New Study Reveals Why Cannabis is Still Illegal, Legal Pot DESTROYS Big Pharma Profits

As more and more people drop prescription drugs for medical cannabis, reports like this explain why Big Pharma is scrambling to keep prohibition in place. It also explains why the DEA has such close ties to the pharmaceutical industry.

By Justin Gardner

Source: The Free Thought Project

The question of why cannabis remains illegal becomes more unavoidable by the day, as scientific evidence mounts for its medicinal powers and states continue to decriminalize the plant. The legal drugs of alcohol and nicotine kill hundreds of thousands every year and have little to no medical value – but the ingestion of cannabis kills no one, and heals many.

The war on drugs itself is an utter failure by the metrics it was supposed to address – drug availability, drug prices and drug use. With the absence of any rational basis for prohibition, it begs the question of what actually sustains it.

We know the State profits immensely from the drug war, acquiring wealth and power by arbitrarily naming certain substances “illicit.” In the modern-day corporatocracy, certain industries profit as well, most notably prisons and various entities involved in State oppression.

In the area of cannabis, perhaps the biggest beneficiary to prohibition is the pharmaceutical industry. Big Pharma tried and mostly failed to defeat the groundswell movement of cannabis legalization in many states. But it seems to have a friend in the federal Drug Enforcement Administration (DEA), which against all reason decided to keep cannabis a Schedule 1 Controlled Substance.

Big Pharma admitted that legal cannabis poses a threat to its profit, and that reality is underscored in a new analysis from New Frontier Data. If medical cannabis were adopted in all 50 states, it would siphon about $4.5 billion a year from the pharma industry.

“New Frontier Data identified nine conditions in particular to assess the impact of the legalization of cannabis would have on prescription drug use.

Among those, spending on treatments for chronic pain and post-traumatic stress disorder (PTSD) represented about 60% of the total. Overall in 2016, it was estimated that patients spent nearly $14.3 billion and $10.6 billion, respectively, to treat chronic pain and PTSD. The costs to treat sleep disorders, anxiety, epilepsy, nerve pain, chemotherapy-induced nausea and vomiting (CINV), Tourette syndrome, and glaucoma collectively accounted for the other 40% dedicated toward treatments.

There is significant savings to be realized in the health care system both to consumers and the U.S. government. It is estimated that cannabis and related products can replace between $4.4 billion and $4.9 billion of current annual spending on those existing treatments.”

In a press release, New Frontier CEO Aguirre De Carcer said, “Looking at these numbers, it would appear that medical cannabis would be a drop in the bucket when it comes to impacting the total pharmaceutical industry. However, when you start to break down the numbers by specific sectors of the industry, like chronic pain or symptoms associated with chemotherapy, which are very lucrative markets for pharmaceutical companies, you will certainly see cannabis have a major impact.

They referenced a July 2016 study which found that, on average, about 11 percent of patients in legal weed states are successfully replacing prescription drugs with medical cannabis. This, along with other studies, prompted New Frontier Data to look further into the dynamic of medical cannabis and pharmaceutical drugs.

A National Academies of Science study identified nine specific conditions where medical cannabis can have a beneficial role – including chronic pain and post-traumatic stress disorder (PTSD) – which were used by New Frontier Data for their analysis. Another report showed that taxpayers could save $1.1 billion on Medicaid prescriptions annually if medical cannabis were legalized nationwide.

Any opportunity for alternatives that could result in reduced pharmaceutical drug use might present a compelling point of discussion from a public policy standpoint,said John Kagia, executive vice president of industry analytics at New Frontier.

The problem is, public policy is largely controlled by interests that have no desire to reduce profits by reducing prescription drug consumption, and have no desire to relinquish power by decriminalizing a medicinal plant that harms no one.

Judging by DEA chief Chuck Rosenberg, his agency will continue taking the lead in government’s war on people. Only a few days ago Rosenberg reminded us of the staggering, willful ignorance that guides the drug war, stating, “Marijuana is not medicine.

How Can a CEO Feel Good About Being Vile?

Heather-Bresch-800x430

Is a big raise enough to make CEOs feel good about being so vile?

By Jim Hightower

Source: OpEdNews.com

Corporate price gouging is never nice. But gouging people on the price of medicines they rely on to stay alive is worse than not nice — it’s predaceously evil.

And if you think corporate morality can’t go lower than that, how about gouging people on the price of a life-saving medicine in order to jack up the personal pay of a drug maker’s CEO? That’s the bottom level of grotesque immorality where Heather Bresch dwells. She is chief executive of Mylan, a pharmaceutical profiteer that markets the EpiPen medical device, which literally is a lifesaver for people who suffer deadly anaphylaxis allergy attacks.

These allergy attacks kill nearly 200 people a year in the U.S. alone. Within seconds, something as common as peanuts or a bee sting can cause severe rash, swelling of the airways, drops in blood pressure, shock, and if not treated right away, death. So, naturally, we would want to increase access to the life-saving medicine that prevents these attacks, right?

Increasing that access is hard to do at today’s price. For years, a two-shot packet of EpiPens cost under $100, but Mylan bought the rights to the injectable drug in 2007, gained monopoly control of the market, and in 2012 suddenly began sticking dependent patients again and again with drastic price hikes. Now, the two-pack averages more than $600, with some paying above $900!

Drug makers routinely claim they must charge high prices to recoup their cost of developing their products — but Mylan didn’t develop the EpiPen, taxpayers did. The original research was initiated by the Pentagon back in 1973. Today, the device and the medicine in it cost Mylan only a few dollars to produce, and the product itself is essentially unchanged from when Mylan bought it. So the company’s only real contribution to the EpiPen has been to raise its price by more than 600 percent — a shameful act of sheer profiteering that rips off hundreds of thousands of users and endangers the lives of those families who simply can’t afford it.

Mylan’s CEO, the one responsible for this price gouge, regards herself as a self-made corporate success story — a woman who came out of hard-scrabble West Virginia and scrambled to the top of the food chain at Mylan. “There is a work ethic and grit about [West Virginia] that allows me to help make a difference,” Bresch told the New York Times.

Well, yes, grit, hard work — and having the advantage of being the daughter of the state’s former governor and current US Senator, Joe Manchin III. Take the MBA degree she got from West Virginia University, an academic credential bestowed on her 10 years after she left the school, having completed only about half of the coursework required to get a degree. The state university later conceded that Bresch was awarded this business degree… well, because her father was governor at the time, overseeing the school’s budget. It’s this sort of ethical “grit” that Mylan’s chief exec has employed to pick the pockets of thousands of vulnerable customers who rely on EpiPen.

Heather’s greed has sparked a furious public backlash, leading to congressional investigations. But, again, her “grit” might pay off, for she has bought off several top allergy-patient advocacy groups who are not backing the people. Why? Because she’s been dispensing millions of dollars to them in PR grants, making them “allies” in her blatant price-gouging scheme.

