- WASHINGTON DC -- The
grand theft bailout now being rammed through Congress by Treasury Secretary
Paulson, Federal Reserve Chairman Bernanke, and other officials of the
Bush regime with the help of accomplices Pelosi, Majority Leader Harry
Reid, and other parliamentarians is a monstrosity for the ages, combining
every hideous feature of monetarism, elitism, oligarchism, and sheer
feckless incompetence. It is to all intents and purposes a national suicide
note of the United States of America, a contract with the devil that absolutely
guarantees irrevocable national decline. For any person of goodwill there
can be only one impulse at the present moment, and that is to stop this
bailout -- to block it, to sabotage it, to bottle it up, to load it with
killer amendments, and to do everything legally possible to stop this
insane design from going through.
- IF MCCAIN VOTES AGAINST THE BAILOUT, HE WILL WIN THE
- In political terms, McCain is now running well to the
left of Obama on this issue, with a much stronger populist profile. McCain
has attacked the outrageous greed and corruption of Wall Street. Obama
does not dare attack Wall Street, since these are his masters. Obama,
sounding like Milton Friedman, only attacks Washington. Obama has said
that he will support whatever Paulson demands. That is not a surprise,
since Paulson represents Goldman Sachs, and Obama is a wholly owned property
of Goldman Sachs, which is his single biggest source of campaign contributions.
Obama is a creature of Brzezinski, Soros, and Rockefeller, and without
them he has no existence; Obama is an abject Wall Street puppet, an agent
of finance capital. This week, both senators will have to decide how
they vote on the odious derivatives bailout. Obama will surely vote in
favor of it, since this is what Wall Street demands. If McCain votes against
it, he will most probably propel himself into the White House on the model
of Give 'Em Hell Harry in 1948. Filthy corrupt Democrats like Schumer
are already attacking McCain as the new Huey Long. Huey Long, the Louisiana
populist of the 1930s, had many positive features, and we could certainly
use a good dose of Huey Long in this country to counteract the elitism,
oligarchism, condescension, and arrogant snobbery of foundation operatives
like Obama. The bailout is already very unpopular 72% of all voters
are opposed to it and it will become more and more hated when it
becomes clear that it is also a failure. McCain's course is clear. Will
he have the brains and guts to cross Obama's T on this vital issue?
- PAULSON OF GOLDMAN SACHS, WOULD-BE FINANCE DICTATOR
- Paulson is a ruthless and brutal eco-freak usurer who
learned his trade at the Goldman Sachs stock-jobbing operation. He is
now the leading member of the committee of public safety which rules in
Washington, and which includes Gates, Rice, and Mullen. He now demands
the astronomical sum of 700 billion dollars for the bailout of mortgage-backed
derivatives, collateralized debt obligations, credit default swaps, and
other poisonous derivatives. Make no mistake -- this is not a bailout
of homeowners who are threatened with foreclosure; it is a bailout of
the lunatic house of cards which desperate bankers have built on these
mortgages using derivatives. The entire crisis is not a crisis of subprime
mortgages, it is a crisis of the derivatives bubble which was launched
by Wendy Gramm of the Commodities Futures Trading Commission and Greenspan
of the Fed with the connivance of Robert Rubin of Goldman Sachs and Citibank,
and others in the Clinton administration, some 15 years ago.
- These derivatives now amount to a total worldwide notional
value that can be estimated between 1 quadrillion and two quadrillion
US dollars. This sum is so large that it dwarfs the total value of the
entire planet earth and all those who live here. Compared to the cancerous,
bloated, and fictitious mass of derivatives which is at the root of this
crisis, the $700 billion demanded by politicians, large as this may seem,
is nothing but a drop in the bucket. And a drop in the bailout bucket
is what it will be. The mass of world derivatives between $1 and $2 quadrillion
represents an insatiable black hole which is capable of putting an end,
not just to civilization, but the human life itself. The moral choice
could not be clearer: humanity will either destroy the derivatives bubble
in our time, or the derivatives bubble will surely destroy humanity.
Those are the stakes in the current exercise.
