Elites Gone Wild

Elites Gone Wild 

"More and more, people don't trust their elites. They don't trust their economic leaders, and they don't trust their political leaders," German Finance Minister Wolfgang Schaeuble said during an IMF panel discussion in Washington.

"In the UK, everyone from the elites told the people, 'don't vote for a Brexit.' But they did."  

-Mr. Wolfgang Schaeuble, Reuters - IMF, Global finance leaders fret over populist backlash

 

By J.M. Hamilton (10-16-2016)

That’s mighty observant of the German Finance Minister. 

And apparently he’s not the only elite that is aware.  The pitchfork and torches crowd (aka the 99%) - POTUS Obama once said he was protecting Wall Street bankers from (aka the 1%) - seem highly agitated w/ the way the elites have been behaving. 

What could have awoken the 99% from their slumber?

Was it the debt driven economy – fueled by central bank printing presses – that have enriched the financial aristocracy to the detriment of everyone else?  Or is the fact that the elites running Wall Street banks, and drug & private equity companies, are caught up in scandal after scandal involving billions of dollars, seemingly w/out repercussion, while a black teen smoking a joint gets sent to a privatized mass incarceration hell?  Maybe it’s our uber Pax Americana foreign policy that has left the Middle East a smoldering ruin, the U.S. bankrupt, and refugees by the millions flooding into Europe and Turkey?  Perhaps it’s the dubious crowd the elite likes to rub shoulders with, like Clinton Foundation contributing members (e.g. the ultra – nefarious, sleazy, & terror spreading Saudi & Qatar governments)?  Maybe it's the elite’s infatuation w/ the multi-billion dollar mass surveillance state, which has stopped zero hacking (just ask the DNC); and despite the Snowden revelations, continues to trample all over the Constitution on a daily basis?  Could it be that the 99% realize, particularly in America, that we have two bum choices for POTUS this year, provided by the oligarchy’s political duopoly?  And we can’t trust either of the mainstream candidates farther than we can throw them. 

Maybe it’s the fact the governments of Western democracies are all too often rigged, from the lowliest local judge all the way up to the executive branch?

One thing is for certain, the elite have made a huge mess of the world, and the public is taking notice.  No longer does a few letters behind one’s name, a prestigious degree, or biz or government title confer omnipotent knowledge or command immediate agreement from the great unwashed.  In fact, all too often these designations of entitlement mean you’re – in many instances – likely to be highly corrupt or a gangster (albeit one that is above the law, nor likely to be held accountable for one’s actions).

Come on.  Get up.  Walk with me…. Let’s take a little stroll, and see what could have gotten everyone so worked up.

Central Banks

Global central banksters, and the IMF, are worried that the trickle down monetary policy  - that the world economy has been malnourished on for the last eight years (and even prior) -  has gone all Japanese on them… as in lost decades, Japanese.  The central banks have fueled extraordinary sums or public and private sector debt, and the central bankster solution seems to be to print yet more debt.  Governments, and private institutions, weighted down with debt, are recognizing what a drag all this debt can be to fiscal policy, the economy, and corporate and multinational bottom lines. 

And just wait until the next inevitable recession hits.  Yowza!  

Suddenly, there’s an outcry for fiscal policy to fill the economic vacuum.  But federal and many state government’s credit lines are maxed out: with big government enriching the 1% w/ tax cuts; MIC contractors profiting from endless war; and wasting astronomical sums on the private sector that runs our federal and state governments into the ground (via the privatization model).  To sum this matter up:  The rise of a hyper-accommodative monetary policy, globally, seen over the last three decades, has consistently enriched the 1% at the expense of the 99%.  The problem is the credit lines are – in far too many instances – toast.   

And a debt bubble the size of the Grand Canyon can be seen floating this way, like a cloud of doom.

Brexit

This story is a work in progress, but the elites in Europe have so alienated the pubic, that there are mass movements throughout Europe looking to breakout of the E.U.   The U.K. was the first to bail.  The London financial elite said the British economy would tank, but an interesting thing happened.

The British stock market, the FTSE, has been on an absolute tear, upward, and economic fundamentals upon the British Isle have been very sound.  Things were looking so good that PM May recently announced dates for the formal break with the E.U…. with the result that the short sellers (hedge fund, speculators, and major banks) immediately went to work devaluing the British pound.  

The short sellers seemed to be sending a message.  To wit:  Just who does PM May think she is representing, the interests of the British people, and how dare she follow through on the referendum.  And what’s this, from the PM, about central banks creating distortions in the market place, and enriching the 1% at the public’s expense?  Doesn’t the PM know the U.K. is not a democracy?  The unelected House of Lords, a throwback to inbred aristocracy/monarchy, will need to weigh in on Brexit, both the process and the dates.  Much more to follow.

Business

Two interesting developments in the last couple of weeks, that are representative of why the general public has such derision and scorn for the biz elite:  In the midst of fraud and scandal, Well Fargo CEO, Stumpf, stepped down only to be replaced by another insider, Mr. Tim Sloan.  Turns out Mr. Sloan played no small role in the problematic cross-selling game employed to boost Wells Fargo numbers and executive management pay.   But don’t cry too hard for Mr. Stumpf.  Unlike the 5,000 and more Wells Fargo employees, who were unceremoniously terminated in the wake of the crisis, Mr. Stumpf will parachute out a rich man.  And my guess is his executive contract spells out that a great deal of his upcoming legal expense will be picked up by the bank and the bank’s stockholders. 

