bryan:

While Secretary Bryan was bearing the heavy responsibility of the Department of State, there arose the curious conditions surrounding Mr. E.M.House’s unofficial connection with the President and his voyages abroad on affairs of State, which were not communicated to Secretary Bryan … The President was unofficially dealing with foreign powers.

U.S. Ambassador Walter Hines Page:

House arrived … [with] the idea of American intervention … a minimum programme of peace – the least the Allies would accept, which, he assumed, would be unacceptable to the Germans …we should plunge into the War, not on the merits of the cause, but by a carefully sprung trick.

(memorandum, February 9, 1916)

On March 9, 1916, President Wilson sanctioned the secret agreement with England and France for the United States of intervene on behalf of the Allies. It seems Wilson and House believed the worthy end, of world peace and a world government, lay through the means of war. They had help: Assistant Secretary of the Navy Roosevelt (the Franklin Delano) urged arming merchant ships in violation of neutrality.

And time passed with America on the sidelines and the Allies accusing Wilson of dragging his feet. Maybe they didn’t understand the U.S. election cycle. The attitude of the British public toward America was “too proud or too scared” and they termed unexploded shells on the front line as “wilsons”.

Both British and German propaganda served to inflame the American public over the next months.

Wilson was narrowly re-elected in 1916. A tipping point happened when Germany attempted to enlist Mexico as an ally, following their new policy. Of unrestricted submaine warfare. This threated American commercial shipping.

On April 2, 1917 in his message to Congress, Wilson spoke of armed neutrality no longer working, “enemies against us at our very doors … unsuspecting communities … and offices of government with spies … criminal intrigues” … and a warning: disloyalty “will be dealt with a firm hand of repression.” And finally, the world must again be safe for democracy.

With fifty representatives and six senators opposted, a declaration of war was passed by Congress on April 4, 1917 and signed by Wilson the April 6.

Behind the scenes during this period, the Federal Reserve went into full operation in 1915. They played a significant role in financial Allied and U.S. War efforts (with some help.)

Wilson furthered Democratic values with the agricultural Smith-Lever Act of 1914 and the Federal Farm Loan Act of 1916. He also thwarted a national transportation shutdown by guiding the Adamson Act through Congress which instituted the eight-hour day.

Then there was the Espionage Act of 1917 and the Sedition Act of 1918. A firm hand, yes. Anarchists, Wobblies, communists, anti-war activists, and even newspaper editors were grist for the DoJ mill. Deportation of recent immigrants who opposed the war came with the Immigration Act of 1918. Then there was Wilson’s Committee of Public information, the first official propaganda office.

Wilson’s League of Nations concept came via a speech on January 8, 1918, his Fourteen Points.

Liberty Bonds

We have a war! And on April 24, the 1917 Emergency Loan Act initiated the first of four bond issues. Buy Liberty Bonds! It’s a patriotic duty. A limit of $5 billion was set; $2 billion were sold.

The second, third and forth issues appeared in, respectively, October 1,1917, April 5, 1918, and September 28, 1918.

A poor response to the bonds was met by the Treasury with a sales campaign promoted by Hollywood stars, Boy Scouts, and even a special Army Air Corps elite group that travelled the country. Buy a bond and get to ride in a JN-4 airplane!

Incidentally, that 1917 act is the tool by which U.S. Treasury bonds are issued to this very day.

We will re-visit the fourth Liberty Bond issue in fifteen years.

The active “war to end war” ended on November 11, 1918 with a cease fire. The Treaty of Versailles was signed on June 28, 1919.

In our next exciting episode, we will see the Federal Reserve assistance to restoring the gold standard for the world. Only it wasn’t …

HOW TO GET RICH IN PHILADELPHIA

Michael Nutter, the mayor of Philadelphia, signed a tough new anti-gun law in 2008. He severely restricted a citizen’s ability to buy a gun. It seems he now has a bit of a problem. Philadelphia is averaging a murder per day so far in 2012. People are getting gunned down like it’s a PS3 game. So he’s got a brilliant solution. Philadelphia is offering $20,000 to anyone who turns in a murderer. What an opportunity. Driving through West Philly every day gives me ample opportunity to generate some extra cash. At the current rate of murders, I’m bound to witness two or three in the next year. Sounds like easy money.

These are the solutions that come from Democratic politicians that have ruined every urban area in the country. Let’s assess the brilliance of the Democratic rule of Philadelphia since 1950. You start to dish out entitlements to the poor voters, like welfare and low income housing. You raise taxes on the workers and the businesses to pay for the entitlements. The workers and businesses leave the city for the suburbs, leaving only the poor people. You double the entitlements so you can continue to get their votes. You raise taxes even more on the productive people. More productive people flea the city. All that remain are the poor, ignorant and criminal. As the pie continues to shrink, the scum start killing each other. What’s left of the good people scramble to get out of the city before it’s too late. You ban the sale of hand guns to law abiding citizens so that only the criminals are armed. You now have chaos and wholesale slaughter on a daily basis. Nutter’s solution will be to hire more police and throw more money at the “problem”. The next Phila budget will require more taxes to pay for his new solution. Do you think it’ll work?

Here is a chart showing gun sales in the U.S. since 2002. Do you see a trend?

This chart is from the FBI. Do you see a trend?

Criminals tend to think twice if they believe the person they are about to commit a crime against happens to be holding a gun. When will do-gooder liberal Democratic douchebags ever get it? An armed citizenry is the best deterrent to crime. Nutter is a Nut. His $20,000 bounty will result in more murders. Anyone turning in someone for murder will likely become the next victim in Killadelphia.

Nutter plans $20,000 bounty for tips leading to slaying arrests

BY DAVID GAMBACORTA
Philadelphia Daily News

THE NUMBERS tell you that the city is back to where it was four and five years ago, back to a murder or two a day and an incomprehensible number of shootings.

Faced with that grim reality, Mayor Nutter yesterday announced at a news conference at Strawberry Mansion High School that the city is, in so many words, now throwing the kitchen sink at its crime problems.

There was no clever, catchall nickname for the assortment of initiatives, just a clear sense that city leaders are ready to try anything to escape being forever known as “Killadelphia.”

One initiative that Nutter said he hopes will be a “major game-changer” simply involves cash: $20,000 for tips that lead to the arrest and conviction of a murder suspect, and $500 for information that leads to the arrest and conviction of thugs who carry or sell illegal guns.

“To every criminal out there, I just put a $20,000 bounty on your head,” Nutter said. “We are coming for you. We will find you. People will give up that information.”

The mayor said he had set aside $500,000 in the city’s budget to fund the reward program.

He discussed other plans:

* Doubling the city’s contribution to the district attorney’s witness-assistance program to $400,000 – an announcement that called to mind the cold-blooded murder earlier this week of North Philly store clerk Rosemary Fernandez Rivera, who had given police information about another slaying.

* Boosting the Police Department’s overtime budget – perhaps by a few million dollars, according to Police Commissioner Charles Ramsey – so that cops can work extra hours in the city’s most violent neighborhoods.

* Hiring 100 police recruits for a class that would start training at the Police Academy in June, coming on the heels of the 120 recruits scheduled to graduate from the academy in March.

* Establishing a program that would enable residents to text anonymous tips and crime photos to police.

* Expanding a Commerce Department corridor-improvement program to put surveillance cameras in residential neighborhoods and other public spaces.

And that wasn’t all.

Nutter noted that although the Pennsylvania Crime Code calls for people caught carrying illegal weapons to get up to seven years in jail, many offenders in the city often get off with a slap on the wrist – a couple of months in the slammer and a little probation.

He and D.A. Seth Williams said they want to make sure the stiffest penalties are being enforced by the courts, but were vague on how that might happen.

Nutter said the city also would establish a Gun Stat program that would bring together cops, prosecutors, prisons, and probation and parole officials to focus on closely tracking those who commit gun crimes.

Temple University criminologist Jerry Ratcliffe, who has helped the Police Department develop crime-fighting strategies, said “the more-specific, focused strategies have the best chance of succeeding. . . . It’s a good chance to try something new.”

WHO ARE THOSE DIRTBAGS NOT PAYING FEDERAL TAXES?

I’m really getting tired of the GOP storyline about 50% of Americans paying no Federal Income taxes. The unspoken, but clear message, is that 50% of Americans are lazy good for nothings riding the coattails of the hard working people who pay Federal Income taxes. The MSM and the ruling establishment want to distract the masses from the real culprits in destroying this country – Wall Street, K Street, and Mega-Corporations – by using propaganda to convince the middle class to focus their wrath on the poor. This 50% storyline has been pounded home day after day by the folks at Fox News and other MSM outlets. You hear it at the GOP debates as the ignorant candidates speak of the unemployed and people on food stamps as if they are lepers.

