An Alternative to Austerity

“I have just returned from Rimini, Italy, where I experienced one of the most amazing spectacles of my academic life. Four of us associated with the University of Missouri at Kansas City (UMKC) were invited to lecture for three days on Modern Monetary Theory (MMT) and explain why Europe is in such monetary trouble today – and to show that there is an alternative, that the enforced austerity for the 99% and vast wealth grab by the 1% is not a force of nature.

“Stephanie Kelton (incoming UMKC Economics Dept. chair and editor of its economic blog, New Economic Perspectives), criminologist and law professor Bill Black, investment banker Marshall Auerback and me (along with a French economist, Alain Parguez) stepped into the basketball auditorium on Friday night. We walked down, and down, and further down the central aisle, past a packed audience reported at over 2,100. It was like entering the Oscars as People called out our first names. Some told us they had read all of our economics blogs. Stephanie joked that now she understood how the Beatles felt. There was prolonged applause – all for an intellectual rather than a physical sporting event.

“With one difference, of course: Our adversaries were not there. There was much press, but the prevailing Euro-technocrats (the bank lobbyists who determine European economic policy) hoped that the less discussion of possible alternatives to austerity, the easier it would be to force their brutal financial grab through.

“All the audience members had contributed to raise the funds to fly us over from the United States (and from France for Professor Alain Parguez), and treat us to Federico Fellini’s Grand Hotel on the Rimini beach. The conference was organized by reporter Paolo Barnard, who had studied MMT with Randall Wray and realized that there was plenty of demand in Italian mass culture for a discussion of what actually was determining the living conditions of Europe. His aim was to show that the emerging financial elite hopes to use this crisis as their opportunity to carve out personal fiefdoms by privatizing the public domain of the governments they have seduced, bribed or coerced into unnecessary debt. Instead of using a central bank to finance their deficits, governments are told to dump these assets under distress conditions at fire sale prices. So governments end up beholden to bondholders and Eurocrats drawn from neoliberal ranks.

“Paolo and his enormous support staff of translators and interns provided us an opportunity to give an approach to monetary and tax theory and policy that until recently was almost unheard of in the United States. Just one week earlier the Washington Post published a review of MMT (followed by a long discussion in the Financial Times . But the theory remains grounded primarily at the UMKC’s economics department and the Levy Institute at Bard College, with which most of us are associated.

“The basic thrust of our argument is that just as commercial banks now create credit electronically on their computer keyboards (creating a bank account credit for borrowers in exchange for their signing an IOU at interest), so governments can create their own money. They can reclaim this proper function without incurring needless interest-bearing debt to private bondholders or from banks that create credit by electronic fiat. Government computer keyboards can provide nearly free credit creation to finance spending.

“Once the money is created by government, the crucial difference is that governments spend it (at least in principle) to promote long-term growth and employment, invest in public infrastructure, research and development, provide health care and other basic economic functions. …”

TSA forces new mom to pump milk out of her breasts before boarding plane

“As NaturalNews readers already well know, the real agenda of the TSA has absolutely nothing to do with airport security (TSA security is a joke) and everything to do with “prisoner training” the public. It’s all about humiliation and dehumanization. It’s about teaching the slave citizens that they are animals to be ordered around by a bunch of lawless government tyrants who only impersonate actual law enforcement officers (TSA “officers” are not sworn officers in any way, and they have no law enforcement training).

“The latest example of all this involves a Hawaiian mother who recently attempted to board an airplane in Lihue, Hawaii. She was carrying a breast pump and several empty bottles to hold her breast milk later on. For those who may not know, many new moms frequently use breast pumps to fill bottles with their own natural mother’s milk which they later give to their children.

“Remarkably, upon seeing these empty bottles, the TSA agent in charge lapsed into a power trip frenzy and told her that she could not carry empty bottles on the airplane!

Fitts On The Necessity of the Myth of the Rule of Law

“In the mid 80s two covert operations of the American government overseen by the National Security Council of the Reagan administration and sanctioned by the highest levels of political authority were exposed. These were the illegal sale of weapons to Iran and the provision of convert aid to the Contra insurgency in Nicaragua in violation of a Congressional vote banning such aid. An independent counsel was appointed to
investigate the matter. The investigation resulted in no fewer than fourteen individuals being indicted or convicted of crimes. These included senior members of the National Security Council, the Secretary of Defence, the head of covert operations of the CIA and others. After George Bush was elected president in 1988, he pardoned six of these men. The independent counsel’s investigation concluded that a systematic cover- up had been orchestrated to protect the president and the vice president.
The sheer breadth of the covert operations was stunning. Indeed, it involved not only arms sales to Iran but also the solicitation of funds from third party governments as well as from wealthy Americans to pursue a foreign policy agenda in Central America that was not only controversial but illegal. During the course of the independent counsel’s investigation, persistent rumours arose that the administration had sanctioned drug trafficking as well as a source of operational funding. These charges were successfully deflected with respect to the independent counsel’s investigation, but did not go away. They were examined separately by a Congressional committee chaired by Senator John Kerry, which established that the Contras had indeed been involved in drug trafficking and that elements of the US government had been aware of it.