The only person likely to be more upset over the Well Fargo debacle, than the general public, is Mr. Warren Buffett himself.  Mr. Buffett is Wells Fargo’s largest shareholder, and for years has been bragging about the San Francisco based bank.  Wells Fargo shareholders have seen the market cap on this bank shrink nearly 60 billion dollars, since 12-29-2015. 

However, what Mr. Buffett has lost on Wells Fargo, his portfolio of businesses has more than made up for – many times over – in tax relief from our federal government.  In the wake of the news that Mr. Trump has not paid federal income tax, likely in decades, and Mr. Trump dragged Warren into the presidential debate over tax dodging schemes, came news that Warren has been a bit of a choir-boy on payment of personal income tax.  Not so, however, w/ Mr. Buffett’s portfolio of businesses, where tax avoidance schemes, after tax avoidance schemes, have been deployed to make Berkshire Hathaway one of the largest and wealthiest companies on the planet.   

In short, the billions that Berkshire Hathaway dodges, the 99% have to make up for in the form of higher taxes, increased national debt, and diminished government services.

The biz elite do it to us all: 24/7/365.

Afghanistan

The gift that keeps on giving.... 

Bloomberg did a piece this week noting that Americans have been nation building in Afghanistan for 15 years now, OBL is long since dead, and seemingly there is no end in sight. 

POTUS Obama has repeatedly reneged on his pledges to pull America out, only to backtrack in the face of hostility from the GOP and hawkish Dems, who are always pushing the MIC’s interests.  And the MIC’s interests are continuous war, never ending war… as same evens out the revenue stream and quarterly financial statements.

As for the 8,400 U.S. troops in Afghanistan, they are largely forgotten.  As there is no draft, nor higher tax to finance this credit card war, my guess is most Americans don’t even know we are still fighting in Afghanistan (which much like Vietnam before it, consists largely of taking provinces, losing provinces/cities, and retaking them again).  Seventy nations have pledged $70 billion in aid to this lost country, but much of that aid will be lost to endemic fraud, and some of it will end up in the Taliban’s hands.

As for the elites in the Congress, these cowards have not passed a new war resolution, since the original authorization passed shortly after 9-11. 

And the multi-trillion dollar question: Why is the U.S. still in Afghanistan or even Iraq?  Excluding the lie that we are fighting a war on terror (no, our military is actually busy creating future terrorists), politically, the foreign policy elite do not want to take responsibility for another failed nation building exercise; and two, these failed wars are just good business for MIC contractors.   

Too bad, the U.S. is bankrupt.

Strange Allies

The Wikileaks revelations on the Clintons and the DNC have been very revealing.  Mrs. C has been quoted on a couple of occasions, stating the Saudis and many of our so-called Gulf-Monarchy allies (like Qatar) are responsible for much of the terror in the Middle East, and the spread of what Republicans like to call Radical-Islam.  Moreover, these two nations also helped create and fund ISIS.  That’s not to say, that both the Bush and Obama administrations, too, directly or indirectly, played a role in Daesh development and growth.

It’s all part and parcel of the religious civil war that has enveloped the Middles East and parts of Africa:  Sunni V. Shia.

Despite Mrs. Clinton calling out the Saudis & Qatar as terror sponsors…. It didn’t prevent the Clinton Foundation from taking contributions from both monarchies, or Mrs. Clinton from using her role at the State Department to make sure the Saudis received billions in martial hardware from U.S. military contractors.

And now, the Obama Administration is backing the Saudi's war crimes in Yemen.  The Saudis enjoy logistical support, weapons, and last week, a Navy destroyer firing missiles into Yemen.  Seems that no matter how rogue the Saudis go, the U.S. elite have no reservations about following Saudi terrorist down the same rat hole.  All of which explains why POTUS vetoed the 9-11 victim’s legislation that – in its pre-watered down stage -  would have allowed 9-11 families to sue the Saudi government.  The popular narrative is that POTUS was looking out for U.S. service personnel by vetoing the legislation; but as Commander and Chief of U.S. service personnel, the POTUS may have been more concerned that he, and future office holders, might find themselves held accountable for war crimes.

Just how perverted is this situation?  Consider this, the U.S. is spending trillions of dollars, ruining thousands of U.S. service personnel’s lives, fighting endless wars in the Middle East (often at the behest of NATO, the oil monarchies & Israel), while the root cause of Middle East terror – the oil rich monarchies - receives U.S. weapons & military support, and access to U.S. capital markets.

The elites in the State Department, and at DOD, are clearly mad.

NSA & Yahoo

The CEO of Yahoo… Marissa Mayer, once said, “In the end, we are capable of so much more than we think.”

Who knew that for Ms. Mayer that would include becoming a Surveillance State spy.  Yet again, at the nexus of an over-reaching Surveillance State and Silicon Valley, we recently found out that Yahoo has been giving the government access to hundreds of millions of emails.  Per the Washington Post:

Now, in a move that has outraged privacy advocates, Yahoo reportedly has helped take government intrusion to a new level. Without apparent protest, according to news reports, it built a mechanism that allowed the National Security Agency and the FBI to scan all of its users’ incoming emails for specific characters or words.