One thing that has risen higher than EpiPen’s price: CEO Heather Bresch’s paycheck. It’s up by 671 percent since 2007, and last year alone she pocketed $18.9 million! But I wonder — is that enough to make her feel good about being so vile? Of Course, Congress and the courts will do nothing to deter her and the other Big Pharma gougers — but surely the lowest level of Dante’s Inferno has rooms reserved for all of them.

 

Jim Hightower is an American populist, spreading his message of democratic hope via national radio commentaries, columns, books, his award-winning monthly newsletter (The Hightower Lowdown) and barnstorming tours all across America.

 

$1,400,000,000,000: Oxfam Exposes the Great Offshore Tax Scam of US Companies

Screen-Shot-2016-04-01-at-3.34.42-PM

By Andrea Germanos

Source: AntiMedia

Using an “opaque and secretive network” of subsidiaries in tax havens, top American corporations have stashed $1.4 trillion offshore, a new report from Oxfam shows.

With “a range of tricks, tools, and loopholes,” for tax avoidance, the 50 largest U.S. companies, including well-known names like Goldman Sachs, Verizon Communications, Apple, Coca-Cola, IBM, and Chevron, raked in $4 trillion in profits globally between 2008 and 2014, are contributing to inequality, the anti-poverty group said.

The report, Broken at the Top (pdf), states that such tax dodging is one of the “profit-making strategies of many multinational corporations.”

As noted in the report,

  • From 2008 – 2014 the 50 largest U.S. companies collectively received $27 in federal loans, loan guarantees and bailouts for every $1 they paid in federal taxes.
  • From 2008 – 2014 these 50 companies spent approximately $2.6 billion on lobbying while receiving nearly $11.2 trillion in federal loans, loan guarantees and bailouts.

Explaining part of their strategy to lower their overall tax rate, the report states: “As a group, U.S. multinationals report that 43 % of their foreign earnings come from five tax haven jurisdictions, yet these countries accounted for only 4 % of the companies’ foreign workforces and just 7 % of their foreign investment.”

Take Bermuda, for example. The report states that U.S. companies reported $80 billion of profits in 2012 in the archipelago—but that’s more than the companies’ reported profits in Japan, China, Germany, and France combined. In other words, it “clearly does not reflect the real economic activity taking place in Bermuda.”

A point highlighted by the report: “We should not lose sight of why tax dodging matters to average people.”

It notes: “Fair tax systems are vital to finance well-functioning and efficient states and to enable governments to fulfill their obligations to uphold citizens’ rights to essential services such as healthcare, education, and social protection for low income families.”

Look no farther than Flint, Michigan—a city facing “falling tax revenues and budget cuts” that took the purported cost-reducing strategies of installing an emergency manager and switching the water system to the Flint River from the Detroit water system, which lead to thousands of children being exposed to lead contamination.

As the report was released in the wake of the Panama Papers, a massive leak that exposed how the world’s rich and powerful use tax havens to hide their wealth, Robbie Silverman, Senior Tax Advisor at Oxfam, said, “Yet again we have evidence of a massive systematic abuse of the global tax system.”

“When corporations don’t pay their fair share of taxes governments are forced to cut back on essential services or levy higher taxes on the rest of us. It’s time governments stopped pandering to big business and started working for the good of their citizens.

“We can’t go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill. Governments across the globe must come together now to end the era of tax havens,” Silverman said.

John Perkins: The New Confessions of an Economic Hitman

apologiesofaneconomichitman

Reposted below is the introduction and sample chapter from John Perkin’s “The New Confessions of an Economic Hitman” (also available in pdf form on his site here).

Introduction

The New Confessions

I’m haunted every day by what I did as an economic hit man (EHM). I’m haunted by the lies I told back then about the World Bank. I’m haunted by the ways in which that bank, its sister organizations, and I empowered US corporations to spread their cancerous tentacles across the planet. I’m haunted by the payoffs to the leaders of poor countries, the blackmail, and the threats that if they resisted, if they refused to accept loans that would enslave their countries in debt, the CIA’s jackals would overthrow or assassinate them.

I wake up sometimes to the horrifying images of heads of state, friends of mine, who died violent deaths because they refused to betray their people. Like Shakespeare’s Lady Macbeth, I try to scrub the blood from my hands.

But the blood is merely a symptom.

The treacherous cancer beneath the surface, which was revealed in the original Confessions of an Economic Hit Man, has metastasized. It has spread from the economically developing countries to the United States and the rest of the world; it attacks the very foundations of democracy and the planet’s life-support systems.

All the EHM and jackal tools—false economics, false promises, threats, bribes, extortion, debt, deception, coups, assassinations, unbridled military power—are used around the world today,even more than during the era I exposed more than a decade ago. Although this cancer has spread widely and deeply, most people still aren’t aware of it; yet all of us are impacted by the collapse it has caused. It has become the dominant system of economics, government, and society today.

Fear and debt drive this system. We are hammered with messages that terrify us into believing that we must pay any price,assume any debt, to stop the enemies who, we are told, lurk at our doorsteps. The problem comes from somewhere else. Insurgents. Terrorists. “Them.” And its solution requires spending massive amounts of money on goods and services produced by what I call the corporatocracy—vast networks of corporations, banks, colluding governments, and the rich and powerful people tied to them. We go deeply into debt; our country and its financial henchmen at the World Bank and its sister institutions coerce other countries to go deeply into debt; debt enslaves us and it enslaves those countries.

These strategies have created a “death economy”—one based on wars or the threat of war, debt, and the rape of the earth’s resources. It is an unsustainable economy that depletes at ever-increasing rates the very resources upon which it depends and at the same time poisons the air we breathe, the water we drink, and the foods we eat. Although the death economy is built on a form of capitalism, it is important to note that the word capitalism refers to an economic and political system in which trade and industry are controlled by private owners rather than the state. It includes local farmers’ markets as well as this very dangerous form of global corporate capitalism, controlled by the corporatocracy, which is predatory by nature, has created a death economy, and ultimately is self-destructive.

I decided to write The New Confessions of an Economic Hit Man because things have changed so much during this past decade. The cancer has spread throughout the United States as well as the rest of the world. The rich have gotten richer and everyone else has got-ten poorer in real terms.

A powerful propaganda machine owned or controlled by the corporatocracy has spun its stories to convince us to accept a dogma that serves its interests, not ours. These stories contrive to convince us that we must embrace a system based on fear and debt, accumulating stuff, and dividing and conquering everyone who isn’t “us.” The stories have sold us the lie that the EHM system will provide security and make us happy.

Some would blame our current problems on an organized global conspiracy. I wish it were so simple. Although, as I point out later,there are hundreds of conspiracies—not just one grand conspiracy—that affect all of us, this EHM system is fueled by something far more dangerous than a global conspiracy. It is driven by concepts that have become accepted as gospel. We believe that all economic growth benefits humankind and that the greater the growth, the more widespread the benefits. Similarly, we believe that those people who excel at stoking the fires of economic growth should be exalted and rewarded, while those born at the fringes are available for exploitation. And we believe that any means—including those used by today’s EHMs and jackals—are justified to promote economic growth; preserve our comfortable, affluent Western way of life; and wage war against anyone (such as Islamic terrorists) who might threaten our economic well-being, comfort, and security.