“It was not until Gary Webb’s Dark Alliance exposé originally published in the San Jose Mercury News that the government’s links to drug trafficking in the United States became established beyond a reasonable doubt. This in itself is curious, because Webb was hardly the first investigator to document the links between American intelligence and narcotics. Alfred McCoy, writing in the 70s, had documented the involvement of the CIA and the military in heroin and opium trafficking in Southeast Asia. Indeed, narcotics had been a source of covert funding and political leverage for years, extending at least as far back as the invasion of Sicily during World War Two. In retrospect, what was so startling about Iran-Contra was the scale of the financing operations involved, which reached even into the American banking system and included various forms of financial fraud. This gave the operation a link to the scandals that enveloped the savings and loan industry in the late 80s. Most observers do not connect these apparently diverse events when in fact they are part of a whole. …

“Over the course of several years my company Hamilton Securities and I were
subjected to a government investigation that ultimately resulted in the
destruction of Hamilton and the loss of my personal fortune. This spring (2001) the
government finally dropped its investigation, having failed to find or establish
any evidence of wrongdoing at Hamilton or by me. This was not a surprising
result, because there was none to find. Nevertheless, over the course of five
years and at a cost of millions of taxpayers’ dollars, Hamilton and I were
harassed into financial oblivion. Why?

“It started in 1996 at the same time that the San Jose Mercury News was
preparing a story exposing the US government’s marketing of crack cocaine into
South Central Los Angeles in the 1980’s. The year before, Hamilton Securities
had launched a company in the inner city to provide data servicing for our
software tool, Community Wizard. The Wizard used geographic information
systems software (GIS) to map the geographic patterns of government investment,
including defaulted mortgage loans of the Department of Housing and
Urban Development (HUD). At that time we put three maps up on the Internet
site for a place-based survey for the HUD loan sales. They showed defaulted
HUD mortgages in New Orleans, the District of Columbia and South Central
Los Angeles. … It seemed understandable that someone might want the Wizard team to be otherwise occupied when the San Jose Mercury News published the “Dark Alliance” series regarding the Iran-Contra drug dealing in South Central Los Angeles. Otherwise we might notice the suspicious patterns that exist between HUD defaulted mortgages and
government sponsored narcotics trafficking.

“The targeting of Hamilton and Fitts stopped in 2001. The final attempt to
frame me was closed after 18 audits and investigations and a smear campaign
that reached into every aspect of my professional and personal life. Years of
hard evidence as to the baselessness of the government’s goals and the criminality
of its conduct had been ignored. The corruption of the courts, lawyers
and the Department of Justice had become painfully visible, then predictable,
then comical. The flood of federal credit, subsidies and contracts bought off
everyone around us and showed what happens when human greed and the need
for safety mixes with cheap money.

“Several things helped to finally bring relief. In 2000, we began to put all
documentation on a website ( thus creating a po ol of
evidence freely available to reporters, editors and readers. A second factor was
that a great deal of money was unaccounted for from the US Treasury. This now
totals over $3.3 trillion based on General Accounting Office (GAO) reports. The
notion that the US Treasury, OMB and DOJ might be capable of significant
fraud was gaining credibility in the investment community. A handful of courageous
reporters published stories about what was happening.

“However, in a deeper sense, the targeting started long ago when narcotics
trafficking and HUD fraud destroyed the Philadelphia neighbourhood where I
grew up. It was then, as a young person, that I learned that the law was a tool
of coercion-that there was no rule of law. It is a terrible truth. As a white,
Anglo-Saxon protestant I had been counting on the rule of law to protect me.
I found, instead, that it is a powerful myth which has fuelled great wealth for
those who run and rule the economy-both legal and illegal. The rule of law is
the basis of liquidity. That is why so much time and money goes into sustaining
the myth.

“Capital gains are highest for those who can combine liquidity, the value
creation of stock price multiples, and the power of new technology with the
high margins of narcotics trafficking, financial fraud and control of the
Congress, the courts and the enforcement agencies to create and protect
markets. Transaction costs rise and market multiples fall as the myth deteriorates. The destruction of Hamilton Securities is a case study in the disintegration of the myth of the rule of law. As that disintegration debases the treasuries and currencies of nations and destroys the equity of communities, it is making its way to your door one way or another.

“For years rumours circulated that the National Security Council was managing
narcotics trafficking directly from the White House under the direction of
Oliver North and Vice President George Bush as part of an operation that came
to be known as Iran-Contra. The story never seemed to catch on. It was unthinkable
to most Americans that the White House was marketing drugs wholesale
to be retailed to their children in order to pursue a foreign policy objective. No
major media business could carry the story if it meant all the drug money
pulled out of their stock. A sell off like that could kill a business over night.
The truth is that the inability of America to come to grips with the Iran-Contra
disclosures about narcotics trafficking by the US government indicated the
extent to which our economy had become addicted to drug profits.” …

And it goes on from there.  Absolutely essential reading.  The narco-financial-governmental-military complex is pervasive, enduring, immune from prosecution and utterly dominates international finance and government policy.  But it’s also significant in the social engineering going on in public schooling, where children are given implausible lectures about drugs by the DARE program, a proven way to seduce  them into experimenting with drugs (drugs other than the ones the school “nurse” dispenses to them) so they can help prop up fraud street and finance secret wars until they fall into the vast spiderweb of criminal justice, privatized prisons and sub-minimum-wage labor that awaits them.  An amazing business model which has the added benefit of tending to divert the traditional targets of eugenics (the lower classes, minorities and discontents) out of the mainstream and into slave labor which competes against american jobs and decimates american cities, creating further fodder for the machine.

And if you have money in fraud street or even buy food with federal reserve notes, you better hope it continues.

Also see “Coverup – behind the iran-contra affair” and “Mike Ruppert: Denial Stops Here” in the reference section.