The beauty of successful propaganda is having a smattering of truth mixed in with a large portion of exaggeration, misinformation and ignorance of a few facts. I happen to be related to one of these low life 50%ers living high on the hog off real working Americans. It’s my widowed mother.

I know she pays no Federal income taxes because I do her tax return. This leech on society doesn’t even pay state income taxes. She rakes in $15,000 per year in Social Security income and makes due with what remains of my Dad’s IRA. Her effective tax rate is zero. The GOP candidates declare that she should pay her fair share. Why should she live off the hard work of real Americans? That is the mantra being shoved down our throats day in and day out.

Well let’s dig a little deeper and maybe find some truth. Let’s try to figure out her EFFECTIVE OVERALL TAX RATE.

My mother still lives in the 900 square foot row home that her and my Dad bought in 1957 for $10,000. Even though they never used the public school system, they have paid real estate taxes for decades. In fact, the annual real estate taxes for her huge estate are $3,600. She also drives a car. The total state and Federal taxes on gasoline comes to 51 cents per gallon. She also uses electricity, phone service and natural gas in her house. Those bills contain approximately 5% taxes from various localities. In addition, she buys stuff to live. PA has a 6% sales tax on stuff you buy in the state.

So lets see what the effective overall tax rate of this “deadbeat” is.

Annual Income $15,000

Real Estate Taxes $3,600 24%

Gasoline Taxes $150 1%

Utility Taxes $150 1%

Sales Taxes $450 3%

Correct me if I’m wrong, but I think that comes to an effective overall tax rate of 29%. In addition, she hadn’t gotten any increases in her Social Security income for two years because the government said their was no inflation. But her Medicare premiums went up 5% per year. As you can see, the GOP candidates really are focusing on the right problem. Deadbeats like my mom are making out like bandits.

Now let’s look at a theoretical deadbeat based on the median salary of people in the U.S. The median worker salary in the U.S. is $25,000 per year. That means that 50% of Americans make less than $25,000 per year.

Let’s assume we have a married couple in my mom’s neighborhood living in a similar row home. The husband works in Philadelphia and makes $25,000, while the wife works part time because they have one child and brings in $10,000. With the deductions for mortgage, real estate taxes and kid, they would owe zero Federal Income taxes. These are the people scorned and ridiculed by the GOP establishment as worthless pieces of shit. Let’s assess their OVERALL TAX RATE:

Annual Income $35,000

State income taxes $1,050 3%

Phila & Local taxes $1,100 3.1%

Payroll taxes $2,000 5.7%

Real Estate Taxes $3,600 10.3%

Gasoline Taxes $500 1.4%

Utility Taxes $200 0.6%

Sales Taxes $1,000 2.9%

If my math is correct that comes to a 27% overall effective tax rate for these free loaders.

So these are a couple examples of the dirtbags that are being used by the powers that be to try and convince you that the super rich in this country aren’t really pillaging the national wealth through their complete capture of the economic, financial and governmental apparatus in this country. Mitt Romney made $20 million last year and his effective Federal tax rate was 14%. I don’t know what his overall effective tax rate was, but I will bet you $10,000 it was lower than my mother’s 29% rate. He has 40 tax specialists working to insure he pays as little as possible under the law – which was written by people like him for people like him.

The next time I go to my mom’s estate, I’ll tell her to vote for Romney or Gingrich because people like her need to pay their fair share. That’s what’s wrong with this country.

LLPOH’s Grim Reality #2

This is an adjunct to Grim Reality #1. The following article, from The Washington Post, details how the US has lost some 687,000 high tech jobs in the last ten years – a decline of 28%. These jobs have gone to – you guessed it – China.

http://www.washingtonpost.com/business/economy/us-losing-high-tech-manufacturing-jobs-to-asia/2012/01/17/gIQA9P1S6P_story.html?hpid=z4

Some salient points, in addition to the job losses, include:

– Research and development expenditures in China now matches that of the US. Of course, given their cost advantage, that implies that they are spending vastly more man-hours on R+D than is the US. Additionally, nine other nations world-wide now spend as much as the US on R+D.

– Doctoral degrees in engineering in China have doubled in the ten years and their output in this area now far exceeds that of the US. No surprise there.

– US multinationals are hiring great numbers of overseas research workers

– “Although the long decline of manufacturing employment in the United States is often attributed to the cheaper wages in developing countries, China and developing countries in Asia have in recent years sought to lure more sophisticated manufacturing operations — and better jobs — by expanding their engineering prowess through government investment in education and research.” Government investment in education and research – now there is a thought. Bet they aren’t investing in art history.

– It also says that China’s cost advantage is shrinking. However, it attributes a lot of that to America’s automation of its factories, which reduces labor cost per unit. So there is not a lot of joy there.

So, in sum, the US is under attack not only in manufacturing but in high tech as well. And service jobs (IT/accounting/etc.) are also under attack, but that is a story for another day. Oh happy days are here again.

INVESTING NEWSLETTER THAT BEATS THE MARKET? I HAVE A BRIDGE TO SELL YOU

Let’s imagine the easiest way to make a bunch of money for providing virtually no actual value, having very little accountability, and having the capability to scale your scam as much as you could ever imagine. Here are a few common “business ventures” that come to mind:

a) Virtually any of the top selling affiliate programs and ebooks you see on numerous blogs. You know, the “make money online” genre, “natural” remedies and cures, diet solutions and workout programs. Why would so many blogs promote the virtues of ebooks and programs that are worthless? Well, that’s what affiliate marketing is all about! The crappier the program, the more they charge for it and then give an ever-increasing cut to bloggers for each sale! Often upwards of 50%. Many bloggers don’t really think twice about promoting horribly useless and often, harmful advice for lucrative payouts like that! Why do you think those reviews are so convincing?!

b) Multi-level marketing of pretty much any sort. MLM is one of the most vile “business” ventures in existence. You basically convince other suckers in your downline to be scammed into the same useless system you were just scammed into so you can leach off their exploits as well. At the end of the day, the goods and services sold through MLMs are invariably overpriced, useless and misleading and a few people at the top get rich. Within months, the vast majority of all the “suckers” realize they’ve been suckered, they’ve run out of other suckers to recruit, and they quit with loads of time wasted and dollars spent. Usually, they don’t talk about their lousy experience because they feel so ashamed for enthusiastically promoting something within their social circles and family members only to bail after such a short period.

c) Investment newsletters. Really?

Continue Reading Why Investment Newsletters are Scammy Rippoffs…

Stucky Ponders The Meaning Of Life For The Millionth Time

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PART ONE – TRAVAILS
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Out of the clear blue, SJ (my schizo son) decided Michigan was no longer a good place for him to live.

He decided to go back to Bellingham, Washington. He took his back-pack, filled it with some fruit and granola bars. In terms of clothes, he had nothing except what he was wearing. A not-so-warm leather jacket, no hat, no gloves, no scarf, and no sweater to keep him warm.

He also didn’t have a dime in his pocket. And I mean that literally. He does have a credit card but it has a limit of only $200 … and it was maxed out. In terms of getting money for the bus ticket from MI to WA ($250), he used his mother’s credit card. I guess that’s called stealing.

He did take his cell phone. He is not aware that his mother is able to track his location if the phone is on. He didn’t call for a few days, so his mother called him. When she saw he was in Chicago, she panicked, and called him while being careful not to disclose that she already knew where he was. He said he was walking around Grand Rapids. I guess that’s called lying. Anyway, she was able to track his westward travels… from Grand Rapids, to Chicago, to Minneapolis.

He called me about a half hour after his mother called him. By then I already knew where he was. But I pretended I didn’t. He lied to me also. But then I heard a voice in the background …. “I’m sorry sir, but your bus leaves at 9:30PM.”. When he got back on the phone, I told him that I heard the background voice. I finally got him to admit that he was at a Greyhound terminal and that he was heading out to Bellingham, Washington. “What will you do for food??”, I asked. “Beg, or play my guitar.”, he said. I tried not to cry.

The next day we see he’s in Minneapolis. We call constantly. He doesn’t pick up. Then around 2AM we get a phone call. I see from the caller id that it’s the Minny police department. This can’t be good. It turns out the Minny Greyhound station does not stay open all night. SJ’s bus doesn’t leave until the next morning. The Greyhound station is in a very bad neighborhood. SJ was just walking aimlessly around. The police tell us he was mugged and beat up. The cop wouldn’t give me ANY more information other than the hospital they took him too … and he said he shouldn’t have even told me that. Nice. I call the hospital. The ONLY info they give me was confirmation that he was admitted. They give me absolutely nothing else, despite my pleadings as his father. Tough shit. Something about confidentiality laws. The government can spy on me with impunity but I can’t get even basic information about my son’s condition. Amazing.

