The Truth will prevail, But only if we Demand it from Congress!
9-11 Inside Job and Neocons Hacked 2004
By Richard C. Cook
5-1-8
Much has been written about whether a worldwide plan exists to
control events and steer them in the direction profitable to an
elite of the rich and powerful. Is this a "conspiracy theory"? While
it is difficult to be specific about who exactly may be behind such
a conspiracy, if it exists, it is at least clear that the privately-
managed system of global financial capitalism gives ample
opportunity for the world's richest people to combine for their
mutual benefit. Further, global financial capitalism itself is based
on the monopolization of money-creation by a world banking system
that is largely privately owned, even while working through the
central banks of the largest and most prosperous nations. This
article postulates the existence of a coordinated and longstanding
matrix set up by the controllers of money to dominate the movements
of history. The article focuses particularly on what seems to have
been an attack that has been going on for over a century against the
independence of the nations of Russia and the U.S. The article also
suggests a series of monetary reforms whereby the U.S. , or any
other nation, can regain its economic identity and preserve its
political freedom. The article was written a short distance from the
reconstructed colonial capitol building in Williamsburg , VA. On
this site on May 15, 1776, the Fifth Virginia Convention voted
unanimously to instruct its delegation at the Second Continental
Congress in Philadelphia to enter a motion for independence. It may
be time to do that again.
Russian philosopher P.D. Ouspensky (1878-1947) wrote, "It is a
mistake to think the times we are living in are like any other.
These are extraordinary times."
Ouspensky, with his mentor, G.I. Gurdjieff, escaped from Russia
after the Bolshevik Revolution, during the Russian Civil War. Though
academia has failed to acknowledge it, this epochal convulsion was
financed in part through the monetary resources of the international
financial elite operating out of London, Amsterdam, New York, Paris,
Hamburg, and Frankfurt.
It was this elite, acting through Western banks, which appears to
have surreptitiously provided the wherewithal for Lenin and Trotsky
to destroy the Russian nation after the fall of the Tsarist regime
at the end of World War I. Support by the Western financiers is
discussed by Dr. Matthew Raphael Johnson in his revisionist history,
The Third Rome: Holy Russia, Tsarism & Orthodoxy. (The Foundation
for Economic Liberty , Washington , D.C., 2003)
The present analysis postulates that the takeover of Russia, whose
backbone was the alliance among the House of Romanoff, the Orthodox
Church, the land-owing nobility, and thousands of self-governing
peasant communes, was one of two major projects which the financiers
set out to accomplish early in the 20th century in a longer-range
plan to dominate the globe. The other was the control and eventual
destruction of the United States of America. That project may be
reaching fruition through the ongoing and seemingly purposeful
financial meltdown of 2008.
Why Russia and the U.S. ?
Events affecting nations have their roots in history, and people
underestimate how what happens today is conditioned by the past. The
respective fates of Russia and the U.S. have been linked for a long
time.
The two countries had a close relationship during the American Civil
War, when the Russian fleet anchored in New York and San Francisco
harbors. In 1867, Russia sold the huge expanse of Alaska to the U.S.
Later, the U.S. provided engineering support for Russian industrial
development.
The two continental giants were, during the latter part of the 19th
century, becoming the greatest land powers in the world. With
Germany , Great Britain 's chief rival for economic might, added to
the mix, the hegemony of the financiers' power base in Britain and
northern Europe was threatened in a way not seen since Napoleon.
Both Russia and the U.S. were largely Christian nations, with a
sizeable portion of the American population, especially recent
immigrants, being members of the Roman Catholic faith. For centuries
nothing had been a greater obstacle to the financial control of
nations through war and finance than the Christian religion and its
teachings against usury.
Plus neither the U.S. nor Russia had a central privately-owned bank.
The U.S. had long since gotten rid of its own central banks, the
First (1791-1811) and Second (1816-1836) Banks of the United States
. The whole concept of commercial banking having control of a
nation's economy was alien to the Russian and U.S. mindset.
Instead, wealth came from work. This was expressed by President
Abraham Lincoln in a December 3, 1861, address to Congress when he
said, "Labor is prior to, and independent of, capital. Capital is
only the fruit of labor, and could never have existed if labor had
not first existed. Labor is the superior of capital, and deserves
much the higher consideration."
Lincoln could make such a statement because the U.S. economy, as was
the Russian, was deeply rooted in the soil. The backbone of the two
cultures was the Russian peasant and the American yeoman farmer, as
Thomas Jefferson called him. The merchant and artisan economies of
the towns and cities in both nations were founded upon the wealth of
the countryside which was derived from human and animal labor and
from working the land. Even when industrialization began to flourish
in the latter part of the 19th century, it was fueled in both
countries largely through savings and retained earnings, not bank
credit created "out of thin air" through fractional reserve lending.
