The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Tuesday, June 24, 2014

The Volker Rule: The Longterm is Somebody Else's Problem.


 At the end of one of Wolf Richter's posts on The Testosterone Pit, he posits that:

 "It would of course come as another surprise to the Fed that its ingenious plan of enriching the top 5% via asset bubbles while pushing the vast majority of Americans ever deeper into the black hole of debt does not lead to stellar long-term economic growth – and might someday backfire".

As though he thinks that the KKK operates in any other way. Since the so-called "Reagan Revolution", in which we were introduced to the new Economics of scarcity via his implementation of Voodoo Economics with its central tenet of Trickle-down, wherein employees became "shareholders" (or more accurately were called such, as their share atrophied), a modernization of the old concept of sharecroppers (there was absolutely nothing original in this so-called revolution, as it was never anything more than a great-turning, back down the road of a planned atavistic return to feudalism), short-term has been all that matters, the crowning apotheosis of which was the dazzling collapse of Enron from the darling of Wall St. to utter ruination at internet speed, after first fleecing its employees of all their retirement savings, freezing their accounts to pad executives' golden parachutes.

But, because, as per the Volker Rule, Long-term is Somebody Else's Problem, none of the blame for the collapse of Enron and the atmosphere in which its criminally-minded executives operated, was ever ascribed to Reaganomics. And therefore, it can't be held accountable simply because it set up the conditions, fostered the environment and rewarded the perpetrators with advancement while demoting those who suggested caution; Gresham's Law writ large.

And  this is only one of the many things for which the Reagan administration has gotten none of the blame for. While conspiracy enthusiasts like to point at the Bush Regime for the planning, if not the execution, of the events on 9/11/2001, the seeds of that plot were planted during the Reagan-Bush years with the funding of the extremist Wahhabi school of Islamic fundamentalism in Saudi Arabia, arming of the Mujaheddin in Pakistan (and the concomitant forming of close ties with the ISI in Pakistan), the debacle in Lebanon, and the funding of the Iraqi dictator, Saddam Hussein, to carry on the Twilight War against Iran.

So here we have disastrous consequences emanating from a policy of waging Cold War politics by using third party countries to fight proxy wars in order to keep direct involvement of the US out of the line of sight. But like other CIA run operations, the only people that ended up blind-sided by this covert use of espionage and the then-third-world, but US-funded, armies, were the American people themselves. The countries that were fighting these wars knew full well where the dollars (that was a big hint right there) and the "Made-in-USA" (that was another clue) weapons originated from.

The bombing that killed the 241 Marines in Lebanon in 1983 is a case in point. For whereas the US called it a terrorist attack, since the US was covertly funneling war materiel, intelligence, and money to the Saddam regime in its War with Iran, how is that not involvement in that conflict, seeing how those arms were used to kill and maim tens of thousands of Iranians, a country with whom we were not at War? (And we won't even go into the Iran-Contra scandal, but I will point out as germane that it was absolute proof of the Death industry providing both sides with weapons of mass destruction so as to reap enormous profits spilling the blood of ferrinners, because the outsize profits to be gained from pirating their resources was simply not enough).  So does the attack on Lebanon then equal terrorism whereas the US-recruited and funded fighters against the Russian puppet regime in Afghanistan occurring at exactly the same time were guerrillas? What exactly is the difference between a guerrilla and a terrorist other than the ability of a Super Power to define the terms and label the combatants depending upon their own convenience, such that those same guerrilla organisations, started with funding from the USSA in Afghanistan, now that they're fighting the US puppet government in Kabul, are currently magically changed from guerrillas and freedom fighters to terrorists?

And for the answer to that question, we return once again to the subject of Oil. The only reason any of this has happened in the first place, the raison d'etre since the onset of a non-existent (yeah, remember, there's no such thing) Peak Oil Production in the US, since which we have been waging what pretty much amounts to continual Warfare, long before Cheney admitted as much, against the rest of the world is for one commodity: Oil. And although I may seem to hammer on that point a bit, it must be remembered that this is always denied, or the geopolitics that arise therefrom often derided by liberals as "uninteresting", their self-conceit being such that such mundane matters are of no concern to them, as they have higher, more elevated concerns than such dirty matters as to what the very foundation of the economy that gives them the luxury of deluding themselves that they're above such concerns, needs for its day-to-day functioning. And economists share, and promulgate, that same point of view, insisting that oil is in fact just another commodity like anything else. As though modern economics could even exist without the energy input from this one source which, if that were true, then WTF are we doing chasing it down all over the world and shooting down, or paying others to shoot down, anyone who gets in the way of its exploitation or safe passage? Why then? If oil is just another commodity that can simply be replaced such that one can use something else, at what point are we going to decide to do exactly that? What cost are we willing to continue to pay, (remember in both the Reagan/Bush and both Bush regimes the price we were willing to pay included, and now under Obambam, still includes, the option of first-strike use of nuclear, tactical, of course, weapons), for something, that according to any economic textbook, is simply another commodity?