- Paulson and Bernanke, both lawyers for the Wall Street
jackals, lampreys, vultures and hyenas, argue that the public interest
demands a bailout of their cronies at Goldman Sachs, Morgan Stanley,
J.P. Morgan Chase, Citibank, Bank of America, Wachovia, and the other
large money center institutions. Before the American public antes up
$700 billion just for openers in the game of genocidal poker which run
by the infernal croupiers Paulson and Bernanke, we would be very well
advised to examine the veracity of this premise.
- COMMERCIAL BANKS ARE INDISPENSABLE
- It is of course true that the healthy functioning of
the United States economy requires a viable and flexible system of commercial
banks. No one should doubt the necessity of commercial banks.
- Andrew Jackson was clinically insane on this point, and
he still has not a few followers around today. But it ought to be clear
that without the services of a well developed commercial banking system,
it is impossible to organize business activities as essential as payments,
deposits, checking, payrolls, and the discounting of short-term commercial
paper, bills of exchange, bills of lading, and all the credit instruments
that are intimately connected with real productive activity. Without
a functioning commercial banking system, the economic heart of the United
States would stop beating, as it briefly did at the end of the Hoover
administration in March of 1933. Without commercial banks, no wheel
of a factory or railroad can turn, and no commodities can move to show
up in supermarkets.
- JPM, CITI, BoA ARE DERIVATIVES MONSTERS, NOT COMMERCIAL
- But when we look at institutions like J.P. Morgan Chase,
Citibank, and Bank of America, we become aware that these large money
center institutions have become detached from any conceivable connection
to the world of production, wages, transportation, and all other useful
and productive activities. These institutions are not commercial banks
any more in any meaningful sense of the term. Ten years ago, in the midst
of the Asian financial crisis and the aftermath of the Russian GKO state
bankruptcy collapse, the boss of JP Morgan Chase went on television to
announce that his bank was specialized in the "risk business."
The risk business meant that JP Morgan Chase, had simply given up on
the traditional activity of commercial banks, which was primarily to provide
loans to corporations for productive investment in plant and equipment
that would also create well-paid industrial jobs. J.P. Morgan Chase
decided long ago that that activity was nowhere near profitable enough
to be continued.
- Instead, J.P. Morgan Chase devoted itself more and more
to the issuance, sale, and purchase of derivatives. As early as 1992,
the best definition of J.P. Morgan Chase was that it was no longer a
commercial bank but rather a derivatives monster. In 2002, the J.P. Morgan
Chase derivatives monster came very close to imploding, collapsing in
on itself like the hopeless black hole that it still remains to the present
day. According to the most recent report of the Comptroller of the Curreny
of the US Treasury dated September 30, 2007, JP Morgan Chase today has
between $90 trillion and $100 trillion of derivatives. In reality this
is a very low-ball estimate, and the real derivatives exposure is some
multiple of this figure perhaps $300 or $400 trillion, especially
now that Bear Stearns, a smaller black hole of derivatives has been absorbed.
But even a mere $90 trillion is already six times the US GDP (currently
estimated between $14 and $15 trillion).
- DERIVATIVES ARE FINANCIAL AIDS
- The question of the derivatives is once again the central
issue of the crisis. Most people may not even know what derivatives are,
although by now many have some idea that they are dangerous and toxic.
French President Jacques Chirac once defined derivatives as financial
aids, and he was right. A share of stock supposedly represents part ownership
in a corporation. A corporate bond is a debt instrument issued by a corporation,
with some claim to a part of the assets in case of bankruptcy liquidation.
That means that the stocks and bonds are paper, but paper that is at
only one remove from the real world of production, consumption, employment,
and wages. The derivative is something radically different.