That’s hundreds of millions of emails.

“This is Big Brother on steroids and must be stopped,” said Rep. Ted Lieu, a California Democrat sometimes described as a “privacy pit bull.” He tweeted that it was an “outrageous abuse of federal government power.”

And Yahoo’s response as to why they allowed this to happen, basically, just following orders (aka The Nuremburg defense).

Our elites are in bed w/ the authoritarian state, Orwellian named, Homeland Security, and Americans are kissing their civil-liberties and their First Amendment rights good-bye.

These government bodies (the NSA, the CIA, and the FBI) have done very little to make the homeland safe or secure from cyber attacks; and many Americans recognize the huge price tag for mass surveillance, that is the surrendering of constitutional rights & privileges (not to mention the billions of tax dollars wasted), isn’t worth the price we are paying.

 

The DNC & the Clinton Campaign

The irony is there is a relatively inexpensive cure for a great deal of the hacking that goes on over the internet, and it’s called encryption.  And more than a few would be willing to bet the farm that Hillary’s crew, and the DNC, wish their emails had been encrypted.

Not only has Wikileaks revealed how corrupt the DNC is, and how it sabotaged Senator Sanders honest campaign, but some of Mr. Podesta’s emails show that Mrs. Clinton likes to talk out of both sides of her mouth ---- shape shifting her speech, her soul, and her talking points to fit her audience.   Apparently, this is such a common element of Mrs. Clinton’s thinking that when asked about it, during a recent Presidential debate, she attempted to use Abraham Lincoln as cover.  To cut to the point, Mrs. C seemed to be arguing that deceiving the public was strategic and altogether commonplace.

The problem for the public, and anyone else involved with the Clintons, is the vast majority of Americans do not trust her.  Unfortunately for America, it’s equally telling that everything HRC has thrown at The Donald - from misogyny to lying, and bigotry to womanizing – has been practiced by Team Clinton for decades.   Things were so bad at the Clinton Foundation, conflicts of interest were so inherent, that Politico reports Chelsea Clinton was attempting to undo some of the corruption at the foundation.  

The elites in the MSM have been highly complicit, in their attempts get Hillary elected... so much for an impartial and even-handed fourth estate.

One looks at the two mainstream political candidates in 2016, and all one wants to do is weep for this nation and our children’s future.

So what’s the lesson here for our so-called elites?  

Perhaps we should start with the words of Arianne Zucker.  Mrs. Zucker is the actress who greeted Mr. Trump and Billy Bush - in the by now infamous hot-mic, "locker-room talk," describing sexual assault (aka #pussygrabgate).  Mrs. Zucker said:

“My name is Arianne (R-E-on) ZUCKER (Zooker) and I am a strong, independent, hard working mother, business woman and partner to a great man. I have grown to learn that the words of others cannot effect the value of my self worth or define the content of my character. How we treat one another, whether behind closed doors, locker rooms or face to face, should be done with kindness, dignity and respect. Unfortunately, there are too many people in power who abuse their position and disregard these simple principles and are rewarded for it. In understanding the magnitude of this situation, I choose to stand tall with self respect and use my voice to enrich, inspire and elevate the best of who we are as people”.

Well said.

At the end of the day, the common thread through all the aforementioned news events is that the elite can’t be trusted.  They lie to our faces, or cover-up until exposed.  Narcissistic and nihilistic to the core, the elite eschew honesty in favor of dishonesty.  They seem to go out of their way to do the wrong thing, even when doing the right thing would – ultimately – likely prove far more beneficial/profitable to themselves, the various private & public organizations they lead, and the global economy.

Were these “leaders” always this way, is their disease congenital, or is this what is meant by the statement: Power corrupts and absolute power corrupts absolutely? 

How many billions and trillions have been lost and wasted because of the elite’s seemingly pathological need to deceive and lie?  How many organizations, private and public, have suffered incalculable reputational costs?  Why are free trade agreements negotiated behind closed doors; why have extra-judicial courts been set up by and for multinational interests, via these agreements; and why do first-world citizens and labor always finds themselves on the short end of the free trade stick?  How many children go to bed at night hungry, due to the global crony capitalist structure and because our western governments are rigged and exceedingly corrupt?

And what is the cure?  A religious revival is likely not in the cards but ultimately, possibly, a revival in ethics could save us all.  If religious dogma gets us there, wonderful; but surely at this point, having tried everything else… what else is left?  What do the elite have to lose?  Why not try and do the right thing, a policy of honesty and transparency?

My guess is Mr. Buffett wishes Wells Fargo had done the right thing; my assumption is HRC wishes she had played it straight w/ the American people, and had been far less Machiavellian. 

Then again, maybe the elite, above all, merely wish that they had not been caught.

P.S. 

On a final note, the elite seem to have forgotten that respect and trust are earned.  No amount of money, titles, degrees, or letters behind one’s name will afford respect, if you are duplicitous, double-dealing, and one’s guiding star is greed’s black hole.  The elite are facing blowback on an unprecedented scale, and the public is tired of being preyed upon by same.  The crème de la crème placed themselves in this position, and have only themselves to blame for the public’s lack of confidence & trust… through altruism, integrity & transparency, and simply paying their taxes, the elite can in time regain the public trust.

