Majorityrights News > Category: White Genocide: America

The 2008 Meltdown And Where The Blame Falls

Robert Lenzner for Forbes Magazine, 2 June 2012:

Note:  This blog is based on my notes for a speech at the Harvard Class of 1957 55th reunion in Cambridge, Mass. on May 22nd.

Armageddon was threatening the financial system on Wednesday, September 17, 2008. The largest bankruptcy in American history,  that of investment bank Lehman Brothers on Monday, September 15, had roiled global markets, accelerating the stupendous decline in values of every possible investment vehicle—common stocks, corporate bonds, real estate, commodities like oil, copper and gold,  private equity and hedge funds alike. In the midst of the chaos Merrill Lynch, the firm that had brought Wall Street to Main Street, was absorbed in a shotgun marriage by Bank of America BAC +0%.

Only days earlier came the recognition at the New York Federal Reserve Bank and the US Treasury that AIG, the largest insurance company in the world was running out of money. This required an immediate injection of $85 billion in bail-out funds. And later another $100 billion, still not paid back to Uncle Sam.

That day, Sept 17, an even greater crisis was pending. All day long the chairman of General Electric, a company recognized across the globe as a leading industrial giant, was calling the Secretary of the Treasury, Hank Paulson to warn that the next day, Sept. 18,  that GE would no longer be able to roll over its short term debt. The American business system was on the cusp of faltering mightily. The US economy was on the brink of a precipice into the unknown.

Messrs Paulson and Bernanke, at the Fed, knew the nation could not suffer the risk of a total breakdown in industry and finance. So, they decided to instantly guarantee the $600 billion commercial paper market, which is widely used to finance day-to-day operations of all major firms. This guarantee became part of the total cost of bailing out Wall Street, which totaled over $7 trillion—when you added guarantees to loans, investments and outright grants. The bailouts were key to raising the Fed’s balance sheet from $1 trillion to $3 trillion—and to upping the nation’s total amount of debt some $5 trillion to a record $15 trillion.

Conversely, the household wealth of the nation, measured by losses in financial markets and the historic drop in residential real estate—was reduced by a sickenly humungus   $12-$14 trillion at the very bottom of the whole process in March, 2009. You take that money—$12-14 trillion away from the asset side of the ledger and add another $5 trillion in debt—- and you are bound to experience   a decline in the nation’s GDP and a very much slower rate of recovery from such a trauma. A recovery that could take 10 years or more according to Harvard economist Kenneth Rogoff. That brings us to 2018. Need I say more?

How did we reach this very near call on a total systemic breakdown?

Firstly, there were no cops on the beat.  Laissez-faire free market economics was the prevailing public policy. Federal Reserve chairman Alan Greenspan spoke of irrational exuberance but took no steps to cool off markets in the late 1990s. In fact, he was asked by Loews chairman Larry Tisch and former Goldman Sachs co-chairman John Whitehead to raise the margins on trading, and refused, claiming falsely that such a move was up to the SEC—and not the Fed. Not true.

In 1999 the Glass-Steagall Act—which had separated commercial banking from investment banking for 66 years, was overturned—a move that opened the door to more speculative trading on the part of Wall Street firms.

Then, in 2000 Messrs. Greenspan, former Treasury Secretary Rubin and his successor Lawrence Summers pressed to pass a bill that would prohibit the regulation of derivatives—the fastest growing and most complicated and murky new financial product. This was an incredible mistake, as derivative contracts like mortgage backed bonds and credit default swaps mushroomed in across the globe without any oversight, strict capital requirements and on an organized exchange where buying and selling were handled daily.

The result of this vacuum; no one anywhere knew who owed what to whom across the world.  Despite the danger lurking in the rapid depreciation of these contracts,  Bernanke publicly stated the absurd amount of sub-prime mortgages being sold to unsuspecting buyers would not spread to a much wider, deeper crisis. He didn’t know what he was talking about, sadly..

Lastly, in 2004 the major firms convinced the SEC to let them value certain assets on their balance sheet at values they chose—rather than marking them t o market—which would reveal what losses they were carrying. This added another dangerous laxity to financial regulation. The system was falsifying its accounts believing the investments would bounce back.

The entire catastrophe’s underlying theme was summed up later by this admission from former Fed chairman Greenspan . ” I made a mistake,” he admitted in a hearing, “in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.” And we made this man into the wise parental guardian of American capitalism for 18 years. We journalists, that is.

Pressed again later on, Greenspan admitted to “shocked disbelief, (because his whole) intellectual edifice had collapsed.”  Naive at minimum. At worst, locked into a narrow limited ideological viewpoint that set the stage for the meltdown. Let Goldman Sachs and Citigroup master their own appetite for profits. So much for reining in animals spirits.