- A derivative represents paper based on paper, no longer
a stock or bond, but a future, option, or index that is based on some
stock, bond, or other form of paper. Derivatives are therefore at least
one step further removed from the world of tangible physical commodity
production of useful items which humanity requires in order to survive
and to conduct civilization as we know it. In addition to the options,
futures, and indices, we have all the possible permutations and combinations
of the above, with new variations that are almost infinite. Even to catalogue
these would take a book. In addition to these exchange traded derivatives,
there is a much larger class of derivative which does not appear on the
Chicago Board Options Exchange or analogous institutions in all the money
centers of the world. The second and larger class represents the counterparty
derivatives, including such things as collateralized debt obligations,
mortgage backed securities, structured notes, credit default swaps, and
the myriad of other derivative products.
- These derivatives were originally supposed to be used
as a hedge against risk, but before too long they began to represent the
biggest single source of risk and the entire lunatic edifice would finance.
By now, to repeat this point yet again, the total world derivatives of
in excess of one quadrillion dollars -- that is to say, 1000 billion dollars,
and may be already approaching the neighborhood of $1.5 quadrillion or
even more. One of the inherent problems of derivatives is that nobody
knows this exact figure, since derivatives are not reportable in many
countries and tend to escape regulation by the proper financial authorities.
- DERIVATIVES ARE USELESS AND A THREAT TO CIVILIZATION
- You cannot eat derivatives. You cannot live in a derivative.
You cannot wear derivatives as clothing, nor can you drive a derivative
work. You cannot sail in them or fly in them. They cannot be used as
tools of any useful trade. They are not computers, not machine tools,
not pharmaceutical equipment, not agricultural implements.
- Derivatives are therefore totally outside the realm of
capital goods production needs, no matter how these may be defined.
- FOR RECOVERY, WIPE OUT, SHRED, DELETE ALL DERIVATIVES
- J.P. Morgan Chase, therefore, performs no useful or productive
social function, and there is absolutely no reason in the world why the
people of the United States should want to bail out this pernicious and
socially destructive institution. It has probably been several decades
since J.P. Morgan Chase created a single modern productive job. J.P.
Morgan Chase's strategic commitment in favor of the derivatives bubble
means essentially that we can easily dispense with most of the functions
of this self-styled "bank," really a casino. Instead of being
bailed out, J.P. Morgan Chase ought therefore to be seized by the Federal
Deposit Insurance Corporation, and put through chapter 11 bankruptcy.
In the course of that bankruptcy reorganization, the entire derivatives
book of J.P. Morgan Chase must be deleted, shredded, used as a Yule log,
or employed to stoke a festive bonfire of the derivatives. The world did
much better when there were no derivatives, and will get along just fine
- Derivatives were of very dubious legality in general
and were illegal in some of their specific forms until the mid-1990s.
- INSTRUMENTS MEANS DERIVATIVES
- According to Paulson's pact with the devil published
in the New York Times on September 20, 2008, the Secretary of the Treasury
is supposed to be empowered by Congress to spend $700 billion on mortgage
related securities, obligations, and instruments. That last word instruments
is the favorite euphemism of television commentators and journalists who
want to propose a derivatives bailout without using this word, which has
now become to some degree unmentionable and taboo, presumably because
of its highly negative connotations left over from the crises of more
than a decade ago. Accordingly, one very good killer amendment that ought
to be added to this pact with the devil should state that not one penny
of taxpayer money should ever be used to finance the purchase of derivatives,
no matter how they may be euphemistically referred to.
- WHY BUY MORTGAGE BACKED SECURITIES THAT HAVE NO PRICE
- Paulson wants to buy up derivatives. But at what price?
Derivatives have no intrinsic value. Like the rasbucknik in the old L'il
Abner comic strip, derivatives have negative value, since somebody has
to be paid to cart them away. Counterparty derivatives currently have
no price, since there is no market where they are trading, and nobody
would want to buy them if there were such a market. Collateralized debt
obligations were selling at 5 cents on the dollar a few weeks ago, but
that was well before the current crisis broke in its full fury. So how
will Paulson know how much to pay for the derivatives he wants to purchase?
Will he use the discredited Black-Sholes model, which led to the bankruptcy
of the Long Term Capital Management hedge fund ten years ago? Given all
this, the only price which can be assigned to the mass of derivatives
is not their notional value, but rather a big fat ZERO. Anything else
is stealing from the government.