Banker Domination
By the early 20th century, the bankers of Europe had a mission
before them. If Russia and the U.S. could be controlled, nothing
would stand in the way of the rule of humanity by the materialistic
pseudo- religion of power and wealth by which the financiers were
obsessed. As Max Weber (1864-1920) wrote in The Protestant Ethic and
the Spirit of Capitalism, the acquisition of wealth was viewed as a
sign that a person was one of the "elect." The financiers' sphere of
influence was centered in northern Europe , where the anti-usury
doctrines both of the Roman Catholic Church and Martin Luther
(1483-1546) had been undermined through the teachings of John Calvin
(1509-1564).
As is well known, banking in Europe began in the medieval period
with store-front gold merchants who invented fractional reserve
banking by lending certificates against a gold reserve held for
their customers on deposit. By the time of the Renaissance, banking
was centered in Italy and Germany , then spread north and west to
the Netherlands , France , and England .
By this time the Catholic prohibition against usury was well-
developed. Pope Sixtus V (1585-90) said charging of interest was
"detestable to God and man, damned by the sacred canons and contrary
to Christian charity." Theological historian John Noonan wrote that
"the doctrine [of usury] was enunciated by popes, expressed by three
ecumenical councils, proclaimed by bishops, and taught unanimously
by theologians." ("Development of Moral Doctrine," 54 Theological
Studies, 662, 1993)
Lending of money at interest was often left to the European Jews,
where statements in various scriptures, such as the Talmud, appeared
to allow the practice when dealing with non-Jews. Some argue that
the Vatican worked behind the scenes by using Jews as fronts for
their own lending operations.
In England , the Tudor and Stuart monarchs made a stand against the
rise of bankers as issuers of currency. As Susan Boskey writes in
her book The Quality Life Plan: 7 Steps to Uncommon Financial
Security, "the Mixt Moneys Case of 1604 in England determined money
as a public measure to be regulated by the state." According to
Alexander Del Mar, head of the U.S. Department of Weights and
Measures in the late 19th century and author of the book, History of
Money in America From the Earliest Times to the Establishment of the
Constitution, the Mixt Moneys Case determined that "the state alone
had the right to issue money."
Boskey continues: "For over half a century, this ruling alarmed the
merchants of London who attempted to defeat the Mixt Moneys
decision. The East India Company was the main instigator in the
effort, because they were eager to turn a profit by shipping silver
to India in exchange for gold. Success was achieved with the British
Free Coinage Act of 1666, which, according to Del Mar, 'altered the
monetary systems of the world.' He wrote: 'The specific effects of
this law were to destroy the royal prerogative of coinage, nullify
the decision in the Mixt Moneys case, and inaugurate a future series
of commercial panics and disasters which to that time were totally
unknown.' Moneylenders known as 'strong room keepers' began the
practice of making interest-bearing loans that were not backed one-
hundred percent by the gold reserves remaining in their strong
room."
"The British Free Coinage Act of 1666," continues Boskey, "marked a
turning point in the role of currency creation as a public measure
to one dominated by moneylenders. No longer was the act of putting
money into circulation directly connected to the actual, existing
material riches of a nation."
About this time, Samuel Pepys (1633-1703) was writing his now-famous
Diary. According to Canadian monetary expert Martin Hattersley,
Pepys "was describing in surprised delight the new institution of
banking, by which the smart investor, instead of paying the
goldsmith for warehousing his valuables, opened an account, and was
actually paid interest for having his money looked after!"
Pepys was captivated by the familiar but pernicious notion that,
instead of working for a living, a person could have his money "work
for him." Aristotle had spoken against this concept 2,000 years
earlier: "The most hated sort of wealth getting and with the
greatest reason, is usury, which makes a gain out of money itself
and not from the natural object of it. For money was intended to be
used in exchange but not to increase at interest. And this term
interest, which means the birth of money from money is applied to
the breeding of money because the offspring resembles the parent.
Wherefore of all modes of getting wealth, this is the most
unnatural." (1258b Politics)
Hattersley continues: "Who paid for Samuel Pepys' remarkable new
service? Basically, the public did. Pepys, leaving his gold with the
banker, enabled the latter to lend it out to a third party. Pepys
had his 'money in the bank,' and the borrower took the gold. The
borrower naturally paid interest on the loan. Pepys received
interest on his deposit. The same money being (notionally) in the
possession both of Pepys and of the borrower meant an increase in
the monetary mass of the nation. All the holders of money in the
nation, therefore, had the value of their holdings very slightly
diluted. There was a profit to the banker on the 'spread' between
borrowing and lending rates. There was a profit to Mr. Pepys, who at
one and the same moment had both money in the bank and an interest
bearing investment. Yet the borrower also profited. His loan would
be at a lower interest rate than that on capital that had had to be
saved up. 'Smart' bank financing put him ahead of conventionally
financed competitors. All three parties gained, at the expense of
the general public, the value of whose money was diluted through
inflation of the monetary mass."