I fly out to Minny within 48 hours. By the time I get to the hospital, SJ has already left. He snuck out. No one is willing to give me information. Again with the privacy laws. I told the doctor that if he didn’t tell me right then and there what SJ was treated for, that I would rip his heart out and stick it in his mouth before he could even dial 9-1-1. I’m pretty sure I meant it. Apparently so did the doctor, so he gave me some info. No major injuries. Lots of bruising, minor lacerations, swollen face and some treatment for minor frostbite. (What the fuck is “minor” frostbite?). The nurse actually asked me where she should send the bill. I told her to stick it up her ass and walk the bill to New Jersey. Then I left. Quickly.

I hung around Minny for another half a day because the phone showed he was there. I kept calling the number and finally it is answered … by a voice I don’t recognize. It was a teenager. Turns out SJ sold him his very expensive phone for $40, so he could buy food. The kid was very apologetic and worried that he did the “wrong” thing and he was scared he’d get in trouble. I assured him this was not the case. I asked him if I sent him the $40 bucks would he please send the phone back? He said “sure”, and we got the phone back.

Fast forward. Several days later we hear from SJ. He borrowed someone’s cell phone. He’s in Spokane, WA. He says he made a big mistake. Can he come home? We immediately go online and get him a ticket to Grand Rapids. Another $250. It’s 2PM. He’s supposed to leave at 5:30PM. We get a call at 7PM. He says he fell asleep and missed the bus. The next bus doesn’t leave until the following morning. Fortunately, that Greyhound bus station stays open all night.

We call the number back about an hour later. A black man answers. We ask if SJ borrowed his phone, and if so, in what kind of condition did SJ appear. The man’s name is Kevin. “Yes”, he says, SJ borrowed his phone. He looks pretty tired and “lost”. Kevin says that SJ is sleeping nearby and that he (Kevin) is “watching over him”. It turns out that Kevin is traveling to Cleveland, so he’ll be on the entire trip with SJ. He tells us “not to worry”. He says he is “a god-fearing man”, and that he’ll watch over Sam the whole trip to Chicago like “he was my own son”. I thank him profusely and offer him money for his troubles. He will hear none of it. I hang up and I cry like a baby … amazed and overwhelmed at this incredible act of kindness from a total stranger.

Very fast forward. SJ is back in Grand Rapids. About 6 days ago SJ calls me to tell him he is “disappearing”. He sounds very sad. As always the phone “conversations” — if you can call them that — are very short before he hangs up. I take his statement about “disappearing” metaphorically .. as in, the real me is no longer here, I don’t really know who I am anymore — that kind of thing. Nevertheless, I call his mother. His mother calls SJ and get’s him to agree to meet her in a coffee shop. His mom gets there. They talk for a while. Then she asks what’s in the brown paper bag (like a brown grocery bag with handles) he’s carrying with him. He doesn’t answer. She says, “let me look”. He just shrugs his shoulders. She looks. In the bag is a bunch of fruit and granola bars. Goddammit!!! He meant “disappearing” literally!! This time he is going to San Francisco.

His mom calls me immediately. She’s freaking out. Understandable. Hell, I’m freaking out. What can we do??? He’s 6’2 and muscular. His mom sure as hell can’t hold him there. And we sure as hell can’t let him leave … again … with no money or clothes or anything. One of these days the call from the police will be, “Stucky, your son is dead.” Soooo … loathe as I am to do so …. we decided to have him committed. I stalled him as long as I could, then his brother showed up and stalled him. They were able to convince SJ to stay for the evening at his mom’s house for “just one more day”. Meanwhile, his mom was making phone calls to the judge (she knows the judge personally), social agencies, hospital, etc. In short, she was able to get a court-order to have SJ committed in less than 24 hours.

They picked him up at the house in the morning. SJ went peacefully …. in handcuffs. But he looked at his mother and said, “Thanks mom. I can’t believe you did this to me again.”. His mom said she cried as she watched the police take him away. But the facility is nearby and top notch. I told her at least we can get a decent night sleep for the first time in a month knowing where our son is and that he’s in the best possible care. Oh, if only that were true.

He broke out of the facility that evening. Threw a chair through the 2nd floor window and jumped. The police came … with dogs. SJ even got his 15 minutes of fame. He made the TV News!! Woohoo, my son made the big time! Well, about 12 hours later they caught him. So, this time they put him in a room with bars. When did their 1AM bed-check they found SJ trying to escape again …. He already had two of the metal bars removed. He’s very persistent. Maybe they’ll make a movie about him some day.

Anyway, he’s now safely tucked away in a room with no windows. I keep having this fear that I’ll be getting a phone call; “Mr. Stucky, you son escaped by eating through the concrete ceiling.”. He’s very resourceful when he needs to be.

He calls me several times a day. Sometimes the phone calls are kind of funny. Yesterday he tried to talk me into helping him escape. He wants me to help him escape to Austria to live with my relatives there. I told him he can’t even speak German and his Tante Linde doesn’t speak English. “No problem”, he says. He feels he can learn German in the next couple weeks before I help him break out. That’s some funny shit there.

I live in terror of the telephone. I now consider it a terrorist device, like an Iraqi IED. What horrible new revelations await when I pick up? I didn’t have to wait long for the latest bad news. Just this morning I was informed they’ll be releasing SJ. They can only hold if they feel he’s a danger to himself or others. And since he hasn’t threatened to kill himself or others they have to let him go. I’m tempted to call and let them know this kid is ripping my heart out and doesn’t that count for something?

I’ll probably go out to Michigan soon. I’m guess I’m going to wow everyone with my personality, cross my arms and blink like I-Dream-Of-Jeannie and make everything better. Ms. Freud suggested I just stay out there. I think she was only half-kidding. This has been quite a strain on our relationship.

But mostly, the phone calls are sad. He blames me for turning him in. Says I’m a traitor. Says he would have never taken drugs in the first place if I were a better father in the first place. Says he hates me and never wants to talk to me again. Says who the hell am I to give him advice considering how I messed up my own life and the family. Says I’m a huge failure, and a hypocrite. Then he hung up.

Well, I know that this isn’t the real SJ talking. It’s the drugs. It’s his own anger and issues. But, it still stings. And I do believe – as I suppose any parent does — that I could have done a better job, and that maybe, indeed, I have failed him to some degree. It wouldn’t be fair for me to tell HIM to accept responsibility for his life while at the same time denying that MY parenting skills had nothing to do with his life today.

I wish I could do things over again. I have all these regrets. I would be a better dad the 2nd time around.

But we don’t get 2nd chances, do we? So I’ve been thinking …. what can I do so that whatever remaining years I have left aren’t filled with even more regrets?

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PART TWO – PESPECTIVE
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Have you ever had one of those life-altering events that make you suddenly realize what’s really important in life vs. the triviality we THOUGHT was important? Quite often those type of moments are the result of a near-death experience. Perhaps you narrowly averted a head-on collision by mere inches. Or, perhaps someone you love is suddenly diagnosed with a horrible disease.

It seems people grow a lot when they are faced with their own mortality, or the mortality of a loved one. There was a study done of 50 people over the age of 95 who were asked what they would do differently if they had life to live over again. I think we can learn much from older folks. Here are the common themes.

1. “I wish I’d had the courage to live a life true to myself, not the life others expected of me.”

This was the most common regret. When people realize that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honored even half of their dreams and had to die knowing that it was due to choices they had made, or not made. It is very important to try and honor at least some of your dreams along the way. From the moment that you lose your health, it is too late. Health brings a freedom very few realize, until they no longer have it.

2. “I wish I didn’t work so hard.”

Not one person in a billion on their deathbed regrets that that didn’t work a few more hours of overtime or take a 2nd job. Quite the opposite is the case. Most people deeply regretted spending so much of their lives on the treadmill of a work existence. That is not to say working or making money is unimportant. Clearly, that’s an idiotic statement. But these people realize the even more idiotic thing was working to acquire so many “things” … the very things they would soon leave behind. It just wasn’t worth it, they say.

3.”I wish I had stayed in touch with my friends.”

There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying. They regretted becoming so caught up in their own lives that they had let golden friendships slip by over the years. It is common for anyone in a busy lifestyle to let friendships slip. A common theme starts to emerge here ….. that is, it is all comes down to love and relationships in the end. That is all that remains in the final weeks — love and relationships.