- "INVESTMENT BANKS" DRIVE UP THE PUMP PRICE
- Let us now leave behind the category of the commercial
banks and move on to institutions like Goldman Sachs and Morgan Stanley,
the stock jobbing operations or counting houses that like to call themselves
investment banks these days, even though they do not have the status of
a commercial bank and are not members of the Federal Reserve. Why should
any public money at all be used to prolong the noxious lives of these
sociopathic and pernicious institutions? A short examination of what
these so-called investment banks do will reveal that there is no public
interest in keeping these creatures alive, and that, once again, touch
better off without them.
- Investment banks used to assist corporations and floating
issues of stocks or bonds on the financial markets. Investment banks
were supposed to function as the advisers of industrial corporations and
other corporations as they sought to raise capital needed for new plant,
equipment, and jobs. But today, these functions have virtually disappeared.
The investment banks do a certain amount of work in initial public offerings
for IPOs of new securities, but these are almost always of a financially
speculative nature. The main thing is that investment banks now place
bets on certain classes of assets in the hope of turning a purely speculative
profit for themselves. Goldman Sachs and Morgan Stanley maintain trading
desks and engage in purely speculative trading of assets which they themselves
own, and most of the time these assets represent derivatives of one kind
or another. In recent times, the most important asset class which Goldman
Sachs and Morgan Stanley have been trading is probably future indices
on commodities, especially oil. Goldman Sachs and Morgan Stanley between
them have in the past year by various estimates accounted for about half
of the speculative activity in the commodities markets of London, New
York, and other money centers which brought about the doubling of the
per barrel price of oil between July 2007 and July 2008, increasing the
cost of gasoline to almost five dollars per gallon.
- GOLDMAN SACHS, MORGAN STANLEY CREATE I.C.E. TO FLAY AMERICANS
- In a very real sense, American motorists filling their
gas tanks at the pump at exorbitant prices have been involuntarily subsidizing
the speculative derivatives activity of Goldman Sachs and Morgan Stanley.
How bitterly ironic that the same American motorists should now be taxed
in order to permit their tormentors to live on and to continue to mercilessly
loot them. Goldman Sachs and Morgan Stanley found that even the very
weak regulatory regime maintained here in the United States under the
auspices of the Commodity Futures Trading Commission was too onerous for
them because it slightly constrained their rapacious quest for speculative
profits at the expense of the American people. These two investment banks
therefore created a new speculative commodity exchange, the ICE or Intercontinental
Exchange located in London, with a regulatory regime is virtually nonexistent.
The ICE or Intercontinental Exchange in London is where about half of
the world futures contracts in oil have been trading in recent months.
- Goldman Sachs and Morgan Stanley, like their now-defunct
brethren Bear Stearns, Lehman Brothers, and Merrill Lynch, have also made
many speculative investments in the area of mortgage backed securities
based on predatory subprime mortgages. The adjustable rate mortgages
that underlie these derivatives should have been declared illegal long
ago. But now let us imagine what will happen if a hapless victim of these
predatory lending practices is forced into foreclosure in the current
world economic great depression.
- Goldman Sachs will send the bailiff to your door to throw
you, your family, and your belongings out on the street, even though you
have been taxed to permit Goldman Sachs to continue its sociopathic existence.
You will in effect be robbed out of one pocket even as you are being
pushed out the door and made homeless by the same institution which has
been the beneficiary of your forced charity.
- Surely any politician daring to come forward to suggest
the public bailout of Goldman Sachs so that it can continue to enforce
foreclosures against the American citizens who are paying the bill for
the financial excesses of this bandit institution ought to be tarred and
feathered and run out of town on a rail. Yet this is exactly what Pelosi,
Reid, Dodd, and Frank are proposing to force through the U.S. Congress
in the coming week. This represents a new low in public morality.
- With Fannie Mae and Freddie Mac, the situation is slightly
different, but the same criteria ought to apply. Fanny and Freddie worked
very well during the three decades after the formation of Fannie Mae in
1938 as an agency of the federal government -- a hillbilly cousin of the
US treasury, as it used to be called.
