By Paul Craig Roberts

Growing up in the post-war era (after the Second World War), I never expected to live in the strange Kafkaesque world that exists today. The US government can assassinate any US citizen that the executive branch thinks could possibly be a “threat” to the US government, or throw the hapless citizen into a dungeon for the rest of his or her life without presenting any evidence to a court or obtaining a conviction of any crime, or send the “threat” to a puppet foreign state to be tortured until the “threat” confesses to a crime that never occurred or dies at the hands of “freedom and democracy” while professing innocence.

It has never been revealed how a single citizen, or any number thereof, could possibly comprise a threat to a government that has a trillion plus dollars to spend each year on security and weapons, the world’s largest navy and air force, 700 plus military bases across the world, large numbers of nuclear weapons, 16 intelligence agencies plus the intelligence agencies of its NATO puppet states and the intelligence service of Israel.

Nevertheless, air travelers are subjected to porno-scanning and sexual groping. Cars traveling on Interstate highways can expect to be stopped, with traffic backed up for miles, while Homeland Security and the federalized state or local police conduct searches.

I witnessed one such warrantless search on Easter Sunday. The south bound lanes of I-185 heading into Columbus, Georgia, were at a standstill while black SUV and police car lights flashed. US citizens were treated by “security” forces that they finance as if they were “terrorists” or “domestic extremists,” another undefined class of Americans devoid of constitutional protections.

These events are Kafkaesque in themselves, but they are ever more so when one considers that these extraordinary violations of the US Constitution fail to be overturned in the Supreme Court. Apparently, American citizens lack standing to defend their civil liberties.

Yet, ObamaCare is before the US Supreme Court. The conservative majority might now utilize the “judicial activism” for which conservatives have criticized liberals. Hypocrisy should no longer surprise us. However, the fight over ObamaCare is not worth five cents.

It is extraordinary that “liberals,” “progressives,” “Democrats,” whatever they are, are defending a “health program” that uses public monies to pay private insurance companies and that raises the cost of health care.

Americans have been brainwashed that “a single-payer system is unaffordable” because it is “socialized medicine.” Despite this propaganda, accepted by many Americans, European countries manage to afford single-payer systems. Health care is not a stress, a trauma, an unaffordable expense for European populations. Among the Western Civilized Nations, only the richest, the US, has no universal health care.

The American health care system is the most expensive of all on earth. The reason for the extraordinary expense is the multiple of entities that must make profits. The private doctors must make profits. The private testing centers must make profits.The private specialists who receive the referrals from general practitioners must make profits. The private hospitals must make profits. The private insurance companies must make profits. The profits are a huge cost of health care.

On top of these profits come the costs of preventing and combatting fraud. Because private insurance companies resist paying and Medicare pays a small fraction of the medical charges, private health care providers charge as much as they possibly can, knowing that the payments will be cut to the bone. But a billing mistake of even $300 can bankrupt a health care provider from legal expenses defending him/her self from fraud accusations.

The beauty of a single-payer system is that it takes the profits out of the system. No one has to make profits. Wall Street cannot threaten insurance companies and private health care companies with being taken over because their profits are too low. No health-provider in a single-payer system has to worry about being displaced in a takeover organized by Wall Street because the profits are too low.

Because a single-payer system eliminates the profits that drive up the costs, Wall Street, Insurance companies, and “free market economists” hate a “socialized” medical care system. They prefer a socialized “private” health care system in which public monies flow into private insurance companies.

To make the costs as high as possible, conservatives and the private insurance companies devised ObamaCare. The bill was written by conservative think tanks and the private insurance companies. What the “socialistic” ObamaCare bill does is to take income taxes paid by citizens and use the taxes to subsidize the private medical premiums charges by private health care providers in order to provide “private” health care to US citizens who cannot afford it.

The extremely high costs of ObamaCare is not “socialistic medicine.” ObamaCare is high-cost privatized medicine that guarantees billions of dollars in profits to private insurance companies.

It remains to be seen whether such a ridiculous health care scheme, nowhere extant on earth except in Romney’s Massachusetts, will provide health care or just private profits.

Paul Craig Roberts is an economist, former writer for the Wall Street Journal, and (believe it) a cabinet member in the Reagan administration.

 

 

 

 

 

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Andre Damon and Barry Grey, WSWS.ORG

The economic and political fallout from JPMorgan Chase’s sudden announcement last Thursday night that it lost more than $2 billion from speculative bets on credit derivatives continued to grow on Monday. The biggest US bank announced the forced retirement of Ina Drew, who headed up the bank’s London-based Chief Investment Office, which placed huge bets on the creditworthiness of a collection of US corporations. Other top executives and traders are expected to be sacked or demoted.