And it is because at the heart of economic and political theory such an obvious truism is denied that enables the Volker rule to prevail, as stratagem is laid upon stratagem and one ruse is replaced with another and any subterfuge that obfuscates reality, keeping it from rearing it ugly head, is deemed acceptable. It is this unspoken assumption that makes anything that smacks of long-term planning inconsistent with the short-term mindset of jerry-rigged economics to keep the reality of the utter lack of a free market for oil, in this so-called free market society, invisible. It is a de-facto Militarized Market supported by the blood of every citizen in the country, and that of vast multitudes outside of it, many of whom reap none of the benefits it bestows on us, but instead live lives severely disrupted, if not outright destroyed, by it.

And because I don't see where the State ends and the Market starts, or where civil society ends and the market starts, which is why I like to spell Capitolism the way I do, as it makes it more clear that although there may be a separation between Church and State, there is never a separation between Capitolism and State. The only way we are able to believe in such nonsense is because of the other little piece of cognitive dissonance that we, as a society, engage in, which is the separation in our minds between the Government and the military, in that we pretend that military spending and government spending are two separate phenomena. They are in fact, one and the same. And whereas all government spending isn't military spending, although that's rapidly becoming untrue, all military spending is in fact government spending.

This is another delusion started in the Reagan Administration, as he is the same man who first said that a reason to be afraid is when you hear someone say, "I'm from the government, and I'm here to help", yet increased government spending more than any president before him, ie, increased the size of government while claiming to reduce it, and to do so, he used the Volker Fed to clamp down on the inflation he set fire to by using borrowed money to pay for tax cuts for the rich, and pay for the Defense Spending increase, which is a fiscal inflationary stimulant to the economy, starting the subterfuge whereby worker' tax dollars and pension savings  were used to:

... funnel those tax dollars to the already wealthy who used their tax-cut monies to purchase the bonds issued to pay for the enormous increase in government debt, caused by their tax-cuts, as they now collected interest rate on those bonds paid for by the rest of the taxpayers; this was, and is still, a conveyor belt of cash going right from workers' paychecks into the bank accounts of the Wealthy,

... then siphoned more tax savings from the reduction on taxes on dividends to move American industry overseas, and started 401K's which siphoned workers' savings to Wall St to be used to finance moving their jobs to places where there'd be no need to pay workers' pensions, or any other benefits, for that matter, which helped

destroy the entire competitive Savings & Loan system that the Banksters prodded him to, then piling debt on debt to bail out the industry thus destroyed by 

using GSE's which solved the short-term problem by offering enhanced interest payments to entice buyers of their bonds via Government guarantees that would in the long-term, become taxpayer liabilities, once again putting a veneer of prosperity while in fact he was eviscerating the economy for short-term gain that assured long-term pain, by

Then securitising that debt in MBS, pushing yet farther away the day of reckoning with another layer of deceit that even now lies on the books of the Fed awaiting a future disaster when they can be sloughed off onto the sheep-like public, while those who raked in fortunes, issuing and disseminating them, stuff their completely legal "killings" (yes, they actually call it "Making a killing", because theft on this scale always results in someone taking that ultimate fall) into off-shore bank accounts. 

From there every successive administration has endeavored mightily to push that long-term pain that has been inextricably already built in, out to a future generation/administration, to actually address it would have the same feared effect of addressing Global Warming: place blame on the Administration that tried to do so for the economic consequences that unraveling decades of deceit would entail. Much like Reagan did in his campaign against Jimmy Carter's energy-conservation measures.  Reagan had those solar panels removed from the Whitehouse roof for a reason. To say the burning and profligate use of imported oil is good for the economy and we're going to go out and get it. JC was almost right. Saving energy, he declared, was the moral equivalent of War . Reagan answered, if using energy profligately means War, then Americans will always opt for War. JC said, "Those who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury", Reagan said, "We will not apologize for our way of life". This was The Great Turning, that point in our history when the US decided en masse to take the fork in the road labelled Madness, at the end of which was guaranteed Mayhem, and that decision has never been acknowledged, never mind questioned or re-assessed, since it was made.

There were crack-ups along the way, but the 2008 crisis was the first time that the enormity of the crimes started in the Reagan administration really demonstrated their horrific implications to a small, but now growing, coterie, such as, ostensibly, Elizabeth Warren, who now understand that there is no going back. Obama's tenure will end in the same debacle as his predecessor's, laying the track for railroading the public into installing yet another even more right-wing Republican administration, the legacy of which will be, although not admittedly:

The die is set, so get set to die;
It's not for your beloved country that you should cry,
But for what it's leaders did to you and I,
With lies claiming oil's just another commoditigh.


















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