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THE LONG CON

BY PHIL OF PHIL'S STOCK WORLD

(Originally published as "Weekend Weekend Reading)

This is amazing, isn't it?

I was reminded in Member Chat this weekend that Eisenhower (a Republican, by the way) once said: "Should any political party attempt to abolish social security unemployment insurance and eliminate labor laws and farm programs you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt, a few other Texas oil millionaires and an occasional politician or business man from other areas. Their number is negligible and they are stupid."  Unfortunately, the Stupids are currently holding our Nation hostage and it looks like the very weak-willed Democrats are going to give into their demands.  

Unlike Obama, President Roosevelt was proud to say "Organized money hates me--and I welcome their hatred!"  These days, the Democrats are in the same beds and wrapped up in the same, stained sheets as the Republicans and Banksters and they are all willing to sell the people of this country down the river in exchange for 4 more years at the head table.  A big difference these days is that a Congressman doesn't need to be in office for life to get rich - Here's a great list of Democrats and Republicans who have more than doubled their net worth in just 4 years of service - here's a good video on the subject.  

These are the Congresspeople who were PAID to look the other way while our economy was destroyed and were PAID to vote for TARP, stimulus and countless other programs that favor their Corporate Masters.  So it is true, trickle-down economics does work - it trickles from the Corporations that make Billions to the Congresspeople who make millions, but that's about as far as it goes unless you happen to work for the Congresspeople, and then you may be able to pick up some scraps of your own.  

Now they prepare to sell us down the river again, engineering another crisis that should never happen (and there was no reason for BSC or LEH to fail at the time either - NOT giving them Billions cost this country Trilllions AND THEY KNEW IT WOULD HAPPEN!).  Here we are though, just 3 years later, entertaining the possibility of letting the United States of America default on it's debt - something that will cost us countless Trillions of additional Dollars in interest payments on our current debt as well as future borrowing costs?  

Why would we let that happen?  Well who do you think those countless Trillions of additional Dollars will be paid to?  That's right, our friends the Banksters!  That's what this whole thing is about - cause a crisis, GET Trillions in low-cost loans, cause another crisis - MAKE Trillions in high-cost loans.  It's called the long con and, as I said, our own Congress has sold us down the river because they aren't as dumb as they seem - if they were, the Banksters wouldn't have had to pay them hundreds of Millions of Dollars to look the other way while they raped their constituents.  Roosevelt also said:  

The first truth is that the liberty of a democracy is not safe if the people tolerated the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.

The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living. Both lessons hit home. Among us today a concentration of private power without equal in history is growing.

That was 1938 and it took 70 years for us to forget everything we had learned from the first Great Depression and allow our Nation to be set up again for the second one.  In that speech, Roosevelt had cited horrific statistics showing that 1% of US Corporations owned 52% of all Corporate Assets and got 50% of all Corporate Income.  Less than 5% of US Corporations owned 87% of the assets and less than 4% of manufacturing corporations made 84% of the net profits.  In 1929, 0.3% of the population collected 78% of all dividends and, in 1936, 33% of all inheritances went to 4% of all heirs.  Those are the numbers we are back to today.

Unlike today's politicians - Roosevelt had a remedy:  He commissioned "a thorough study of the concentration of economic power in American industry and the effect of that concentration upon the decline of competition" to be undertaken by the Federal Trade Commission, Department of Justice and Securities & Exchange Commission, for whom he recommended appropriating $500,000 (a lot of money back then). In addition, the President requested $200,000 more to enable the Department of Justice — whose Assistant Attorney General Thurman Arnold (The Folklore of Capitalism), who told a New York audience about his plan to publicize antimonopoly prosecutions and to enforce existing anti-trust laws. The President also initiated Congressional investigations into the following:  

  1. Improvement of anti-trust laws by placing the burden of proof of innocence on those charged with certain violations, such as presenting identical bids, uniform price raises.
  2. More careful scrutiny of mergers and interlocking relationships.
  3. Supervision of investment trusts and gradual separation of banks from holding companies.
  4. Supervision and publicizing of activities of trade associations;
  5. Amendment of patent laws to prevent use of patent controls for suppression of new inventions.
  6. Correction of tax laws to encourage competition and dividend distribution.

You will notice, of course, that almost all of Roosevelt's reforms have been rolled back in the intervening seven decades and here we are again, right back where we were in the 1930s - a nation controlled by Business Interests with a People who are suffering and near the end of their ropes.  Obama had the opportunity to come in and push for a new, New Deal but that opportunity was squandered in his first two years and now we dwell in the muck and quagmire that is the current state of affairs in Washington.  

Perhaps things have to get worse before they get better.  Perhaps we can't have proper reform until the entire system crashes. Perhaps that will happen on Tuesday?  As it stands now, it would take an unprecedented act by both houses of Congress to move a bill to the President's desk in 48 hours.  Tom Daschle was a Senate Democratic leader in the mid-1990s, when Congressional Republicans forced government shutdowns rather than compromise on spending cuts states in the NYTimes:  “That was nothing compared to this. That was a shutdown of the government; this could be, really, a shutdown of the entire economy,” Daschle said. “You can’t be too hyperbolic about the ramifications of all this.”  

Democrats and Republicans with legislative experience agree that even if both sides decided Saturday to raise the $14.3 Trillion borrowing ceiling and to reduce future annual deficits, it would be extremely difficult for the compromise measure to wend its way through Congress before Tuesday’s deadline, given Congressional legislative procedures.  Will they do it? 

Update:  House Passes Debt Ceiling Vote
See Also: Such a Deal