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The Big Guy’s on Our Side

Posted on Sep 28, 2010
AP / Cliff Owen

Paul Volcker, head of the President’s Economic Recovery Advisory Board, testifies on Capitol Hill in February.

By Robert Scheer

Paul Volcker, or the “big guy,” as President Barack Obama refers to the former Federal Reserve chair who heads his Economic Recovery Advisory Board, nailed it in a series of blistering remarks on the sorry state of our economy. But what he said was even tougher than was indicated by the media’s scattergun reporting on his speech last Thursday to the Chicago Fed. Thanks to Reuters, which posted the video coverage online, it is possible to take the full measure of his concern over where we are and how we got here.

Volcker warned that “the financial system is broken. ... We know that parts of it are absolutely broken, like the mortgage market, which only happens to be the most important part of our capital markets [and has] become a subsidiary of the U.S. government.” That sentence was quoted in brief mentions of the speech in The New York Times and other leading news outlets but not so his explanation of how this was allowed to happen: “I don’t think anybody doubts that the underlying problem in the markets is this too-big-to-fail syndrome, bailout and all the rest.”

Volcker is right that those too-big-to-fail banks were at the heart of the problem, but the folks who pushed through the legislation allowing the creation of those unwieldy financial monsters still feign innocence. They include Bill Clinton; his Treasury secretaries, Robert Rubin and Lawrence Summers; former Sen. Phil Gramm, a Texas Republican; and former Federal Reserve Chair Alan Greenspan. Their success in smashing the wall between investment and commercial banking is the source of our current misery.

As Volcker observed, the investment banks stopped investing in truly productive ventures and turned into “trading machines instead of investment banks,” resulting in “encroachment on the territory of commercial banks, and commercial banks encroached on the territory of others in a way that couldn’t easily be managed by the old supervisory system.”

That melding of Wall Street high rollers’ risky bets with the federally insured deposits of ordinary folks required the U.S. government to bail out the former to save the latter. That was just what a small band of eight senators predicted when they alone voted against the radical deregulation that Clinton signed into law in 1999. The urgency behind passage of that law was the temporary waiver of the Glass-Steagall Act by the Fed, an action that allowed the merger of the Travelers insurance company and Citibank to form Citigroup, creating the biggest of the too-big-to-fail banks.

That merger was celebrated in an April 8, 1998, New York Times editorial that was all too typical of the response of the big news corporations:

“They have announced a $70 billion merger—the biggest in history—that would create the largest financial services company in the world, worth more than $140 billion. If regulators approve the merger, Citigroup, as the company will be called, will serve about 100 million customers in 100 countries. In one stroke, [they] will have temporally demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.”

The same theme of modernization was struck by President Clinton when he signed the law making permanent the temporary exemption for the newly formed Citigroup: “Today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority.”

Clinton then handed one of the pens he had used to sign off on the new law to a beaming Sandy Weill, Citigroup’s CEO, who had it installed in the hallway of the new company. The trophy was just steps away from the office where Weill installed Rubin, who had left the Clinton Treasury post after the law that cleared the way for Citigroup went into effect. Rubin was at Citigroup for the full crazy ride but insisted in congressional testimony that, despite his $15-million-a-year compensation, he did not know of the company financial shenanigans he had done so much to make legal.

Citigroup, thus freed from sensible regulation, went on to become a major leader in the securitization of subprime and Alt-A mortgage debt before being put on government life support. It required $45 billion in a taxpayer bailout and Fed backing of $300 billion of Citigroup’s toxic assets to stay alive, at less than $4-a-share stock valuation. On Monday, Norway’s central bank joined a long list of plaintiffs attempting to hold Citigroup responsible for the toxic debt it had sold. Guess they are not so happy with the destruction of those “unnecessary walls” that Clinton and the editorial writers at The New York Times had so wildly celebrated.

Click here to check out Robert Scheer’s new book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”



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Egomet Bonmot's avatar

By Egomet Bonmot, October 4, 2010 at 7:18 pm Link to this comment

Hey Mr. Scheer, I took your LRC advice and watched the youtube of Jerry Brown debating Meg Whitman.  And you were right, he was electrifying.  So how about a Truthdig article on him?

Jerry, we hardly knew ya!

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Shenonymous's avatar

By Shenonymous, October 2, 2010 at 4:52 am Link to this comment

Frankly, Fat Freddie, and I’ve said this numerous times before, I
was not a poly-sci student nor had any economic courses in my
professional education track.  However, in the last couple of years
I’ve become most interested in what is happening here and in the
world, and particularly since it affects my own pocketbook and social
life as well as my family’s and friends’, I have become intent on
learning more so that I can make better political decisions.  I haven’t
the slightest idea if BlackRock or JP Morgan will own AIG, nor what
the effects could be if one of them does.  Nor do I know who would
manage toxic assets of wholesale credit unions.  I am not the last word
on the subject.  Since my credit union is ‘my’ credit union, there is no
private owner, only the members either benefit or suffer.  And of course
there is political motivation especially when it comes to advantage to
the credit union that could be at stake. 
I definitely do not believe profits are a bad thing and why you would
attribute that attitude to me is a frolic of your own mind.  I completely
support a capitalist economic system.  I am just fed up with the
exploitation that privatized capitalism has exercised on the people for
at least a century.  It is time for a change and time the people take
charge of their own lives.  I am for a more socialist driven capitalism
that would compete with the private system.  I am sorry for your limited
experiences with coops.  I actually have none!  But I am for a change in
the direction where the public is not under the thumbscrews of the
government or private capitalists.  I do not believe in a centralized
government system either.  But I do believe that government must play
a role in regulating the unbridled abuses in the financial industry.  And
it is a lucrative industry that has abused the public long enough.  From
the data I’ve collected there are plenty of examples where cooperatives
and collectives are successful.  This is an evolutionary effort and if
there are aspects that are not conducive to the betterment of the
society, then those coops you referenced are not the right models. 
What I have in mind is not coercive, no one is mandated to belong to a
collective, but the social capital that is generated when a cooperative
works is beneficial to the society since there is just that many more
people not controlled by big business nor a socialistic tyranny.  The
idea is in an embryonic stage.  Unless it is not given any thought then
the society will forever remain in thrall to the wealthy and corporate
class.  Slaves are always seething.  And the likes of you would try to
convince them they are properly where they belong.

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Shenonymous's avatar

By Shenonymous, October 2, 2010 at 4:46 am Link to this comment

“Workingman’s Blues #2”
There’s an evening haze settling over town
Starlight by the edge of the creek
The buying power of the proletariat’s gone down
Money’s getting shallow and weak
Well, the place I love best is a sweet memory
It’s a new path that we trod
They say low wages are a reality
If we want to compete abroad

My cruel weapons have been put on the shelf
Come sit down on my knee
You are dearer to me than myself
As you yourself can see
While I’m listening to the steel rails hum
Got both eyes tight shut
Just sitting here trying to keep the hunger from
Creeping it’s way into my gut

Meet me at the bottom, don’t lag behind
Bring me my boots and shoes
You can hang back or fight your best on the frontline
Sing a little bit of these workingman’s blues

Well, I’m sailing on back, ready for the long haul
Tossed by the winds and the seas
I’ll drag them all down to hell and I’ll stand them at the wall
I’ll sell them to their enemies
I’m trying to feed my soul with thought
Going to sleep off the rest of the day
Sometimes no one wants what we got
Sometimes you can’t give it away

Now the place is ringed with countless foes
Some of them may be deaf and dumb
No man, no woman knows
The hour that sorrow will come
In the dark I hear the night birds call
I can feel a lover’s breath
I sleep in the kitchen with my feet in the hall
Sleep is like a temporary death

Well, they burned my barn, and they stole my horse
I can’t save a dime
I got to be careful, I don’t want to be forced
Into a life of continual crime
I can see for myself that the sun is sinking
How I wish you were here to see
Tell me now, am I wrong in thinking
That you have forgotten me?

Now they worry and they hurry and they fuss and they fret
They waste your nights and days
Them I will forget
But you I’ll remember always
Old memories of you to me have clung
You’ve wounded me with your words
Gonna have to straighten out your tongue
It’s all true, everything you’ve heard

In you, my friend, I find no blame
Wanna look in my eyes, please do
No one can ever claim
That I took up arms against you
All across the peaceful sacred fields
They will lay you low
They’ll break your horns and slash you with steel
I say it so it must be so

Now I’m down on my luck and I’m black and blue
Gonna give you another chance
I’m all alone and I’m expecting you
To lead me off in a cheerful dance
I got a brand new suit and a brand new wife
I can live on rice and beans
Some people never worked a day in their life
Don’t know what work even means.

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Fat Freddy's avatar

By Fat Freddy, October 1, 2010 at 3:00 am Link to this comment

The government could very well do a
lot of things, but the probability of it liquidating the assets of credit
unions is nil.

And if the Republicans gain control, or some other group? I have the feeling, and I could be wrong, that either BlackRock or JP Morgan is going to end up owning AIG. Do you think that is a possibility? If you read the Maiden Lane agreement, you will see that BlackRock is managing the toxic assets that AIG is on the hook for. It’s only one small step to ownership from there. Look into the credit union. Who is really going to manage the toxic assets of the wholesale credit unions? Not the government. They will contract that out. To whom? I don’t know, but BlackRock is already managing the assets of AIG. They may as well manage the assets of the credit unions to keep things simple, no? Don’t believe everything that your credit union tells you. They, like everybody else, can be politically motivated. They may be right. But when the government is controlling the assets, it might be wise to do your own research, and not take their word for it. I know I would.

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Fat Freddy's avatar

By Fat Freddy, October 1, 2010 at 2:39 am Link to this comment

The Federal Savings Bank does nothing for its
depositors except take their money and charge for their services.  Their
interest rates are lower than the credit unions and their loan rates are
higher.  And all the money goes to its private owners. 

Wrong. Pay attention. Like I said, the depositors are the shareholders. That means the depositors are owners.

On the other hand, moving to a mutual holding company - a hybrid structure that combines co-operative ownership with capital-raising powers—is a neat balancing act. You can serve your members and build the strength to serve the community at large. Mergers and acquisitions are also facilitated.

For some reason you seem to think that profit is a bad thing. I’ll tell you, I own a business and profit is what gets me out of bed in the morning. The fear of bankruptcy is what keeps me honest. Without a profit motive, you risk stagnation. What the big banks have been doing is definitely dishonest. That’s what happens when there is no fear of bankruptcy. The Federal Reserve was set up to be “the lender-of-last-resort”. That right there tells you that it protects banks from bankruptcy. Now, to add fuel to the fire, we have Treasury bail-outs. The banks are dishonest because the government protects them. Remove the protection, and banks will be forced to operate honestly. As it is now, we are forced to accept the dishonest practices of the banks. Tell me, how can you expect a government to “protect” you, and your interests with regulations, if the government is already protecting the banks with bailouts and the Federal Reserve??? It’s like feeding a lion with one hand, and whipping him with the other. Then add to that, that no one is being held accountable. No one. All the regulations in the world won’t matter if no one is held accountable. This may soon change, however, unlikely. This is what Iceland is doing.

Now, if they could only do that here, and follow through. Jeffery Skilling is sitting in jail for the Enron debacle. Why isn’t Dick Fuld, from Lehman? Because there is no enforcement, and no accountability. Besides, if you put Fuld in prison, you would have to put half of the members of Congress in jail, as well. We can’t have that, right?