4. “I wish that I had let myself be happier.”

Many did not realize until the end – until it was too late — that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort’ of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content. But deep within, they longed to laugh properly and have silliness in their life again.

5. “I wish I looked for more opportunities to truly live more.”

How long have you lived?

In Thornton Wilder’s play “Our Town”, Emily, the main character dies given birth to a child. In the afterlife the Spirits allow her to return to earth to relive one day of her life. She chooses her 12th birthday. She goes back and watches herself and her family live out that day. They warned her not to do it but she does it anyway. She soon finds out why they told her not to do it because as she watches herself and her family live out that day she is shocked by the fact that they do not enter into the day’s experiences with sufficient appreciation and awareness of how precious this moment is. They just basically go through the motions. She yells at her family (of course they can’t hear her) and she yells at herself and asks … “Don’t you understand?? Don’t you understand you won’t have this moment forever? Don’t you understand that?!” And then she yells at the audience; “Do any of you … do any of you ever really live life when you’re alive?!”

So, “How long have you lived?” is not a question of how many days have gone by since you entered this world. These older folks are talking about those precious times – we’ve all had at least a few – where they felt really … REALLY alive!! All your senses were extra sharp. Reds were redder and blues were bluer. You were totally aware of .. and IN, your environment. You feared nothing. You could conquer anything. In other words, those moments that literally take your breath away. Of course, no one can live every single day like that. But then again, how long did you have to think about your own take-your-breath-away moment? How many do you have? One? Two? A handful? And that’s a shame. These folks realized they could have had many many more such moments, and also let the good feelings last longer, if only they looked for them and let them happen.

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PART THREE – THERE IS NO SHORTAGE OF FREE ADVICE
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So, I’m mulling over all these things in my tiny brain trying to figure out how I should live my life moving forward. And while there are only five measly little concepts listed above, and none of them all that earth shaking, I still find myself a bit overwhelmed. What I need to do is to simply it even further. I want to discover a single Unifying Theme. A simple sentence to live by. Maybe even just a word, or two. I need a Stephen Hawking-like Theory Of Everything that packages all of life’s complexities in a nice little box. This is what tiny brains need and want.

Faith.

I need to let Jesus in my heart. That’s what SJ’s mom, the ex-Mrs. Stucky, says I need. Every single phone call ends the same way. A little mini sermon. “We serve an awesome and mighty God.” “SJ is in God’s care.” “God knows even the number of hairs on SJ’s head and He surely knows where SJ is and how to take care of him.”. I just listen politely. That is, until I hear this one, “This is all in God’s plan.”. Oh, really? Sooo, billions of years ago when God formed the earth – or was it just 6,000 years ago — God had this plan to allow my son to have the gift of schizophrenia, and then in his 27th year of life he would get the shit kicked out of him by some thugs in Minneapolis? Is that the plan, Stan? If so, count me out. I am not anti-Jesus – if she wants to believe that I don’t care – but, it’s not for me. I’ve been there and done that. You can’t put toothpaste back in the tube. There’s no going back.

DN – SJ’s brother – suggests a different kind of faith. While still having religious overtones, it’s more a “spiritual” type of faith without a personal deity. Destiny. A Higher Power. It’s kind of like The Force in Star Wars. There’s Good. There’s Evil. We just need to believe that Good will prevail. The only problem with that is …. Darth Vader is my favorite character. I can’t be relying on some nebulous esoteric “force” to give me answers. Not unless Obi Wan Kenobe comes walking through the door.

Ms. Freud – my psychologist significant other – has even more ideas regarding the faith I need. Faith in myself. The Power of Positive Thinking. Building up my self-esteem. Cognitive Behavioral Therapy. And all other kinds of psycho-babble crapola. But doesn’t faith require at least a little bit of “mystery”? The Bible tells us faith is hoping for things unseen. The problem with the “believing in myself” line of thinking is that I have seen both the light AND the blackness of my soul. There is no mystery there. It ain’t a pretty sight. In fact, believing in myself is the very thing that got me to the point where I am now! I’m stuck in an endless loop. No! I need a better god than myself. Trust me.

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PART FOUR – EUREKA!!
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The ex-Mrs. Stucky was giving me one of her mini-sermons, one I heard a thousand times before …. how SJ won’t find any peace in his heart until he stops running from God. Much to my chagrin I actually thought about that for quite a while after we hung up. A million seemingly random thoughts were swirling around in my head until they gradually coalesced into one single word.

Surrender.

I am not talking about surrender in terms of “giving up”. It doesn’t mean lying around in bed all day or moping around the house.

I am not talking about surrender in terms of its religious connotations, even though the general concept is somewhat similar to that old-time religious hymn, “I surrender all”. (That hymn talks about surrendering all to Jesus.)

So, what is surrender? It’s a prayer and a state of mind.

The prayer goes something like this; “I surrender. But, I’m going to do everything that I can do. And when I’m done doing all I can do, I will leave the result in your hands. It’s OK!”

So I will continue to talk to SJ a thousand times a day, about the same topics, and with the same advice until I turn blue in the face. That’s OK. I will continue to talk to his doctors, and nurses, and his mother, his brother, Ms Freud, his grandparents, and all the people in the state bureaucracy doing all I can to encourage and motivate until I’m blue in the face. That’s OK. I’m going to continue to support SJ financially whenever I can even though I’m pretty sure the money is often pissed away. That’s OK. And, if, ten years from now he is still in the same state of mind that he’s in today, well … that’s OK too. I did all I could. I surrendered.

It doesn’t matter who the “you” is in the prayer above. The ‘you” isn’t key. Surrendering is. Is there a Higher Power, a personal one (like Jesus) or impersonal one (like The Force)? Who really knows? I’m not really concerned with what “name” is given to this “you”. All I know is I can’t control everything. My “prayer” is simply my reminder to me to do all I can … and then let it go.
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The other liberating aspect of surrendering is that it totally frees me from the prison-chains of expectation.

Looking back on my life it seems a huge portion of it was driven by expectations. I was expected to get good grades in school and go to college. There was the expectation to get a good paying job. Get married. Have kids. Get a house. Acquire stuff. Pay the bills. Save for retirement. Be fulfilled with all of this. Live a “normal” life. Not that there’s anything wrong with any of that.

But I wonder how much did I limit myself by having these expectations … these mental constructs of how life “should” turn out? I wonder who imposed these expectations on me? Myself? My parents? My teachers? Society? I actually achieved most of my expectations, but at what cost? Did I chain myself to a way of living that didn’t necessarily suit me? Am I more unhappy with expectations not met … or those that I did meet? Don’t expectations inevitably lead to disappointment?

And now I suppose I have expectations that SJ will get better because, dadgummit, we’re doing all the right things to make sure he gets better!! But what if SJ himself doesn’t want to get better?? Doesn’t a mentally ill person have the right to stay mentally ill, or must they conform to society’s expectation to conform and “get better”? It seems SJ is hellbent on living the life he CHOOSES. I can’t force him to meet my expectations. He has a right to his own life choices. I just need to find the grace, and power, to accept his choices. I’m tired of fighting the heartache.

You know what? I am friggin sick and tired of all these expectations imposed on me and that I impose on others. So, I am going to liberate myself from them by throwing them ALL out. I’m not going to live up to SJ’s expectations, Ms. Freud’s expectations, the world’s expectations, or even my own expectations. Screw that. I’m going to do all that I can and then simply allow each day to unfold however it may. One day at a time, Stucky. One day at a time. For the first time in my life I’m going to live the life I want, without expectations. It’s all I can do. I surrender.
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In closing, I hope it’s obvious that I’m not trying to convince anyone that I have “arrived” or that I have the answers … or, that I’m even correct in my thinking. I’m probably full of shit and mentally ill myself. I mostly wrote this for myself. It’s cathartic. Writing helps me slow down my mind. It helps me “see” my brain. I probably would have written this to myself if I didn’t have my TBP friends to share with. Many of you have been wonderfully supportive. I can’t thank you enough.

LLPOH’s Grim Reality #1

I came across the following article in the New York Times:

http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&pagewanted=all

This article is reasonably long, but I highly recommend it, as it gives great insight as to why manufacturing is doomed in the western world, particularly in the US. The destruction cannot be avoided. Action was needed decades ago, but was not taken.

This article highlights the problems manufacturers face in the US, and clearly demonstrates why large-scale manufacturing is not coming back to the US. It is a fairly long article, and focuses mainly on Apple and its manufacturing, but the issues are the same for all manufacturing. China has a number of significant advantages that cannot be overcome, including: 1) huge economies of scale, a skilled, 2) a compliant and cheap workforce, 3) a government that invests in, and supports manufacturing, 4) major advantages in the supply chain (ie. all suppliers of sub-components of a product are located close together), and 5) enormous flexibility and responsiveness to customer requirements. Following are the salient points, and some comments of my own. The US in particular lacks all of these things. Following are salient points from the article, with my comments added.

