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Hillary Remains Clueless About Regulation on the 28th Anniversary of the Keating Five Meeting

By William K. Black | New Economic Perspectives | April 9, 2015

The Clintons’ Unlearned Lessons of the Keating Five Meeting

On April 9, 1987, twenty-eight years ago today, my colleagues and I from the Federal Home Loan Bank of San Francisco (FHLBSF) met with five senators at the behest of the most notorious savings and loan (S&L) fraud – Charles Keating. Keating was looting Lincoln Savings through classic “accounting control fraud” techniques. Our examiners and enforcement investigation led by Anne Sobol (detailed from Litigation Division) had discovered and documented some of Keating’s worst frauds. Keating, desperate to prevent our recommendation that the federal agency place Lincoln Saving into conservators (removing Keating from power), used the five senators to try to pressure us into taking no enforcement action against Lincoln Savings and its officers for the largest violation of rules in the history of our agency.

The agency’s statutory authority to place a state-chartered S&L like Lincoln Savings into conservatorship had lapsed so Bank Board Chairman Edwin Gray could not act on our recommendation until Congress passed legislation restoring our power. The five Senators, of course, would have a great deal to say about whether and when that legislation was passed. Because we refused to give in to their intimidation, the Keating Five helped ensure that the power to remove Keating from power was not passed until after Gray’s term ended – and President Reagan’s cynical secret deal with Speaker of the House James Wright ensured that Reagan would not reappoint Gray.

Gray’s successor, M. Danny Wall, was a Republican political staffer whose boss, Senator Jake Gran, after a single meeting with Keating had his number and refused to ever meet with him again. But the lesson Wall took from seeing Gray reduced to roadkill at the hands of Speaker Wright and the Keating Five was to never block the road when powerful thieves and their political cronies are racing down that road and eager to run you over.

Wall first took the unprecedented step of removing our (the FHLBSF) jurisdiction over Lincoln Savings and gave Keating a sweetheart deal. Wall’s critical, Neville Chamberlain-like order to his senior staff to reach an “amicable resolution” with Keating (which, given Keating, meant “surrender”) occurred immediately after a meeting with Keating. Wall’s meeting with Keating, in turn, occurred immediately after Keating met with Senator Glenn and Speaker Wright. Keating and Wright used their after-lunch meeting to plot how to get me fired and sued. Keating hired private investigators twice that we know of to try to find dirt on me.  Fortunately, I live a very Midwestern personal life. Keating eventually sued me for $400 million.

Keating, being Keating, started his meeting with Wall by noting that he had just met with Speaker Wright and Senator Glenn. Keating was capable of being subtle, but he preferred smash mouth football, so his next line, referring to the Speaker, was that “There’s someone you would have much better relationships with if you took care of your red-headed lawyer in San Francisco.” I still had bright red hair (and beard) at that time.

After getting rid (he thought) of the accursed FHLBSF regulators, Wall proceeded to force Joe Selby, the Nation’s most respected financial regulator, to resign as our top supervisor for Texas.  Selby’s sin was being a vigorous regulator. The Texas frauds targeted him for removal and successfully enlisted Speaker Wright’s enthusiastic support through contributions and by telling Wright that Selby was gay. Bank Board Chairman Gray, who personally recruited Selby and Mike Patriarca because of their reputations as the Nation’s best financial regulators, had placed Selby and Patriarca in charge of the two states with the worst fraud problems (Texas and California). Wall, while still a congressional aide, had urged Gray to fire Selby to placate the Speaker. Gray refused. Wall now publicly took “credit” for forcing Selby to resign or be fired.  Within months, Wall had removed or sidelined the Nation’s best financial regulators.