All this talk about co-ops sounds a lot like some egalitarian communal society. If you are really interested, I suggest taking a ride to Louisa, Virginia, and check out the Twin Oaks Community. Spend some time there, and see what it is like. If you like it enough, then join.

There are a couple of co-ops where I live. However, they are not worker controlled, they are owner controlled. The co-ops in my area are pools of individual owners that co-op their buying power, in the case of Wakefern/Shop-Rite.

There is also a co-op of farmers. They operate a produce auction.

Individual farmers own the land, and are free to grow whatever they want. If there is a shortage for a particular item in the market, say cabbage, the price will go up. This will encourage, but not force farmers, through the profit-motive system, to grow more cabbage, but farmers are still free to grow beets, if they desire. Farmers that do not meet the market demands, go bankrupt. It is not perfect, but this is the most efficient system for meeting the needs of the market and consumers, and the most fair. However, this system will not function properly if there is not free and fair competition. Free, being free from government interference, and fair, being an adequate number of competitors (no monopolies).

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By Shenonymous, September 30, 2010 at 9:00 pm Link to this comment

Fat Freddy - if there are regulations that are not being enforced,
then the public has the responsibility to make its government live
up to those regulations.  The bill passed in May, as the NYT article
reports, expands federal banking and securities regulation from its
focus on banks and public markets, subjecting a wider range of
financial companies to government oversight, and imposing regula-
tion for the first time on “black markets” like the enormous trade in
credit derivatives.
This is a very revealing article, “Financial Regulatory Reform” and
anyone interested in what is happening regulationwise ought to read it.

I know the difference between corporate credit unions and retail
credit unions but I did not think many of the readers of TD knew.  My
credit union explains the difference quite thoroughly.  If a frog had
wings it wouldn’t bump its ass.  The government could very well do a
lot of things, but the probability of it liquidating the assets of credit
unions is nil.  Show me where it is even considering that action.  I’ve
already posted how it works and don’t need to repeat myself.  Yes, my
credit union does make me feel warm and fuzzy.  Not one second were
my accounts at risk during the worst of the financial crisis and not one
service was interrupted.  The Federal Savings Bank does nothing for its
depositors except take their money and charge for their services.  Their
interest rates are lower than the credit unions and their loan rates are
higher.  And all the money goes to its private owners.  In my credit
union the money goes to providing lower interest loans and higher
return on savings accounts.  Their credit card services also charge lower
API.  You certainly have the right to put your money where you want.  I
suggest that people check out the credit union avenue and see about
how their membership actually is considered as ownership of the

At any rate, I don’t claim to be a wizard at the financial industry.  I
don’t see many others who are either.  My interest is to find ways
where people can make claim to owning their own lives as much as
possible without being thralls to the corporatocracy.  Instead of the
constant whining people can take charge and do have the power to
determine their lives more than they have had.  There is no illusion that
it would be a complete divorce as we are embedded too much in the
corporate world as it is now.  But self-empowerment can only come if
one takes the first steps away from that manmade nefarian.

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By Inherit The Wind, September 30, 2010 at 8:03 pm Link to this comment

Actually, N-G, you are wrong.  English is a Germanic language. There’s even a bit of Scandinavian languages in it, because of the Viking conquest of Britain, hence King Canute (Cnut) and his descendants.  Their language was called Old English.

But there was a huge injection of French into the language in 1066 with the Norman conquest.  The Court spoke French and other languages, but little, if any English.  Henry II of Becket infamy, and Richard The LionHearted, his son, spoke only French.  Richard, Coeur de Lione lived in the French part of the Kingdom—the English Channel was a river down the middle of it.

By the time of Chaucer, English looked fairly familiar, just with funny spellings (to our eyes). But that’s because it sounded like German.

Many people think Shakespeare is Middle or even Old English, but it’s not.  There’s some vocabulary we don’t get (“dudgeon”—a dagger handle, “pitard” as “the enginer is hoist on his own pitard”—an explosive used in construction, like blasting for roads today—not a crane as some people think).  And some grammar—“I’ll to England” (leaving out “go”).  But it’s modern English.

Go to Glasgow today and listen for people speaking Glaswegian.  It sounds like German and you’ll be lucky to pick up a word or two.  But it’s English, not Gaelic, and when it’s written you’ll have no trouble reading it.

And the Dutch group is much closer to English than German is.  Dutch, Flemish and Afrikaans are actually more similar to English than German.

But still, our language is Old German with an overlay of early to middle French.

Even now we see American English is less French than British English. They still “colour” theirs with French spellings (I’ll not “labour” over this anymore).

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Napolean DoneHisPart's avatar

By Napolean DoneHisPart, September 30, 2010 at 6:20 pm Link to this comment

Ok, you got me.. I didn’t research Mario that much… your thoughts on JFK? 

Just Oswald? 

Notice how JFK was blown back and forth in the videos?

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By AT, September 30, 2010 at 5:25 pm Link to this comment
(Unregistered commenter)

(To be continued)
Did you happen to see on GMAC when the august republican senator from the great state of UTah, reached into his bag of tricks and pulled out the sign of national Rifle assocaition and showed it to Obama’s supreme Court nominee in hope that her words will hang herself. Not to be outdone she muttered a polite commentSo this time it di not work, but unlike last time, when something negative came out, he went looking for some cable company to hang the blame on. (to be continued)

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Shenonymous's avatar

By Shenonymous, September 30, 2010 at 5:24 pm Link to this comment

Yeah, I’ve taken a look at Hagger and his books.  Where exactly
does he make sense?  I’ve already commented on his unverifiable
new age universalism.  He is just another self-appointed guru,
shades of the 70s, but no realism there.  Anyone who goes around
talking about the soul is delusional.  He reminds me of Duncan
Idaho, the ever present ghola of the Dune Chronicles.  There’s
always a new guru around the corner.

I checked with the Stanford Philosophy Department and they emailed
me a reply that they do not recognize Hagger as a relevant philosopher.
They don’t even have an entry for him or his universalism in their
online encyclopedia.  Yikes.

And Michael Ruppert?!!!  Okay, o k aaaaayyyy!  I get the willies
whenever conspiracy theorist and obsessive alarmist are attached as
descriptions to anyone. I’ve read his anti-American “The Light of a
Burning Bridge, A Permanent Goodbye to the United States.” 
Sorry, but this piece offended me.  I think it is a completely myopic and
reactive view. 

I really don’t have the time that I would want to devote to the
disaffected who are great at blistering criticism but really are
ineffectual to assimilate in order to make changes from within.  But
rather sit outside the fray and preach a new species of “spiritualism”
and complains about the flaws and imperfections of a society that is for
me a great entity, that has given my very large family from
grandparents to uncles and aunts, their children, and my parents and
me and my children a fairly good life, a poor one, but not without its
rewards and opportunities.  I don’t mind working to get it in a better
state.  In spite of my humble beginnings I was able to reach the highest
degree earnable in my field and enjoy employment for a very long time. 
And I am not the only one to have done that in my family.  I do make a
difference.  And I will work to get rid of those who would exploit the
poor and middle class. 

But of those who are so desperate to have something beyond their own
rational consciousness and intelligence are followers not independent
critical thinkers, and I don’t really have much respect for them.  Yup
and you can buy lots of Hagger’s products.  He is definitely into writing
lots of books and the money book sales bring.  He and Kiyosaki make
great partners.  Go ahead youse guys, go for it.  As I said, KoolAid
is not my cup of tea.  But you are welcome to have a pint.  Oh by the
way, did you know there is a GURU Energy drink that has a video “Clean
Energy for Dirty Minds” advertising campaign.  LOL

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Fat Freddy's avatar

By Fat Freddy, September 30, 2010 at 4:31 pm Link to this comment


Most retail credit unions rely on the wholesale credit unions to manage their assets. Wholesale credit unions do not deal with the general public. Wholesale credit unions, by law, are restricted from making risky investments. If the wholesale credit unions collapsed, so would most of the retail credit unions. There are some exceptions, of course.

The fact is, the government now controls 70% of the assets of the wholesale credit unions. Since the retail CU rely on the WCUs for asset management, that means the government effectively controls the many of the assets of the RCUs, just like they control many of the assets of GM and AIG.

The Federal government now has control of the NCUA. It is no longer an independent institution. Don’t you understand the significance of that? Your credit union is no longer a co-op. It is a “gov-op”. Your credit union is now beholden to the government. What the government does with this newly acquired power is open for debate. But the fact of the matter is, the government very well could liquidate the assets, or sell them to JP Morgan or BlackRock if they wanted to. I don’t know about you, but that doesn’t make me feel all warm and fuzzy inside.

My money is in a local Federal Savings Bank. It is a mutual-holding company. That means that the depositors and managers own controlling shares of the bank. I have a vote on the election of the Board of Directors, simply because I have an account. The difference between a mutual-holding company, and a co-op, is a co-op is “not-for-profit. My FSB is “for-profit”, but I have a say in how the company is managed. I can earn stock in the company, the managers own stock, and stocks are sold on the open market to generate equity. It’s the best of all worlds, so long as it effectively managed. But that’s the key to any company. But since the management has a vested interest in the company, they tend to be more conservative with investing, and lending.

They have plenty of money to lend to qualified borrowers both individuals and local businesses. They didn’t take any money from the government.  However, they are forced to comply with the Community Reinvestment Act.

A note about Zerohedge. The posters are anonymous by design, and they go to great lengths to keep them anonymous. Many of them are employed on Wall Street and would be fired for expressing their opinions, good or bad. The founder was the one who exposed Goldman Sachs practice of using proprietary high frequency trading to gain an unfair competitive advantage. Something the government has yet to address properly.

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By Shenonymous, September 30, 2010 at 3:09 pm Link to this comment

So okay, I check your links out, Fat Freddy.  According to the WSJ
article, the majority of retail credit unions are sound.  Since credit
unions do partake of the financial market, they do make investments
with the money they take in on savings accounts and loan interests,
no one said they were completely divorced from the regular
marketplace, they suffered the same kind of losses as all the other
financial institutions.  So, “they [too] will have to shoulder the losses
through special assessments over the next decade. 

The seizure was of this nature: “the federal government swooped in to
stabilize a crucial part of the credit-union sector battered by losses on
subprime mortgages.”  That was a good thing.  But using the word
“swoop” is emotionally charged to create grab headlines.  Also reported
by WSJ, “Officials said the plan won’t cost taxpayers any money.”

There is a distinction between wholesale credit unions and retail credit
unions, and you failed to make that clear Fat Freddy.  As I said, my
teacher’s credit union is fine. They sent all the members a letter
assuring that members will suffer no negative impact.  Members should
see no interruption in the service at my FCU or in the more than 4,600
other consumer credit unions served by the five corporate credit unions
now under conservatorship. 

Yes, they are FCUs Federal Credit Unions.  Investopedia says FCU
means that a credit union is chartered and supervised by the National
Credit Union Association (NCUA), a federal government agency that
functions much like the FDIC.  Federal credit unions operate like retail
banks with one major exception: every credit union member is also a
partial owner of the institution.  Credit unions operating under the
label “federal” are not directly run by the government or limited to
government employees.
  Rather, they’ve simply opted to organize
themselves under federal credit union regulations instead of state
banking laws.  This is a reassuring financial system.