Copyright JM Hamilton Publishing 2016

Robbing Hoods?

Robbing Hoods?

Every government dollar that progressives and liberals see wasted, or that goes uncollected in the form of tax dodges, is a dollar that could be spent on our children, paying down the national debt, or afforded to future generations.

-       Jay M. Hamilton, Absolute Power Corrupts Absolutely

A company’s profits should be taxed in the country where the value is created.

-       Apple CEO Tim Cook, Reuters – E.U. hits Apple with $14.5 billion Irish tax demand

By Jay M. Hamilton (10-2-2016)

Gallon of black coffee, dark roast.  Check.

Smoldering maduro cigar.  Check.

Vodka-tini, no vermouth – slightly bruised… Check again.

It’s 3:00 PM somewhere.

Vivaldi, cranked…

Okay.  Let’s do this.

The U.S. Congress is perennially under fire as ineffective, somnolent, and venal.  An easy target, no doubt, read here, here and here.  But we often forget that the U.S. Congress, like the legislatures of most Western democracies, are merely doing the ownership class’ bidding.  Citizens United, and a whole host of other judicial rulings, means that if Congress is comatose, it’s likely, at their master’s instructions.

That is to say, the Congress maybe deliberately sabotaging government, based upon instructions from above: so as to make citizens more dependent upon the private sector; the agenda could be to make voters more apathetic, which tends to support the U.S. political duopoly & incumbents; and least improbable, the existing rules, laws, and regulations are an exceptional benefit to the ruling/plutocratic class (e.g. our existing tax code).  So why mess with success?

Congress presents itself as an easy target, but what of its puppet masters?  The corporations, multinationals, banks, and the billionaires who pull the government’s strings, and carry around judges & politicians in their pockets, like so many nickels and dimes.

And therein lies the problem: American business is sacrosanct, and its CEOs are often treated as deities and celebrities; and yet, they – often - continually work at cross purposes with the interests of the American people.  

Four rogue corporations recently came to mind, which upon review and carefully scrutiny, we learn are stealing from the American people and – in some cases - the E.U.:

Mylan Pharmaceutical’s CEO, Heather Bresch, has been in the news for jacking up the price of the EpiPen, a life saving drug required for those suffering allergic shock.  Congress called Ms. Bresch in, (who happens to be the daughter of U.S. Senator Manchin), they held their show hearing, Congress vowed to study the matter, and off Ms. Bresch went, free to rob the taxpayer & the community at large.  Mylan’s solution: don’t do the right thing and lower the EpiPen's price, but rather, have the medicine placed upon a “federal list of preventive services.”  By having the EpiPen placed on this federal list, much of the cost of the EpiPen is picked up by the disenfranchised and faceless American taxpayer.  Some might call this socialism, or crony-capitalism… in essence, using the government to subsidize one’s profits, and Mylan exec bonuses.  Others just might call it outright theft.  But don’t look to the U.S. Congress to hold Mylan accountable… it’s already been swept off the front pages.

Seems that Warren Buffett’s beloved Wells Fargo bank, and its CEO Mr. Stumpf, are the current news, much to Mylan’s relief.  Wells Fargo – at a time when bank lobbyist were attempting to roll back more bank rules & regs, generated as a result of the ’08 crisis – appears to have been caught in a cross selling scheme.  Wells Fargo employees, in order to stay employed and fed, sold real financial products to unsuspecting real customers, based upon fictitious consent.  The financial products were sold to juice numbers and results, and executive pay packages.  Wells got caught, and their solution:  fire some five thousand employees, and let the executive in charge skate with a multi-million dollar pay package (although as of this writing, and thanks to the public outcry, some executive bonuses maybe clawed back).  Wells is now faced with a barrage of lawsuits from customers, former employees, and stockholders.  And, per the usual, management is using ignorance as their excuse.  Wells Fargo is now just another example of corporate excess, greed, and the need for a quarterly gain triumphing over the interests of the American people.  Some might call it poor risk management, while others might call it theft or stealing.

Wells Fargo isn’t the only bank presently in the spot light.  Germany’s Deutsche Bank has been in the news.  Seems that the SEC has fined the Teutonic bank $14 billion for its role in, allegedly, fraudulent mortgage backed securities transactions leading up to the 2008 crash.  Fourteen billion is not chump change, and Deutsche too, is being sued by shareholders, third party clients, and world governments… to such an extent, that its reserving for legal costs is now both material to its financial wellbeing and in question.

Can you say, “Lehman Event?” 

Turns out, per Bloomberg: “The International Monetary Fund in June said Deutsche Bank may be the biggest contributor to risk among so-called global systemically important banks.”  Deutsche is said to have derivatives positions w/ notional values of $46 trillion; and anybody – who remembers the ’08 crisis – knows there’s a web of counterparties that likely includes financial interests in London and on Wall Street.  And just yesterday, Deutsche got nailed with more fraud allegations.  German taxpayers may soon find themselves on the hook yet again for TBTF, and Merkel’s government on the ropes.  U.S. citizens may find that The Federal Reserve isn’t watching their back, but rather, engaged in being banker to the world … and involved in apolitical moves to bailout banks, and soothe markets, with yet another wave of job killing liquidity, QE, and interest rate suppression.  As bank bailouts continue, owned politicians – on both sides of the Atlantic– will continue to cry for further rounds of fiscal austerity.  That is to say, bailouts for banks, and social program cuts for those most in need…. Or theft by any other name.