The bank’s shares fell another 3.2 percent, bringing its two-day market capitalization loss to nearly $19 billion. The Wall Street Journal reported that JPMorgan was prepared for a total loss of more than $4 billion over the next year from its soured stake in credit default swaps—the same investment vehicle that played a central role in the collapse of Lehman Brothers and the government bailout of insurance giant American International Group (AIG) in September of 2008.

In an interview on NBC’s “Meet the Press” program on Sunday, JPMorgan CEO Jamie Dimon sought to present the loss as an innocent mistake, resulting from “errors, sloppiness and bad judgment.” Only a month ago, Dimon, who has led the public campaign by Wall Street against even the mildest restrictions on speculative banking practices, dismissed warnings over the massive bets being made by his Chief Investment Office as “a complete tempest in a teapot.”

The scale of the loss and the denials that preceded it raise the likelihood that banking rules and laws against investor fraud and deception were breached.

President Obama, however, rushed to the defense of JPMorgan and Dimon, declaring on a daytime television talk show Monday that JPMorgan was “one of the best managed banks there is” and Dimon was “one of the smartest bankers we got.” At the same time he cited the bank’s loss as a vindication of the Dodd-Frank financial regulatory bill that he signed into law in July of 2010. “This is why we passed Wall Street reform,” he said.

In fact, the JPMorgan debacle demonstrates that nearly four years after the Wall Street crash nothing has changed for the financial aristocracy. No measures have been taken to rein in the banks, which received trillions of dollars in government handouts, guarantees and cheap loans. The same forms of speculation and outright swindling that led to the financial meltdown and the worst economic crisis since the Great Depression continue unabated.

The big banks, such as JPMorgan, have increased their stranglehold over the US economy. They have recorded bumper profits by withholding credit from consumers and small businesses, keeping unemployment high, while speculating on credit default swaps and other exotic financial instruments that drain resources from the real economy. On this basis, bank executives and traders, including those at bailed-out institutions, have continued to rake in eight-figure compensation packages. Last year, Ina Drew made $14 million, and Jamie Dimon took in $26 million.

The Dodd-Frank law trumpeted by Obama is a fraud, an attempt to give the appearance of financial reform while enabling the banks to continue their parasitic and criminal activities. A case in point is the so-called Volcker Rule, named after the former chairman of the Federal Reserve and economic adviser to the Obama White House, Paul Volcker.

The rule, incorporated into the Dodd-Frank Act and supposedly one of its most daring provisions, ostensibly bars proprietary trading—speculation by a bank on its own account—by commercial banks whose consumer deposits are guaranteed by the federal government. The idea is to prevent government-insured banks from speculating with depositors’ money.

But the regulation as drafted by federal regulators—under pressure from the Federal Reserve and Obama’s treasury secretary, Timothy Geithner, as well as the banks—would actually allow the type of speculative bet made by JPMorgan in the guise of a “hedge” to offset risk in the bank’s overall investment portfolio.

The Volcker Rule, whose precise form is yet to be announced, will do nothing to halt speculation by government-backed banks using small depositors’ money.

The JPMorgan scandal also throws into relief the government’s failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.

When Iowa Senator Charles Grassley submitted a letter to the Justice Department earlier this year asking how many bank executives had been prosecuted in response to the financial crisis, the Justice Department replied it did not know because it was not keeping a list.

According to a study by Syracuse University, however, federal financial fraud prosecutions have fallen to 20-year lows under the Obama administration, and are down 39 percent since 2003. Under Obama, the number of financial fraud cases has fallen to one-third the level of the Clinton administration.

These facts demonstrate the de facto dictatorship exercised by the financial aristocracy over the entire political system and both major parties. The Obama administration, in particular, is an instrument of the most powerful financial institutions. It has focused its efforts on protecting and increasing the wealth of the privileged elite while utilizing the crisis to permanently slash the wages and living standards of the working class.

For much of Obama’s tenure, Jamie Dimon was known as the White House’s “favorite banker.” According to White House logs, Dimon visited the White House at least 18 times, often to talk to his former subordinate at JPMorgan, William Daley, who had been named White House chief of staff by Obama after the Democratic rout in the 2010 elections.

The incestuous and corrupt relations between Wall Street, the Obama administration and the entire political system underscore the necessity for the working class to build its own mass socialist movement to fight for its interests in opposition to the ruling elite.

The bankers responsible for the financial crisis, including Dimon and his co-conspirators, must be held criminally liable for their lawlessness and held accountable for the social suffering that has resulted from their actions. The ill-gotten trillions accumulated by the banks must be expropriated, with full protection for small depositors and small businesses, and used to provide decent jobs, housing, health care and education for all.

There is no way to rein in the banks and end their socially destructive activities within the framework of the capitalist system. The only way to stop the fraud and parasitism that go on every day on Wall Street is to nationalize the banks and run them as democratically controlled public utilities.