Keating’s successful extortion of Wall to remove the FHLBSF’s jurisdiction over Lincoln Savings did not work out well for Wall and the Keating Five for Keating used the sweetheart deal to intensify his looting of Lincoln Savings and its customers which led it to become the most expensive financial institution failure in U.S. history (at what now seems a quaint $3.4 billion), to sell worthless (and uninsured) junk bonds of Lincoln Savings’ insolvent holding company, and to target tens of thousands of widows for those sales. My extensive notes of the Keating Five meeting led to a Senate ethics investigation of the Keating Five. The Democratic Party Senate Committee colleagues on that investigation spent most of their energy attacking us, the regulators, for the high crime of criticizing Senators for aiding the Nation’s most notorious fraud loot the S&L and rip off widows. (Senators Cranston, Riegle, Glenn, and DeConcini were Democrats. Senator McCain was the lone Republican.)

The type of violations we had documented were invariably fatal. Keating had recruited the Keating Five through political contributions and through hiring Alan Greenspan as a lobbyist. Greenspan also served Keating as his outside economist to attempt to prevent the agency from adopting effective regulations to restrain looting by the Keatings of the world. In that capacity Greenspan had famously claimed that Lincoln Savings posed no foreseeable risk of loss to the FSLIC insurance fund.  Greenspan was slightly (as in 180º) off as I just explained.

But here’s the thing – given their ages, the lessons of the S&L debacle should have been the formative experiences for everyone involved in the most recent crisis. Wall resigned in disgrace in December 1989 after months of House hearings. The Senate ethics committee hearings on the “Keating Five” took place in 1990 and 1991.

“These [Senate ethics committee] hearings would take place from November 15 through January 16, 1991.[31] They were held in the Hart Senate Office Building‘s largest hearing room.[51] They were broadcast live in their entirety by C-SPAN, with CNN and the network news programs showing segments of the testimonies.[51] At the opening of the hearings, as The Washington Post would later write, ‘the senators sat dourly alongside one another in a long row, a visual suggestive of co-defendants in a rogues’ docket.’[52] Overall, McCain would later write, ‘The hearings were a public humiliation.’[51]

The committee reported on the other four senators in February 1991, but delayed its final report on Cranston until November 1991.”

Greenspan’s role was discussed in both the House and Senate hearings.

“Progressives” tend to roll their eyes in disgust at the entire “Whitewater” investigation, but two points are worth noting in terms of what the scandal should have taught the Clintons and their appointees. First, James McDougall, the CEO, looted Madison Guaranty through classic accounting control fraud techniques. (He was acquitted by a jury of one series of alleged bank frauds and convicted subsequently of other band frauds.)

James Clark, the Bank Board examiner-in-charge (EIC) of the 1986 examination of Madison Guaranty, testified in front of Congress about McDougall’s domination of the S&L and his massive multiple frauds. Clark’s testimony is devastating.

Second, McDougall’s frauds were made possible by the criminogenic environment created by the three “de’s” – deregulation, desupervision, and de facto decriminalization – and McDougall was brought to book when the regulators and prosecutors learned their lessons and got rid of the three “de’s.” The FSLIC was appointed the conservator for Madison Guaranty in February 1989.

Then first lady Hillary Clinton received substantial adverse publicity about her role not simply as an investor with but also as an attorney for the S&L.  She and her husband were publicly humiliated by the sex aspects of the investigation. Both Clintons, therefore, would logically have come out of the experience with a strong appreciation of how dangerous accounting control frauds are, why bank CEOs pose by far the greatest risk of fraud and do so through accounting fraud techniques (the fraud “recipe” for a lender) that require the lender to intentionally make large numbers of bad loans. This, in turn, requires the CEO to suborn the underwriting and internal controls. The Clintons should have had an acute appreciation of how critical underwriting is to avoiding banking crises. They observed first hand that the S&L debacle was driven by an epidemic of accounting control fraud.