Finally, concludes Hattersley, "Skipping forward three centuries
(past events such as the South Sea Bubble, tulip mania, the railway
boom and the 1929 market crash) we find that the little spot of
inflation that Mr. Pepys indulged in has become a universal way of
life. The extensive capital development of Canada [and the U.S. ] in
the post-World War II boom has been largely financed, not by
personal savings and investment, but by the inflation of the money
supply. This has left the thrifty who invested their little savings
from the hard times of the Great Depression in mortgages, bonds, and
life insurance deprived of most of the rewards of their thrift, and
has caused the profits of inflation to benefit all who could borrow,
build, and then repay their capital in deflated dollars later on."
Hattersley captures the essence of the modern usury-based economy.
No longer is life based on honest human labor and the resources of
nature, but on financial manipulation. This is why religious people
have always viewed usury as a crime. Aristotle placed the usurer in
the same category as others who "ply sordid trades," such as pimps.
Returning to the march of history, in 1688, James II, who had become
a Catholic, fled the British throne. Through the "Glorious
Revolution," he was replaced by the Protestants William and Mary of
the Dutch House of Orange. The main instrument of power of the
financiers who supported them was the Bank of England, founded in
1694.
The next two centuries saw the financiers' control of world commerce
spread through the instrumentality of the British Empire . The
bedrock of British policy was "free trade," which allowed British
manufacturers who paid their workers a pittance to undersell their
competitors elsewhere. This was aided by having the British pound
become the world's trading currency.
With the First Zionist Congress of 1897, one of the financiers'
geopolitical goals became to support the creation of the nation of
Israel , at least partly to dominate the world's crossroads in the
oil-rich Middle East . The oil was needed to fuel the British navy.
The nature and origins of Zionism have been hotly debated in recent
years, as the role of Israel on the world stage has grown. One thing
seems certain: The Jewish religion is by no means monolithic. But
its followers, many of whom opposed the philosophy of Zionism, would
now be drawn into the financiers' power game. From this point on,
anyone who even questioned Zionism would be labeled "anti-Semitic."
As the 20th century advanced, the financier elite became heavily
involved in getting rich off world war and the manufacture of the
new weapons of mass destruction that modern technology made
possible. Warfare and weaponry, combined with control of credit
manufactured through the leveraging of industrial production, were
to be the primary means of putting nations and their populations
into debt. A materialistic slave society was being created, which
books like 1984 warned against. Humanity was lured into compliance
through the fantasy world brought about by the mass media by means
of advertising, cinema, and television. Another enticement was the
growing availability of mass-produced consumer goods.
How It Was Done
While World War I and the Russian Revolution still lay a few years
in the future, the international financiers quietly took control of
the U.S. economic system in 1913 through the Federal Reserve Act and
the 16th Amendment to the Constitution which provided for the
federal income tax. The purpose of this tax was to use citizens'
earnings to pay the interest on the "funded" national debt. As with
the debt owed by the British people to the Bank of England, this
would be one so large the principle could never be paid off.
Russia was allied with Britain and France during World War I
(1914-18). But the war against Germany and Austria-Hungary had
reached a stalemate until the tide was turned by entry of the U.S.
on the side of the Allies. Fighting on the eastern front between
Germany and Russia was savage. By the end of the war the Russian
Revolution broke out, and, after a terrible Civil War, the Soviet
Union came into being.
It was the financier-controlled press which goaded President Woodrow
Wilson into taking the nation into World War I on the side of
England and France. But it was also part of the financiers' plan to
shift the apparent focal point of their financial power from London
to New York . This was done through the financing of the war by
loans made to the European combatants by the New York banks.
It seemed to be in accord with a plan spelled out decades earlier by
Cecil Rhodes, whereby the U.S. would not only be "recovered" for the
British Empire, but would appear to become the senior partner in the
enterprise. By the start of the 1920s, this objective had been
accomplished. German, English, French, and other European taxpayers
were all deeply in debt to the U.S. banks for the costs of the war.
Also during the war years the financiers had secured the issuance of
the Balfour Declaration signaling British support for the
establishment of a Zionist state in Palestine. The 1917 Declaration
was made in a letter from Arthur James Balfour, British Foreign
Secretary, to Walter Rothschild, Second Baron Rothschild, for
transmission to the Zionist Federation.