Andre Damon and Barry Grey are senior political analysts with WSWS.ORG, a socialist organization.

 

 

 

 

 

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By Robert Reich, Robert Reich’s Blog

J.P. Morgan Chase & Co., the nation’s largest bank, whose chief executive, Jamie Dimon, has lead Wall Street’s war against regulation, announced Thursday it had lost $2 billion in trades over the past six weeks and could face an additional $1 billion of losses, due to excessively risky bets.

The bets were “poorly executed” and “poorly monitored,” said Dimon, a result of “many errors, “sloppiness,” and “bad judgment.” But not to worry. “We will admit it, we will fix it and move on.”

Move on? Word on the Street is that J.P. Morgan’s exposure is so large that it can’t dump these bad bets without affecting the market and losing even more money. And given its mammoth size and interlinked connections with every other financial institution, anything that shakes J.P. Morgan is likely to rock the rest of the Street.

Ever since the start of the banking crisis in 2008, Dimon has been arguing that more government regulation of Wall Street is unnecessary. Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

Dimon argued that the financial system could be trusted; that the near-meltdown of 2008 was a perfect storm that would never happen again.

Since then, J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown.

And now — only a few years after the banking crisis that forced American taxpayers to bail out the Street, caused home values to plunge by more than 30 percent and pushed millions of homeowners underwater, threatened or diminished the savings of millions more, and sent the entire American economy hurtling into the worst downturn since the Great Depression — J.P. Morgan Chase recapitulates the whole debacle with the same kind of errors, sloppiness, bad judgment, excessively risky trades poorly-executed and poorly-monitored, that caused the crisis in the first place.

In light of all this, Jamie Dimon’s promise that J.P. Morgan will “fix it and move on” is not reassuring.

The losses here had been mounting for at least six weeks, according to Morgan. Where was the new transparency that’s supposed to allow regulators to catch these things before they get out of hand?

Several weeks ago there were rumors about a London-based Morgan trader making huge high-stakes bets, causing excessive volatility in derivatives markets. When asked about it then, Dimon called it “a complete tempest in a teapot.” Using the same argument he has used to fend off regulation of derivatives, he told investors that “every bank has a major portfolio” and “in those portfolios you make investments that you think are wise to offset your exposures.”

Let’s hope Morgan’s losses don’t turn into another crisis of confidence and they don’t spread to the rest of the financial sector.

But let’s also stop hoping Wall Street will mend itself. What just happened at J.P. Morgan – along with its leader’s cavalier dismissal followed by lame reassurance – reveals how fragile and opaque the banking system continues to be, why Glass-Steagall must be resurrected, and why the Dallas Fed’s recent recommendation that Wall Street’s giant banks be broken up should be heeded.

Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama’s transition advisory board. His latest book is Aftershock: The Next Economy and America’s Future. His homepage is www.robertreich.org.

 

 

 

 

 

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By Paul Craig Roberts

Paul Craig Roberts

Living in America is becoming very difficult for anyone with a moral conscience, a sense of justice, or a lick of intelligence. Consider:

We have had a second fake underwear bomb plot, a much more fantastic one than the first hoax. The second underwear bomber was a CIA operative or informant allegedly recruited by al-Qaeda, an organization that US authorities have recently claimed to be defeated, in disarray, and no longer significant.

This defeated and insignificant organization, which lacks any science and technology labs, has invented an “invisible bomb” that is not detected by the porno-scanners. A “senior law enforcement source” told the New York Times that “the scary part” is that “if they build one, they probably built more.”

Secretary of State Hillary Clinton declared that “the plot itself indicates that the terrorists keep trying to devise more and more perverse and terrible ways to kill innocent people.” Hillary said this while headlines proclaimed that the US continues to murder woman and children with high-tech drones in Afghanistan, Pakistan, Yemen, and Africa. The foiled fake plot, Hillary alleged, serves as “a reminder as to why we have to remain vigilant at home and abroad in protecting our nation and in protecting friendly nations and peoples like India and others.”

FBI Director Robert Mueller told Congress that the fake plot proves the need for warrantless surveillance in order to detect — what, fake plots? In Congress Republican Pete King and Democrat Charles Ruppersberger denounced the media for revealing that the plot was a CIA operation, claiming that the truth threatened the war effort and soldiers’ lives.

Even alternative news media initially fell for this fake plot. Apparently, no one stops to wonder how al-Qaeda, which has become so disorganized and helpless that it is on the run and left its revered leader, Osama bin Laden, in a Pakistan village alone and unguarded to be murdered by US Navy Seals, could catch the CIA off guard with an “undetectable” bomb, to use the description provided by Senate Intelligence Committee chairman Dianne Feinstein, who was briefed on the device by US intelligence personnel.