Bill Clinton announced his candidacy for the Democratic Party’s nomination for President on October 2, 1991 – while the Senate Ethics committee was still wrapping up its investigation of the Keating Five. The S&L debacle was the defining scandal of the Clinton’s era and it was fresh in their minds as they made the run for the nomination and the presidency. We were convicting several hundred banksters and their cronies annually as Clinton prepared to run and actually ran his first campaign for the nomination and the presidency.

The same logic applies to Greenspan. He had to read our examination report and my report on why Lincoln Savings would be a disaster. My report emphasized the key role of its deliberately pathetic underwriting. Similarly, our presentation to the Keating Five emphasized the non-existent nature of Lincoln Savings’ underwriting on multi-million dollar loans. This was reprised in our testimony before the House and the Senate about Keating’s looting of Lincoln Savings.

But we know what the Clintons, their appointees, and Greenspan (originally a Bush I appointee) learned from the S&L debacle – nothing, or worse than nothing. Greenspan told the sycophantic author of Maestro that he would have done, said, and wrote the same things for Keating now that he did then based on the “facts.” I discuss later Greenspan’s actual approach to the “facts.”

Clinton’s Goal: Destroy the “Culture of Regulation”

But the Clintons and their bankster allies learned something far worse – the need to push the three “de’s” to ensure that never again would banksters and their political cronies be prevented from looting “their” banks or be held accountable for their looting. Bill Clinton, in his first major meeting with financial regulators (from the Office of the Comptroller of the Currency (OCC)) as President, chose to make these revealing remarks. One part of government most upset Clinton – the examiners who checked for threats to the safety and soundness of banks and businesses.

“The federal government to many people is not the President of the United States, it’s the person who shows up on the doorstep to check out the bank records, or the safety in the factory, or the integrity of the workplace, or how the nursing home is being run. I believe that we have a serious obligation in this administration to work with the Congress to reduce the burden of regulation and to increase the protection to the public. And we have an obligation on our own to do what we can to change the destructive elements of the culture of regulation that has built up over time….”

The federal examiners that expose the banks, workplaces, and nursing homes that engage in fraud or abuse provide a vital and unique service not only to the public, but also to honest competitors by blocking the “Gresham’s” dynamic that “control fraud” produces (bad ethics drives good ethics out of the markets). Clinton, however, is unaware of this dynamic. This type of regulation does not (net) “burden” honest businesses – it makes it possible for them compete by relieving them of the impossible burden of competing with control frauds. Clinton sees regulation not as episodically failing, but as the inherently flawed product of a “destructive” “culture of regulation.”  He started the process that replaced a “culture of regulation” with what even the anti-regulators now concede is the “culture of corruption” that dominates Wall Street and the City of London.

Clinton then singled out the worst examiners – bank regulators.

“When I was out in New Hampshire in 1992, I heard more grief about the regulation of the private sector by the Comptroller of the Currency than any other single thing. And now every time I go to New England, they say, we’re making money, we’re making loans, and we can function, because we finally got somebody down there in Washington who understands how to have responsible and safe banking regulations, and still promote economic growth. I hear it every time I go up there, and I thank you, sir, for what you’ve done on that. (Applause.)”

Vice-President Gore had already praised the OCC head, Gene Ludwig, for embracing the three “de’s.” Gore was particularly impressed that the bankers’ lobbyists were praising Ludwig. Readers will vary on what they infer from that praise, but Gore thought the only possible inference was that Ludwig’s deregulatory policies were superb.  When the bank lobbyists are praising you as a financial regulator you know you are on a path to disaster for the industry and the public. Bank lobbyists do not represent the interests of “banks” or their shareholders. They represent the interests of the banks’ controlling officers and when those CEOs create a culture of corruption the lobbyists will push policies that will make it easy for the CEOs’ to loot “their” banks with impunity through the “sure thing” of accounting control fraud.