In response to readers’ requests, I have added many new details and accounts of how we did our work during my time as an EHM, and I have clarified some points in the previously published chapters. More importantly, I have added an entirely new part 5, which explains how the EHM game is played today—who today’s economic hit men are, who today’s jackals are, and how their deceptions and tools are more far-reaching and enslaving now than ever.

Also in response to readers’ requests, part 5 includes new chapters that reveal what it will take to overthrow the EHM system, and specific tactics for doing so.

The book ends with a section titled “Documentation of EHM Activity, 2004–2015,” which complements my personal story by offering detailed information for readers who want further proof of the issues covered in this book or who want to pursue these subjects in more depth.

Despite all the bad news and the attempts of modern-day robber barons to steal our democracy and our planet, I am filled with hope. I know that when enough of us perceive the true workings of this EHM system, we will take the individual and collective actions necessary to control the cancer and restore our health. The New Confessions of an Economic Hit Man reveals how the system works today and what you and I—all of us—can do to change it.

Tom Paine inspired American revolutionaries when he wrote,“If there must be trouble, let it be in my day, that my child may have peace.” Those words are as important today as they were in 1776. My goal in this new book is nothing less than Paine’s: to inspire and empower us all to do whatever it takes to lead the way to peace for our children.

 

CHAPTER 34

Conspiracy: Was I Poisoned?

The situation has gotten much worse since Confessions of an Economic Hit Man was first published. Twelve years ago, I expected that books like mine would wake people up and inspire them to turn things around. The facts were obvious. I and others like me had created an EHM system that supported the corporatocracy. Together, the EHMs, corporate magnates, Wall Street robber barons, governments and jackals, and all their networks around the world have created a global economy that fails everyone. It is based on war or the threat of war, debt, an extreme form of materialism that pillages the earth’s resources and is consuming itself into extinction. In the end, even the very rich will fall victim to this death economy.

Most of us have bought into it in a big way; we are collaborators—often unconscious ones. Now it is time to change. I had hoped that exposing these facts, making people conscious, would inspire a movement that, by 2016, would have resulted in a new vision, anew story.

People were in fact shaken awake. Activities in so many parts of the world, including localized ones such as the Occupy movements,national ones in places as diverse as Iceland, Ecuador, and Greece, and regional ones such as the Arab Spring and Latin America’s Bolivarian Alliance for the Peoples of Our America (ALBA), have demonstrated that we understand our world is collapsing.

What I had not anticipated was the flexibility in the EHM system or its absolute determination to defend and promote the death economy. I had not anticipated the rise of an entirely new class of EHMs and jackals.

I made it clear in the original book that I did not believe the EHM system was driven by some nefarious, illegal, secret plan devised by a small group of people determined to control the world; in other words, I did not believe in some unified “grand conspiracy.”

Then something strange happened.

In late March 2005, less than five months after publication of the book, I flew to New York City on a Monday. I was scheduled to speak at the United Nations the next day. I was in perfect health,as far as I knew. A man who identified himself only as a free-lance journalist had been hounding my publicist for an interview. Because his credentials were sketchy and I was receiving a lot of press at that time, she kept putting him off. But when he suggested picking me up at LaGuardia Airport, taking me to lunch, and driving me to the apartment where I was staying with a friend, she consulted with me and I acquiesced. He was waiting for me when I exited the airport. He took me to a small cafe, told me how much he admired my book, asked some of what had become rather standard questions about my life as an EHM, and then drove me to my friend’s apartment on the Upper West Side.

I never saw that man again, and meeting him would have been an unmemorable event—except that a couple hours later I suffered severe internal bleeding. I lost about half the blood in my body,went into shock, and was rushed to Lenox Hill Hospital. I ended up spending two weeks there and having more than 70 percent of my large intestine removed.

As I lay recovering in that hospital bed, I thought that perhaps my illness was a message to slow down, that my body was over-taxed and I needed to cut back on writing and the speaking tours.

The New York gastroenterologist told me that I’d suffered from complications due to a severe case of diverticulosis. I was shocked to hear this, because I’d recently had a colonoscopy. My Florida doctor had assured me that there were no signs of cancer, which had been my main concern. He mentioned that I had some diverticula, “like most people your age,” and ended by advising me to come back in five years.

Of course, my UN speech was canceled, as were numerous other media events. Word of my operation got out very quickly, and soon I was receiving lots of e-mails. Most supported me and expressed concern for my well-being. Some e-mails came from people who accused me of being a traitor to my country. Several assured me that I’d been poisoned.

When I asked my gastroenterologist, he responded that he was“quite certain” I hadn’t been poisoned, but that he’d also learned“never to say never.” In any case, all of it got me to thinking and reading more about conspiracies.

I still do not believe in the grand conspiracy theory. In my experience, there is no secret club of individuals who get together to plot illegal, world-dominating strategies. However, I do know that part of the power of the EHM system is that it foments many small conspiracies. By “small,” I mean that they are focused on specific objectives. Such conspiracies—secret actions to accomplish illegal goals—happened when I was just beginning school, such as the CIA coup that replaced the democratically elected Iranian prime minister, Mossadegh, with the shah, in 1953. They continued during my high school years; consider the CIA-supported Bay of Pigs invasion of Cuba, in 1963. But I became most aware of them when I was an EHM and the CIA arranged the assassinations of my two clients, Ecuador’s Roldós and Panama’s Torrijos, in 1981. Then, as I began writing the original of this book in 2002, there was the US-led conspiracy to overthrow Venezuela’s president, Hugo Chávez. After that came the conspiratorial lie about weapons of mass destruction in Iraq. This was followed by a flurry of conspiracies against leaders and governments in the Middle East and Africa.

While I was an EHM, the goals of most conspiracies were to further US and corporate interests in the economically developing countries—to do whatever it took, including overthrowing or killing government leaders, to enable our companies to exploit resources. After my colon operation, as I lounged around my home reading various reports, it became obvious that the tools I had used in Indonesia, Panama, Egypt, Iran, Saudi Arabia, and other countries were now being applied in Europe and the United States. Fortified by the so-called threat of global terrorism after 9/11, these conspiracies have given excessive power to the very wealthy individuals who control global corporations. Among the most striking are conspiracies to implement “free” trade agreements such as NAFTA and CAFTA, and the more recent Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), which empower corporations to assume defacto sovereignty over governments in countries around the world; to convince politicians to pass laws that permit the rich to avoid paying taxes, to control the media, and to use media to influence politics; and to terrify US citizens into fighting endless wars.

These and many other conspiracies took the EHM system far beyond where it had been in the 1970s. Despite all that I had writ-ten, I had to admit that I’d missed much of what had been going on beneath the surface. The old tools had been sharpened and new ones invented. The heart of this system remained the same: an economic and political ideology based on enslavement through debt and enforced by paralyzing people with fear. In my day, it had convinced the majority of Americans and much of the rest of the world that all actions were justified if they protected us from Communist subversives; the fear had now switched to Muslim terrorists,immigrants, and anyone threatening to rein in corporations. The dogma was similar, but the impact was now much greater.