– Obama (Einstein that he is) asked Steve Jobs why the manufacturing jobs cannot return to the US. Jobs replied that manufacturing jobs are not coming back.

– Made in the USA is simply not viable. (I have been making this point ad nauseum).

– Apple employees 63,000 people directly world-wide, about 2/3 of those in the US. An additional 700,000 are employed on their behalf, almost entirely overseas, designing and building Apple products. (700,000 employees transferred to the US would fix the US unemployment problem, when the trickle-down effect is considered. Of course, if Apple relocated the 700,000 from overseas to the US, they would go broke. Small problem there.)

– One of the primary sub-contracting agencies, Foxconn, employees 230,000 manufacturing workers in one facility. That bears repeating: One of the primary sub-contracting agencies, Foxconn, employees 230,000 manufacturing workers in one facility. They have dozens of facilities. The employees live in dorms at the facility. (Try that in the US!)

– The average wage in the above facility is $17 per day – for 12 hour shifts. (My average wage and benefits bill for a 12 hr. shift would be over $400 – or over 20 times more. I simply cannot compete.)

– The entire supply chain is geographically close together – i.e. parts suppliers are right next door to each other. (My suppliers are spread out across the country and across the world. As a result, transport costs for my sub-components are quite high, and delivery/lead-times times are long.)

– The US is not and has not produced enough mid-skill workers. (That is one of my theme songs.)

– China has the ability to increase and decrease production in a very short period of time – almost instantly. (I need weeks and/or months to do the same thing. For me to hire and train workers, get my supply chain in order, etc. for an increase is an extended process. To decrease production also takes weeks – I have outstanding purchase orders in place that I have to honor, I have work-in-process that needs to be completed, etc. I cannot compete on speed.)

– They give an example of a special made screw being made/delivered in 3 hours. (For me it would take days or weeks to get a special made screw, or anything else for that matter.)

– Governments assist their manufacturing industry. (Mine – not so much. Quite the opposite.)

– They are able to hire 3000 employees overnight if required. Let me repeat that – they can hire 3000 fully trained people overnight! (For me to hire/train 30 would take at least 5 or 6 months. I cannot compete.)

– They hired 8,700 industrial engineers in 15 days. Again, I repeat – they hired 8,700 industrial engineers in 15 days. In the US they predicted it would take 9 months to do the same thing. (No comment needed.)

– “The US has stopped producing people with skills we need” – unnamed Apple exec. (Wow – now there is a detail I had missed. Not. He is absolutely correct.)

– It predicts that middle class-jobs may return, eventually. But not for the current workers – for “future” workers. But it doesn’t predict when or in what fields. But it does say that those people already out in the workforce are screwed. (It doesn’t use the word screwed – that is my translation. But of course they are correct. Unskilled workers are available – but there is no market for them, as they are far too expensive and spoiled to compete in a global marketplace. Unskilled people or people with non-marketable skills are in for a very bad time. Skilled manufacturing people in particular are in for a bad time – as there are too few of them, and there are too many obstacles to overcome – wages (20 times higher), a dislocated supply chain, the inability to be able to react quickly, etc.).

So, in sum, the picture is not pretty. In fact, it is disastrous. Globalism is here to stay – it is not going away. The pain and suffering for the middle class will increase, and accelerate, in my opinion. We have fallen too far behind to recover position, even if the scale issues and cultural issues were not so severe. There may be some opportunities in niche markets, but they will not be plentiful.

It will be ever more difficult to start up and run a business, in any event, as US government policy continues to add to the burden of small businesspeople. Large companies will continue to send work overseas – the US cannot compete against the rest of the world, and the fact is that they have no choice, as they will fall prey to their competitors if they do not – not only to minimize cost, but to improve responsiveness to their customers, as it is suicide to be slow to meet customer’s demands. Anyone who believes that the situation can be reversed is deluding themselves. Manufacturing, and indeed services, will continue to leave the US as the Chinese are simply more cost efficient, educated, flexible, and responsive to their customers. It is game over, man. Game over. The Chinese have won and are now just running out the clock.

PAYCHECKS, PERCEPTION, PROPAGANDA & POWER

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” – Upton Sinclair

I began to write this article in early December. I had just written a piece that attempted to scrutinize how the American public could stand idly by while heavily armed mercenary thugs viciously crushed the Occupy encampments across the country in a Department of Homeland Security coordinated attack at the behest of the ruling oligarchy. Comfortably Numb made a case that the political and economic systems of the United States have been captured by a few evil men and they use their wealth and power to control the message hammered into the psyches of an apathetic, distracted, vincibly ignorant public. I started to tackle the question of why Americans could stand by as the new Greatest Generation was being abandoned, derided, scorned, beaten, tear gassed, and arrested for having the courage and audacity to stand up to a powerful corrupt unholy alliance between Wall Street psychopaths, corporate fascist barbarians, and Washington DC power hungry jackals. But I became overwhelmed with a feeling of disillusionment and hopelessness and was unable to write anything for about a month. I found myself questioning whether it was worth fighting such a powerful foe after seeing how easily they crushed the opposition put forth by OWS. After a month I decided I am not one to love my servitude.

“Most men and women will grow up to love their servitude and will never dream of revolution.” – Huxley’s Brave New World

I owe it to my three sons to keep fighting the good fight. They deserve a future. Day by day we draw ever closer to a showdown with the traitors who have sold this country into debt slavery. I don’t dream of revolution, but my eyes are wide open and I see it coming. I had been trying to wrap my head around what happened with the Occupy Movement since the Department of Homeland Security coordinated destruction of most of the encampments around the country in November. The corporate mainstream media immediately moved onto more pressing issues like the Kim Kardashian divorce and Jessica Simpson’s weight gain. The American public has been instructed by the media the Occupy story is history, just like the BP oil spill, the Fukushima nuclear meltdown, and the Egyptian revolution. In a society consumed by reality TV Occupy Wall Street was just another show. The credulous American populace dutifully turned their attention to Black Friday and whipping out one of their 15 credit cards to purchase remote control pillows, 3D 72 inch HDTVs, a see through tank top from the Snooki line of slutware, or thousands of other ludicrous Chinese crap churned out by slave labor in factories built to support the “efficiency” efforts of U.S. conglomerates.

Without a constant irritating presence in the heart of NYC and other large cities, the Occupy Movement appears to have lost steam. I’ve been trying to figure out how and why this happened. The issues that motivated the protests have not gone away. The despicable MF Global crime, committed by a hall of shame member of the .01% – Jon Corzine – has proven beyond a shadow of a doubt the Wall Street/Washington DC criminal conspiracy is alive and well. Unless you have been sitting in line at a Wal-Mart for the last two months to get a $3 waffle-maker, you saw young people across the country tear gassed, shot with rubber bullets, maced, bludgeoned, and brutalized by the paid thugs of the ruling oligarchy on a daily basis. The outrage at the continued looting by the psychopathic Wall Street aristocracy and the horrific police brutality against young people exercising their Constitutional right to free speech and assembly should have ignited widespread anger and mass protest. Instead the reaction has been silence, scorn and smug satisfaction with the government response.

Paychecks & Perceptions

There are a plethora of rationales for the apathy and lack of critical thinking overwhelming our society as we plunge into the depths of a looming economic calamity. They include economic self interest, the power of propaganda to condition the masses, fear of opposing authority, and the perception of a reality that allows you to sleep at night. The Upton Sinclair quote above hit home for me a few weeks ago and explains much of the disdain for the Occupy movement. I was in a high level meeting at my University and during the course of the meeting the Occupy Movement was brought up. A senior executive made a derogatory comment about Occupy and then laughed. I smiled and bit my tongue. In retrospect it shouldn’t have surprised me. I work at one of the top business schools in the world. The person who made the comment has spent his entire life educating students who end up with jobs at Wall Street financial institutions and with America’s largest corporations. It is a natural response for someone whose whole life is reliant upon the existing financial system to psychologically overlook the obvious criminality of the Wall Street fat cats and corporate executives who validate his entire existence and life’s work. He chooses to not understand the message of these protestors because to truthfully comprehend their message would nullify his thirty years of academic efforts. My non-response to the comment about the Occupy Movement was also based upon self-interest and reliance on a paycheck to make a living. I had learned my lesson the hard way during a previous career stop.