During and after World War I, world financial power shifted to the
New York banks through which, however, it would be the London-based
elite exerting de facto control. It might also be said that starting
with U.S. entry into World War I, once you look past the patriotic
slogans, the U.S., its vast productivity, and the blood of its
population have been used in making this country the worldwide
military enforcer of international financier domination.
World War II became the means of consolidating financier control.
Prior to that, during the years of the Great Depression, both Russia
-aka the Soviet Union-and the U.S. were slipping away from the fold.
Stalin had shown his "Bonapartist" tendencies by favoring "Socialism
in one country," as well as by his deadly purges of the
financier-controlled Trotskyite faction and his shocking
rapprochement with Hitler in 1939 that seemed to foil the
financiers' intent to play off Nazi Germany and the Soviets against
each other.
In the U.S., President Franklin Roosevelt had taken steps during the
Great Depression to rebuild the U.S. economy by exerting an
unaccustomed degree of control over the Federal Reserve System and
providing credit at low rates of interest to homeowners, farmers,
and businessmen. This made Roosevelt seem to many wealthy Americans
"a traitor to his class."
Roosevelt saw that a healthy and self-sustaining domestic economy is
essential for the well-being of a sovereign nation. But instead of
looking for ways to create a monetary system based on the
productivity of the economy, as Lincoln had done with the Greenbacks
during the Civil War, Roosevelt left intact the debt-based system
overseen by the Federal Reserve. He added to this system the
Keynesian idea of government deficit spending for public works to
create employment. This was essentially a system whereby government
would try to pay its debts by engendering inflation, a policy that
has continued until today.
But World War II thwarted even these stirrings of nationalism in
both countries. In both the Soviet Union and the U.S. , the
financiers worked the levers of debt to build massive war machines.
They were also working through the Western banks, including Brown
Brothers Harriman in New York, to achieve the same ends in Nazi
Germany. Eventually Hitler invaded the Soviet Union, and the U.S.
entered the war. Both during and after the war, operatives from the
international financial elite centered in London were the linchpins
of a worldwide matrix of spying, assassination, terrorism,
industrial espionage, psy ops, media manipulation, and monetary
control. This included financing the founding of Israel as the
Western bridgehead in the Middle East in 1948.
Despite the creation of an appearance of conflict between the West
and the Soviet Union through the Cold War, the financiers continued
to work both sides of the fence through their London-based
operatives. In the U.S. they created the modern national security
state with both the National Security Agency and the CIA firmly
under their control. Then, after President John F. Kennedy moved to
forestall the neocolonialist Vietnam conflict and replace the
Federal Reserve with a U.S. system of silver-backed Treasury
currency, he was shot dead in Dallas 's Dealey Plaza on November 22,
1963.
In charge of convincing the public that the Warren Commission was
correct in concluding that Kennedy was killed by Lee Harvey Oswald,
supposedly a lone deranged gunman, were figures associated with the
financier elite from the New York Times, Washington Post, and Yale
Law School . (See The Kennedy Assassination Cover-Up Revisited by
Donald Gibson, 2005.) But in 1979, a report of the House Select
Committee on Assassinations stated that Kennedy was killed by a
"probable conspiracy."
It has been thoroughly documented that since World War II the
Western intelligence agencies, all with close ties to the financial
world, particularly the New York and London investment banks, have
been responsible for engendering wars, revolutions, and mayhem in
countries around the world, causing the deaths of millions of people
in Asia, Africa, Latin America, and southeastern Europe.
Meanwhile, the worldwide arms industry, also under financier
control, have produced the greatest arsenal of weapons of mass
destruction ever seen. After Kennedy was killed, the U.S. moved to
arm Israel as the leading military power of the region. Today
nuclear weapons have proliferated, with Israel , Pakistan , and
India becoming nuclear powers in addition to the U.S. , Russia ,
Britain , China , and France .
But warfare and weapons cost money, and by the late 1960s the
Vietnam War was sinking the U.S. deeper into debt. The U.S. war
machine was to be the main tool for financier enforcement of their
worldwide plan of domination, but the nation was going broke. The
problem was made worse by heavy federal expenditures for the poor
and elderly through such programs as Medicare and Medicaid.
But President Richard Nixon's Secretary of State Henry Kissinger had
a plan. The government worked out an arrangement whereby Saudi
Arabia and the other OPEC nations would gradually increase the price
of oil, with the profits to be used by the oil-producing nations to
buy U.S. Treasury debt securities. By 1980 the cost of oil would be
ratcheted up from about $3.50 a barrel to $39.50.
The drastic increase of the price of gasoline at the pump acted as a
de facto tax on the U.S. economy. But the plan worked. The
"petrodollar" and "dollar hegemony" were born, with the dollar
becoming the world's reserve currency. Dollars could flood the world
only because in 1971 the Nixon administration had abandoned the
dollar's gold peg as a basis for international currency exchange.