Recuperating from that operation also sent me into the dark abyss of guilt. I’d wake up in the middle of the night haunted by memories of leaders I’d bribed and threatened. I had not yet come to terms with my EHM past.

I asked myself why I’d stayed in that job for ten long years. And then I realized how difficult it had been to escape. It wasn’t just the seduction of money, flying first class, staying in the best hotels, and all the other perks. Nor was it the pressure exerted by my bosses and fellow employees at MAIN. It was also the aura of the job, my title—the very story of my culture. I was doing what I’d been schooled to do, what I’d been told was the right thing to do. I was educated as an American whose job it was to sell America and to believe and convince everyone else that Communist regimes were out to destroy us.

One day, a friend e-mailed me a photograph of a poster like one that had hung on the wall of the boys’ bathroom in my elementary school. It depicted a sinister-looking man who asked, “Is your washroom breeding Bolsheviks?” It was an ad for Scott paper towels, and the subtitle read, “Employees lose respect for a company that fails to provide decent facilities for their comfort.” It sent a strong message that not buying American was akin to treason.

That photograph got me thinking about those most formative years in my life. After the Soviet Union launched Sputnik, the first satellite, we all became convinced that nuclear warheads were on the way. The chilling scream of sirens sent us scampering under our desks in weekly drills, to hide from imagined Soviet missiles. Movies and TV shows like I Led Three Lives, a gripping drama based on the memoir of an FBI agent who infiltrated a Communist cell in the United States, warned us to be vigilant; Red provocateurs, like the evil Bolshevik in the poster, lurked among us, ready to pounce.

By the time I entered the EHM ranks, it had become apparent that we were losing in Vietnam, a nation portrayed as a Sino-Soviet puppet. We were told that there would be a “domino effect”—that Indonesia would go next, then Thailand, South Korea, the Philip-pines, and on and on. It wouldn’t be long before the Red tide would sweep Europe and then engulf the United States. Democracy and capitalism were doomed—unless we halted the onslaught. And that meant doing whatever it would take to promote companies such as Scott, which portrayed themselves as bulwarks against communism.

Delving into my feelings of guilt helped me see the ease with which I had deceived myself in those years. It opened my mind to understanding that millions of people are in positions similar to mine. They are no longer taught to fear communism, but they still fear Russia, China, and North Korea, in addition to al-Qaeda and other terrorists. They may not travel to foreign lands and confront, face-to-face, the consequences of what their companies do. They may not personally stand beside oil spills in the Amazon or see the hovels where sweatshop workers sleep. Instead, they anesthetize themselves with TV. They succumb to assurances by their schools, banks, human relations experts, and government officials that they are contributing to progress. But in their hearts they know other-wise. Deep down, they—we—realize that the stories misrepresent. And now it is time to admit to our complicity.

On a trip to Boston, not long after my operation, I reconnected with my former Boston University professor and the author of A People’s History of the United States, Howard Zinn. Now in his eighties, he was still actively campaigning to reform a system he saw as an experiment that hadn’t worked. When I shared with him the guilt that so often threatened to overwhelm me, he urged me to keep opening to it.

“Don’t be afraid of it,” he said. “You are guilty. We’re all guilty. We have to admit that although the big corporations own the propaganda machine, we allow ourselves to be duped. You can set an example. Show people that the way out, redemption, comes from changing it.”

I told him that I often thought of middle-class Americans as being like the medieval bourgeoisie—the majority of the people, who lived in the bourgs outside the castle walls. “We pay our taxes so soldiers and jackals will defend us from the knights in the neighboring castles.”

“Exactly,” he said, with that smile of his that had enchanted and inspired so many students. “We will do anything to maintain a system that has failed us.”

I came to understand, during those days following my operation and in discussions with Howard, that my most important lesson since the publication of Confessions of an Economic Hit Man was similar to the one I had learned as a Peace Corps volunteer working with Andean brick makers: the only reason the EHM system works is because the rest of us give it permission to work. At best, we look the other way; at worst, we actively support it. One of the things that most bothered me was having to admit to myself that I not only had looked the other way but also had convinced many people to actively support that system. I made a commitment to myself that I’d be more diligent; I’d watch more closely what was going on in my own community, my country, and the world.

Although I was determined to follow Howard’s advice, I also found myself envying another man, who did not struggle with his conscience—a friend who became an immense support during my physical recuperation in Florida and who seemed to have no problem justifying his own violent actions. He was a jackal, taking a short leave of absence from the Middle East.

ABOUT THE AUTHOR

As Chief Economist at a major international consulting firm, John Perkins advised the World Bank, United Nations, IMF, U.S.Treasury Department, Fortune 500 corporations, and leaders of countries in Africa, Asia, Latin America, and the Middle East.

The New Confessions of an Economic Hit Man(2016), a follow-up to John’s classic New York Times bestseller, brings the story of economic hit men and jackal assassins up to date and chillingly home to the U.S. It goes on to provide practical strategies to transform the failing global death economy into a regenerative life economy. Confessions of an Economic Hit Man(70 weeks on the New York Times bestseller list, 32 languages), The Secret History of the American Empire(New York Times bestseller) and Hoodwinked were ground-breaking exposés of the clandestine operations that created the current global crises; they set the stage for the revelations and strategies detailed in The New Confessions of an Economic Hit Man.

John is a founder and board member of Dream Change and The Pachamama Alliance, nonprofit organizations devoted to establishing a world future generations will want to inherit, has lectured at Harvard, Oxford, and more than 50 other universities around the world, and is the author of books on indigenous cultures and transformation, including Shapeshifting, The World Is As You Dream It, Psychonavigation, Spirit of the Shuar, and The Stress-Free Habit. He has been featured on ABC, NBC, CNN, CNBC, NPR, A&E, the History Channel, Time, The New York Times, The Washington Post,Cosmopolitan, Elle, Der Spiegel, and many other publications, as well as in numerous documentaries including The End of Poverty?, Zeitgeist Addendum, and Apology of an Economic Hit Man. He was awarded the Lennon Ono Grant for Peace 2012, and Rainforest Action Network Challenging Business As Usual Award, 2006.

 

Is This China & USA’s “Thelma & Louise” Moment?

thelma-and-louise

By James Howard Kunstler

Source: Zero Hedge

Why would anybody suppose that the Peoples Bank of China might want to tell the truth about anything that was within their power to lie about? Especially the soundness of any loan portfolio vested unto the grasp of its tentacles? Of course, most of what China has done in speeding toward the wall of financial crack-up, it learned from watching US bankers slime their way into Too Big To Fail nirvana — most particularly the array of swindles, dodges, and frauds constructed in the half-light of shadow banking to hedge the sudden, catastrophic appearance of reality-based price discovery.