Secondly, the banks and investment banks were using reckless amounts of leverage. They borrowed, in many cases, $30 to $40 of debt for every dollar of capital they had. In truth, this was a recipe for disaster, since a decline of only 4% in their capital put them on the road to insolvency.  It was as if you bought a million dollar house, put down a payment of $30,000 and borrowed $970,000. What sense of irrational optimism allowed this mad way of doing business.

By the fall of 2008 the decline in the value just of subprime mortgage backed bonds—which lost up to 80% of their value in the market—meant that Fannie Mae, Freddie Mac, Lehman, Merrill Lynch, Citigroup, Bank of America, Washington Mutual and Wachovia were in a state of peril. The only way to make money in bank stocks was to short them. My favorite day trader told me after it was all over that I should be worth $50 million. With the run on Lehman Bros. both Morgan Stanley and Goldman Sachs were in danger of experiencing a run on their accounts.

Perhaps AIG is the most extreme example of leverage as financial hari-kari. It had sold protection to banks and insurance companies across the globe by issuing $540 billion of credit default swaps, which meant AIG promised to make good on any losses in value of their mortgage holdings.

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Christopher Caldwell: America’s two constitutions — since the ‘60s, competing visions of a more perfect union

Christopher Caldwell, author of the book ‘The Age of Entitlement,’ says Democrats and Republicans have two different conceptions of what the country is about. Fox News, 27 Jan 2020:

     

Not long after he left the White House, Bill Clinton gave what is still the best description of the fault lines that run through American politics. “If you look back on the ’60s and on balance you think there was more good than harm, you’re probably a Democrat,” he said. “If you think there was more harm than good, you’re probably a Republican.”

What could he have meant by that?

Though Americans are reluctant to admit it, the legacy of the 1960s that most divides the country has its roots in the civil rights legislation passed in the immediate aftermath of John F. Kennedy’s assassination. It was enacted in a rush of grief, anger and overconfidence — the same overconfidence that had driven Kennedy to propose landing a man on the moon and would drive Lyndon Johnson to wage war on Vietnam. Shored up and extended by various court rulings and executive orders, the legislation became the core of the most effective campaign of social transformation in American history.

This campaign was effective both for its typically American idealism and for its typically American ruthlessness. It authorized Washington to shape state elections, withhold school funds, scrutinize the hiring practices of private businesses and sue them. It placed Offices of Civil Rights in the major cabinet agencies, and these offices were soon issuing legally binding guidelines, quotas and targets. Above all, it exposed every corner of American social, business and political life to direction from judges.

Americans assumed that solving the unique and extraordinary problem of segregation would require handing Washington powers never before granted in peacetime. In this they were correct.

But they were also confident that the use of these powers would be limited in time (to a few years at most), in place (to the South), and in purpose (to eliminating segregation). In this they misjudged, with fateful consequence for the country’s political system.

Civil rights law may have started off as a purpose-built tool to thwart the insidious legalism of Southern segregation and the violence of Southern sheriffs. It would end up a wide-ranging reinvention of government.

After the work of the civil rights movement in ending segregation was done, the civil rights model of executive orders, regulation-writing and court-ordered redress remained.

This was the so-called “rights revolution”: an entire new system of constantly churning political reform, bringing tremendous gains to certain Americans and — something that is mentioned less often — losses to many who had not necessarily been the beneficiaries of the injustices that civil rights was meant to correct.

The United States had not only acquired two codes of rules (two constitutions), as people rallied to one code or the other, they also sorted themselves into two sets of citizens (two countries). To each side, the other’s constitution might as well have been written in invisible ink.

Civil rights became an all-purpose constitutional shortcut for progressive judges and administrators. Over time it brought social changes in its wake that the leaders of the civil-rights movement had not envisioned and voters had not sanctioned: affirmative action, speech codes on college campuses, a set of bureaucratic procedures that made immigrants almost impossible to deport, gay marriage, transgender bathrooms.

In retrospect, the changes begun in the 1960s, with civil rights at their core, were not just a major new element in the Constitution. They were a rival constitution, with which the pre-1964 one would frequently prove incompatible — and the incompatibility would worsen as the civil-rights regime was built out.

Our present political impasse is the legacy of that clash of systems. Much of what we today call polarization” or “incivility” is something more grave. It is the disagreement over which of the two constitutions shall prevail: the pre-1964 constitution, with all the traditional forms of jurisprudential legitimacy and centuries of American culture behind it; or the de facto constitution of 1964, which lacks this traditional kind of legitimacy but commands the near-unanimous endorsement of judicial elites and civic educators, and the passionate allegiance of those who received it as a liberation.