Furthermore, some feel that credit unions may be one of the best-kept
secrets of consumer banking. Since these organizations are
essentially owned by the people who deposit money with them, credit
union members often enjoy higher rates on their savings accounts and
lower costs of borrowing than customers at traditional banks.
Making credit unions even more attractive is the fact that deposits are
protected by the the U.S. Treasury similar to FDIC insurance, as long as
the credit union is either federally chartered or a state-chartered credit
union that has opted to participate in NCUSIF.

The corporate credit union my credit union uses, Western Corporate
FCU, has been under conservatorship since March 2009, and has been
managed by the NCUA since 2009. Any funds on deposit with my credit
union are guaranteed by the NCUA. Members have federal insurance up
to a minimum $250,000 on individual accounts and greater amounts
are available.

zero hedge is a site that does not give names of those writing reports. 
I guess that is all right for some.  But after checking with my credit
union I think zero hedge is a bit reactive.  I am not in any panic over
the status of credit unions.  And I still recommend that people put their
money into those rather than regular banks.  They still own a piece of
the action.  The interest rates paid are pretty good. And their loan rates
are good too. People ought to check this stuff out for themselves rather
than rely on you or me for any information.

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By Shenonymous, September 30, 2010 at 2:33 pm Link to this comment

Yeah, I’ve taken a look at Hagger.  Where exactly does he make
sense?  I’ve already commented on his unverifiable new age
universalism.  Just another self-appointed prolific book writing guru,
shades of the 70s, but no realism there.  Anyone who goes around
talking about the soul is delusional.  Lots of perfumed bullshit. 
Those who are so desperate to have something beyond their own
rational consciousness and intelligence are followers not independent
thinkers.  Yup and you can buy lots of his products.  I think he is into
lots of money guys.  He and Kiyosaki make great partners.  Go ahead
youse guys, go for it.  As I said, KoolAid is not my cup of tea.  But you
are welcome to have a pint as you sit in a pyramid with your Reynolds
hats on.  The image is delightful.

Fat Freddy - my teachers’ credit union is quite solvent! I’ve banked with
them for 30 years.  I will check out your links and get back to the topic. 
It may or may not be as you presented it.

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Fat Freddy's avatar

By Fat Freddy, September 30, 2010 at 2:28 pm Link to this comment


Also. You keep calling for more regulations. We have the regulations, they just weren’t enforced. The Federal Reserve had authority under HOEPA to stop the mortgage shenanigans, but they didn’t. The Federal Reserve has unique authority, as well. Not only do they have the regulations they need, they have the leverage as a creditor.

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Fat Freddy's avatar

By Fat Freddy, September 30, 2010 at 2:21 pm Link to this comment


Credit unions? I guess you missed this article in the WSJ. The government now controls 70% of all of the credit union’s assets. I’m surprised it wasn’t covered here at TD. Zerohedge had a very nice write up about it. The credit unions are insolvent, as well.

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By Night-Gaunt, September 30, 2010 at 2:04 pm Link to this comment

Okay Balkas, English isn’t a derivative of German. But they both come from a similar source. Indo-European. There is also Indo-Germanic. With many loan words and from Latin from which Italian, Spanish, &  French come from. {This is a thumbnail, I am no linguist or philologist.} It is obvious that English and German at least now have little in common. (There might have been more similarity 500 years ago, and maybe not.) We have more in common with Spanish.

How will one learn more if one stays in a rut? That is how a-literacy works. It stays the same or even declines in knowledge over time. Words aren’t status symbols, but symbols of communication like colors used to paint pictures. The fewer colors you use the less you can say. How do you think I learned? By being stumped by words I didn’t know.

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By Shenonymous, September 30, 2010 at 1:57 pm Link to this comment

Aw, thank you balkas, for calling me sweetheart.  No other
truthdipper does that!  In front of your wifey I would blush. 
Well your language does need polishing up and occasionally
it does not make linguistic or syntactic sense and often it does
not make semantic sense either, but that is all right, you are not
the only one.  Yup I did vote for Obama, and I’m not f’sale.  And
I’ll do it again.  I can’t imagine what you would be selling!  But
whatever it is, I don’t want any.  You make wild claims without
much substance, but that is all right too, as you fit right in with
the other computer chairbound supercilious pontificators on TD. 
Whatever it is you do buy, it is all snake oil in disguise. 

I am not angry at all.  I always have my family and of course Bob Dylan
to comfort me.  I’m amused at the pedestrian thinking that goes on
‘round here.  And it is my profession to put things into making sense
perspective.  So I’m the one who gets paid for it.  If you hate America
so much, why don’t you immigrate to somewhere else? I don’t think
you would find many who would try to stop you, maybe none, maybe
not even your wife, and I’m sure you could find quarters that would
suit you better in some third world country.  Find one that hates
America and Americans as much as you do.  The Middle East might be
a first place to look.  Course they might not want you, and besides, you
would not be able to stand the autocracy you would have to live under.

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By Inherit The Wind, September 30, 2010 at 1:00 pm Link to this comment

Let me see…your wife thinks you’re crazy…wise woman, hang on to her.

You detest meritocracy.  I’m going to take a wild-ass guess that if you were paid what your work is worth, it wouldn’t be much.

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By balkas, September 30, 2010 at 11:51 am Link to this comment

My use of english language avoids labeling even s’mbody’s writing let alone
investing any person with traits—-good or bad.
I am deliberately writing for kids, miners, fishers, tillers, pavers, nurses, house
Those that ask, What’s zionism? Or what is this “symtomatic of the effete”
If u said this to my wife, who also thinks i am crazy and asks, What’s a muslim
or islam, she’d be screeming at u in two seconds and demand u put that in

Long ago i began destesting meritocracy. Thus, i no loger use dys- nor
euphemestic labels.

English is a germanic language. I know u know this. At one time englsih and
german languages were just about one language but german until very recently
was a pure germanic tongue and there was no idea or fact that cld not be
expressed init.

Unfortunately, educated people speak no longer english but mostly freench,
latin, greek, etc. So i speak and write english and u simple have not noticed it
because it lacks brilliance.

Obama speaks brilliantly and i don’t but obama steals from american to give
money to rich people and kills aliens and i don’t.

Look, sweetheart, money does not change anything—people who manage and
own money abuse the money.
Money appears as a mere symbol. It is indeed a great tool. But like every tool, so
money can be turned by evil people into a weapon.

In short, i economize with words and paying attention whether the message
sent wld be the message received. U din’t get my messages. I sent them, but u
did not receive them.

But if u have voted for obama or the other one, ooh la lah, i got a bridge to sell
to u.
I even dare ask u if u’r for sale or on sale. I am! Show me some money!

ell, girl, u defend ur beloved america and what i say about it wld enrage anyone
who just votes let alone who also sepaks and write brilliantly.
U do not espy nor even postulate [in english: demanding that a theory or guess
be taken very seriously], that US is neither a specialty nor a novelty; differing
only slightly from nazi ideolgy and ruled by most brutal people one cld imagine. 
I stopped long ago buying snake oil.
Please try it and u’d be much less angry and wld use less of that voodoo.
Voodoo= magic of words.  tnx

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By Shenonymous, September 30, 2010 at 10:36 am Link to this comment

To make it through this life healthy, one just simply has to get real.
Yeah, I know, health is gone the day one dies.  But up to that time,
the organism is happiest if it is healthy, body and mind.

” attempting to reveal something that cost JFK his life…and Mario
also fell ill and died fairly young… mystery?“
  Two more popular
conspiracy speculations, given away by the last word, “mystery.” 
Savio had a history of heart problems and died at the age of 53. 
Not unheard of.  A young high school football player just recently
died right on the football field.  He was prone to being overly excited
and had high
blood pressure and went into a deep coma after having fibrillation of
the heart while moving furniture at his home.  He was on medications
for his heart problems at the time.

Also reported by Douglas Lain, about Savio, “Winded while moving his
furniture into his new home in San Francisco, he sat down at the
kitchen table and had a massive coronary.  His wife told us at the
funeral that he had seemed embarrassed by his weakness as he
watched his colleagues and friends carry his bed, desk, and bookcases
up a flight of stairs and into the two bedroom apartment. He was
embarrassed, winded, and then he was dead.

His wife Justine was asked in November 2001, “How did they get him?”
when she called friend Noah to say that Mario was dead. “They didn’t
get him, Noah. He had a heart attack. Nobody got him.”

Nothing mysterious about it.  It is hysterical fear that keeps looking for
bogeymen at every turn where ideology is challenged.

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By Shenonymous, September 30, 2010 at 10:00 am Link to this comment

5Nups ITW, I dn’t twttr

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By Inherit The Wind, September 30, 2010 at 9:27 am Link to this comment

U dnt lik ths shrhnd? U ned 2 chng @ 1ce!

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By Maani, September 30, 2010 at 8:28 am Link to this comment


Yes, we are at one.  And no, you are not confused.  (But we really have to stop agreeing like this…LOL)


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By Lafayette, September 30, 2010 at 8:00 am Link to this comment


TS: 1. The US government has been captured by Citigroup, Goldman Sachs & CO, said thieves were enabled by the likes of Bill Clinton; his Treasury secretaries, Robert Rubin and Lawrence Summers; former Sen. Phil Gramm, a Texas Republican; and former Federal Reserve Chair Alan Greenspan

This is populist nonsense. Lobbyists for these companies do have powerful influence in Congress, yes. But they by no means have “captured the US government”, unless one wants to believe such evident folderol.

It is obvious that we need a much better control of sums that are employed by campaign financing and a law that is not a sieve but effectively blocks it. Even if funding must be provided proportionately by the US government for elections.

It is reported that half a billion dollars was spent electing a PotUS in 2008. Imagine the Health Care that money would have bought.

And reports have it that Mystery Money is again seeping into the campaign form anonymous donors. Probably to help the Reps fund more smear campaigns. Which means we need a anti-defamation law in this country.

Freedom of speech is right in this country, but like all rights it bears responsibilities. We have a responsibility to speak without defamatory purpose or slander. How does “poking fun” at a candidate become defamation? Very easily ... besides it is sterile.

There are sufficient cogent reasons, in adversarial debate, to present the facts such that the public is allowed to make a reasonable political decision. Presuming that one has a solid political platform to support a politicians race for public office.

2. Republicans AND Democrats have provided further enabling from their posts in the Senate or House. How will more of the same (“vote Democratic’) change anything?

And how will more Reps, if they gain control?

“Throw the bums out!” OK, then what do you do? Continue bitching-in-a-blog?

3. Anyone with a credit card or mortgage should stop paying on it immediately until the top ten banks are forced to adhere to normal accounting practices-where assets are balances on the books defined in this way

Credit is the backbone of any modern economy, not just ours. If the above is put to use, the banks stop lending, the economy contracts and perhaps YOU are out of a job. Is that what you want?

Please, we get enough Populist Nonsense from the Tea Partiers. If we have something to say, let’s put our Thinking Caps on?

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By Napolean DoneHisPart, September 30, 2010 at 7:52 am Link to this comment

Robert Kiyosaki helped people ‘see’ things… he helped me!

Mario Savio did the best he could for his time and with the resources he had… but he was attempting to reveal something that cost JFK his life…  and Mario also fell ill and died fairly young… mystery?