When so many loans end up networked as collateral in some kind of bet against previous bets against other previous bets, you can be sure that cascading contagion will follow. And so that is exactly what’s happening as China’s rocket ride into Modernity falls back to earth. Like most historical fiascos, it seemed like a good idea at the time: take a nation of about a billion people living in the equivalent of the Twelfth Century, introduce the magic of money printing, spend a gazillion of it on CAT and Kubota earth-moving machines, build the biggest cement industry the world has ever seen, purchase whole factory set-ups, and flood the rest of the world with stuff. Then the trouble starts when you try to defeat the business cycles associated with over-production and saturated markets.

Poor China and poor us. Escape velocity has failed. Which raises the question: escape from what, exactly? Answer: the implacable limits of life on earth. The metaphor for all this, of course, is the old journey-into-space idea, which still persists in the salesmanship of Elon Musk, the ragged remnants of NASA, and even the nightmares of Stephen Hawking. Get off this messed-up home planet and light out of the territories, say Mars. Of course, this is a vain and stupid idea, since we already have a planet engineered to perfection for all the life systems associated with the human project. We just can’t respect its limits.

So now, that dynamic duo, Nature and Reality, the actual owners of the planet, have showed up to read the riot act to the renters throwing a wild party. The fourth and perhaps ultimate financial crisis of the last twenty years begins to express itself in terms that only the raptors and vultures can see from on high. George Soros, Kyle Bass, and the other flocking shadow banking scavengers prepare to short the living shit out of the old Middle Kingdom. The immortal words of G.W. Bush ring in their ears: This sucker is going down,” and they are sure to win big by betting on the obvious. Trouble is, this sucker could go down so much further than they imagined, that whatever fortunes they gain from its descent will be foiled by the destruction of the very economic system needed for them to enjoy their gains.

For instance, when banking systems go down, governments usually follow, and when governments go down, societies often unravel. It doesn’t take a great effort of imagination to see China’s one party politburo leadership machine lose the respect of its governed masses, and then its control of events, followed by a Great Struggle among the regions and factions to restore some kind of order. And when the smoke clears there will a whole lot of nearly worthless concrete and steel, and a vast loss of notional wealth, and China will be lucky to land back in some approximation of the Twelfth Century.

It must be interesting for China to watch the horrifying disintegration of America’s political party structure currently on view, with the mad bull called Trump rampaging across the land and the designated inevitable Mz It’s-My-Turn hijacking her collective for the greater glory of Goldman Sachs. The last time China got the vapors politically — the so-called Cultural Revolution of the 1960s — the country went batshit crazy. Surely some of the ruling party remembers that with requisite terror.

Or maybe this is China and the USA’s Thelma and Louise moment. Pedal to the metal, they drive into the abyss of history holding hands. Remember, audiences loved that!

Report: Flint lead filters provide inadequate protection for residents

12424867_102316463489123_1674206032_n

By Shannon Jones

Source: WSWS.org

Federal and state officials are warning Flint residents that the lead filters they are using may be inadequate to protect them from the effects of elevated levels of lead in the city’s drinking water.

The warning came Friday after random samples collected from 26 residences since the final week of December came back with lead levels higher than the filters are designed to handle. The highest reading among the 26 homes was 4,000 parts per billion (ppb). The filters are not rated to handle lead levels above 150 ppb. The tests covered 3,900 homes.

After more than two years of lies and cover-up by federal, state and local officials, Flint residents are in a restive mood. Megan Kreger, a member of the local activist group Water You Fighting For, told the WSWS, “I didn’t believe it [about the lead filters] from the beginning. It has only finally hit the press.

“There has been fraud and negligence at all levels. It is a humanitarian disaster. We should not be living without clean water when we are only one hour away from one of the largest bodies of fresh water in the world.”

She rejected claims that Flint water is now safe for bathing. “My boyfriend took a shower before the Rachel Maddow town hall [over the weekend] and got the worst rash he has ever gotten. It almost looked like chicken pox.”

The US Environmental Protection Agency (EPA) recommends action be taken when lead levels exceed 15 ppb, though there is no safe level of lead exposure. Mark Durno of the EPA said the affected residents have now been contacted. The state had previously insisted that drinking filtered water was safe.

In the wake of the findings, Michigan Governor Rick Snyder urged all Flint residents to have their water tested as soon as possible. Dr. Eden Well, chief medical executive of the state’s Department of Health and Human Services (DHHS), advised children under six and pregnant women to drink only bottled water.

In an effort at damage control, Snyder sent a letter to state employees Friday, stating “what happened in Flint can never be allowed to happen again anywhere in our state.” The governor has tried to deflect all blame for the crisis to the Michigan Department of Environmental Quality (DEQ) and lower-ranking officials.

The DEQ said Monday that it has undertaken a five-part strategy to determine whether Flint water is safe to drink. The DEQ said it is working on a plan to make sure that residents with high lead-blood levels get their water tested.

Another issue of concern to Flint residents is that filters only have a limited life span, after which they are no longer effective. This is particularly true if the faucet where the filter is installed is the only source of water in the home.

Further, many Flint homes have older faucets that will not accommodate the water filters provided by the state. Over the weekend some 300 plumber volunteers installed new faucets free of charge in some 1,100 Flint homes, still a fraction of the city’s residences.

Federal officials said they were not sure why recent samples came back showing elevated levels of lead. Despite the findings, the EPA did not call on residents to stop using the lead filters. More testing is being planned.

The report on lead filters comes as state officials on Friday informed residents at more than 250 addresses living in areas of Genesee County outside of Flint that their water may also be tainted.

Dana, an auto parts worker who lives just outside of Flint, said she had just learned that her water may be dangerous to drink. “This is crazy. I live in the county and they just posted a whole bunch of addresses that might be affected. It appears it is impacting more than just the city of Flint. They had us misled. They told us it was fine. I was making coffee with the tap water every morning.

“It is an outrage. It is getting worse and worse. Everyone in the government is to blame. We as citizens do not know what is going on.”

Soon after the switch by the city of Flint in 2014 from its traditional water source, the Detroit water system, to the polluted Flint River, residents began to complain of foul-tasting, discolored water coming out of their taps. Nevertheless, citizens were repeatedly told the water was safe.

It later emerged that the highly corrosive water from the Flint River was leaching lead from the city’s antiquated piping, poisoning the city’s 100,000 residents. Even after the switch back to the Detroit water system in October, lead levels remain dangerously high due to the damage already done to the city’s water pipes.

Ten deaths from the deadly Legionnaires’ virus have also been traced to Flint water.

In another development, the US Department of Agriculture rejected a request by Snyder to extend the Women, Infants and Children (WIC) program to Flint residents up to the age of 10. A department spokesperson said federal law limited the program to children under age five. The program provides grants to states for supplemental foods, health referrals and nutrition information to pregnant and postpartum women with infant children.

Health professionals say proper nutrition is important in mitigating the long-term effects of lead poisoning in children. Children are especially vulnerable to lead, since their developing brains and nervous systems are more sensitive to toxins. The city has a child poverty rate of nearly 67 percent, 10 percentage points higher than Detroit.

According to the Michigan DHHS, 130,095 people in Genesee County, where Flint is located, are using food stamp assistance now, compared with 87,847 in 2005.