I am convinced that…Americans live in the Matrix. Nothing that they know or think that they know is correct.”

Notice that the Secretary of State has committed the bankrupt US and its unravelling social safety net to the protection of “India and others” from terrorists. But the real significance of this latest hoax is to introduce into the fearful American public the idea of an undetectable underwear bomb.

What does this bring to mind? Anyone of my generation or any science fiction aficionado immediately thinks of Robert Heinlein’s The Puppet Masters.

Written in 1951 but set in our time, Earth is invaded by small creatures that attach to the human body and take over the person. The humans become the puppets of their masters. Large areas of America succumb to the invaders before the morons in Washington understand that the invasion is real and not a conspiracy theory.

On clothed humans, the creatures cannot be detected, and the edict goes out that anyone clothed is a suspect. Everyone must go about naked. Women are not even allowed to carry purses in their hand, because the creature can be in the purse attached to the woman’s hand.

Obviously, if the CIA, the news sources, and Dianne Feinstein’s briefers are correct that defeated al-Qaeda has come up with an “undetectable” bomb, we will have to pass through airport security naked.

If so, how will this be possible? If each airline passenger must go through a personal screening by disrobing in a room, how long will it take to clear “airport security”? I doubt there is any place in North or South America that the traveler couldn’t drive there faster. Or perhaps this is an answer to depression level US unemployment. Millions of unemployed Americans will be hired to view naked people before they board airliners.

As the Transportation Safety Administration division of Homeland Security has taken its intrusions, unchallenged, into train, bus, and highway travel, are we faced with the total collapse of the clothing industry? Stay tuned.

A couple of years ago a noted philosopher wrote an article in which he suggested that Americans live in an artificial or virtual reality. Another noted philosopher said that he thought there was a 25% chance that the philosopher was right. I am convinced that he is right. Americans live in the Matrix. Nothing that they know or think that they know is correct.

For example, our non-truth-telling “leaders” continually declare that “Israel is the only democracy in the Middle East.” This myth is one of the many reasons rolled out to justify American taxpayers’ declining incomes being taxed to provide the Israeli government with the means to murder Palestinians and steal their country.

Israeli democracy a myth you say? Yes, a myth. According to news reports compiled and reported by Antiwar.com (May 8), the September 4 Israeli elections have been cancelled, because the “opposition leader Shaul Mofaz is joining the government.”

Mofaz sold out his party for personal power, a typical politician’s behavior.

Mofaz’s treachery produced protests from his followers, but, according to news reports, “israeli police were quick to crack down on the protest, terming it “illegal’ and arresting a number of journalists.”

Ah, “Israel is the only democracy in the Middle East.”

In truth Israel is a fascist state, one that has been in violation of international law and Christian morality during the entirety of its existence. Yet, in America, Israel is a hallowed icon. Like Bush, Cheney, and Obama, millions of American “Christians” worship Israel and believe it is “God’s calling” for Americans to die for Israel.

If you believe in murdering your opponents, not debating with them, dispossessing the powerless, creating a fictional world based on lies and paying the corporate media to uphold the lies and fictional world, you are part of what the rest of the world perceives as “The West.”

Let me back off from being too hard on The West. The French and Greek peoples have shown in the recent elections that they are unplugging from the Matrix and understand that they, the 99%, are being put by their elites in a position to be the sacrificial lambs for the mistakes of the 1% mega-rich, who compete with one another in terms of how many billions of dollars or euros, how many yachts, collections of exotic cars, and exotic Playboy and Penthouse centerfolds they have as personal possessions.

The central banks of the West — the US Federal Reserve, the European Central Bank, and the UK bank — are totally committed to the prosperity of the mega-rich. No one else counts. Marx and Lenin never had a target as exists today. Yet, the left-wing is today so feeble and brainwashed that it does not exist as even a minor countervailing power. The American left-wing has even accepted the absurd official account of 9/11 and of Osama bin Laden’s murder in Pakistan by Navy Seals. A movement so devoid of mental and emotional strength is useless. It might as well not exist.

People without valid information are helpless, and that is where Western peoples are. The new tyranny is arising in the West, not in Russia and China. The danger to humanity is in the nuclear button briefcase in the Oval Office and in the brainwashed and militant Amerikan population, the most totally disinformed and ignorant people on earth.

Submitters Website: http://www.paulcraigroberts.org/

ABOUT THE AUTHOR

A quintessential establishmentarian at one point, Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury, under, of all people, Ronald Reagan. He’s come a long way since those days. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He was awarded the Treasury Department’s Meritorious Service Award for “his outstanding contributions to the formulation of United States economic policy.” Roberts is listed in Who’s Who in America and Who’s Who in the World.

 

 

 

 

 

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