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By Shenonymous, September 30, 2010 at 7:02 am Link to this comment

I watched the old ’64 Berkeley speech video recommended for this
Sheer on Volker forum and now again for Don’t’ Pity the Democrats
and I haven’t changed my mind.  The Savio rhetoric might have been
all right, stunning as the claim goes, for the 60s, but forty years
later a new strategy, or rather a strategy in the first place since Savio
didn’t really have one, needs to be developed.  Yeah, it is true that
he did not have facebook or twitter, etc., the electronic media, to
shout on.  But of course, we do.  Just what does freedom mean? 
That is not really discussed, ever.  Because it is a nebulous term. 
The abstract word freedom only has meaning when used in context.

I strongly agree personal money ought to be moved from the traditional
banks but I’d look around for credit unions that do banking.  That
would put the thumb screws on the private corporate banks.  Taking
money out of them hits them right in the groin.  But use local banks if
and only if they are similar to the Bank of North Dakota, which are
banks for the local people and not just local extensions of the larger
private financial world.  This is the very first step ordinary people can
do to help themselves.  If there are no credit unions for those outside
of the education sector or industrial labor, then what I call “Civic Credit
Unions” must be created.  Models for credit union formation are
available.  This is the second step people can do to help themselves. 
Third, pressure for the politicians to legislate laws of regulation is
imperative.  If the politicians don’t do this then they unequivocally need
to be gotten rid of.  Just like that!  Period!  Fourth step is to create
cooperatives and collectives as much as is feasible to create what is
called social capital.  If it is in the form of currency, then that goes
towards central government treasury that is spent only on social
programs for the general public from where such capitals is generated. 
Not one cent goes towards privatized capitalism.  This is another
imperative.  The fifth imperative is that the government must be
responsive to the only to needs of the people and the welfare of
politicians is completely negligible. 

As it was once said, politicians ought to serve their country for no
salary.  It should be a completely voluntary endeavor.  That way the
needs of the country are served without prejudice.  Of course politicians
need to make a living, so a nominal salary equal to the national average
income is all that should be paid, plus travel expenses on behalf of
their official work needs. 

Then I watched the Kiyosaki video that allegedly “reveals”… in reality,
what we already knew!  Or at least those who are not always asleep at
the wheel.  While it is true that my eyes glaze over when trying to read
finan-cial reports, and I don’t have an awful lot of cash flow money, the
Cash flow game purports to show how to make money with money. 
Taught and learned.  Kiyosaki is clever and a seller of not only his
financial “wisdom,” but a seller of books.  His algorithm of “making
money,” ala cash flow theory, is really a lesson in learning to invest in
the classic financial marketplace.  Just the same old same old capitalism
only how one can maximize one’s own “cash flow,” keeping the status
quo and shafting the general public’s needs.  He is just telling how to
“think” about not putting one’s income into a protocol of income and
outgo expenses but to build an asset cache.  Not really new advice. 
The Adam Smith Wealth of Nations is very old, very classic and free at

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By Leefeller, September 30, 2010 at 6:56 am Link to this comment

Not being an economic wizard, more like a not interested novice who inherited a dog in the fight from my uncle Otto. My thanks to the posters on TD,  this is my assimilated simplistic opinion.

As the Volker goes;  his apparent dissatisfaction may be with the so much media publicized blatant abuses known to everyone not living in a bubble, may be his main reason for concern. Possibly in Volkers eyes,  economic abuses have recently been so obviously blatant and not as well covered and hidden as he would prefer?

Differences may be something like Volkers preferred subtle tapping of the till as a commission approach,..... compared to the recent in your face up yours greed driven wholesale robbing and rape of the piggy bank on TV, may be how he sees it now, unfortunately to many eyewitness, all very sloppy indeed!

It seems even some people have their standards on how opportunists should rob the piggy bank and more importantly, without getting caught.

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By Shenonymous, September 30, 2010 at 6:54 am Link to this comment

balkas, so what if Middle Easterners at one time thought of wester-
ners as savage?  That would be the entire world west of the Sinai
peninsula. That is the way it is with primitive minds.  The Chinese
also had that opinion of everything west of China.  Times change. 
And now the shoe is on the other foot with most of the Middle
Easterners still in tribal mode.  But as it is said, “money changes
everything.”  So does the electronic media.  So relatively speaking,
I expect the perception of savagery will also change in time. 

YOUR twitter-speak writing style shows a laziness of the use of
language.  Personally I have no appreciation for truncated language,
it is adolescent…at best and lends itself to sloppy communication. I
think it is symptomatic of the effete.  If the moneyholders, and hence
the powerful, whether they are mafia or not, own most of us to a
degree, though by your own words, not totally, then that is because,
pure and simple, they own most of the world.  IT is that not-so-totally
part that becomes important and the part in which we all can mover our
asses around.  Just try to redistribute the wealth of the world. And who
is to say how it is to be redistributed?  Just remember that “executive”
central committees invariably redistribute it to themselves.  Just look at
the city of Bell in California these days.  Oh boy.

By the way, I do not “blitz” read anything nor “blitz” understand
anything.  So you are assuming how I read and understand only because
you are at a loss to explain to yourself why I take exception to what you
say.  And you make up a story about what I said for the same reason. 
You need to learn to read better yourself.  You actually are not very
coherent in your writing, perhaps you cannot see that of yourself. 
Hubris at work.  You use broad brushstroke comments when in fact
they are based on no facts.  Your sperm/uva analogy is pretty lame
and really amounts to just a bunch of feeble comment filler.

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By Inherit The Wind, September 30, 2010 at 6:22 am Link to this comment

The Tri-Lateral Commission has been a target of extreme left-wingers as well.  I first heard about it in the summer of 1979 by a committed, radical Trotskyite who gave it the same satanic force the John Birchers do.

Still trying to figure out what the problem is….

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By Fat Freddy, September 30, 2010 at 5:38 am Link to this comment

What a joke! Did Scheer listen to the entire speech? Obviously not. He fixated on one small comment in the opening remarks, then went on some tangent about Clinton and Citi. Scheer suffers from the disease known as, intellectual sloth. There was a lot of good insight in that speech, and some very good advice. Unfortunately, Scheer missed it all. I simply do not have the time, nor the desire to explain it all. I suggest that Mr Scheer do some real research into exactly how our banking system really works. The Creature From Jekyll Island, G. Edward Griffin, Secrets of the Temple: How the Federal Reserve Runs the Country (1987) , William Greider, and End the Fed, Ron Paul are good places to start.

There are two important points i would like to address in Mr Volcker’s speech.

First, he states that in 50 years of macroeconomics, that “they still haven’t straightened out macroeconomics…you can hardly call it an effective discipline”. This begs the question, is macroeconomics ever going to be effective? Is it possible? Can human behavior be defined by a series of mathematical equations? Is macro a hard science, or a soft science? He makes a reference to all the potential physicists and engineers that went to Wall Street. Perhaps it should have been psychologists and sociologists, instead.

Second. There was a certain amount of neglect by, but not limited to, the Federal Reserve. The Federal Reserve is the most important regulator, according to Volcker. This begs the question of, do we really desire a to have a central bank, especially in its current form? The central bank’s primary function is to maintain stability. Stability of what? Stability in the short term, or stability in the long term. The past 10-12 years have been a concentration on the short-term, and the micro-managing of the economy. This short term mentality led to an explosion in consumption, a decline in savings, and increase in foreign investment, a decline in interest rates, and a decline in the value of the US Dollar which brought huge amounts of liquidity, and it all supported the growth of sub-prime mortgages and mortgage backed securities, and other risky investments.

If the Federal Reserve is the ultimate regulator, and burdened with the enormous task of stabilizing the economy, how can we possibly allow it to be controlled by the bankers, with no transparency or accountability? Who is the Federal Reserve really protecting, and for what reasons?

There are ways to “regulate” the economy, without having to rely on regulators. They are simple concepts, but very difficult to implement. That is sound money, and honest banking. A transformation to a commodity based currency, and the elimination of fractional reserve lending on demand deposits would mean the the US would no longer be #1. it would also place a huge strain on the economy during the implementation process, however, short lived. These two things would provide stability and regulate the banks for the simple fact that the banks would be forced to operate with a real fear of bankruptcy. Insolvency of banks would be discouraged. Today, insolvency is the norm. All banks are insolvent. Fear of bankruptcy is the only real regulation of a free market that is effective. The more that we “protect” the banks from insolvency, the more they will take. Eventually, it will end, one way or the other.

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By Lafayette, September 30, 2010 at 4:45 am Link to this comment


Their (Clinton, Rubin and Greenspan) success in smashing the wall between investment and commercial banking is the source of our current misery.

Yes, this is the pitiful truth. It was almost consummate crassness that led these three unlikely kissing-cousins to undo the Glass-Steagal Act (of 1931) that had been purposefully passed in order to build a fire-wall between Commercial Banking (of which the business model is risk-averse) from Investment Banking (which is risk-prone). It was passed after the debacle of the 1929 stock market crash, that provoked the Great Depression.

The act’s demise was all the more pitiful because both Greenspan and Rubin had been able to convince Clinton of a falsehood. That markets were somehow magically “self-regulating” – for which there is not the slightest shred of empirical evidence. (Of course, Billy-boy probably let himself get easily convinced by the pie-in-the-sky arguments, since he was already eyeing the financial wherewithal that would be necessary for Hillary’s run at the White House.)

Markets are markets, sometimes they go up and sometimes they go down. But when human beings, by hook or by crook but mostly by greed, try to manipulate them to serve personal enrichment, then the consequence is far more serious. The consequence thus becomes systemic – and because credit is so fundamental to a modern economy – we all start wearing some very deep sneakers. The economy flounders, touching each and every one of us—some more fiercely than others.

Which is why progressives must start educating people regarding markets, making it very clear that Free Markets are truly “free” when they are well regulated to do no harm. Otherwise, they are free to do so. And we all pay the piper for such negligence.

Our economy must not be Darwinian. It must allow us all to survive, perhaps some better than others, but all commonly well-enough for a decent standard of living. And if there need be fewer billionaires to do so ... who will miss these dinosaurs?

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By Shenonymous, September 30, 2010 at 4:38 am Link to this comment

Unless you are a John Bircher, a read of the history of the Trilateral
Commission (which was composed of 107 members from North
America and 150 European with Japan the only Asian rep at first but
expanded to 117 Pacific Asia group, Japan, South Korea, Australian,
and New Zealand, and the ASEAN nations) would show it was not the
sinister world take over group that is often being bandied about
especially on these forums by the conspiracy-fantasists.  It was
composed of a select, meaning screened for obvious reasons of
authentic commitment to the project, wealthy elite who did have in
mind managing the world economy, and in fostering economic
development and in alleviating world poverty, to improve the chances
of a smooth and peaceful evolution of the global system. 

Obviously by proof of the latest world financial crisis that almost put
it into a deep black hole of depression, apparently this group was and
is not very effective, and are impotent to live up to their alleged
precepts.  Ahem….

As it exists today, its intentions are what they were originally, to
encourage closer political and economic cooperation among all the
member nations. Too bad they are so unsuccessful.  Course the freaky
Birchers continue to perpetrate the New World Order satanic myth,
As I said, Republican shills troll the halls of Truthdig, what I should
have said is freaky ultra-right wing conservative nutso Republicans (the
FURWCNRs).  FYI: who continue to plant the
crap seeds that will really only give them a bumper crop of crap.