- Things began to go wrong in 1968 when Fannie Mae was
privatized, under the pernicious influence of the doctrines of the monetarist
Milton Friedman of the infamous Chicago school of pseudo-economics and
obscurantism. Fanny and Freddie have now been placed under the control
of conservators, but they ought to be nationalized as part of a permanent
state sector of the US economy, and operated as the public utility that
they were intended to be. The salaries of their officials ought to be
determined by the government-wide GSA schedule. Fannie and Freddie have
guaranteed mortgages, and ought to continue to do so. But they have no
obligation to guarantee mortgage backed securities or any other form of
newfangled derivatives which were never mentioned in their charter.
- Accordingly, Fannie and Freddie thought to strip away
the mortgage backed securities that have been used to package or bundle
the mortgages that they now hold. The mortgages represent a valuable
asset for the future, under conditions of economic recovery which we
intend to organize. But that extra layer of derivatives paper represents
a useless additional tax on the public treasury, which the US government
has no obligation to maintain. In short, it is time to separate the socially
useful core of actual mortgages representing residential and commercial
properties from the harmful and speculative overlay of the mortgage-backed
security. By this kind of financial engineering, speculators can receive
condign punishment, even as the public treasury is believed of an extra
layer useless payment which would only reward speculative crimes.
- If anyone should inquire as to the ultimate philosophical
causes of the current George Bush world economic depression, the answer
is simple: this depression is a direct result of the influence of Milton
Friedman and the Chicago school, who are themselves to kind of come down
American version of the Viennese school of Friedrich von Hayek. Ludwig
von Mises, and other charlatans masquerading as economists. The common
denominator of the Chicago school is the Vienna school which is represented
by the right-wing anarchist thesis that government is always bad and the
private sector, especially speculators, are always good. This absurd thesis
is now being consigned to the dustbin of history. Friedman and von Hayek,
if they were alive today, would doubtless demand the full fury of the
free market the unleashed against the American people. This would lead,
not to a recovery, but merely to death on a large scale.
- The implications of the Chicago school and the Vienna
school under current circumstances are nothing short of genocidal, and
even the financiers are hastily dumping the discredited doctrines of
Friedman and from Hayek as they rush to get their hands into the public
till through bigger and better bailouts in an endless series. There is
nothing anywhere in the world left today that might resemble a free market,
only an endless list of cartels, trusts, monopolies, oligopolies, duopolies,
and other conspiracies in restraint of trade. In fact, there has been
nothing even vaguely resembling a free market in most of the world in
the past several centuries. What is collapsing today in September 2008
is the delusion that such a thing as a free market might exist in the
- The same negative judgment applies to the lunatic doctrines
of Joseph Schumpeter, who preached the madness of creative destruction
as a way out of the world economic depression of the 1930s.
- Schumpeter's doctrines today are nothing less than a
public menace, and persons who demand a deflationary crash of the world
economy by preaching the Andrew Mellon formula of liquidating labor,
liquidating stocks, liquidating bonds, liquidating real estate, etc.,
are to be put in a padded cell. This is even worse than Herbert Hoover.
It was tried in 1932-33, and it turned out to be a bottomless pit already
then, so it does not need to be tried again.
- BACK TO THE NEW DEAL: RESTORE THE GLASS-STEAGAL FIREWALL
- Scribblers like Friedman and von Hayek were paid by finance
oligarchs to wage a relentless war against that heritage of the Franklin
D. Roosevelt New Deal, the set of policies which allowed humanity to survive
the Great Depression of the 1930s. The current crisis would not have
been possible in the present form if the institutional safeguards enacted
during the New Deal had been left in place, as they should have been.
These safeguards represent permanent features of civilization, and they
need to be restored. The best example is the repeal of the Glass-Steagall
Act under the Clinton administration in 1999. The Glass-Steagall Act
was a classic piece of New Deal legislation which established that being
a commercial bank and being a stockbroker are mutually exclusive activities
that could not be legally combined in the same company.