It’s not enough that the Congress abdicates responsibility for plutocratic welfare on a daily basis – courtesy of the Fed; but the Congress is also remarkably reticent when the FTC and the Department of Justice authorizes grants of monopolistic pricing power in nearly all U.S. economic sectors.  The U.S. tax code, itself, has become another corporate entitlement, and here again, the Congress has punted.  Trillions of dollars are parked offshore by multinational U.S. based corporations, who enjoy w/in America: the best courts and democracy money can buy; a first class military – second to none - protecting trade routes and multinational interests around the globe; and U.S. sponsored free trade agreements that have established extra-judicial courts, run by and for corporate interests (hence, subverting national sovereignty and citizen interests).

This leads us, of course, to Apple and Mr. Tim Cook.  Seems that the E.U. is cracking down on sweetheart tax deals.  Mr. Cook’s and Apple’s effective tax rate in the E.U., as recently as 2014, was .005%.  Apple achieved this tax rate by running all its European revenue through Ireland, even though there is no distributive, intellectual, or manufacturing based properties located on Irish soil.  The E.U. wants $14 billion dollars in back taxes.  And the E.U.’s Ms. Vestager calls the Apple/Ireland tax deal as nothing short of anti-competitive “state aid.”  Ironic, during a time when the Irish have been suffering high unemployment and fiscal austerity, the Irish government apparently has billions to give away to the likes of Apple, with no reciprocal job creation guarantees.  The some times eloquent Mr. Cook referred to the E.U.’ ruling as “total political crap,” and was quoted in Reuters as stating:  “A company’s profits should be taxed in the country where the value is created.”

Apparently, per Apple, value is created in the country that affords the greatest tax dodge.  Or since the resulting tax burden that Apple dodges is carried in turn by U.S. and Irish citizens, who suffer fiscal austerity on a daily basis…. Value, for Apple, is created by the government that affords the greatest amount of corporate welfare, which Western governments afford by stealing from the poor & the middle class ( – who cannot escape paying taxes or avoid the compounding debt & interest upon same).

…. Sort of like Robin Hood in reverse.

Citizens around the globe are waking up to the massive transfer of wealth that occurs on a daily basis by Western governments, and central banks, owned and operated by the plutocratic elite.

How much longer can Western governments survive, based solely upon: corporate welfare; government enhancing the profits of their billionaire overlords, to the exclusion of citizen’s needs; and crony-capitalism?  The pretense that we live in a democracy, when both U.S. political parties are controlled by corporate/multinational interests, is on full display for any who dare look.

The political solutions to the problem are elementary:  terms limits; caps on both campaign contributions and the amounts spent – by politicians – during an election; limits on the duration of the campaign season; and placing a lock on the revolving door.  Government stability, as well as the elemental security of the West, may ultimately depend upon these fundamental reforms.

Copyright JM Hamilton Publishing 2016

Symphony of Debt & Destruction

Symphony of Debt & Destruction

“We’re not in a stable equilibrium,” Greenspan said. “I hope we can all find a way out because this is too great a country to be undermined, by how should I say it, crazies.”

- The Maestro, Mr. Alan Greenspan, Former Federal Reserve Chairman, Bloomberg.

By J.M. Hamilton (9-17-2016)

Perhaps Mr. Greenspan should observe the old saw, “Those who live in glass houses…” 

After all, what’s crazy?  Living under the delusion that the Federal Reserve, under one’s watch, played a small role in the worst economic calamity, so far, in the twenty-first century?   Yes, the Maestro had just left the conductor’s stand, while the music played, the Fed fiddled, and Wall Street burned the country’s 2008 economy to the ground.

But heh, the elite tell us we are not supposed to talk about such things.  Shame on Mr. Trump for bringing up the “Federal Reserve” topic.  Apostasy?  Sacrilege against the high priests of finance, many of whom Senator Warren says should be jailed.

 

Doesn’t Mr. Trump know that the elite never talk about the fourth branch of government, and the most powerful branch of government, at that?

Personally – for me, The Donald waffles too much.  Add in xenophobia, bigotry among his following, intolerance, and Mr. Trump is a non-starter in my book.  And yet, he continues to rise in the polls.  Warts aside, Mr. Trump has several estimable qualities, among them:  his derision and scorn for corporate/multinational welfare, I mean free trade agreements; his oft stated belief that our “military allies” should stop sponging off a bankrupt United States, and carry their own martial/security freight; Mr. Trump’s ready acknowledgment that our economic & political system is deeply corrupt & rigged; and of course, taking on, or at least touching upon, the taboo topics of the national debt and the Federal Reserve, and the politicization of same.

Please… haven’t we all read enough from the mainstream news media that Ms. Yellen & Co. are some how above the political fray.   Yes, consistent with elementary school civics, the women & men wearing black robes are not politicians, and there’s an Easter Bunny and a Tooth Fairy, too.  Ditto a non-political Fed.