Now currencies floated freely in world markets with speculation and
inflation rampant. The economies of the world were no longer based
on production, but on financial manipulation. It was also the start
of the era of monetarism, where the Federal Reserve thought it could
regulate the economy by the raising and lowering of interest rates.
The Kissinger plan also made the U.S. dependent on Middle Eastern
oil and turned it into the muscle behind the financiers' ambition
for Israel to dominate the region. So now Americans, who had
liberated Europe from the Nazis, had to fight and die for the
financiers in the Middle East . The final conquest of Iraq ,
starting in 2003, and the planned war against Iran are the latest
phases.
Meanwhile, through the financiers' control of the U.S. Federal
Reserve System, the producing economy was shattered through the Fed-
induced recession of 1979-83, where interest rates were raised to
the highest in history to combat the inflation the financiers had
themselves caused by the oil price shocks. By this time, as some
allege, the controversial concept of "peak oil"-whether it really
existed or not-was being used as a cover for financier manipulation
of oil markets by limiting production in order to maintain prices.
By 1992, when Bill Clinton was elected president, the U.S. producing
economy had been devastated by the shutdown of factories and the
export of jobs. The work of wrecking the economy was completed by
Clinton 's embrace of NAFTA, which has largely eliminated family
farming in favor of financier-controlled agribusiness in the U.S. ,
Canada , and Mexico . Deregulation of the financial industry began
in earnest during the Reagan years from 1981-89 and accelerated
under Clinton .
By this time, the U.S. economy was being kept afloat only through
financial bubbles that allowed the purchase of consumer goods to
take place through more family and household debt. We had the
merger- acquisition bubble of the 1980s, followed by the George H.W.
Bush recession which led to Clinton 's election in 1992. During the
1990s we had the dot.com bubble fueled by foreign investment.
Capital gains taxes on stock price inflation and counting trust
funds like Social Security as budgetary assets allowed Clinton to
balance the federal budget the last three years of his presidency.
But the dot.com bubble also burst with the loss of $7 trillion of
wealth through the crash of 2000-2001. Next came the Bush bubbles-in
housing, equity funds, commercial real estate, and hedge funds that
have been deflating while threatening to destroy altogether the
economic viability of what was once the world's greatest industrial
democracy.
After this, the only bubble left for an economy that appears to be
entering terminal depression may be the current fuel/food bubble
that could result in the starvation of millions worldwide. Now the
longstanding ambition of the financier elite for the destruction of
the American republic may finally be realized-with a lot of help, of
course, from their American friends.
"End Times"
Can it be that the last stage of the U.S. takedown is "The Project
for the New American Century"? Is this ambitious plan for "global
leadership" through military might that was seemingly invented by
the "neocons"-many with dual U.S.-Israeli citizenship-a Trojan
Horse?
It certainly appears that with 9/11 as a pretext, the neocons
suckered the U.S. into the invasions of Afghanistan and Iraq as a
means of military occupation of the Middle East . Certainly 9/11 and
the Iraq invasion benefited Israel, as some Israeli politicians have
frankly stated.
Were the neocons also acting on behalf of the financial controllers
in London and elsewhere? And was one reason the neocons were so
eager to engage in a "clash of civilizations" against the Islamic
world the Koranic prohibition of usury which states, "Those who
charge Usury are in the same position as those controlled by the
devil's influence. This is because they claim that Usury is the same
as commerce. However, God permits commerce, and prohibits Usury."
(Koran, Al-Baqarah 2:275)
Prior to 9/11, the Bush administration got Congress to cut taxes for
the highest income brackets, reversing Bill Clinton's budget
surpluses. The tax cut remained in effect, even as the massive
expenditures on the Middle Eastern wars mounted. The consequence has
been to bring the federal government to the brink of bankruptcy.
The last official act of this phase could well be the ultimate
insanity of a U.S. attack on Iran . If successful, this would
complete the Western conquest of the Middle East but may start a
larger conflict that could eventually force the U.S. to withdraw its
forces once the money runs out. Israel would then be at liberty to
sweep in to dominate a region that U.S. military power had
devastated.
Whatever may happen overseas, the U.S. economy at home is on the
verge of collapse. It if does, we will have to retreat to our own
shores and face here the edifice of a ruined nation with no
manufacturing base, a crumbling infrastructure, an aging population,
insufficient food, poorly developed resources, and the collapse of
the dollar. Of course the prophets of doom who claim that
overpopulation must inevitably lead to Malthusian scarcity will take
all this as justification of their prejudices. The rumored North
American Union, with its currency the amero, could then follow, both
under the control of the financiers.