- Commercial banking was one thing, and stock brokerage
was something completely separate. Naturally, the greedy financiers and
their spokesmen clamored for the repeal of Glass-Steagall, and they finally
got their wish. Now less than 10 years later all of the Wall Street banks,
seemingly without notable exceptions, are bankrupt and insolvent institutions
that cannot not survive without a massive infusion of taxpayer money.
We need to restore Glass- Steagal, which will mean among other things
that Goldman Sachs and Morgan Stanley will not be eligible to become bank
holding companies after all. If you don't like your tax bill next year,
you should thank Newt Gingrich and others who made it their business to
destroy and roll back the achievements of the New Deal in the name of
the despicable ideology of monetarism as preached by Friedman and von
Hayek. Newt, by the way, is now calling for an immediate deflationary
crash to find out what the real prices of housing might be. This is like
doing experiments on your own flesh, and Newt should go to the funny farm.
- BACK TO THE NEW DEAL: RESTORE THE UPTICK RULE
- Another example is the uptick rule. This New Deal measure
meant that it was illegal to sell a stock short if it were continuously
in decline. The speculator had to wait until there was an uptick, meaning
a trade in which the stock in question increased in price; only then could
a short sale be carried out. Another piece of bitter irony inherent in
the present crisis is that this uptick rule was abolished by the feckless
and incompetent Chairman Cox of the Securities and Exchange Commission
at the beginning of last summer, just in time for the explosion of the
world credit crisis which has led to the current world economic depression.
Incredibly enough, Chairman Cox of the SEC has been unable to pull himself
together long enough to permanently re-impose the uptick rule.
- Instead, he has drawn up a list of 799 financial institutions
and banks whose stock will now be illegal to sell short for at least 10
days, although one suspects that this prohibition will be prolonged indefinitely.
This crackpot expedient reveals the true nature of the current monetarist
regime. Shorting and destroying General Motors, which actually produces
something useful, is fine, but no shorting of JP Morgan Chase, which is
a public menace that produces nothing but toxic paper. The long-term roots
of the current crisis go back to August 15, 1971, when Nixon, Kissinger,
Arthur Burns and George Shultz wantonly destroyed the Bretton Woods system
of fixed currency parities, ushering in the new world of financial risk
which is now collapsing around us.
- NATIONALIZE THE FEDERAL RESERVE AS A BUREAU OF THE TREASURY
- The present crisis ought to provide the death warrant
for the failed Federal Reserve System. When the Fed was created back under
Woodrow Wilson, its Rockefeller and Morgan sponsors promised that the
Fed would protect us against all future financial panics. The Fed failed
once in 1929-1933, and now it is failing again for a second time. The
Fed is worthless as a firewall against depression. We must therefore seize
the Fed, audit it, nationalize it, and operate it in the future as a bureau
of the US Treasury. From now on, we must go back to the Constitution,
meaning that the size of the money supply and short-term interest rates
will have to be determined by public laws of the United States, passed
by the House and the Senate and signed by the president. Using this method,
we can mandate new initial credit issues of $1 to $2 trillion to be used
exclusively as low interest (.5% to 1%) and long-term (30 to 40 year maturities)
credit for productive purposes only manufacturing, farming, mining,
commerce, energy production, infrastructure, and the other things we need.
We should stop having the Fed lend money to Citibank at 2% and then having
the Treasury borrow that same money back for 4% to 5% in the form of Treasury
paper. Nationalize the Fed, and let the Treasury finance itself, cutting
out the parasitical middlemen like JP Morgan Chase, Goldman, Citibank,
and the rest. The taxpayers will be the big winners.