Of course chronic arch moaner, and anti-capitalist, Noam Chomsky
tends to further the myth in his 1981 The Carter Administration: Myth
and Reality (it did help sell his books).  Chomsky does nothing to make
a better world, he only betters his own pocketbook.  A secret richman.
You wonder if he sews his money in his mattress?  Oh yeah, I bet. LOL

Among true believers, opinions about what the Trilateral Commission is
up to fall roughly into two categories: the merely dubious and the
totally insane.

Then because a 1954 international conference that was attended by
leaders from Europe and the United States, was held at a hotel named
Hotel de Bilderberg, in the Netherlands, the name stuck as a nickname
and thus the fabrication of the Bilderberg Group, the aim of which was
to promote antlanticism, you know, hands across the pond, for a better
understanding between America and Europe and to foster cooperation
on political, economic, and defense issues. Also because of its cherry
picked composition, a less vitriol ambience of opinion developed that
though the TLC and the BGs might be well-intentioned, depending
whether you are far left or far right, either a socialist or a fascist, laugh
laugh), it is antithetical to America’s real interests (which are never
quite spelled out, by the way).

Well it seems to me that there is constant whining that the rich do not
care about the affairs of the world’s people, but when they do get
together to further better relations the whiners and envious create an
atmosphere of evil and sinister motives. So well, and so it goes, thank
you Kurt Vonnegut.

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By thebeerdoctor, September 30, 2010 at 3:49 am Link to this comment

Sodium-Na’s comments point out that when you are dealing with actual individuals making decisions, there is no black and white. Paul Volcker has seen the workings of the financial system from several perspectives. The abandonment of the gold standard, something hard core libertarians still complain about, is one of those. Of course reliance on hard currency has its own edge, something that seemed unforeseeable, forty years ago.
A positive note I find in Volcker was his comment that the only modern banking innovation he considered worthy was the creation of the ATM. It makes me wonder what privately is his opinion of all that toxic slush being promoted by Rubin, Geithner, Summers and Bernanke.
Conducting yourself honorably in a dubious enterprise, is too often an impediment for climbing up the power ladder.

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By Sodium-Na, September 30, 2010 at 3:23 am Link to this comment

Although Paul Volcker may be a founding member of the Bilderberg Group,as thebeerdoctor stated,his profound implacability is rarely matched by his peers. His long experience of 30 years in the field of financial/economical world is also rarely matched by the professionals in the fields(finance/economics) of his generation.

However,he has made one serious decision whose repercussion was not felt then and was thought of then as the right decesion for a highly productive nation. The decision has to do with gold:

He was the main force behind President Richard Nixon’s decision in the abandonment of gold-standard and rely in backing the dollar on America’s great productivity,then,which was perhaps the right decision to make,if many of America’s manufacturing base were not moved to China and other foreign countries,for cheaper labor.

On reflection,neither Nixon nor Volcker could possibly envision that a significant part of America’s industrial base would move out to foreign countries. But it was a decision that was surrounded by a lot of unknowns,no one could,in reality,predict.

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By thebeerdoctor, September 30, 2010 at 3:18 am Link to this comment

There are critics of this administration who have pointed out that perhaps Paul Volcker is merely window dressing to hide the duplicitous mechanics of the Obama administration’s economic policies, very similar to the touting of Elizabeth Warren: plenty of sound and fury, but bloody little substance. After awhile, cheap cosmetic tricks seem awfully tiresome.
President Obama, despite his claim of looking out for the guy pulling down sixty grand a year, still works for and is owned by those “savvy businessmen” Blankfein and Dimon, whom he does not begrudge for their multi-million dollar bonuses.

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By Inherit The Wind, September 30, 2010 at 2:12 am Link to this comment

“The Big Guy” isn’t running for election or re-election. HE can say “raise taxes” and then the President can say “Oh, no! We are not raising taxes on the middle and working classes.”  See how it works?

zxzxzx:  Be seeing you…(NOT!)  Scumbags like you infect every forum to advertise their cheap shit.  You want to advertise here? Then PAY FOR THE PRIVILEGE LIKE THE HONEST MERCHANTS!  You see the ads all over? They PAID TruthDig for that space!

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By thebeerdoctor, September 30, 2010 at 1:28 am Link to this comment

Just for the record: Paul Volcker was Chairman of the Federal Reserve from August 6, 1979, to August 11,1987. Although it is often stated that Volcker was fired by the Reagan administration for not being a stronger advocate of deregulation, this only happened after President Reagan had re-appointed him as Fed Chairman in 1983.
The Federal Reserve, under Paul Volcker, believed that combating inflation was the chief concern. In 1981, Federal Funds rate peaked at 20%, with a prime rate of 21.5%.Such tough monetary policy, it has been said, lowered the inflation rate from over 13% in 1981, down to 3.2% by 1983.

As far as those who supposedly read the conspiracy tea leaves, Paul Volcker was appointed Chairman of the Federal Reserve by President Carter, who were both members of the Rockefeller Trilateral Commission. Paul Volcker is also a founding member of the Bilderberg Group.

Tall Paul, as “the big guy” on President Obama’s Economic Recovery Advisory Board, must have questionable influence, since only recently as last May, Mr. Volcker proposed looking into creating a national sales tax, saying: “if, at the end of the day, we need to raise taxes, we should raise taxes.”
Of course such a blunt statement flies in the face of the bipartisan consensus that taxes should always be lowered. Walter Mondale discovered that when he said, flat out, that he would raise taxes, during his 1984 presidential bid. George Herbert Walker Bush had his “read my lips, no new taxes” come back to bite him when he had to break that promise.
I suspect that Volcker’s proposal for a national sales tax, is seen by insiders in the Obama administration, as simply the avid fly fisherman, having “a senior moment”.

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By Shenonymous, September 29, 2010 at 10:09 pm Link to this comment

Indeed, Maani, if any politician showed stainless steel backbone in
the face of the corrosive power of the deregulators, he/she should
be sanctified in some overt way.  The only problem I have is what
motive each of the 44 had.  Politicians do not always vote for
altruistic reasons, with the benefit of the people in mind.  The
Senate vote was petty much made along partisan rationale (53
Republicans and one Democrat in favor; 44 Democrats opposed
but this was not to remain the ratio).

I would say that if and only if they voted against the GLB because
they felt deep in their little pea-sized politician’s heart the people
would benefit if the deregulation bill was not passed, then they should
be granted saint status.  So how would you determine their genuine
intention? Let me show you why the 44 Democratic Senators do not
deserve canonization.

In the House it was a little bit different story, [from the Wiki report: The
House passed its version of the Financial Services Act of 1999 on 1 July
1999 by a bipartisan vote of 343-86 (|Republicans 205–16; Democrats
138–69; Independent 0–1).]  But, the two chambers did not agree and
the joint version of the bill so the House voted again and this time it
was 241-132 (R 58-131; D 182-1; Ind. 1–0) where the committee
negotiators were requested to be more attentive to the public at large
and by working for a law which ensured that consumers enjoyed
medical and financial privacy as well as “robust competition and equal
and non-discriminatory access to financial services and economic
opportunities in their communities” (i.e., protection against exclusionary
redlining)  Now that was nice of them.  Someone is looking out for the
public, and it isn’t the Republicans as can be seen by the vote. After the
committee worked out some of the problems, they had a final vote that
still was not unanimous but did have the proper majority required and
the bill was passed by the Senate 90-8 (which is where the 8
saints held their ground and 36 defected to the financial hell that was
to eventualize up to the 2008 crisis) and by the House 362-57. 
Republicans voted 207-5 in favor with 10 not voting. Democrats voted
155-51 in favor, with 5 not voting. Independent-Socialist Rep. Bernard
Sanders of Vermont voted no (Bernie definitely deserves sainthood!).  So
I would add those 57 to my list of those earning elevated status.  All in
all House Reps and Senators, I’d say there were 65 divine politicians
on that issue.  The 10 Republicans and 5 Democrats not voting are
banished to purgatory (if there was such a place). 

So I guess we are at one and peace on this? 

Do you still think “I” am confused?

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By Maani, September 29, 2010 at 8:40 pm Link to this comment


“Then names of those eight senators who alone voted against the radical deregulation that Clinton signed into law in 1999 needs to be published broadly everywhere so their names become synonymous with dastardly sellouts.”

I know you already corrected yourself, and meant that they should be canonized.  But I think you may be confused or something.  According to GovTrack, the senate vote on Gramm-Leach-Bliley (which undid Glass-Steagal, was 54-44, with 1 present and 1 not voting.  So there were 44 votes against it in the Senate.  Should we be canonizing all 44?  LOL.  (I’m all for it if you think so…)


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By Shenonymous, September 29, 2010 at 4:35 pm Link to this comment

ThaddeusStevens, September 29 at 8:04 pm You wouldn’t mind
showing where I was for deregulation would you?

Yes, I should have said those eight senators should have been
canonized.  That was a faux pas on my part.  My bad and it was
incoherent. For some reason, I was in too much of a rush to get
to work I guess, I read where they were for deregulation but they
weren’t.  They were the only ones with backbone.  I’m back
on track.  Thank you for catching me!  It was inadvertent and

But to put things back into perspective, and perhaps to redeem myself,
if we look back to the 1970s, then during the 1980s and 1990s we
would see there has been nothing but far-reaching and unstoppable
deregulation, both at national and international levels. Since the 80s,
there has also been a relentless and constant drive towards deep
financial crises here in America and in rest of the world both developed
and developing. These crises have been extremely costly in terms of
growth and advancement.  The fact that in the last twenty-five years,
money and banking crises have reduced the income of the developing
world by an equal number percent, 25%.  Furthermore, the impact of
the global crises that came to a festering head 2008 shows Japan’s GDP
fell 12%.  That was a major serious situation.

While financial crises are caused by many and complex factors, the
main factor is that the liberalization of financial markets if not attended
by appropriate regulation, almost always lead to damaging crises that
turn out to be extremely costly.  These crises could be prevented by
appropriate public policy and definitely by regulations.  Regulation
reform is an absolute step towards controlling the financial world that
has brought the entire world to its knees. It has become crystal clear
that effective regulation is not only in the interest of a real viable
economy, but also they protect the stability of the financial system itself
— as well as individual financial institutions. Furthermore, for a country
to have a competitive financial system, it must be well-regulated. And
as we breathe steps are beginning to be taken to improve regulation,
eg., by making it more comprehensive.

The question is not whether to regulate, but what is the best way to do
it.  If the future contour of the financial system is to be sustainable, it is
important that it is seen as a means to serve the real economy, that of
the needs of households and enterprises that consume and invest.  It is
supremely important that government use regulation to avoid the
generation of what could be called systemic risk, so that future crises,
which could be caused by a more chaotic and deeper financial
implosion, is avoided. What those regulations precisely should be is not
something I would know for if I did would be employed by Washington

But I would think that inherent flaws in the way the capital markets and
banks have operated and the erratic pattern of boom and bust led to
horrible cycles of greed and fear and ultimately failure.  Too rapid a
liberalization without appropriate brakes can cause a crises as well. 
One thing that seems obvious is that bankers’ and other financial
agents’ compensation (ala bonuses) needs regulated.  Seems like their
risk ought to be as big as those who use their service.  While I am not
an economist, I am not completely unaware of what has been reported
for the last year and a half every single day on every news program.