As long as the baby boom generation was in its working years, permitting the country to run large debts, Washington could afford to pay for two social orders at the same time. Conservatives could console themselves that they, too, were on the winning side of the revolution. They just stood against its “excesses.” A good civil rights movement led by the martyred Rev. Dr. Martin Luther King Jr. had been hijacked, starting in the 1970s, by a radical version that brought affirmative action and eventually political correctness.

But affirmative action and political correctness were not temporary. Over time they hardened into pillars of the second constitution, shoring it up where it was impotent or illogical, the way the invention of judicial review in Marbury v Madison (1803) shored up the first constitution.

Both affirmative action and political correctness were derived from the basic enforcement powers of civil rights law. And this was the only civil rights on offer. If you didn’t like affirmative action and political correctness, you didn’t like civil rights. By 2013, when Americans began arguing over whether a cake maker could be forced to confect a pro–gay marriage cake, this was clear.

The United States had not only acquired two codes of rules (two constitutions) —as people rallied to one code or the other — they also sorted themselves into two sets of citizens (two countries). To each side, the other’s constitution might as well have been written in invisible ink. Democrats were the party of rights, Republicans of bills. Democrats say, by 84 to 12 percent, that racism is a bigger problem than political correctness. Republicans, by 80 to 17 percent, think political correctness is a bigger problem than racism. The Tea Party uprising of 2009 and 2010, and its political mirror image, the Black Lives Matter uprising of 2015 and 2016, were symbols of that division.

Much happened this century to bring matters to the present boil. Barack Obama, both for his fans and his detractors, was the first president to understand civil rights law in the way described here: as a de facto constitution by which the de jure constitution could be overridden or bypassed. His second inaugural address, an explicitly Constitution-focused argument, invoked “Seneca Falls and Selma and Stonewall” — i.e., women’s rights, civil rights and gay rights — as constitutional milestones.

In this view, the old republic built on battlefield victories had been overthrown by a new one built on rights marches and Supreme Court jurisprudence. When Justice Anthony Kennedy wrote his decision in Obergefell v. Hodges, the 2015 gay marriage case that was in many ways the culmination of this new rights-based constitution, he said as much.

The election of 2016 brought the change into focus. Today two nations look at each other in mutual incomprehension across an impeachment hearing room. It appears we are facing a constitutional problem of the profoundest kind.

For anyone without meaningful experience of black behavior, Antonio Brown’s is typical…

...the kind of abusive arrogance which explains why those of us who do have meaningful experience of their behavioral patterns cannot relate to anyone who’d live with blacks.

A Lawschool student at Oklahoma City University Law School was banned from campus due to a complaint in regard to his private Tinder singles account, which specified that he did not want a woman who has been with a black.

For a Halloween party, he ventured back onto campus in costume, thinking that he might not be recognized. But when he posted a flyer saying “it’s ok to be White”, the administration inferred that it was him - seen through security camera footage, as he made the postings - and expelled him from the Lawschool.

The more interesting part (and liable to challenge) is the banishment from campus (setting-up trespassing grounds for expulsion) for his preference on the Tinder account.

The American Enterprise Institute is a major (((neocon))) thinkthank, that conjures up ways to get poor White American boys to fight wars to “secure the realm around Israel” - i.e. Operation Clean Sweep/Project for a New American Century; and, in the case of the war in Afghanistan, to secure the opium cash crop for a corporation like the Sacklers to exploit; then if these White boys come home alive, albeit dismembered and/or mentally destroyed, they are prescribed the Sackler’s opioid product, Oxycontin, to deaden their pain until they are haplessly unable to head a family, eventually die off of an overdose or other indirect consequences of their trauma .... no worry, keep the borders open to replace their sacrifice with non-Whites.

AEI peddled fabricated stores for Purdue that Oxycontin is innocuous.

By Dr. Kevin MacDonald, December 6th 2019, at The Occidental Observer:

My 2017 article on the Sackler family and the unfolding opioid disaster (“Opioids and the Crisis of the White Working Class”) emphasized the corruption of the academic and medical establishment:

The AEI, a Major Neocon Thinktank, Implicated in the Sackler Family’s Opioid Crisis

As in The Culture of Critique, this was a top-down movement based ultimately on fake science created at the highest levels of the academic medical establishment, motivated by payoffs to a whole host of people ranging from the highest levels of the academic-medical establishment down to sales reps and general practitioner physicians.

Now Tucker Carlson has uncovered another angle intimately tied to our new Jewish elite: the American Enterprise Institute (AEI). The AEI figured prominently in my article “Neoconservatism as a Jewish Movement,” published in 2004:

Jewish intellectual and political movements also have typically had ready access to prestigious mainstream media outlets, and this is certainly true for the neocons. Most notable are the Wall Street Journal, Commentary, The Public Interest, Basic Books (book publishing), and the media empires of Conrad Black and Rupert Murdoch. Murdoch owns the Fox News Channel and the New York Post, and is the main source of funding for Bill Kristol’s Weekly Standard—all major neocon outlets.