- HOOVER'S RECONSTRUCTION FINANCE CORPORATION WAS A FAILURE
- The Paulson-Bernanke $700 billion is roughly comparable
(factoring in about 2000% inflation from 1932 to 2008) to the Herbert
Hoover Reconstruction Finance Corporation, which started with $2 billion
real 1932 dollars, but failed because it tried to prop up insolvent banks
and shore up collapsing financial values. Under FDR, the RFC was put under
Jesse Jones, who used it to create real plant and equipment with great
success. Under Jones, the RFC contributed decisively to US economic recovery
by building up the Metals Reserve Company, the Rubber Reserve Company,
the Defense Plant Corporation, the Defense Supplies Corporation, the War
Damage Corporation, the U.S. Commercial Company, the Rubber Development
Corporation, and the Petroleum Reserve Corporation. In other words, the
RFC under Jones rebuilt the industrial infrastructure which we have been
using down to the present day. Most of these investments represented added
physical commodity production. Today, this could be repeated to produce
infrastructure and energy plants for civilian use.
- CLEARING THE DECKS FOR WORLD ECONOMIC RECOVERY
- It is time to forget about paper and the price of paper,
and to concentrate on production securing the tangible physical
commodities and hard commodity production which are necessary for human
life and civilization. It is impossible to prop up financial values in
a panic, and it is foolish to try. To secure a decent future, we must
now enact the following measures. Any of these points, all of which seek
to defend the general welfare and the public interest, can and should
be used as killer amendments to be attached to the current bailout monstrosity
as a means of bringing it down.
- Stop all foreclosures on homes, farms, businesses, factories,
mines, transport systems, for a period of at least five years or for
the duration of the present world economic depression, whichever takes
longer. If you throw a family out of their home or shut down a family
farm, taxicab company, trucking firm, ferry, airline, railroad, or factory
of any kind because of debt, you will be on your way to Leavenworth. All
politicians now say that we have to keep families in their homes. Excellent!
A uniform federal law with real teeth is the way to do it.
- Seize bankrupt banks and financial institutions. Put
them through Chapter XI bankruptcy, and cancel the hopelessly unpayable
parts of their debts, starting with their derivatives book.
- Wipe out all derivatives, whether exchange traded or
counterparty, without compensation. They have always been illegal. They
are now a threat to all of our lives. Not one penny of public money must
go to buy derivatives.
- Securities transfer tax or Tobin tax on all financial
transactions, including stocks, bonds, foreign exchange, etc. This is
a sales tax on finance oligarchs who need to start paying their fair share.
This will take the life out of the booze for many speculators.
- Stop oil, food and commodity speculation with comprehensive
re- regulation including position limits, 50 to 100% margin requirements
depending on market conditions, and by distinguishing between legitimate
hedgers and predatory speculators.
- No tax increases on households. Surtax for foundations
like the Ford, Rockefeller, Carnegie, Annenberg, and Gates Foundations,
who use their funds not for charity but for subversion and divide and
conquer social engineering to divide and weaken the American people in
defense of the financier interest.
- Restore business confidence and credit with new credit
issue through the nationalized Federal Reserve, operating under the legal
auspices of the US Treasury. Use credit as a public utility. Provide
cheap, long-term credit for productive purposes only, not parasitical
speculation or financial services.
- Institute an absolute guarantee for Social Security,
Medicare, Medicaid, Head Start, WIC, food stamps, unemployment insurance,
and the other remaining elements of the social safety net. No "entitlement
reform" under any circumstances. Austerity for bankers, not people.
Use the proceeds from the Securities Transfer Tax to replenish the Social
Security Trust Fund and preserve the other vital programs through the
end of the twenty-first century.
- Using New Deal methods, it is possible to stop a depression
cold in a single day. We did it before, and we can do it again. Only 28%
of the American people now support the monstrous derivatives bailout,
with 37% opposed and 35% unsure, according to Rasmussen on Sept. 22.
This is an issue powerful enough to crystallize the current party re-alignment
in the same way that slavery in the territories did in 1860, or the last
depression did in 1932. Within a month, the current empty husks of the
gutted Democratic and Republican Parties could collapse, and be replaced
by the pro-Wall Street Bailout Party led by Obama and his phalanx of rich
elitists and Malthusian fanatics from both parties, and the pro-middle
class and pro-worker Anti-Bailout Party with support from right-wing
Republicans, libertarians, and working class Democrats. Who will have
the brains and guts need to assert leadership over the Anti- Bailout Party?
Will it be McCain? Or Hillary Clinton? Or someone else? We will soon find