It appears older generations have a considerably more negative view of young people protesting the capture of our political and economic system than younger generations. This also makes sense because they have the most to lose and cannot visualize a society other than the one they have created. To acknowledge the validity of the Occupy Movement and the justice of their positions would be to admit their own guilt in the creation of a society that has allowed a chosen few to enrich themselves at the expense of the many. The Baby Boom Generation has been living a lie their entire adulthood. It is true that prior generations created the welfare/warfare state we have today, but the Boomers have had the reins of power for the last two decades in Congress and chose to not only ignore the fact the entitlement promises made by previous administrations could not be fulfilled. They even made further promises in the trillions to their fellow Boomers. Instead of making a budgetary choice between guns and butter, the Boomers chose guns, butter, education, universal healthcare, the right to own a home, the right to a 72 inch HDTV, and zero percent financing on their Cadillac Escalade from government motors. The consequences of these choices are a $15.2 trillion National Debt growing at a rate of $3.7 billion per day and unfunded entitlement liabilities totaling in excess of $100 trillion.

I had the pleasure of meeting Neil Howe, co-author of The Fourth Turning and fourteen other books, in early December. His ground breaking work with William Strauss on generational theory has proven to be uncannily accurate, as their 1997 assessment of what dynamics would drive the course of history over the coming decades have materialized exactly as they presumed. We had a fascinating two hour discussion about various topics impacting the world today and I found that we were in agreement on just about everything, except for the Occupy protests. Neil Howe is an expert on interpreting how generations react to events. I expected him to be impressed by the courage and fortitude of the Millenials leading this protest against Wall Street gluttony and audacious criminality. This is the new GI Generation and I anticipated him perceiving these protests as a prelude to greater feats ahead by this generation. Instead he described them as naive adolescents being led down a phony path by anarchist Boomers. As an example he referenced the fact that many of the protestors were wearing Guy Fawkes masks, the most famous anarchist in history. He found this distasteful and dangerous. My interpretation of the Guy Fawkes masks was more in line with the movie V For Vendetta and the theme of a corrupt evil government keeping the public living in perpetual fear.

“Because while the truncheon may be used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who will listen, the enunciation of truth. And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression. And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission. How did this happen? Who’s to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you’re looking for the guilty, you need only look into a mirror. I know why you did it. I know you were afraid. Who wouldn’t be? War, terror, disease. There were a myriad of problems which conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic you turned to the now high chancellor, Adam Sutler. He promised you order, he promised you peace, and all he demanded in return was your silent, obedient consent.” – V For Vendetta

Neil Howe’s impression of the movie centered on the terroristic aspects of blowing up Parliament, not on the symbolism of citizens rising up and casting off the yoke of a malevolent oligarchy that has used propaganda, fear and intimidation to manipulate and control the population. Howe is a Baby Boomer and I’m Generation X. We are each viewing the Occupy Movement through the prism of our life experiences and perceptions about the intentions of these protestors. The existing social, economic, and political structure is dominated by Boomers. Neil Howe views the Occupy Movement as a threat to the system he believes in and supports. As a cynical Xer with no allegiance to a corrupt government, a crony capitalist economic system or a greedy self centered society, I see these young revolutionaries as our last great hope.

Neil Howe runs a very successful consulting firm whose clients include Fortune 500 corporations, including Wall Street financial firms. His annual income and net worth is dependent upon the existing corporate dynamic. When your living depends upon not understanding the real reason young people are protesting corporate malfeasance, fraud and corruption, your mind can ignore observable facts and visible truths. Anything can be rationalized when putting food on the table requires you to ignore obvious truths and understandable facts.

Propaganda & Power

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.” – Edward Bernays, Propaganda, 1928

I was shocked when I came across the above quote a few months ago. Bernays had it figured out 84 years ago before mass media, television, or spin doctors. His vision of a society manipulated by a small number of governing elite who believe they know better than the masses has come to fruition. True republican equality as defined by the founders in the Constitution is considered quaint and a belief of the trusting and naïve masses by the wealthy elite. Manipulation of the masses through a relentless never ending barrage of propaganda disguised as news and unremitting false advertising is designed to control and herd the cattle into the slaughterhouse. We are given the illusion of free choice, when in reality the choices are being made for us by a chosen few who think they know what is best. These puppeteers controlling the strings inhabit the financial, government and corporate halls of power. Their purpose is not to benefit society and its citizens but to protect their wealth and influence, using any means at their disposal. Propaganda to control the minds of a willfully uninformed public has been their most potent weapon.

Source: Mike Kreiger

Most people have never heard the name Edward Bernays. That is the way public relations specialists (manipulators of the truth) like it. They operate in the shadows, subtly influencing public opinion through what Bernays arrogantly referred to as the sinister method of “engineering of consent”. The Governing Elite have no time for messy processes like true capitalism or non-manipulated free elections. The objective for Bernays and his ilk has always been to provide corrupt government power brokers, shadowy bankers and corporate media kingpins with potent psychological instruments of social persuasion and mind control. Edward Bernays is considered the “father of public relations”, and he was the nephew of Sigmund Freud. He pioneered media manipulation techniques.

He understood the weaknesses of the human mind and developed methods and processes for taking advantage of that weakness.

“The average citizen is the world’s most efficient censor. His own mind is the greatest barrier between him and the facts. His own ‘logic proof compartments,’ his own absolutism are the obstacles which prevent him from seeing in terms of experience and thought rather than in terms of group reaction.” – Bernays, Crystallizing Public Opinion

Bernays got his big break during the administration of Woodrow Wilson, the outset of the American interventionist empire bankrolled by an inflation creating Federal Reserve and a tax and spend Congress. During WWI, Edward began work for the Committee on Public Information, the immense propaganda machine ordered by Woodrow Wilson to sway the American public towards a war he campaigned to keep us out of. He became so instrumental he was invited to accompany Wilson to the Paris peace conference. His claims to fame afterward included:

Creating a false storyline of communists in Guatemala on behalf of his client United Fruit Company, resulting in a CIA led military coup which ushered in a brutal dictatorship resulting in the dislocation, torture and death of thousands.
He was responsible for breaking the taboo of women smoking in public while working for American Tobacco Company.

His biggest claim to fame was inspiring the most reviled propagandist in history. Bernays’ techniques were so effective that Joseph Goebbels, the Nazi propaganda minister, made copious use of Bernays’ book, “Propaganda” throughout the Holocaust, often crediting Bernays. That was quite a feather in Bernays’ cap. The German people were gradually indoctrinated by their government through propaganda into consenting and supporting the most horrific crimes in history as described by Milton Mayer in his book, They Thought They Were Free – The Germans, 1933-45:

“This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter.

“To live in this process is absolutely not to be able to notice it—please try to believe me—unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must someday lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head.”

Bernays was a master of using psychological techniques to mask the motives of his clients, as part of a calculated strategy aimed at keeping the public unaware of the forces that were working to mold their psyches. Bernays died in 1995, but his techniques have been taken to a new level as our government, media and financial elite use any means at their disposal to keep the masses sedated and content while they are fleeced and herded towards the slaughterhouse. The Big Lie perpetrated upon the masses is the fallacy of America being a democratic society. The anti-democratic and treacherous corporate public relations Madison Avenue maggots manage and manipulate the opinions of the many in order to make sure a true democratic system doesn’t threaten the privileges and supremacy of the governing elite.

I wonder if it was coincidental the creation of the Federal Reserve, implementation of the personal income tax, and virtually non-stop war coincided with the rise of an industry designed to manipulate and control the thoughts and opinions of an easily influenced and willfully unaware populace. Most people want to be led and told what to believe. Critical thinking and taking personal responsibility for your life and your society requires hard work, sacrifice, honesty, and self restraint. Simply believing storylines supplied by authority figures and media pundits allow the masses to continue living lives of debt delusion and hope, occasionally stirred into a frenzy of fear and loathing towards the foreign bogeyman of the moment, chosen by the governing elite. Bernays and his disciples understood this dynamic and have been able to utilize corporate mass media and the human weakness of trusting in the judgments of authority figures to control and manage the vast swath of America without them knowing it.

“If we understand the mechanism and motives of the group mind, it is now possible to control and regiment the masses according to our will without them knowing it.” – Edward Bernays

The propaganda techniques employed to manipulate the masses seemed less abhorrent when they centered upon just consumer products. Convincing women they would look like a gorgeous model if they used a company’s cosmetics or convincing a man he’d be admired by his neighbors if he drove a certain car was small potatoes. In the last few decades the misinformation and outright lies fed to the American public by oligarchy of governing elite has become more manifest and repugnant. The list of abuses is virtually endless.