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By Amon Drool, September 29, 2010 at 3:13 pm Link to this comment

prole: “Tall Paul is a founding member and recent chairman (1991-‘01) of the ultra-elite Trilateral Commission, the semi-official ruling class capitalist comintern.”

do ya really think any potential capitalist, trying to gain entry into america’s manufacturing sector during the early 80’s, appreciated volker’s prohibitive interest rates? point being, volker is more a creature of an international bankers comintern than a ‘capitalist’ one.

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By ThaddeusStevens, September 29, 2010 at 3:04 pm Link to this comment

This comment is almost completely incoherent. The Clintonian deregulation was a disaster for the common person, remember? If Senators voted AGAINST it, would they not be heroes? Also, please explain, as precisely as you can, what you mean by more regulation. Until you explain this comment better, I’m not sure where you stand on the issues brought out in the article.

Those issues are:
1. The US government has been captured by Citigroup, Goldman Sachs & CO, said thieves were enabled by the likes of Bill Clinton; his Treasury secretaries, Robert Rubin and Lawrence Summers; former Sen. Phil Gramm, a Texas Republican; and former Federal Reserve Chair Alan Greenspan
2. Republicans AND Democrats have provided further enabling from their posts in the Senate or House. How will more of the same (“vote Democratic’) change anything?
3. Anyone with a credit card or mortgage should stop paying on it immediately until the top ten banks are forced to adhere to normal accounting practices-where assets are balances on the books defined in this way:

Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings.

Top Ten banks with their most recent reported worth-which is a lie of course:
1. Bank of America Corp. Charlotte, N.C. $2,340,667,014
2. J. P. Morgan Chase & Company New York, N.Y. 2,135,796,000
3. Citigroup New York, N.Y 2,002,213,000
4. Wells Fargo & Company San Francisco, C.A. 1,223,630,000
5. Goldman Sachs Group, Inc. New York, N.Y. 880,677,000
6. Morgan Stanley New York, N.Y. 819,719,000
7. Metlife, Inc. New York, N.Y. 565,566,452
8. Barclays Group US, Inc. Wilmington, Del. 427,837,000
9. Taunus Corporation New York, N.Y. 364,079,000
10. HSBC North America Inc.

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By Night-Gaunt, September 29, 2010 at 2:25 pm Link to this comment

Even banks don’t put former bank robbers in charge of the money. Just in how to design the security of the bank to protect from other robbers. This is putting the criminals in charge of our country’s money and monetary fidelity! Ruining both as we, the new poor slapped with that very heavy bill as they laugh all the way to their banks.

Leefeller, the corporations have super-human rights over us. When was the last time one of them was put to death? i.e. dissolved? Its a travesty of our Constitution and Bill of Rights every day it is used against us and our gov’t. However it must be said that some corporations are “more equal than others.” Some people are miffed after they incorporate to find they don’t get the same rights as General Electric. So shallow minded to conceive such a thing! It takes money and power to be in that lofty position in our country, much less the world.

Mike789, the debt is less important than returning safeguards to stop another 2008 from happening. The conservatives in 1937 got FDR to stop repairing the economy and work on the debt. It caused the recovery to stall and falter till 1938, then he came back to his senses and stopped it. Is that what you want for us today, Mike789?–1938

TITLE 28 > PART IV > CHAPTER 85 > § 1350
Prev | Next
§ 1350. Alien’s action for tort
How Current is This?
The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.


Heard on Democracy Now 9/29/2010 that the court has upheld that corporations aren’t liable for civil rights violations (slavery, torture, murder) overseas!

Court Exempts Corporations from Alien Tort Law

A federal appeals court has ruled US corporations can no longer be sued for human rights violations abroad under the longstanding Alien Tort Statute. Earlier this month, the Second US Circuit Court of Appeals ruled that Alien tort claims can only be brought against individuals, not corporations. The ruling dismissed a lawsuit accusing the oil giant Royal Dutch Shell of complicity in the murder and torture of Nigerian activists including Ken Saro-Wiwa. In a separate opinion, Second Circuit Judge Pierre Leval criticized the ruling, writing, “The majority opinion deals a substantial blow to international law and its undertaking to protect fundamental human rights… So long as they incorporate, businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy—all without civil liability to victims.”

You see how this fits into the overall psychopathic corporate mind set for aggrandizement of money and power overseas and eventually here? One step at a time. If all that has befallen us for the past 40 years had been done in one year people (in general) would be up in arms. But gradually the noose tightens and most adjust to it. Just one more bit of tightening around all our throats. Not well publicized either on most of the CMSM is it?

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By balkas, September 29, 2010 at 2:06 pm Link to this comment

Shenonymous, I was talking about use and abuse of money.
But look sweetheart, one cannot get rich by working; i.e. make much more than
$100k a yr.
One gets rich by owning people and work they do. We no longer own our very
own work that long time ago we had before individuals took ownership of that,
That alone makes all of us who work for others dependencies to some degree
U can earn mns a yr only if u steal—there is no other way. Remember we all
came from those tiny wigglers swimming desperately for ovaries and all are
equal or at least we do not know that they are not or which ones are good and
which are not.
If we knew a bad wiggler we cld kill it before producing a bad person.
And if knew which ones produce geniuses to whom we owe all or much
progress, we’d be all b’lnaires, butiful, famous, charming,etc., then   we cld
train chimps to do the dirty work for us.
But we don’t. And all of us were in diapers except maybe me for we were to
poor for that.
That doesn’t mean tho that dumb wiggler and dumb ovary made me. tnx

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By balkas, September 29, 2010 at 1:40 pm Link to this comment

I did not mean to say that in US u cannot move your ass around.
I chose the word “darkies” on purpose. At one time they thought whities were
barbarians and uncivilized. That wld include my own ancestors.

Note, please, that i have said that strongly or even fiercely-united—and i may
add—strongly interdependent group of people, whom i also on occasion call
mafia, own most of us to a degree—not totally.

In other words u can take a walk, shower, cheat on your husband, spend more
than your husband wants u to,etc.

U probably blitzread and blitzunderstood my post. If u have taken modicum of
time, u wld have understand what is said.
But one can lead a horse to water but not force him to drink it. U have the right
to opine. And u seem to think that king, earl, count, prince, amir, jefferson did
not own people!

American ruling class teaches people to strive to become independent while self
are strongly interdependent. In fact, running after independence is delusional
because one can never be independent but one sure can be much dependent
and particularly for clean air and food, political power, peace of mind, securtity,

So being a near utter dependency is not fun while others are fiercely
interdependent. What do the bailouts mean? All politicians, bankers, large
shareholdres acting as one for them!

It is ok with me. U got a mind of your own!  tnx

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By Napolean DoneHisPart, September 29, 2010 at 1:18 pm Link to this comment

Someone asked “do we vote all incumbents out” which was the cry the day after the $700B wasn’t passed ( because the people saw the BS and snow job that they were about to have to swallow ).

Back then voting incumbents out wasn’t the issue, for most actually did their job and listened to their constituents.

But folks, whether you vote EVERYONE out in November and replace them with your neighbors and friends… the PTB ( powers that be… the invisible hand ) will either attempt to buy them or scare them off.. either choice the new hired hand must either obey and be fed or to what is right and risk ridicule or worse… death.

Obama was wise NOT to bite the hand that feeds his office… he learned the JFK lesson.

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By Inherit The Wind, September 29, 2010 at 1:04 pm Link to this comment

As usual, the trio of Samson, TD3 and Prole don’t know WTF they are talking about, but that doesn’t stop them!

Samson: Volcker was GONE before Daddy Bush became Prez.  Reagan appointed Greenspan in 1987.

To all 3 of you: It was Volcker’s policies that kept us afloat throughout the Reagan years despite RR’s best efforts to undermine them.  When PV left the Fed and AG took over, well, from then (1987) through Nov 1992, the economy tanked and tanked and tanked, so much that Clinton won on “It’s the economy, Stupid!”

Sometimes you guys have as loose a grip on facts as Sarah Palin.

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By eir, September 29, 2010 at 1:01 pm Link to this comment

So when do we get Glass Steagall back?

American Fascism awaits that answer.

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By G.Anderson, September 29, 2010 at 12:59 pm Link to this comment

Yes Mr. Scheer, At this point, who did what is well known.

The question now is what to do about it. Don’t look to Mr. Volcker, or Elizabeth Warren to save our ass.
Now that it’s clear that Mr. Obama has become part of the problem.

Should we vote all incumbents out? Should we vote for the lesser of the two Evils? (A recognition that the Democratic pary is an Evil.) Or should we try to wreck, the structure of the senate committe system, by voting out of office their chairs. Senators with spotless records, are in some ways more of a problem, than hotly contested races, because they will probably perpetuate the current malfunction simply due to their longevity.

At any rate, we need a stategy. A way of voting, so that we can make our dissatification with the status quo felt, and felt deeply. Not just making stabs in the dark.

There must be a more efficient way of voting than just voting incumbents out, though I’m inclined to do just that.

Since Yesterday, my own view, has changed.

For example, I am reconsidering what would be the outcome if Lunatics, like Fiorina, and Whitman are elected.

It might send a powerful message to Washington, and incumbents, who’ve been their too long already, that their on the wrong side of history at this point. California, is beyond saving at this point anyway.

But surely there must be a political scientist out there who has a better stategy?

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By Hammond Eggs, September 29, 2010 at 12:43 pm Link to this comment

Robert Scheer’s trust in certain Establishment figures would be touching were it not so tragic.  Why does Scheer have any trust at all in that gangland called the United States government?  What happened to the man who founded Ramparts magazine?

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By Shenonymous, September 29, 2010 at 12:35 pm Link to this comment

Sorry, make that 59 million to McCain.

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By Shenonymous, September 29, 2010 at 12:33 pm Link to this comment

For the 2008 Election, 169 million registered - 86 million Democrat
- 55 million Republican - 28 million others registered as Independent
and other third parties.

So what percentage of these actually voted in 2008 presidential

According to United States House of Representatives floor summary
for January 8, 2009,
Statistics for the 2008 presidential election, there were 131,257,328
total voters out of an eligible voting age population of 212,702,354,
which gives you a 62.4% participation rate.  But 169,000,000 registered.
That is really 79% registered of eligible voting age.  So of the registered,
78% voted.  Not really too bad.  Now of the 131+million 69.5 million
went to Obama, 69 million to McCain, 736 thousand to Independent
candidate, 524 thousand to Libertarian, 196 thousand to Constitution
candidate, and 161 thousand to Green Party candidate.,_2008

In checking out the link “2012: How U.S. Voters Can Wrest Control of
Congress from Special Interests” there are no references from where
they get their information.  I believe the media has conspired to create a
false impression that Democrats are doing worse than they really are
just to make news stories.  And those who would like that to be the
case welcome the fabrications and perpetrate them.

Oh no, another drawf-minded harbinger of the Trilateral Crap
Commission crowd.  Yikes! Will they never-say-die?  When all else fails
the particulate-minded conspiracy theorists call out the xombie TCC,
that has been irrationally feared for about 37 or so years without so
much as a chirp from those accused of membership.  ROTFLMAO.  And
prole where exactly do you get your ersatz information?