The reality is – since Congress campaigns 24/7/365 and has abdicated all responsibility for economic, fiscal, foreign, and tax policy – the Federal Reserve is the only game in town.  The Fed’s chairperson and board of governors are hand picked by the POTUS, and sent to the Senate for review and approval. 

Political?  Perish the thought.

With the power the Fed possesses & wields, perhaps the Fed Chair and her board should be up for national election every four years, and the Chair could then nominate the POTUS for Senate confirmation. 

But I digress because the Fed is the composer of much of what troubles the U.S. economy today.  Indeed, central banks have had similar deleterious impact across the globe.  The Fed and central banks underwrite the credit card economy/ the debt driven economy.  The Fed’s liquidity has fueled consolidation and M&A in industry after industry…. that, and financial engineering on a colossal scale.   Industry consolidation, M&A, and financial engineering are often driven by a need for corporate management to do something, anything, in the face stagnating top line growth. 

The Street, stock analysts, and activist investors demand that management take action, so the dance begins to the beat of a fugue symphony: low demand and stagnant growth fueled by globalization & free trade leads to consolidation and M&A, which leads to job cuts and lower aggregate demand, which leads to more consolidation and financial engineering, etc., etc., etc. (repeat ad nauseam).  The symphony grows louder and the fugue builds with an ocean of private and public debt across the globe. 

How smart is it to do a stock buyback or a merger at a market top (?)… presumably, not very.  History shows that the serial acquiring companies usually perform poorly in an economic downturn, buried under debt and debt service payments (much of which is often at adjustable rates).  In a downturn, short sellers begin to circle, and the feeding frenzy begins.

Who fuels cheap liquidity for consolidation and M&A, the resulting stagnation, and a stock market on roids?   You guessed it, our friends at the Fed… that non-partisan body.  The same folks, who tell us w/ a straight face that they have a dual mandate of maximum employment and keeping inflation in check…. When in reality, the Fed's true mandate is to keep Wall Street financial institutions in the black and the stock market juiced for a happy plutocracy.  There’s a reason why an inordinate number of Fed governors, and twelve regional Fed bank heads, come from Wall Street and are white males.  The Fed, by printing money and suppressing interest rates, pursues its policy of trickle down monetary policy. 

Trickle down tax policy is a proven failure.  In the long run, the debt burden caused by trickle down monetary policy has proven to be a failure, and dovetails – not so nicely – with stagnating wages and rising wage and wealth inequality.  (There's all sorts of bogus nostrums floating around today, about the need for greater productivity, when the nation's true problems are the debt & monopoly driven economy.) 

Given that private and public sectors are both often underwater, in nation after nation, central banks will continue to keep interest rates at all time lows, in order to mitigate debt service loads.

Meanwhile, Congress is off the hook.  The women and men who make up both houses, as long as interests rates are suppressed, don’t have to worry about the national debt, and interest expense on same, crowding out defense, foreign adventures, and entitlement spending (i.e. Medicare, Social Security and Medicaid, etc.)  Nor does Congress feel the need to break up job/opportunity killing cartels & monopolies, which dodge taxes at every turn.

Which means America can continue to abuse what remains of its largely spent Superpower status on the global stage, with endless war, endless nation building, seemingly “sky is the limit” MIC spending, and free military aid – often to countries least in need.

That’s right.  At a time when 20 to 25% of U.S. children live in poverty, and many teens are selling their bodies just to get a bite to eat, Uncle Same has $38 billion to give to Israel, four to five trillion to waste in the Middle East & Afghanistan, and at least a trillion to spend on a nuclear upgrade. 

Who’s to say what the final price tag will be w/ trillions used as a rounding number by DOD accountants.  It’s almost as if America is at war with itself, or the elites are at war with Americans.  Arguably, if one wanted to learn of a way to destroy an empire, one would follow the course we are presently on.  Mr. Blitzer's hand wringing aside, it is morally repugnant to be at war with the world, or be the number one Merchant of Death on the planet, in order to save a couple hundred thousand engineering jobs.

War is the mother of all waste and fraud, as well as, standing armies.   As noted by POTUS Madison – both, war & standing armies - are producers of debt, and debt is a key instrument in bringing the many under the subjugation of the few (read Wall Street banks, the beneficiary & conduit of Federal Reserve policy).  Mr. Madison went onto note: "No nation could preserve its freedom in the midst of continual warfare."  For further clarification, see the police & surveillance state, and our catastrophic national debt.

A world at war brought to you by that above the fray, apolitical, non-partisan body… The Federal Reserve, and the Wall Street banks it supports, with bailouts and free money.

Let us all join hands and give the Fed a standing ovation.  Encore!  Encore!  Hopefully, the concert will not end under Ms. Yellen’s watch, like it did shortly after the Maestro's.

Who else could keep our wilting empire from foundering; who else would enable multinationals to dodge paying hundreds of billions in back taxes, at the expense of honest tax paying citizens?

Fed & global central bank polices, and their smoking hot printing presses… that’s who.