The report on continued high levels of lead in Flint’s water supply comes as Michigan’s Attorney General Bill Schuette says the state may not provide legal counsel for seven DEQ employees who are the subject of a class action lawsuit by Flint residents. Schuette has asked a federal judge to decide the matter of representation.

The lawsuit alleges the state endangered Flint residents by switching the city’s water source to the Flint River. In addition to the DEQ employees, the lawsuit also names Snyder, the state of Michigan, the city of Flint, two former emergency managers, the former Flint mayor and three city employees.

It has been filed on behalf of 10 plaintiffs, but seeks class action status for all Flint residents. It seeks compensatory and punitive damages, the creation of a medical monitoring fund and the appointment of a monitor to oversee Flint water.

The suit does not name federal officials, however the Obama administration’s EPA is deeply implicated in the cover-up of the lead poisoning danger. As early as April 2015, the highest-level EPA official in Michigan was aware that Flint water was not being treated for corrosion control, but said nothing. This, despite the fact that water professionals understand that such treatment is necessary if highly corrosive water like that from the Flint River is being used for drinking because of the danger of lead leaching from old piping.

Snyder has claimed he did not become aware of problems with Flint’s drinking water until October 1, 2015.

The Rise of “Criminal Capitalism”

corporate-crime-525

By James Petras

Source: Dissident Voice

About 75% of US employees work 40 hours or longer, the second longest among all OECD countries, exceeded only by Poland and tied with South Korea. In contrast, only 10% of Danish workers, 15% of Norwegian, 30% of French, 43% of UK and 50% of German workers work 40 or more hours. With the longest work day, US workers score lower on the ‘living well’ scale than most western European workers. Moreover, despite those long workdays US employees receive the shortest paid holidays or vacation time (one to two weeks compared to the average of five weeks in Western Europe). US employees pay for the costliest health plans and their children face the highest university fees among the 34 countries in the Organization for Economic Cooperation and Development (OECD).

In class terms, US employees face the greatest jump in income inequalities over the past decade, the longest period of wage and salary decline or stagnation (1970 to 2014) and the greatest collapse of private sector union membership, from 30% in 1950 down to 8% in 2014.

On the other hand, profits, as a percentage of national income, have increased significantly. The share of income and profits going to the financial sector, especially the banks and investment houses, has increased at a faster rate than any other sector of the US economy.

There are two polar opposite trends: Employees working longer hours, with costlier services and declining living standards while finance capitalists enjoy rapidly rising profits and incomes.

Paradoxically, these trends are not directly based on greater ‘workplace exploitation’ in the US.

The historic employee-finance capitalist polarization is the direct result of the grand success of the trillion dollar financial swindles, the tax payer-funded trillion dollar Federal bailouts of the crooked bankers, and the illegal bank manipulation of interest rates. These uncorrected and unpunished crimes have driven up the costs of living and producing for employees and their employers.

Financial ‘rents’ (the bankers and brokers are ‘rentiers’ in this economy) drive up the costs of production for non-financial capital (manufacturing). Non-financial capitalists resort to reducing wages, cutting benefits and extending working hours for their employees, in order to maintain their own profits.

In other words, pervasive, enduring and systematic large-scale financial criminality is a major reason why US employees are working longer and receiving less – the ‘trickle down’ effect of mega-swindles committed by finance capital.

Mega-Swindles, Leading Banks and Complicit State Regulators

Mega-swindles, involving trillions of dollars, are routine practices involving the top fifty banks, trading houses, currency speculators, management fund firms and foreign exchange traders.

These ‘white collar’ crimes have hurt hundreds of millions of investors and credit-card holders, millions of mortgage debtors, thousands of pension funds and most industrial and service firms that depend on bank credit to meet payrolls, to finance capital expansion and technological upgrades and raw materials.

Big banks, which have been ‘convicted and fined’ for mega-swindles, include Citi Bank, Bank of America, HSBC, UBS, JP Morgan, Barclay, Goldman Sachs, Royal Bank of Scotland, Deutsche Bank and forty other ‘leading’ financial institutions.

The mega-swindlers have repeatedly engaged in a great variety of misdeeds, including accounting fraud, insider trading, fraudulent issue of mortgage based securities and the laundering of hundreds of billions of illegal dollars for Colombian, Mexican, African and Asian drug and human traffickers.

They have rigged the London Interbank Official Rate (LIBOR), which serves as the global interest benchmark to which hundreds of trillions of dollars of financial contracts are tied. By raising LIBOR, the financial swindlers have defrauded hundreds of millions of mortgage and credit-card holders, student loan recipients and pensions.

Bloomberg News (5/20/2015) reported on an ongoing swindle involving the manipulation of the multi-trillion-dollar International Swaps and Derivatives Association (ISDA) fix, a global interest rate benchmark used by banks, corporate treasurers and money managers to determine borrowing costs and to value much of the $381 trillion of outstanding interest rate swaps.

The Financial Times (5/23/15, p. 10) reported how the top seven banks engaged in manipulating fraudulent information to their clients, practiced illegal insider trading to profit in the foreign exchange market (forex), whose daily average turnover volume for 2013 exceeded $5 trillion dollars.

These seven convicted banks ended up paying less than $10 billion in fines, which is less than 0.05% of their daily turnover. No banker or high executive ever went to jail, despite undermining the security of millions of retail investors, pensioners and thousands of companies.

The Direct Impact of Financial Swindles on Declining Living Standards

Each and every major financial swindle has had a perverse ripple effect throughout the entire economy. This is especially the case where the negative consequences have spread downward through local banks, local manufacturing and service industries to employees, students and the self-employed.

The most obvious example of the downward ripple effect was the so-called ‘sub-prime mortgage’ swindle. Big banks deliberately sold worthless, fraudulent mortgage-backed securities (MBS) and collateralized debt obligation (CDO) to smaller banks, pension funds and local investors, which eventually foreclosed on overpriced houses causing low income mortgage holders to lose their down payments (amounting to most of their savings).

While the effects of the swindle spread outward and downward, the US Treasury propped up the mega-swindlers with a trillion-dollar bailout in working people’s tax money. They anointed their mega-give-away as the bail out for ‘banks that are just too big to fail”! They transferred funds from the public treasury for social services to the swindlers.

In effect, the banks profited from their widely exposed crimes while US employees lost their jobs, homes, savings and social services. As the US Treasury pumped trillions of dollars into the coffers of the criminal banks (especially on Wall Street), the builders, major construction companies and manufacturers faced an unprecedented credit squeeze and laid off millions of workers, and reduced wages and increased the hours of un-paid work.

Service employees in consumer industries were hit hard as wages and salaries declined or remained frozen. The costs of the FOREX, LIBOR and ISDA fix swindles’ fell heavily on big business, which passed the pain onto labor: cutting pension and health coverage, hiring millions of ‘contingent or temp’ workers at minimum wages with no benefits.

The bank bailouts forced the Treasury to shift funds from ‘job-creating’ social programs and national infrastructure investment to the FIRE (finance, insurance and real estate) sector with its highly concentrated income structure.