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By truedigger3, September 29, 2010 at 12:10 pm Link to this comment

Paul Volker is on our side??!! Is that a joke?! He was a prominent member of the “Club” when its members were looting the economy big time and not even a faint voice came from him protesting or warning! Where has he been all that time??!!
Now Volker looks too weak and frail and good for nothing and I guess that is why he was picked as harmless window dressing.
Why Mr. Scheer doesn’t demand REAL financial reforms from his beloved Obama instead of these make-believe bullshitting that passed the Congress, lately, as the much ballyhooed financial “reforms”.
These so called “reforms” didn’t address or solve any single issue that caused the last financial debacle and the stage is set for the inevitable next financial debacle with its more bail-outs and more money, riches and bonuses for the fraudsters and thieves of Wall St. and the big banks that will be paid for by the hapless and helpless common people.

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By Steve E, September 29, 2010 at 12:08 pm Link to this comment

What happened to that concept of auditing the Fed? I take it there was some half
baked agreement to allow us some “transparency” but with a very limited scope.

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By prole, September 29, 2010 at 11:13 am Link to this comment

Oh, please…not another paean to the big lie! Volcker is a living symbol of the one-party state, the consummate Washington insider, equally acceptable to both Carter and Ray-gun – whose policies weren’t all that different themselves – as Fed Chairman. David Rockefeller originally recommended Volcker as Fed Chairman to Carter, who dutifully followed his orders. Tall Paul is a founding member and recent chairman (1991-’01) of the ultra-elite Trilateral Commission, the semi-official ruling class capitalist comintern. “The media’s scattergun reporting” on this secretive organization that casts such a long shadow over policy-making should be a matter of even graver concern; especially now with so many of its members ensconced in the Obama cabal. Volcker’s own allegiance has never been in question, he’s always been committed to saving the system from its own worst excesses, no matter what the costs to working stiffs. Even the so-called Volcker rule doesn’t restore Glass-Steagall, it only curtails ‘proprietary trading’ by banks, and may not even do that much because of regulatory vagueness.
  In the early eighties Volcker drove government interest rates to their highest levels in post-war history, thereby engineering a severe global recession and massive unemployment, breaking inflation for panicky investors on the backs of the working class. Interest rates internationally are also tied to U.S. rates, which helped cause many governments in the less developed countries to default on their international loans and new sources of funding to dry up, further increasing the downward spiral of workers in those countries. The big guy nailed them good! But it pleased David Rockefeller and the Trilateral Commission no end. Oh, yeah: ‘The Big Guy’s on Our Side’ alright – if you’re one of them!

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By Shenonymous, September 29, 2010 at 9:35 am Link to this comment

To not vote Democratic in November gives it all back to the
Republicans.  You know it and I know it.  Vote Democratic to save
whatever there is that can be saved.  Just say YES to keeping the
Republicans yelping for two more years. 

There are Republican shills in our midst who would encourage you
to just give them the election.

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By SteveL, September 29, 2010 at 9:29 am Link to this comment

There seems to be a school of thought that repealing Glass-Steagall was not a
mistake. Same for insane trade, tariff, and tax laws.  Until we get people in power
on the same page the current mess is apt to last a long time.

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By Samson, September 29, 2010 at 9:28 am Link to this comment

Wow, I guess Truthdig thinks most of us are too young to know better.  This guy was Ronald Reagan’s and Bush Daddy’s guy at the Federal Reserve.

And yet now, the Democrat spin machine presents him as some sort of economic savior.  Amazing.  If you want to know how far to the right the Democrats have gone, this tells you a lot.  Suddenly Reagan’s boys look liberal in comparison to today’s Democrats.

What, does the left not have any economists any more?  Why the heck are the Democrats pushing this guy?

Gee, maybe its because their Democrat President is the guy who says Ronald Reagan was a great President?  Maybe its because Obama and the Democrats are giving us exactly the same “trickle-down” economics that Reagan and Volcker once gave us.


If you do, the closest the Democrats will give you to any real change is sticking this old Reagan-Republican back in charge of the economy.

JUST SAY NO.  Don’t vote Democrat.

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By Nancy Bordier, September 29, 2010 at 9:27 am Link to this comment

Volcker may be on our side, but neither he nor mainstream U.S. voters have more power over decision-makers in Congress or the White House than the business and financial services sector that bankrolls Congressional and presidential election campaigns.

Now that this sector has co-opted the Tea Party movement to serve as the angry, anti-government core of the GOP’s new hybrid electoral base, and the Supreme Court has authorized unlimited corporate spending to sway elections, progressive voters will have even less influence in deciding who gets elected and what legislation is enacted.

The only feasible near-term remedy to the electorate’s inability to elect lawmakers who will champion their constituents’ interests over special interests, IMNSHO, are the winning transpartisan voting blocs that voters across the political spectrum can create using the breakthrough web invention, the Interactive Voter Choice System.

It is described in 2012: How U.S. Voters Can Wrest Control of Congress from Special Interests.

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By nickmammano, September 29, 2010 at 9:20 am Link to this comment

Great article—pointing clearly who the “bad guys” were namely Clinton, Rubin, Summers, Greenspan and Gramm.

But why not also IDENTIFY the “good guys”—those eight Senators who voted against deregulation?

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By phreedom, September 29, 2010 at 9:13 am Link to this comment

Part 1

Look, the only way the rich should get tax breaks is
in the form of tax shelters. And those tax shelters
should be designed by some new agency of the federal
government, and not a private organization, and
certainly not be part of a for profit scheme itself. 
The tax shelters would need to be projects/aspects
of infra-structure rebuilding, repairing and ref-
fitting. Tax breaks are benign incentives toward
value creating investments, they are a whimsical and
arbitrary means of getting the necessary
implemented, which is no real way to go about the
necessary, the needed. Investment left up to the
invisible hand of the markets, to decide on what are
necessary investments into societies infrastructure
and well-being, well has become the joke no one can
afford to laugh at today. Tax breaks, as an
investment motivator or incentive, are naturally
directed by the politics of the day.

De-regulation, has successfully become a nebulous
concept or who’s consequences are being blended into
our everyday acceptance of this or that. It is very
difficult for any normal person, a non-insider, to
follow the endless thread of selfish and
irresponsible acts that accumulated into breaking our
financial system. But, it does appear most can focus
enough, understand personally, the problem with
housing or real estate market today. So then, why not
take a look at the Tax Reform Act of 1986, and work
at least, target it, as to repair its’ horrible
impact and repeal its’ horrendous intention. 

It almost sounds nutty today, to say that real estate
investment should be motivated by sheltering income,
and not for profit. Well people, the most seemingly
successful period for this country was when in fact,
investment into real estate, commercial or
residential, especially in terms of residential,
well, was predicated on sheltering income of the
wealthy, and not for profit to the wealthy. Tax
shelters, as the wealthy’s only means of saving on
taxes, is not a tax loop hole, it’s a method or
format to ensure that the wealthy and powerful in
this society participate in that same society in a
manner that sustains the underpinnings of the system
they reaped so much reward, security & prestige from.
It was not so unpredictable that the Bush tax cuts
resulted in the pursuit of profit, at the expense of
society’s basis, and that those tax cuts made it
profitable to ignore the need to create tangible
value, necessary for attainable & realistic
foundational benefits to stay rooted in generally
reasonable hopes of a population/citizenry for
materialistic betterment.

Rhuen Phreed
11 Marlborough Street, #22
Boston, MA 02116

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By phreedom, September 29, 2010 at 9:13 am Link to this comment

Part 2

The tax breaks passed by the Republicans,  rode on
the back of changing the nature of real estate
investment from tax shelter or tax benefit to for
profit only, this was a wealth distribution coup, 
the likes of which the middle class may never recover
from, well, at least not for a good 20 years. But you
know, we need to start somewhere, why not by taking a
second look at TRA86 and its consequences to date,
get rid of the tax breaks to the wealthy, and replace
the tax breaks with infrastructure based tax shelters
for them( not oil and gas mirage or thoroughbred
horse breeding types) but rather only tangibly
conceived, usable, value added tax shelters, which
would be strictly regulated by a new agency within
the Federal Reserve, “The National Tax Shelter
Initiative to Rebuild, Refit and to Repair America”,
sounds promising?

Look, this has been unabashed capitalism at its’
worst. Old and new regulatory regiments need to be
implemented and enforced, but that is the difficult
and long view approach, easily to become mitigated
and distorted by the republican party trying to
regain power, or the democratic party trying to cover
their near fatal missteps after coming to power. So,
in the meantime, replace the notion of tax breaks
with the naturally value creating, result of tax
benefits to build things,(creation of new value) and
repair & refit things(current and worthwhile value
maintained). Employment and/or the labor force, will
nicely piggy back on building or repairing/refitting,
inherent in creating or maintaining tangible value.

Believe it or not, the national housing supply,
especially rental units, needs to be increased
hugely, through tax shelter incentive building, and
the crazy idea, that the current supply of owned
housing, the values of this particular & limited
supply of housing , needs to be increased or
maintained, as the advent to economic recovery, well, 
is ludicrous and a sucker pitch being lobbed from
both sides of the isle. 

Rhuen Phreed
11 Marlborough Street, #12
Boston, MA 02116

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By surfnow, September 29, 2010 at 9:12 am Link to this comment
(Unregistered commenter)

And Bill Clinton is still the darling of the mainstream media. He was the biggest hypocrite and phony to ever pillage the presidency. Bush made no attempt to even deny how much of a privileged creep he was; but Clinton always pretended to be such a man of the people.

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By omop, September 29, 2010 at 9:09 am Link to this comment

And the one man that came out smelling like a ROSE, was SIR ALAN GREENSPAN.

  Now why would Queen Libby take the time to make Alan the Money Man
Greenspan a SIR?

  IF, as Las Vegas Louie put it, ” by the third hand of the poker game you all don’t
know who the patsy is…. you are it Mr and Mrs America”.

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By ocjim, September 29, 2010 at 8:53 am Link to this comment

I don’t believe that the neo-conservatives had enough smarts to know that administrations that followed them would be handcuffed into the same corrupt systems that they created: mercenary armies, torture abroad, fascist-type FBI policy against activists, pro-Wall Street policy, accepting too-big-to-fail corporations, regulatory agencies in the pocket of big business.

We have this with Obama, whom we believed could really depart from the Bush corruption.

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By Shenonymous, September 29, 2010 at 8:24 am Link to this comment

WHAT do you mean by darkies, balkas, when you said, “people and
land began to be owned by darkies of mesopotamia and Egypt”? 
Also when did the “darkies” begin to own people and land according
to your history, citation please.

I own my home, how about you?  Do you and your wife live under a
bridge in a cardboard box?  Where did you get your box?  Boxes are
made by corporations, BTW.  Far as I know, I do not pay for the air that
I breathe and I can get a drink free at any public fountain.  SO it is not
as absolutely bleak as you make it out to be.  You might consult with
your wife more often.  She can help you keep your secrets better.

WHAT do you see about money usage that Volker does not?  You speak
with a very wide and loosely woven net.  You could be more helpful if
you gave specifics in a more coherent form with some references so
that we can check out your charges.  I am always open to verifiable
information that would help make citizens and myself more self-reliant
and self-determined.

Having watched Mario Savio in the mid-60s as an impressionable
teenager, I found him to be rather hysterical and demagogic.  His
message is now over 50 years old and is still not as coherent as it
should have been.  His movement was relatively short lived, as was he,
and had elements of fanaticism.  I think Martin Luther King, Jr.’s
approach to civil rights reform efforts were much more effective and
long lasting, actually permanent.  There will always be civil rights
violations as long as there are men who think they have more rights
than others, the kingly set. I call it the baronial system still at work,
most obvious around the world, but surreptitiously in America hidden
by the ravages of privatized capitalism.  Resistance is the call but there
are forms of resistance that have to be understood for their real
effectiveness rather than mere bombast.