Copyright JM Hamilton Publishing 2016

As American as Apple Pie, but Still Schedule I

As American as Apple Pie, but Still Schedule I

As has been well documented, I smoked pot as a kid, and I view it as a bad habit and a vice, not very different from the cigarettes that I smoked as a young person up through a big chunk of my adult life.  I don’t think it is more dangerous than alcohol   - POTUS Obama

By J.M. Hamilton (9-4-2016)

Cannabis is as American as … well… apple pie.   Our founding fathers (Washington, Jefferson, Madison) not only grew hemp (cannabis’ industrial grade cousin), but many of the nation’s leaders ingested it or smoked it.  The bellicose Andrew Jackson, along w/ Zachery Taylor, is said to have enjoyed a pipe full with his troops.  (If only Mr. Jackson had vaped a few hits of Mary Jane before he sent the Cherokee on the Trail of Tears, which resulted in Native-American genocide, perhaps things might have turned out differently?)  President Kennedy smoked cannabis to relieve back pain, as a result of a WWII injury.

The last three U.S. Presidents have all admitted to smoking marijuana.  President Obama said he didn’t think cannabis was any more dangerous than alcohol; and the POTUS is partially right, alcohol is far more dangerous than marijuana, but more on this later.

What’s none too shocking is that the DEA (a government entity that reports up to the Justice Department, which reports to the Executive branch) recently decided to maintain cannabis as a Schedule I drug, that is to say, highly harmful to the American public w/ no redeemable medical value.  Shockingly, opioids and pain pills, and the national epidemic of drug overdoses opioids have created, remain a Schedule II substance.  Now having the DEA rule on this matter presents something of an inherent conflict of interest, akin to asking the lobbying group, the American Petroleum Institute, whether or not the Oil and Gas Industry should continue to enjoy billions in tax breaks.

The DEA’s decision to maintain cannabis as a Schedule I substance also presents a Catch -22, since it’s much harder to test Schedule I labeled drugs to determine medicinal value. 

Since Richard Nixon declared the war on drugs, the U.S. has spent a trillion dollars on prohibition.  The Drug Enforcement Agency (DEA) is at the tip of the spear, and on the receiving end of billions in government largess to fight this failed war.  Hence the conflict of interest of having the DEA make the decision on cannabis scheduling, and the resulting impact upon DEA funding. 

Fortunately, the American people already know what the elite, the warrior class, and the medical community say they don’t know: marijuana not only has medicinal benefits, but is a far safer alternative than alcohol, opioid based pain medication, and tobacco. 

Of course, Big Pharma and assorted beer and liquor distributors throughout America already know  - the effectiveness of cannabis in treating pain, epileptic seizures, reducing nausea for cancer sufferers, in shrinking tumors, as a possible treatment for PTSD, and recreationally, as a safer alternative to alcohol consumption – and its why they lobby so hard against legalization.  The bottom line is the bottom line, and cannabis legalization means a hit to Big Pharma’s, Big Tobacco’s, and beer & liquor manufacturer’s and distributor’s profits.  Hence, the endless campaign to malign and vilify the drug.  (Note:  The National Cancer Institute, a Federal government agency, also seems to disagree w/ the DEA’s findings against cannabis' medical potential.)

Twenty-five states have legalized cannabis for medical use, several states have legalized it for recreational use, and more states have simply decriminalized the drug.  The majority of Americans support legalization for medical use.  Even the VA's doctors are now permitted to prescribe cannabis for our nation’s veterans, in states that have authorized medical use.  And cannabis legalization, medical or recreational, is on the November 2016 ballot in nine states.  Watch the California referendum closely, as Cali goes so goes the nation - eventually. 

I’ll hazard another guess - despite the big money lobbying efforts of Big Pharma, Big Tobacco, Big Alcohol, and Sheldon Adelson, casino magnate – cannabis legalization efforts will pass in the majority of these states.  (Note, there appears to be a demographic component to these legalization initiatives: States w/ older voters, say Arizona and Florida, will likely prove more challenging for pro-legalization forces.  Looks like the geriatric crowd has bought into four to five decades of fear-mongering; even though the older demographic would likely be the largest beneficiary of legalized medical cannabis, both in terms of drug efficacy and the curtailment of out of pocket pharmaceutical expense.)  Have you seen how the Super-Villains of Big Pharma have been jacking up the price of medicine recently?

The irony in all this is President Obama, for the most part, got it right.  Cannabis, when matched up to alcohol, pain pills, heroin, and tobacco is much safer.  As noted in Vox:  

Overdose on heroin? You might die. Overdose on cocaine? You also might die. Alcohol? The same.

But marijuana? You won’t die.

Compare that to tobacco, which the Centers for Disease Control and Prevention (CDC) links to 480,000 deaths each year. Or alcohol, which the CDC links to 88,000 deaths each year. Or opioid painkillers and heroin, which were linked to nearly 29,000 drug overdose deaths in 2014.

The total number of marijuana overdose deaths, meanwhile, is zero.

As noted in the same Vox piece, and as exhibited by an Omaha man, who unknowingly ingested his adult children’s pot brownies, you just might call the house cat, “bitch.”  But in another Vox piece, the writer cites the CDC about the harm & mayhem society’s legal drugs cause on a daily basis:

The available data from the Centers for Disease Control and Prevention (CDC) shows tobacco, alcohol, and opioid painkillers were responsible for more direct deaths in one year than any other drug. 