The American public has been lured into debt by the incessant unrelenting lifestyle marketing messages spewed from our TVs 24/7. From the introduction of the show Lifestyles of the Rich & Famous in the early 1980s, wealth, materialism, and consumerism became the motivating force in America. Consumption accounted for only 63% of GDP in 1980, with capital investment accounting for 17%. Today, consumption accounts for 71% of GDP and capital investment only 12%. Keeping up with the Kardashians is the mantra of our times.
The utter failure of our government controlled educational system in teaching our children how to think critically or question the validity of government created data has allowed the elite to paper over the fact the average American worker has not had any real income gains in at least four decades. The insidious nature of Federal Reserve created inflation (up 600% since 1970) is incomprehensible to a public that finds math boring and not essential in their lives.

Once the manipulators convinced the masses they needed a 4,000 sq ft McMansion, two brand new stylish cars, four big screen HDTVs, three computers, stainless steel appliances, granite countertops, a Rolex, Armani suits, an in-ground pool, an ATV, and house at the shore, there was only one thing left to do – loan them the money to live the faux American dream. GDP has grown 525% since 1980. Personal consumption expenditures have grown 600% since 1980. Consumer debt outstanding has grown 700% since 1980. And total household debt outstanding has grown 800% since 1980. It seems the purveyors of debt on Wall Street have been the only beneficiaries of the apparition of an American dream sold to a willingly duped American populace.

The dream of home ownership was used by politicians of both parties to further their agendas, egged on by the Wall Street elite and the National Association of Realtors – two of the largest contributors to politicians. As politicians tried to outdo themselves creating programs to get poor people into homes, Federal Reserve Chairman Greenspan urged the masses to use creative new adjustable rate mortgage products. With a wink and nod from Greenspan and no fear of any regulation whatsoever, the Wall Street elite created liar loans, negative amortization loans, subprime loans, Alt-A loans and a myriad of other products to induce fraud in the housing market. Appraisers did their part by overstating the values of homes and Wall Street colluded with the rating agencies to package the toxic mortgages and sell them to clueless dupes around the globe with a AAA rating stamped on them. At the absolute peak in 2005, with prices two standard deviations above the long term average, Ben Bernanke declared the housing market strong and the NAR proclaimed it the best time to buy. As the coup de grace, Wall Street urged home owners to unlock that equity in their homes and borrow $3 trillion to spend on gadgets, home upgrades, automobiles, facelifts, new boobs, and exotic vacations. The greatest mass fraud in history was complete. And not one person has gone to jail.
Not only have the governing elite lured the masses into debt slavery, but they’ve convinced them to love their slavery. The governing elite have done a fantastic job of using their media mouthpieces to deflect criticism away from their pillaging and looting of the national wealth. They’ve successfully persuaded the slaves the extreme income inequality is beneficial to the country because the 1% are the job creators and have earned their way to the top through our free market capitalism system. Convincing the middle class to blame the poor for their three decade decline is a tribute to the effectiveness of their propaganda crusade. Jesse gives accolades to the father of propaganda as the moneyed interests have won:

“The moneyed interests have done quite a successful PR job in refocusing the national discussion on priorities involving social issues, and the reform of the support systems for the weak, the unfortunate, and the elderly. Turning one group against another, and objectifying your intended victims through slogans and stereotypes, has always been an effective method of bending the herd to your will. Score one for Edward Bernays.”

The Social Security System is an example of propaganda and misinformation on a grand scale. A modest (1% tax) insurance program designed to help widows and orphans during the Great Depression, which should have been treated much like term life insurance, morphed into a massive retirement plan at the behest of politicians over the last eight decades. The voters shockingly voted for more benefits. Millions are now totally dependent upon the monthly pittance they receive, as the promise of a Social Security pension deterred them from saving for their old age. Politicians perpetuated lies about the funds being protected in a lockbox. The truth is the politicians raided the lockbox and took every dime to spend on wars of choice, aid to dictators, paying off their corporate masters, and leaving only IOUs. They have promised $17.5 trillion more than they can payout. It could be made viable with a gradual rise in the retirement age and a simple means test that would eliminate payouts to those who do not need it. Instead politicians use it as a means to control their constituents and obscure the simple truths. Americans choose to remain ignorant of the facts based on their perceptions of a false reality.

Another storyline propagated by politicians of a liberal bent is that Medicare is a successful Federal government program. Only someone from the governing elite would declare a program that is $90 trillion underfunded, racked by fraud and abuse totaling almost $100 billion per year, despised by doctors across the land for its insane bureaucracy, and allows corporate insurance, drug and hospital conglomerates to dictate the costs, a success. The entire government run sickcare industry is a scam designed to enrich the corporations that contribute to the campaigns of the politicians writing the rules and regulations. The pricing mechanism between doctor and patient is broken, with neither having any say in the decisions.
With the unleashing of a torrent of inflation during the 1970s the governing elite needed to resort to obfuscation and manipulation of inflation figures to create the illusion of price stability and positive GDP, while screwing seniors citizens out of their Social Security benefits and convincing the middle class their annual 3% wage increases were getting them ahead in life. Inflation has been systematically understated by 5% to 7% annually since 1980.

The government drones at the BLS do the dirty work for their masters by reporting unemployment of 8.6% when the real level exceeds 20%, Great Depression levels. The corporate media just does the bidding of the corporate fascist state by unflinchingly reporting the bogus figures. Reporting the truth would be detrimental to the political and financial elites, so propaganda is rationalized as being beneficial to the country. The sheep just keep grazing as their shepherds herd them toward the slaughterhouse.

By conducting focus groups and testing words, master manipulators like Frank Lutz have been able to convince the masses to support repeal of the estate tax even though it does not affect 99.7% of American taxpayers. By renaming it a Death Tax, the public was convinced that this horrible abuse of the tax code should be repealed. The 0.3% with the ability and means to manipulate public opinion, won again.
The tax code and the propaganda campaign being waged by the richest .01% to obscure the truth and misinform the masses is the most barefaced attempt of the elite to retain their wealth and power. Their corporate media legions pound home the storyline of 50% of Americans not paying their fair share because they pay no Federal income tax. It sure sounds like these weasels must be doing something dishonest to avoid paying Federal taxes. What is not mentioned by the media mouthpieces is 50% of Americans make less than $25,000 per year. What is also conveniently forgotten is these people pay payroll taxes, local income taxes, state income taxes, real estate taxes, sales taxes, tolls and a multitude of other taxes, fees and charges to their utility, cable, and phone providers. In the real world, the total effective tax rate for someone making $50,000 per year exceeds the total effective tax rates of Mitt Romney, Lloyd Blankfein and Warren Buffett.

The IRS tax code did not grow to 75,000 pages because the middle class and the poor used their undue influence to convince politicians in Washington DC to insert credits, loopholes and deductions for mega-corporations and the wealthy elite into the code. Only those with wealth, power and influence are allowed to “sway” legislation in Congress. This is called crony capitalist democracy. The current propaganda coming from the GOP candidates is our poor mega-corporations that outsourced millions of American jobs to Asia are overburdened by the 35% corporate tax rate, despite the fact they actually pay an effective rate of 18% and many multi-billion dollar conglomerates pay nothing. The truth is not important or relevant to those running the show in this country.