A good example illustrating these connections is Richard Perle. Perle is listed as a Resident Fellow of the AEI, and he is on the boards of directors of the Jerusalem Post and the Hollinger Corporation, a media company controlled by Conrad Black. Hollinger owns major media properties in the US (Chicago Sun-Times), England (the Daily Telegraph), Israel (Jerusalem Post), and Canada (the National Post; fifty percent ownership with CanWest Global Communications, which is controlled by Israel Asper and his family; CanWest has aggressively clamped down on its journalists for any deviation from its strong pro-Israel editorial policies. Hollinger also owns dozens of smaller publications in the US, Canada, and England. All of these media outlets reflect the vigorously pro-Israel stance espoused by Perle. Perle has written op-ed columns for Hollinger newspapers as well as for the New York Times.

Neoconservatives such as Jonah Goldberg and David Frum also have a very large influence on National Review, formerly a bastion of traditional conservative thought in the US. Neocon think tanks such as the AEI have a great deal of cross-membership with Jewish activist organizations such as AIPAC, the main pro-Israel lobbying organization in Washington, and the Washington Institute for Near East Policy [which produces pro-Israel propaganda]. (When President George W. Bush addressed the AEI on Iraq policy, the event was fittingly held in the Albert Wohlstetter Conference Center.) A major goal of the AEI is to maintain a high profile as pundits in the mainstream media. A short list would include AEI fellow Michael Ledeen, who is extreme even among the neocons in his lust for war against all Muslim countries in the Middle East, is “resident scholar in the Freedom Chair at the AEI,” writes op-ed articles for The Scripps Howard News Service and the Wall Street Journal, and appears on the Fox News Channel. Michael Rubin, visiting scholar at AEI, writes for the New Republic (controlled by staunchly pro-Israel Martin Peretz), the New York Times, and the Daily Telegraph. Reuel Marc Gerecht, a resident fellow at the AEI and director of the Middle East Initiative at the Project for a New American Century [a neocon group], writes for the Weekly Standard and the New York Times. Another prominent AEI member is David Wurmser who formerly headed the Middle East Studies Program at the AEI until assuming a major role in providing intelligence disinformation in the lead up to the war in Iraq. His position at the AEI was funded by Irving Moscowitz, a wealthy supporter of the settler movement in Israel and neocon activism in the US.[2] At the AEI Wurmser wrote op-ed pieces for the Washington Times, the Weekly Standard, and the Wall Street Journal. His book, Tyranny’s Ally: America’s Failure to Defeat Saddam Hussein, advocated that the United States should use military force to achieve regime change in Iraq. The book was published by the AEI in 1999 with a Foreword by Richard Perle.

Given this history—and understanding the Sacklers’ modus operandi—I should not have been surprised that AEI has been involved in promoting false, Purdue-funded research that doubtless had a prominent role in creating the crisis. Here’s Tucker’s segment:

Kevin MacDonald
@TOOEdit
@TuckerCarlson links Purdue Pharma’s opioid epidemic to the American Enterprise Institute, a neocon outfit. No surprise really. An excellent example of the corruption of Conservatism Inc. https://twitter.com/ColumbiaBugle/status/1202820016145461249 …

The Columbia Bugle@ColumbiaBugle

Tucker Carlson on the Opioid Crisis & Corrupt Conservative Think Tanks Defending Big Pharma

“If you’re starting to suspect that the Conservative Establishment doesn’t really represent your interests, there’s a reason for that. They’re every bit as corrupt as you think they are.”
     
        video
        2:55 PM - Dec 6, 2019

In my 2017 article I described how Purdue funded research that found that Oxycontin was not significantly addictive.

Purdue essentially created a very large community of people who benefited financially from prescribing opioids. They set up and funded organizations that lobbied for more aggressive treatment of pain by treatment with opioids. Millions were funneled into organizations like the American Pain Society and the American Academy of Pain Medicine and Purdue’s own advocacy group, Partners Against Pain, as well as to medical professionals willing to provide data supporting the movement. Purdue hired an army of sales reps to promote opioids to all medical personnel, from doctors to physician assistants. A consistent part of the pitch was to minimize addiction rates. Purdue claimed addiction rates were less than 1% by cherry picking studies that did not examine the effects of long-term use. Other studies often showed much higher rates, as high as 50%. This misrepresentation was at the root of the $600M judgement against Purdue obtained by the US government.

Related at Majorityrights:

Big Pharma Pushes Opioid Epidemic on West Virginia, the Poorest and Whitest part of America 

       

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Trump signs executive order combating anti-Semitism