Capitalism could work for the population but the form that has evolved
did so partnered with the notion that some through the power of their
money could take advantage of others.  I believe there are ways to
overcome this domination that are not grotesquely eruptive, but
through using the human rational principle and reasoned collective
action.  Irrational emotions do not effect healthy change.  Read Eric
Hoffer’s True Believer. 

The late Howard Zinn, as an advisor to the Students Non-violent
Coordinating Committee, was a mensch who understood the need for
those to use their brains and not brawn, and his legacy provides the
circumspective model for activism.  It does not do much long range
good for one to lose their minds.

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By Napolean DoneHisPart, September 29, 2010 at 7:56 am Link to this comment

Educate and defend yourself… or you’ll be played like a pawn.

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By Inherit The Wind, September 29, 2010 at 7:55 am Link to this comment


Volcker didn’t have a change of heart.  Your command of the facts of his actions in the 70’s and 80’s is fundamentally flawed.

Volcker FIXED the economy, realizing that, like physical therapy, you have to go through some serious pain to get healthy again.  And it took Alan Greenspan and Ben Bernanke from the mid-80’s until 2008 to actually destroy what Volcker built in just a few years.

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By Napolean DoneHisPart, September 29, 2010 at 7:54 am Link to this comment

These people dictate the treating of the chattel, the populous… the masses.

People are seen as that unless your ‘net worth’ defines you otherwise…

Thing is, those whose ‘worth’ is attached to their social security number are screwed.. you are the chattel.

Those with ‘worth’ in tax id numbers of various companies, trusts, etc… you are the capital pimps.

Those who take ‘office’ with an ‘oath’ do so at the sifting and siphoning of the very masses they are SUPPOSED to defend, serve and protect and the rest of it…. but instead mistreat the servants.

Dark was the day when man attached a value to his brother… and sold him.

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By Napolean DoneHisPart, September 29, 2010 at 7:50 am Link to this comment

Interesting if one can consider:

If anyone of “us” was in these folk’s shoes who are choosing what and how and knowing full well you’ll be compensated and will ‘ride the wave’ of prosperity on the backs of the overly taxed masses… you may have done the same and kept your head down while having your hand extended.

You may have justified it by stating you’ll help your family and friends.. or choice family and friends after crossing over to the land of fantasy and monopoly millions.

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By REDHORSE, September 29, 2010 at 7:45 am Link to this comment

I’ve heard this same story at TRUTHDIG a few times by a few different authors. As other posters noted a little more factual meat in the editorial stew would be much appreciated.

    THANK YOU SHENONYMOUS!! Efforts like yours today (and others) to help access the wider picture gives this site a chance at community.

    Also—THANKS Mr. Scheer. Looking forward to reading your book.

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By cmarcusparr, September 29, 2010 at 7:21 am Link to this comment

After the demise of the Glass-Steagall Act, the American financial system has relied on capitalism for profits and on socialism to protect it from losses.

If America were comprised of democratically-minded people, instead of delusional fools glued to their televisions, there would be ten million protesting in the streets of New York, Chicago, and Washington DC.

If Americans had a healthy independent media comprised of investigative journalists and critical thinkers (presuming Americans can still read), democracy might stand a chance.

If America were not a “corporate fascist wasteland” (Cindy Sheehan), and if this country were not run by the One Percenters, perhaps this November would be just another election.

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By balkas, September 29, 2010 at 7:07 am Link to this comment

I think that following observation helps understand how money is [ab]used:
people and land began to be owned by darkies of mesopotamia and egypt.

In modern times we can add to that the fact that strongly-united individuals
now also own our air and water and not just land,seas [de facto or by ‘law’;i.e.
diktats or lawlesness], space, work, freedoms, people,etc.

So, volcker cannot explain money usage unless he casts the widest look
And he may know what i have said, but of course, he’s a part of the masters-
owners of people.
So he’s not gonna tell u this.
If one abuses people to any degree and ownership of people which can be seen
only with eyes and not any mouth, the abuse left undisturbed may last for
millennia longer.

This simplicity cannot be rendered simpler or more elucidating; thus, all
banksters and assorted people snatchers, wld ignore it!

Ok. My wife thinks i am crazy. But i got news for her i don not dare tell a living
soul. tnx

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By MoaningLisa, September 29, 2010 at 6:19 am Link to this comment
(Unregistered commenter)

It is literally *all* about Glass-Steagall, and its repeal - the Gramm Leach Bliley Act of 1999. 

If we had still had Glass-Steagall, there wouldn’t be any TBTFs.  Those who lost money on fake investments could just go bankrupt.  The only reason giants like AIG existed and were speculating in the market, is because the separation between investment/speculative entities and others (commercial banks, insurance companies - businesses that should be more careful with OUR SAVINGS) was gone. 

Then the government HAD to bail them out, because OUR savings was all tied up with the bad debt - not separate from it, as it OUGHT to have be, and ought to be now.

Return to Glass-Steagall NOW.

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By cheyennebode, September 29, 2010 at 5:22 am Link to this comment
(Unregistered commenter)


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By Shenonymous, September 29, 2010 at 5:20 am Link to this comment

Martens quickly replied that emailing requests for a copy of the Act
would take 20 minutes each (it is a 53 page document) and so many
academics sent requests that she wouldn’t have time to comply so
she provided a website (which is an interesting site in itself) to access
it oneself.  If you are interested, see if you can access it.  It takes a
while to download so be patient.  I did and converted it to a pdf at:
Scroll down to the second item under June 22, 1933, i.e. “Banking Act of 1933.

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By raykeith7, September 29, 2010 at 5:07 am Link to this comment

Welcome to WalMart Nation & get used to it.
We need soup kitchens out here- where are they?

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By thebeerdoctor, September 29, 2010 at 5:00 am Link to this comment

Robert Scheer’s reliance on the various personalities of the government remind me of those baseball managers switching logo caps, revealing now who is “up” or “down”, but ultimately there is always a job found for someone inside the loop. With Robert Scheer, it seems he gets upset when his favorite bureaucrat baseball card players are not being listened to. Oh why, he must wonder, doesn’t he send in the relief pitcher he needs?

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By Shenonymous, September 29, 2010 at 4:49 am Link to this comment

It is worth it to read the Counterpunch article by Pam Martens,
The Most Vital Ingredient in Wall Street Reform Goes Missing,
March 26-28, 2010, edition at
RE: the Gramm-Leach-Bliley Act (also known as the Financial
Services Modernization Act of 1999).

I ordered a copy of the Act from Martens.  See article for how to get
your free email copy.

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By cheyennebode, September 29, 2010 at 4:39 am Link to this comment
(Unregistered commenter)


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By Billy Pilgrim, September 29, 2010 at 4:24 am Link to this comment

The merger was in 1998, not 2008. And Volker raised interest rates to kill inflation, which he accomplished and which led to a gradual decrease in long term rates that spurred the economy in the 1980’s until Greenspan kept rates artificially low, which led to the dot com and mortgage bubbles.

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By jan de bont, September 29, 2010 at 4:13 am Link to this comment
(Unregistered commenter)

What this article and so many others prove, is that everyone in government is only there for one reason: to get paid better,much better (like Rubin’s 15M) once they leave their job. They will do anything, lie, cheat, corrupt, to get to help the friends (Corporate America) who will pay them in gold afterward once they get what they wanted. Nobody in government should ever be allowed to take any of these jobs.
But so many already have reached that goal, Summers, Emmanuel etc. etc. They have lied and cheated us while asking us for our money to put this President there. They knew it would open wallets in a very big way. Unfortunate President Obama doesn’t get it, or is part of the problem.

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By bogi666, September 29, 2010 at 4:10 am Link to this comment
(Unregistered commenter)

About government insured mortgages and how the mortgage lenders played the system. Well knowing that if people defaulted on their mortgages, that were government insured and the mortgage lenders, the insured, would get the proceeds. The premiums are paid by the mortgagee. As long as the sub prime loans granted were insured, FHA, VA, Ginny, Freddie the lenders could grant loans without discretion, ignoring their fiduciary responsibility. The sub prime loans are a lenders scam.

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By Mike789, September 29, 2010 at 4:06 am Link to this comment

The national debt has to be addressed.

The middle class is tapped out. They’ve been compelled by job security fears to incredible levels of productivity with all proceeds going to the bottom line and lining CEO pockets. On top of that, middle class families are backing two wars and its associated consequences.

When are the so utterly “needy” wealthy going to fess up? The big boys, who sytematically transfered wealth to the top (trickle up) and gained piles of loot, are copping out.

Right now, with our nation’s citizens divided along party lines, a condition sustained by special interests who have nothing to gain and much to lose by a national consensus on campaign finance reform, term limits. military over-reach and its assoiated spending…..on and on. We have put our financial responsibility on a crazed auto-pilot.

The efforts of the Tea Party, in essence virtuous, have been usurped and led awry. Government is a problem, but not the ultimate problem. Corporatism has taken over government and via the SCOTUS will amass an irrevocable grip on national policy.

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By Shenonymous, September 29, 2010 at 3:25 am Link to this comment

Regulation is the first step towards the people reclaiming their
government.  Everyone who wants it back ought to hound their
congressmen to create or reinstate regulations to control the
corporate slavemasters.  Then names of those eight senators who
alone voted against the radical deregulation that Clinton signed into
law in 1999 needs to be published broadly everywhere so their names
become synonymous with dastardly sellouts.  Sheer ought to say what
is currently being done to reshape the laws to prevent another 2008.

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By ewener, September 29, 2010 at 3:20 am Link to this comment

It’s well worth remembering that The Big Guy is a Big Reason why we got into this
financial mess in the first place.  As Fed Chair back in the late 70s and 80s, he
engineered the whole financialization of the economy, strangling the productive
economy with punishingly high interest rates and giving the paper-pushing sector
the political upper hand ... over unions, over industry, over farmers, over the
social safety net, over Keynesian fiscal policy, and over most of the countries of
the world, who had borrowed money for economic and social development in the
low-interest 60s and 70s, and suddenly found their entire economies sold into
bondage to the bankers.

Volcker may have had a change of heart, I suppose.  But he looks more like a man
who feels like he’s surrounded by idiots who are screwing up the nice, neat,
smoothly running imperial profit machine he created, and he’s not happy about it.

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By Inherit The Wind, September 29, 2010 at 3:18 am Link to this comment

My very first disappointment with President Obama was putting Larry Summers at the top of the White House food chain of economic advisers and not Paul Volcker.  As we watched the Clinton administration enact pretty much ineffective tools that only benefited the financial corporations and mega-businesses, we learned that Summers, whose role in CREATING the disaster is undisputed, iced and isolated Volcker, whose role in FIXING the disaster of the 60’s and 70’s is unimpeachable.

Hopefully, now after 20 months of poor results in the economy, particularly unemployment, on the brink of an electoral tsunami, President Obama will give a free hand to the ONLY person PROVEN to have been able to save the economy, Paul Volcker.

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By Leefeller, September 29, 2010 at 1:36 am Link to this comment

To big to fail, what about to small to fail? Corporations in their to big to fail mode, have lobbied hard to have the same rights as the individuals of this so called nation, meaning they get what they want and pay for.

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