As a result of the increasing concentration of wealth among the financial swindlers, inequalities in income grew; wages and salaries were frozen or reduced and manufacturers outsourced production, resulting in declines in production.

Employees, suffering from the loss of income brought on by the mega-swindles, found that they were working longer hours for less pay and fewer benefits. Productivity suffered. With the total breakdown of the ‘capitalist rules of the game’, investors lost confidence and trust in the system. Mega-swindles eroded ‘confidence’ between investors and traders, and made a mockery of any link between performance at work and rewards. This severed the nexus between highly motivated workers, engaged in ‘hard work, long hours’ and rising living standards, and between investment and productivity.

As a result, profits in the finance sector grew while the domestic economy floundered and living standards stagnated.

Financial Impunity: Regulatees Controlling the Regulators

Despite the proliferation of mega-swindles and their pervasive ripple effects throughout the economy and society, none of the dozens of federal or state regulatory agencies intervened to stop the swindle before it undermined the domestic economy. No CEO or banker was ever arrested for their part in the swindle of trillions. The regulators only reacted after trillions had ‘disappeared’ and swindles were ‘a done deal’. The impunity of the swindlers in planning and executing the pillage of hundreds of millions of employees, taxpayers and mortgage holders was because the federal and state regulatory agencies are populated by ‘regulatory administrators’ who came from or aspired to join the financial sector they were tasked with ‘regulating’.

Most of the high officials appointed to lead the regulatory agencies had been selected by the ‘Lords of Wall Street, Frankfurt, the City of London or Zurich.’ Appointees are chosen on the basis of their willingness to enable financial swindles. It therefore came as no surprise on May 28 2015 when US President Obama approved the appointment of Andrew Donahue, Managing Director and Associate General Council for the repeatedly felonious, mega-swindling banking house of Goldman Sachs to be the ‘Chief of Staff’ of the Security and Exchange Commission. His career has been typical of the Washington-Wall Street ‘Revolving Door’.

Only after fraud and swindles evoked the nationwide public fury of mortgage holders, investors and finance companies did the regulators ‘investigate’ the crimes and even then not a single major banker was jailed, not a single major bank was closed down.

There were a few low-level bond traders and bank employees who were fired or jailed as scapegoats. The banks paid puny (for them) fines, which they passed on to their customers. Despite pledges to ‘mend their ways’ the bankers concocted new schemes with their windfalls of billions of Federal ‘bailout’ money while the regulators looked on or polished their CV’s for the next pass through the ‘revolving door’.

Every top official in Treasury, Commerce and Trade, and every regulator in the Security Exchange Commission (SEC) who ‘retired to the private sector’ has ended up working for the same mega-criminal banks and finance houses they had investigated, regulated and ‘slapped on the wrist’.

As one banker, who insists on anonymity, told me: ‘The most successful swindlers are those who investigated financial transgressions’.

Conclusion

Mega-swindles define the nature of contemporary capitalism. The profits and power of financial capital is not the outcome of ‘market forces’. They are the result of a system of criminal behavior that pillages the Treasury, exploits the producers and consumers, evicts homeowners and robs taxpayers.

The mega swindlers represent much less than 1% of the class structure. Yet they hold over 40% of personal wealth in this country and control over 80% of capital liquidity.

They grow inexorably rich and richer, even as the rest of the economy wallows in crisis and stagnation. Their swindles send powerful ripples across the national economy, which ultimately freeze or reduce the income of the skilled (middle class) employees and undermine the living conditions for poor working-class whites, and especially under and unemployed Afro-American and Latino American young workers.

Efforts to ‘moralize’ capital have failed repeatedly since the regulators are controlled by those they claim to ‘regulate’.

The rare arrest and prosecution of any among the current tribe of mega-swindlers would only results in their being replaced by new swindlers. The problem is systemic and requires deep structural changes.

The only answer is to build a political movement independent of the two party system, willing to nationalize the banks and to pass legislation outlawing derivatives, forex trading and other unnatural parasitic speculative activities.

James Petras is author of Extractive Imperialism in the Americas: Capitalism’s New Frontier (with Henry Veltmeyer) and The Politics of Empire: The US, Israel and the Middle East. Read other articles by James, or visit James’s website.

Pillage and Class Polarization: The Rise of “Criminal Capitalism”

wealth

By Prof. James Petras

Source: GlobalResearch.ca

About 75% of US employees work 40 hours or longer, the second longest among all OECD countries, exceeded only by Poland and tied with South Korea.  In contrast, only 10% of Danish workers, 15% of Norwegian, 30% of French, 43% of UK and 50% of German workers work 40 or more hours.  With the longest work day, US workers score lower on the ‘living well’ scale than most western European workers. 

Moreover, despite those long workdays US employees receive the shortest paid holidays or vacation time (one to two weeks compared to the average of five weeks in Western Europe).  US employees pay for the costliest health plans and their children face the highest university fees among the 34 countries in the Organization for Economic Cooperation and Development (OECD).

In class terms, US employees face the greatest jump in income inequalities over the past decade, the longest period of wage and salary decline or stagnation (1970 to 2014) and the greatest collapse of private sector union membership, from 30% in 1950 down to 8% in 2014.

On the other hand, profits, as a percentage of national income, have increased significantly.  The share of income and profits going to the financial sector, especially the banks and investment houses, has increased at a faster rate than any other sector of the US economy.

There are two polar opposite trends: Employees working longer hours, with costlier services and declining living standards  while finance capitalists enjoy rapidly rising profits and incomes.

Paradoxically, these trends are not directly based on greater ‘workplace exploitation’ in the US.

The historic employee-finance capitalist polarization is the direct result of the grand success of the trillion dollar financial swindles, the tax payer-funded trillion dollar Federal bailouts of thecrooked bankers, and the illegal bank manipulation of interest rates.  These uncorrected and unpunished crimes have driven up the costs of living and producing for employees and their employers.

Financial ‘rents’ (the bankers and brokers are ‘rentiers’ in this economy) drive up the costs of production for non-financial capital (manufacturing).   Non-financial capitalists resort to reducing wages, cutting benefits and extending working hours for their employees, in order to maintain their own profits.

In other words, pervasive, enduring and systematic large-scale financial criminality is a major reason why US employees are working longer and receiving less – the ‘trickle down’ effect of mega-swindles committed by finance capital.

Mega-Swindles, Leading Banks and Complicit State Regulators

Mega-swindles, involving trillions of dollars, are routine practices involving the top fifty banks, trading houses, currency speculators, management fund firms and foreign exchange traders.

These ‘white collar’ crimes have hurt hundreds of millionsof investors and credit-card holders, millions of mortgage debtors, thousands of pension funds and most industrial and service firms that depend on bank credit to meet payrolls, to finance capital expansion and  technological upgrades and raw materials.

Big banks, which have been ‘convicted and fined’ for mega-swindles, include Citi Bank, Bank of America, HSBC, UBS, JP Morgan, Barclay, Goldman Sachs, Royal Bank of Scotland, Deutsch Bank and forty other ‘leading’ financial institutions.