The most damaging and far reaching use of propaganda, misinformation and outright scare tactics by the financial and political elites was during the financial meltdown during September and October of 2008. The American public was whipped into a frenzy of fear by the protectors of Wall Street – Hank Paulson and Ben Bernanke – in order to funnel trillions of taxpayer funds to the Wall Street cartel that created the crisis in the first place. The governing elite declared the economic system would fail unless Wall Street was bailed out. When some courageous Congress members balked at passing TARP, the masters of the universe crashed the stock market with their super computer trading machines. The hysterical pundits on CNBC and the other corporate media outlets shrieked that our way of life would surely die if the banks were not saved. TARP was passed and Wall Street bankers rejoiced by paying themselves billions in bonuses. The truth not revealed to the masses was that the failure of a few reckless ravenously greedy Wall Street banks would not have destroyed our economic system. It would have destroyed the wealth of psychotic bankers like Blankfiein, Dimon, Pandit and a slew of other criminals on Wall Street. Wealthy stockholders and bondholders would have been wiped out. Bank depositors would not have lost a dime. The irresponsible risk junky bankers would have seen their banks liquidated. Bad debts would have been written off. The remaining good assets would have been sold to prudent banks. But instead, the ethically and financially bankrupt were saved by their corporate fascist partners in crime at the expense of the confused and disoriented American citizens. Saving bankers had been successfully marketed to the sheep as being on par with saving the nation. Chalk another one up for Bernays and his brethren.
After Bush and his banker cronies successfully fleeced trillions from taxpayers and handed it to bankrupt bankers, Obama and his minions continued the con on the middle class. With the help of Pelosi and Reid he was able to dispense $800 billion of payoffs to various contributors, constituents and special interests while calling it a job creating stimulus plan. When it became clear to even the ignorant masses that no jobs were being created, the governing elite channeled their best Edward Bernays and invented the term “jobs saved”. The beauty of this concept was the impossibility of ever verifying the figures spouted by the paid shills disguised as expert economists. Billions more were funneled to the housing industry and auto industry as paybacks for their contributions in the form of homebuyer tax schemes and Cash for Clunker scams. The bill for these complete failures was passed onto future generations as the National Debt soared from $10.6 trillion to $15.2 trillion in just three years of Obama rule.
The latest fraud being perpetrated on the American public is the lie about energy independence touted by GOP candidates for president. Rather than leveling with the people and explaining the facts of peak cheap oil to them honestly, the governing elite prefer slogans, half-truths and fantasy projections. The left touts solar, ethanol and other green energy fantasies, while the right peddles drilling, fracking, and fake estimates of supplies. Both are lying. All the cheap easy to access oil in the world has been found. The oil being discovered and accessed today is harder to reach, more expensive to produce and requires producers to expend almost one barrel of oil to produce a new barrel of oil. The easy to access oil is being depleted at the same rate that new hard to access oil is being brought on line. Meanwhile, demand grows across the globe. Our far flung suburban sprawl society teeters on the edge of an abyss and the governing elite pretend all is well.

The above list of abuses committed by the ruling oligarchy pales in comparison to the totalitarian like measures that have been executed since September 11,2001. With the country cowering in fear, the governing elite passed an Orwellian like 350 page bill that changed this country forever. The USA PATRIOT Act, which changed the relationship between our government and its citizens forever, was supposedly written, introduced, debated and passed in the space of 30 days in October 2001. I wonder which public relations firm came up with the Orwellian acronym? Uniting (and) Strengthening America (by) Providing Appropriate Tools Required (to) Intercept (and) Obstruct Terrorism Act of 2001. The purpose of naming this bill was to imply that anyone who was against allowing our government to spy, monitor or place under surveillance anyone our government chooses would make you unpatriotic. The American people chose implied safety and security over true freedom and liberty by their deafening silence. The governing elite used fear and propaganda to achieve their goal of more domination over our lives.

Drunk with their new found power, the political elite decided to change the world by using their spin machine to create visions of mushroom clouds over U.S. cities in the minds of a gullible public to craft a believable storyline for the invasion of Iraq. A willingly pliant press corp. spread the misinformation about weapons of mass destruction and Al Qaeda connections to fashion a convincing plot for pre-emptive war on a sovereign country that did not threaten our country. Who benefitted from war with Iraq? The military industrial complex reaped billions in profits and the Wall Street banks bankrolled the invasion with more debt. It only destroyed the lives of thousands of low income American soldiers, killed 100,000 Iraqi peasants, drove the price of oil from $25 a barrel to $100 a barrel, and will ultimately cost American taxpayers $4 trillion. And the great thing about passage of the Patriot Act and invasion of Iraq was the bipartisan cooperation pushing us ever closer to an authoritarian state.

The erroneous notion that Americans have a choice between two political parties that offer distinct and clear opposing policies addressing the major issues facing our country is still perpetuated by politicians and the corporate media. It is untrue, as we have seen the Obama administration employ the same repressive methods instituted by the Bush administration. Military spending rises. Wars of choice proliferate and grow. Obamacare is virtually identical to a plan created by the leading GOP presidential nominee. Further restrictions, regulations and laws are put forth to keep the masses controlled, sedated and fearful. The governing elite and their propagators of misinformation are again formulating a false storyline to convince the easily fooled ignorant public that a sovereign country 7,500 miles from our shores is actually a threat to their lives. While our government has already committed acts of war against Iran (sanctions, assassinations, cyber warfare, and using drones to spy), the public is being worked into a bloodthirsty frenzy of nationalism. Bipartisanship worked so well with Iraq. How could it possibly go wrong with Iran?

In the last six months cracks have begun appearing in the fascist façade masquerading as a democratic republic. The rise of the Occupy Movement, increasing pain and discontent among the middle class, a small but vocal irate minority utilizing the internet to organize, inform and spread knowledge, and the growing support among the liberty minded for Ron Paul’s candidacy are the opening salvos in a coming revolution. The volleys being traded between the forces of the American aristocratic elite and the leading forces of this revolution are only the opening shots on par with Bunker Hill. The oligarchs have won the initial skirmishes with the Occupy Movement through their control of superior mercenary fire power and ability to falsify the message and nature of the protestors. The corporate mass media propaganda machine convinced an apathetic, non critical thinking public the protestors were nothing but dirty, lazy, college students looking for government handouts organized and led by George Soros. Journalist Robert Fisk reveals the true nature of the protests and rage:

“And that is the true parallel in the West. The protest movements are indeed against Big Business – a perfectly justified cause – and against “governments”. What they have really divined, however, albeit a bit late in the day, is that they have for decades bought into a fraudulent democracy: they dutifully vote for political parties – which then hand their democratic mandate and people’s power to the banks and the derivative traders and the rating agencies, all three backed up by the slovenly and dishonest coterie of “experts” from America’s top universities and “think tanks”, who maintain the fiction that this is a crisis of globalization rather than a massive financial con trick foisted on the voters.

The banks and the rating agencies have become the dictators of the West. Like the Mubaraks and Ben Alis, the banks believed – and still believe – they are owners of their countries. The elections which give them power have – through the gutlessness and collusion of governments – become as false as the polls to which the Arabs were forced to troop decade after decade to anoint their own national property owners. Goldman Sachs and the Royal Bank of Scotland became the Mubaraks and Ben Alis of the US and the UK, each gobbling up the people’s wealth in bogus rewards and bonuses for their vicious bosses on a scale infinitely more rapacious than their greedy Arab dictator-brothers could imagine.” – Robert Fisk, Bankers are the Dictators of the West

The mounting desperation of the oligarchs is palpable. They have circled the wagons as one of their leaders – Jon Corzine – was caught stealing $1.2 billion directly from the accounts of his customers after making reckless bets that went wrong and bankrupted his firm. The Department of Homeland Security coordinated brutality unleashed upon peaceful protestors in cities across America opened the eyes of more people to the approach of an increasingly oppressive state. The media lapdogs have come out in force with an organized smear campaign designed to derail the presidential campaign of Ron Paul, the only candidate talking about real change and a real downsizing of the American empire. Ron Paul’s platform of liberty, freedom, non-interventionism, sound money, and a government not controlled by bankers and corporate interests is anathema to the ruling elite of both parties. A vote for one of the hand selected candidates offered by the moneyed interests is simply a vote for the special interest status quo. As our economic system becomes more saturated with debt by the day a tipping point approaches.

Obama’s signing of the NDAA, overwhelmingly supported by politicians of both parties, now gives the ruling class the ability to track down and imprison indefinitely any American citizen they consider a threat to their power, without charges. The only remaining thorn in their side is the internet. The internet has allowed critical thinkers to share information, organize resistance to the oligarchs, create communities of like-minded citizens, and allow individuals the opportunity to turn the tables and perform surveillance on the state. The state does not like an unfettered internet because it allows citizens to find the non-manipulated truth and undermines their mainstream media propaganda machine. Young people are less able to be manipulated. The introduction of abominable legislation like SOPA and PIPA are a blatant attempt by the governing elite to crush dissent by locking down the internet and eliminating sites that question their version of reality.

Humans are a flawed species. Our minds are easily manipulated. We don’t like pain. We prefer instant gratification. We are susceptible to mass delusion. We will often choose hope over critical thought. Those with higher IQs will regularly attempt to take advantage of those with lower IQs. Fear and greed are the two motivations used by the minority in power to control and manipulate the majority. The American people have been led astray by a small group of powerful men. We were herded through a door in the wall of perception that promised an American dream of material goods, entitlements and pleasure with no obligations or responsibility to future generations. There is only one choice that can save this country from ruin. Each individual must make a choice to either to continue supporting the manipulative, corrupt status quo or coming back through the Door in the Wall.

“The man who comes back through the Door in the Wall will never be quite the same as the man who went out. He will be wiser but less sure, happier but less self-satisfied, humbler in acknowledging his ignorance yet better equipped to understand the relationship of words to things, of systematic reasoning to the unfathomable mystery which it tries, forever vainly, to comprehend” – Aldous Huxley