Meanwhile in Russia, things took a surprising turn when the Russian
people threw out their communist controllers in 1991 and established
a Russian republic. The financiers immediately took over through the
government of Boris Yeltsin and began to divide up the nation's
resources through their local allies, the "oligarchs." But the
Russian people refused to comply. Despite desperate poverty, they
elected Vladimir Putin, a nationalist leader who moved quickly to
establish a self-governing Russian state that the financiers and the
Western press clearly intend to take down. Russia is now back on the
world scene, and a revival of the Orthodox Church is taking place.
The drama in that country has not been entirely played out it seems.
As far as the U.S. is concerned, the financiers will have used us
for a century, then thrown us in the trash. The U.S. may well be
replaced by China, which the financiers seem to be grooming as the
world's next military enforcer. China has the advantage of an
absolutist one- party system which has achieved remarkable success
in terrorizing its huge population into obedience and passivity. The
financiers would not hesitate to sacrifice hordes of Chinese to
fight both Russia and what may remain of the U.S. By this time, the
European Union will likely have its own unified nuclear deterrent to
protect the financial centers. The time may come when there will be
Chinese bases in the U.S. as occupiers/military police.
The wisest and safest course for U.S. foreign policy could be a new
alliance with Russia that would rekindle our affinity with that
nation from over a century ago. But how likely is this in a world
ruled by the financiers where the destruction of the two nations is
a long-term goal?
One of the tools of financier domination in the meantime will likely
be worldwide famine engineered by artificial shortages. This has
already started and may cause hundreds of millions of people to die
and their resources to be seized. The smokescreens for this will not
only be peak oil but also global warming as a means of dealing with
the world's "surplus eaters." Numerous non-profits and NGOs are
greasing the skids with their insistent lobbying against even
responsible economic development.
Now in the U.S. we will likely see riots, panic, martial law,
plagues, epidemics, and prison camps, much of which has already
begun with police crackdowns, anti-terrorist exercises, declining
public health, erosion of civil liberties, and the world's largest
prison population.
It is likely that the "American Century" is over and that the "New
American Century" will really be the "No American Century." Outside
of select pockets of prosperity around financial centers, resorts,
and military installations, the U.S. is being destroyed. As an
example, the residents of once-prosperous towns in Michigan have
turned to the illegal manufacture of meth-amphetamine now that the
jobs are gone.
We have been used and abused, though often suckered into it by our
own stupidity and greed. We have allowed ourselves to serve the will
of an alien force-the world's financial elite. Our payback now
appears to be a looming national catastrophe.
Economic Restructuring
Economically, what is left of America must be rebuilt from the
ground up. The flaw is not in the productivity of nature, the
availability of resources, our ingenuity, nor our ability to work.
The flaw has been in the capitalist financial system.
We must now rebuild three things: American family farming, since a
nation that cannot feed itself cannot long exist; then
infrastructure and manufacturing, which will require energy
conservation and redevelopment of our energy resources; then income
security tied to productivity but not always to employment-a basic
guaranteed income for all. The best available treatment of the
history and benefits of a guaranteed income may be found in Steven
Shafarman's new book, Peaceful, Positive Revolution, Tendril Press,
2008.
The concept of a guaranteed income as a benefit of a modern
industrial economy has been around for a long time. But it is often
confused with job-creation. As indicated earlier, during the 1930s,
British economist John Maynard Keynes came up with the idea of using
government deficits to try to out-run unemployment through
government- controlled pump priming. But in the long run his methods
were doomed to fail as debt-based economic growth eventually reached
its limits due to inflation. This is where we are today, with
President George W. Bush now the largest deficit spender in history.
The most successful attempt to define a rationale for an honest and
democratic monetary system, one based on human labor and not
financial chicanery, was the Social Credit movement founded by
British engineer C.H. Douglas (1879-1952). He first set forth his
ideas in his book Economic Democracy in 1918 and continued to teach
his system for the next thirty years, attracting a considerable
following in Great Britain , Canada , New Zealand , and Australia .
Douglas explained the dynamic whereby the incredible productivity of
modern technology can readily be harnessed to provide the material
sustenance for all members of society, but fails to do so because
there is a chronic shortage of purchasing power from the cumulative
societal income realized through wages, salaries, and dividends. The
main reasons income cannot keep pace with prices is that the latter
include retained earnings for savings and reinvestment, along with
depreciation of capital-i.e., the tools and facilities of
production.
But the "gap" between prices and earnings (what Keynes was to call
"aggregate demand") was viewed by Douglas as a benefit of a modern
industrial economy rather than the curse which in the Depression was
causing farmers to dump their milk in the fields because consumers
lacked the money to purchase it.