The mega-swindlers have repeatedly engaged in a great variety of misdeeds, including accounting fraud, insider trading, fraudulent issue of mortgage based securities and the laundering of hundreds of billions of illegal dollars for Colombian, Mexican, African and Asian drug  and human traffickers.

They have rigged the London Interbank Official Rate (LIBOR), which serves as the global interest benchmark to which hundreds of trillions of dollars of financial contracts are tied.  By raising LIBOR, the financial swindlers have defrauded hundreds of millions of mortgage and credit-card holders, student loan recipients and pensions.

Bloomberg News (5/20/2015) reported on an ongoing swindle involving the manipulation of the multi-trillion-dollar International Swaps and Derivatives Association (ISDA) fix, a global interest rate benchmark used by banks, corporate treasurers and money managers to determine borrowing costs and to value much of the $381 trillion of outstanding interest rate swaps.

The Financial Times (5/23/15, p. 10)   reported how the top seven banks engaged in manipulating fraudulent information to their clients, practiced illegal insider trading to profit in the foreign exchange market (forex), whose daily average turnover volume for 2013 exceeded $5 trillion dollars.

These seven convicted banks ended up paying less than $10 billion in fines, which is less than 0.05% of their daily turnover.  No banker or high executive ever went to jail, despite undermining the security of millions of retail investors, pensioners and thousands of companies.

The Direct Impact of Financial Swindles on Declining Living Standards

Each and every major financial swindle has had a perverse ripple effect throughout the entire economy.  This is especially the case where the negative consequences have spread downward through local banks, local manufacturing and service industries to employees, students and the self-employed.

The most obvious example of the downward ripple effect was the so-called ‘sub-prime mortgage’ swindle.  Big banks deliberately sold worthless, fraudulent mortgage-backed securities(MBS) and collateralized debt obligation (CDO)  to smaller banks, pension funds and local investors, which eventually foreclosed on overpriced houses causing low income mortgage holders to lose their down payments (amounting to most of their savings).

While the effects of the swindle spread outward and downward, the US Treasury propped up the mega-swindlers with a trillion-dollar bailout in working people’s tax money.  They anointed their mega-give-away as the bail out for ‘banks that are just too big to fail”!  They transferred funds from the public treasury for social services to the swindlers.

In effect, the banks profited from their widely exposed crimes while US employees lost their jobs, homes, savings and social services.  As the US Treasury pumped trillions of dollars into the coffers of the criminal banks (especially on Wall Street), the builders, major construction companies and manufacturers faced an unprecedented credit squeeze and laid off millions of workers, and  reduced wages and increased the hours of un-paid work.

Service employees in consumer industries were hit hard as wages and salaries declined or remained frozen.  The costs of theFOREX, LIBOR and ISDA fix swindles’ fell heavily on big  business, which passed the pain onto labor: cutting pension and health coverage, hiring millions of ‘contingent or temp’ workers at minimum wages with no benefits.

The bank bailouts forced the Treasury to shift funds from ‘job-creating’ social programs and national infrastructure investment to the FIRE (finance, insurance and real estate) sector with its highly concentrated income structure.

As a result of the increasing concentration of wealth among the financial swindlers, inequalities in income grew; wages and salaries were frozen or reduced and manufacturers outsourced production, resulting in declines in production.

Employees, suffering from the loss of income brought on by the mega-swindles, found that they were working longer hours for less pay and fewer benefits.  Productivity suffered.  With the total breakdown of the ‘capitalist rules of the game’, investors lost confidence and trust in the system.  Mega-swindles eroded ‘confidence’ between investors and traders, and made a mockery of any link between performance at work and rewards.  This severed the nexus between highly motivated workers, engaged in ‘hard work, long hours’ and rising living standards, and between investment and productivity.

As a result, profits in the finance sector grew while the domestic economy floundered and living standards stagnated.

Financial Impunity:  Regulatees Controlling the Regulators

Despite the proliferation of mega-swindles and their pervasive ripple effects throughout the economy and society, none of the dozens of federal or state regulatory agencies intervened to stop the swindle before it undermined the domestic economy.  No CEO or banker was ever arrested for their part in the swindle of trillions.  The regulators only reacted after trillions had ‘disappeared’ and swindles were ‘a done deal’.  The impunity of the swindlers in planning and executing the pillage of hundreds of millions of employees, taxpayers and mortgage holders was because the federal and state regulatory agencies are populated by ‘regulatory administrators’ who came from or aspired to join the financial sector they were tasked with ‘regulating’.

Most of the high officials appointed to lead the regulatory agencies had been selected by the ‘Lords of Wall Street, Frankfurt, the City of London or Zurich.’  Appointees are chosen on the basis of their willingness to enable financial swindles.  It therefore came as no surprise on May 28 2015 when US President Obama approved the appointment of Andrew Donahue, Managing Director and Associate General Council for the repeatedly felonious, mega-swindling banking house of Goldman Sachs to be the ‘Chief of Staff’ of the Security and Exchange Commission. His career has been typical of the Washington-Wall Street ‘Revolving Door’.

Only after fraud and swindles evoked the nationwide public fury of mortgage holders, investors and finance companies did the regulators ‘investigate’ the crimes and even then not a single major banker was jailed, not a single major bank was closed down.

There were a few low-level bond traders and bank employees who were fired or jailed as scapegoats.  The banks paid puny (for them) fines, which they passed on to their customers.  Despite pledges to ‘mend their ways’ the bankers concocted new schemes with their windfalls of billions of  Federal ‘bailout’ money while the  regulators looked on or polished their CV’s for the next pass through the ‘revolving door’.

Every top official in Treasury, Commerce and Trade, and every regulator in the Security Exchange Commission (SEC) who ‘retired to the private sector’ has ended up working for the same mega-criminal banks and finance houses they had investigated, regulated and ‘slapped on the wrist’.

As one banker, who insists on anonymity, told me: ‘The most successful swindlers are those who investigated financial transgressions’.

Conclusion

Mega-swindles define the nature of contemporary capitalism.  The profits and power of financial capital is not the outcome of ‘market forces’.  They are the result of a system of criminal behavior that pillages the Treasury, exploits the producers and consumers, evicts homeowners and robs taxpayers.

The mega swindlers represent much less than 1% of the class structure.  Yet they hold over 40% of personal wealth in this country and control over 80% of capital liquidity.

They grow inexorably rich and richer, even as the rest of the economy wallows in crisis and stagnation.  Their swindles send powerful ripples across the national economy, which ultimately freeze or reduce the income of the skilled (middle class) employees and undermine the living conditions for poor working-class whites,   and especially under and unemployed Afro-American and Latino American young workers.

Efforts to ‘moralize’ capital have failed repeatedly since the regulators are controlled by those they claim to ‘regulate’.

The rare arrest and prosecution of any among the current tribe of mega-swindlers would only results in their being replaced by new swindlers.  The problem is systemic and requires deep structural changes.

The only answer is to build a political movement independent of the two party system, willing to nationalize the banks and to pass legislation outlawing derivatives, forex trading and other unnatural parasitic speculative activities.