Alcohol-caused health problems, such as liver disease, led to more than 30,000 deaths in 2014. But that actually undercounts the number of deaths caused by alcohol: When including other causes of death like drunk driving and homicides, the toll rises to 88,000 per year.

Nearly 42,000 of the total 480,000 deaths from smoking are caused by secondhand smoke.

One might think that if the DEA really cared about Americans, and not about their budget, they’d list alcohol, opioids, and tobacco, as Schedule I drugs, and knock cannabis down a notch or two.  Then again, it was - the Godfather of the Drug War - Richard Nixon’s own commission (the National Commission on Marihuana and Drug Abuse) that recommended marihuana legalization in small amounts.  Nixon crushed and buried that recommendation, post-haste.

You see, beyond the money Big Pharma, Big Liquor & Tobacco make off of keeping cannabis criminalized, there’s a racial, or arguably a racist, component to keeping cannabis Schedule I.  Mr. Nixon, some may recall, had created the Southern Strategy, a political strategy that encouraged traditional Southern White democrats – angry over Demo passage of civil rights legislation in the 60s – to convert over to the GOP.  During the 60s and 70s marijuana was more closely associated with minority usage and distribution.  And so when Mr. Nixon waged his drug war, he was also waging a war on minorities and minority voters (as prisoners and convicted felons are, or are often, disenfranchised).  And POTUS’ Reagan and Clinton took the drug war and ran it further up the field, cracking down even harder – largely at the minority population’s expense.

It’s no accident then that minorities are far more likely than whites to be locked up for drug possession and distribution.  It’s no accident that America has the largest prison population in the world.  It’s also no accident that law enforcement, and private prison corporations, have lobbied heavily against the decriminalization of cannabis, and stand to gain financially by keeping pot on Schedule I.

So what have we covered so far in the DEA’s recent decision:  quite possibly, the DEA’s naked self-interest; a money grab by Big Alcohol, Pharma, & Tobacco or preservation of the status quo and profits; the commercialization of “legal” drugs that are far more dangerous to society, than all the illegal drugs combined; and a decision that is responsible for the perpetuation of the mass incarceration state and a thriving privatized prison industry?  And don’t forget the U.S. police state (local, state & federal) is armed to the teeth, w/ cutting edge military and surveillance technology.  Yep, the MIC and the Surveillance state contractors also have zero incentive to see cannabis made legal.  

Per the Huffington Post: Despite an increased emphasis on treatment and prevention programs in recent years, the Obama administration in its 2013 budget still requested $25.6 billion in federal spending on the drug war. Of that, $15 billion would go to law enforcement, interdiction and international efforts.

But wait, there’s more because as we all know… despite the aforementioned information, cannabis is the demon weed.

·      There’s a body of research that shows that pain pill abuse and overdose decline where cannabis is legal.

·      Medicare prescription drug savings, in the 17 states where cannabis is legal (the study covered a period through 2013), is estimated at 165 million dollars. The authors of that study also estimated that had cannabis been legal in all fifty states Medicare would have enjoyed a half billion dollar savings.

·      From ’96 through ’14, Purdue enjoyed $27 billion in sales from painkillers… painkillers that have now sparked a national heroin epidemic.

·      Employers also stand to gain from legal cannabis.  Early studies suggest there is less employee absenteeism in states that have made the drug legal.

·      Another study shows that cannabis abuse and dependency is down in states that have made the drug legal.

·      Another study shows that in Colorado marijuana use has not climbed among teens.

·      Drug related crime is down in Colorado.

·      There is less domestic violence in families where the adults smoke marijuana.

Funny, I didn’t hear the DEA mention any of these studies or findings.   Time doesn’t permit me to go into the foreign policy aspect of the failed Drug War (quick thoughts are: the Drug War is mostly fought on foreign soil, which explains why many of our Latin American neighbors have recently legalized, or are more open to cannabis legalization; Afghanistan – under U.S. occupation - remains the biggest producer and purveyor of heroin and opium; and it’s been pretty well documented that the CIA stood by, while crack cocaine was introduced to the Southern California black community, in order to finance Reagan’s war against communism in Central America during the 80s). 

Okay got to wrap this up…

I’m not pretending for one moment that cannabis is a panacea for all that ails America.  Yes, it would give our farmers a cash crop; yes, it would wipeout substantive swaths of organized crime; yes, it would give revenue hungry states another income source; yes, decriminalization would cut the expense of a hyper-militarized police & mass incarceration state; yes, there would be less overdoses from the poison Big Pharma and Liquor distributors, and merchants, sell to the American people, daily.

But what about the profits from these legal and legitimate industries: Big Pharma; Liquor & Wine; Defense contractors & Private Prison contractors?  They desperately need this Drug War to be maintained.  Quarterly income statements demand it.

At the end of the day, whether you are a libertarian or liberal, GOP or Dem, fiscal conservative or social-democrat/green, there’s gotta be something about the DEA’s decision that, hopefully, upsets you on some level.   In pulling this piece together, the deeper I went on research…  well, let’s just say it’s disappointing.  The DEA’s position and decision speaks to the rank dysfunction that Americans see in Washington on a daily basis… where moneyed interests and the politics of the status quo (in lieu of the “change,” we thought we were voting for) triumph over common sense and the national good.

Copyright JM Hamilton Publishing 2016