Douglas saw this gap as the natural appreciation of the potential
producing economy to which everyone in society was entitled as
monetized shares. He said this appreciation should manifest in
regular payments of a National Dividend by government from a
calculated credit account not dependent on taxation or government
borrowing. The National Dividend could be paid by a combination of
regular stipends to citizens and/or through a system of price
subsidies. And it would be non-inflationary.
Douglas went further by explaining that in real life the
price-income gap was in fact filled-nature abhors a vacuum-but by
bank lending at usury. This was why the banks got richer, while
everyone else struggled just to survive. Banks also use their credit
creating ability to acquire securities, such as Treasury bonds, with
the government paying interest that is compounded because the debt
is constantly being re-financed. Interest on the U.S. national debt
is expected to exceed $500 billion in fiscal year 2009. To pay it,
many social programs will be cut.
The technical explanation is provided by Canadian Social Credit
expert Wallace Klinck, "Expanding interest charges being paid on
exponentially compounding debt accumulates due to an industrial cost
accountancy error related to allocating capital charges in retail
prices which do not distribute equal incomes within the same
production cycle. The growing disparity between prices and incomes
is progressively worsened by the replacement of human labor by
capital (technology)."
Under the current system, the banks steal the fruits of economic
wealth which properly belong to the public as a whole, both workers
and non-workers, and while the financiers were well aware of Douglas
's system, they hated it. Word went out in the 1920s that his name
was never to be mentioned in the British press. John Maynard Keyes
was said to have developed his own deficit-spending theories as a
means to counter Douglas 's influence. And when Douglas visited the
U.S. in the late 1930s, he was told to his face that he would never
be allowed to introduce his ideas in this country.
Next Steps
To accomplish a program of real reform will require a strong
president but possibly a political revolution to get one.
Congressman Ron Paul has made history as the first major
presidential candidate to call for the abolishment of the Federal
Reserve. He is right. The first thing a president worthy of the name
should do is eliminate the Federal Reserve as a bank-of-issue, get
rid of our debt-based monetary system, and depose the bankers and
Wall Street financiers from the seats of power. Ron Paul is also
right that the U.S. should withdraw its military from overseas and
stop trying to control the world.
What Ron Paul's candidacy proves is that in the internet age, with
financial crises jumping from the headlines every day, and
authorities such as Ben Bernanke, chairman of the Federal Reserve,
and Secretary of the Treasury Henry Paulson manifestly having no
intention of making real changes, the public is ready to listen to
new ideas. But even progressive analysts are so locked into outmoded
concepts that they fail to realize an entirely new type of monetary
system is needed.
The basic concept that must be understood, as expressed repeatedly
by this author in past articles, is that credit is a power of nature
that is part of the human "commons." Credit allows society to
materialize value by drawing from future potential productivity into
present actualized reality. Credit therefore should be treated
legally as a public utility, like water or electricity.
Credit is not a mathematical abstraction that should be manipulated
into building pyramids of debt. Such practices are suicidal for an
economy. Rather credit is organic, deriving ultimately from human
labor (including mental labor, as in the application of technology),
along with the sun, the soil, natural resources, and the rain. Thus
we have gone full circle to the beginning of this article, where
Russia and the U.S. were cited as the two nations that best
understood where real wealth comes from.
The management of credit may be licensed to responsible private
parties who are accountable to public authority, but it should never
be given away or "privatized" to individuals or corporations who
manipulate it mainly for their own profit, as banks do today. It is
the privatization of credit through the banking systems of the world
which has loaded humanity with debt, rendered short-term profits the
highest priority of all business endeavor, and made modern
industrialization as much a curse as a blessing.
Note that credit differs in this discussion from the legitimate
investment of capital derived from profits or savings whereby an
individual risks a portion of his wealth through a contract with a
producing entity. Capital markets that facilitate this type of
investment fall under the category of commerce, not usury.
A national monetary system should reflect the treatment of credit as
a public utility and thereby make possible responsible economic
activity and the fair distribution of wealth. Some of the measures
which should be implemented are contained in the American Monetary
Institute's draft American Monetary Act. (www.monetary.org/) The
resulting currency could be issued, not in the form of debt
instruments like Federal Reserve Notes, but silver-backed Treasury
certificates as in President Kennedy's program of 1963.
Features of a new monetary system could be as follows:
A guaranteed income, followed by a National Dividend, should be paid
directly to citizens from a Treasury credit account without recourse
to either taxation or government borrowing. (C.H. Douglas's theory
of the National Dividend as the monetization of the net appreciation
of the productivity of a modern industrial economy is set forth in
this author's Global Research article entitled, "An Emergency
Program of Monetary Reform for the United States ," April 26, 2007.)
The National Dividend, currently estimated at over $12,000 per
capita annually, could be distributed in a variety of ways, in
addition to a subsistence stipend. This could include price
subsidies for consumer purchases, taking over existing Social
Security payments, universal health insurance, or payments to women
with young children. Another way to issue a National Dividend would
be to monetize food production, whereby anyone who delivers food
products to wholesalers receives a government payment as a
producer's subsidy, thereby discounting food at the consumer
point-of-sale. This would work in a similar fashion to farm parity
pricing programs of bygone days. As explained by Wallace Klinck,
"Social Credit policy is to compensate retail prices at the
point-of-sale. It is not, however, to subsidize production which
would be subject to consumer choice and fully supported by consumers
having at all times financial income adequate to fully liquidate the
costs of production. That is, production policy is to be determined
essentially by consumers-this being the Social Credit concept of
genuine economic democracy with maximum decentralization, or
dispersion, of power over production policy. Price controls under
the present financial cost-accountancy system, where continued
economic activity is dependent upon an inflationary expansion of
credit to meet rising costs arising consequent to flawed
accountancy, is demonstrably impossible. Price regulation, however,
would appear to be both necessary and realistic under a self-
liquidating Social Credit system of finance. Although not generally
recognized, prices are 'controlled,' (or manipulated) under the
present system of finance in a most deleterious manner."
The government should also spend money directly into circulation, as
it did with Greenbacks in the 19th century, both for operating
expenses and for infrastructure projects at the federal, state, and
local levels. A national infrastructure bank could be capitalized by
state and local infrastructure bonds without any impact on the
federal budget. Such spending would again be without recourse to
borrowing or taxation. Infrastructure spending could be either
through grants or low-interest loans. As with Congressman Dennis
Kucinich's current proposed infrastructure bank legislation, the
program could specify that a requisite proportion of funding be
spent on American-made products such as steel.
We should reform banking by eliminating the catastrophic privately-
controlled fractional reserve system. Instead, the government should
lend money at a low rate of interest to banks, then use the proceeds
to help pay for legitimate government expenditures in the areas of
regulation or services. Use of the proceeds, combined with the new
Greenbacks and savings from no longer having to pay interest on an
unnecessary national debt, would eliminate the need for the federal
income tax, allowing the 16th Amendment to be repealed. In fact,
under a monetary system such as the one described herein, probably
three-fourths or more of the current societal tax burden could be
eliminated.
In order to clear the way for these reforms, bankruptcy
reorganization of the entire $50 trillion of existing debt in the
U.S. should be undertaken, with debt being restructured and paid
down over time or simply written off. Bank lending for speculation,
such as for mergers and acquisitions, equity and hedge fund
speculation, and purchase of securities on margin has been
explosively enabled through bankers' ability to move massive amounts
of funds electronically. These leveraging practices should be
outlawed, as they are abuses of the public interest. (According to
the London Times, one John Paulson made $3.7 billion in hedge fund
trading last year. "Mr. Paulson's firm, Paulson & Co, made a fortune
from shorting America 's sub-prime mortgage markets.") A national
fuel conservation program with real teeth should also be instituted.
And at least half of the U.S. military budget should be eliminated,
with half of the remainder devoted to energy R&D and domestic public
works. Employees of the military-industrial complex will find many
new career opportunities as the domestic economy revives.
As these measures are taken, the United States will no longer be
dancing to the financiers' tune. We would be helping prepare a
future where man's inhumanity to man as expressed through war and
financial exploitation is no longer glorified. Such a future would
be a milestone in the eventual enlightenment of the human race. But
these are measures that must be implemented now, before it is too
late.
While we await these epochal changes, more modest steps may be in
order. The author is often asked for personal financial advice. His
advice is to invest in yourself and in other people. Plant a robust
home garden. Learn new skills. Start community food co-ops that buy
local products. Establish local currencies and barter networks. Join
or form a union. Raise bees. Put kids through school. Get out of
debt. Pray and meditate. Become politically active. Demand change.
Richard C. Cook is a former U.S. federal government analyst, whose
career included service with the U.S. Civil Service Commission, the
Food and Drug Administration, the Carter White House, NASA, and the
U.S. Treasury Department. His articles on economics, politics, and
space policy have appeared on numerous websites. His book on
monetary reform is entitled We Hold These Truths: The Promise of
Monetary Reform and will be published this autumn by Tendril Press.
He is also the author of Challenger Revealed: An Insider's Account
of How the Reagan Administration Caused the Greatest Tragedy of the
Space Age, called by one reviewer, "the most important spaceflight
book of the last twenty years." His website is at
www.richardccook.com. Questions, comments, or contributions may be
directed to economicsanity@gmail.com .