Clinton launched an unholy war against effective financial regulation. He began the process, and bragged about, the massive cuts in the FDIC staff that eventually (Bush made it worse) led to the FDIC losing over three-quarters of its total staff and the OTS over half of its staff. FBI agents were reassigned from prosecuting the S&L frauds and such prosecutions largely ended in 1993. Clinton’s “reinventers” ordered us to refer to the industry as our “customer” and to treat them as if they were our “customer.”  Clinton’s reinventers eliminated the most important rule – the underwriting rule. They replaced it with a deliberately unenforceable “guideline” that was exceptionally criminogenic and would greatly intensify the epidemic of liar’s loans. This rule change was actually far more damaging than the more infamous statutory acts of deregulation that Bill Clinton, Rubin, and Greenspan pushed in order to essentially repeal the Glass-Steagall Act and pass the Commodities Futures Modernization Act of 2000 to not only kill Brooksley Born’s effort to protect the Nation and the world from financial derivatives, but ensure that no regulator in America would have any ability to regulate effectively massive classes of derivatives.

Clinton’s key economic appointees, and Gore, were fervent proponents of the three “de’s.” They came from banking and represented the interests not of banks, but of the banksters. Robert Rubin, the former head of Goldman Sachs and Clinton’s Treasury Secretary exemplified the bankster representing the interests of his peers. In particular, they pushed the global regulatory “race to the bottom” – warning that any effective financial regulation would drive the bankers to relocate to the City of London.

While anyone open to reality would have learned the grave dangers of the three “de’s” and the enormous value of effective regulation, there were three excellent reasons for the Clinton/Gore administration to be closed to reality and to embrace the three “de’s” and the banksters. First, it is not pleasant to be the subject of a government investigation and a conservatorship for your friend, business partner, and legal client’s S&L. It is perfectly human to react by being enraged at regulators. It was effective banking examiners who stopped McDougall’s frauds, conducted the bulk of the investigations that led to McDougall being convicted, and led to the exposure of the “Whitewater” “scandal.” From the Clintons’ perspective, that represented “Strike One, Strike Two, Strike Three – You’re Out!”

Second, the Clintons and Gore were leaders of the Democratic Leadership Council (DLC). The DLC’s creed was that the three “de’s” were divinely inspired. It was revealing that Clinton chose Gore as his running mate. Gore provided neither geographic nor ideological diversity to the ticket. Clinton did not want ideological diversity. He wanted a loyal junior partner who shared his disdain for regulators. It would require unusual independence of thought for Clinton and Gore, in their moment of electoral triumph, to say: “we’ve been observing the S&L debacle and thinking hard about its implications for our anti-regulatory policies and we have been forced to conclude that the DLC dogmas we have long championed about the virtues of the three ‘de’s’ are not simply incorrect but dangerous to the Nation.” Humans are more likely to do what Clinton and Gore did – religiously ignore the lessons of the S&L debacle and surround themselves with zealous advocates of the three “de’s.”

Third, the DLC had a special place in its heart for big finance. Big finance had the big money to make contributions, but it also had CEOs who were often at least moderate on social issues. These big contributors had been there in the DLC’s corner since its founding in 1985. How likely was it that Clinton and Gore, its two greatest DLC beneficiaries, would turn on big finance in their moment of triumph?

Hillary Clinton Learned the Same Perverse Lessons as Bill about Financial Regulation

I thank Samantha Lachman for her April 9, 2015 column entitled “As Clinton Tries To Win Over Progressives, She Might Want To Distance Herself From This Economic Adviser.” I hope that my column will not seem too harsh, but I feel the need to point out the key ways in which my analysis differs from Lachman’s – each of which adds to her thesis.

Lachman’s column explains that Hillary Clinton chose Robert Hormats as one of her most prominent economic advisors. Lachman points out that Hormats is a rabid deficit (and war) hawk, wants to cut the safety net, supports the faux “free trade” agreements that the Rubin-wing of the Democratic Party constantly seeks to inflict on the Nation, and favors aggressive deregulation. Lachman warns that this will cause progressives to wonder whether they should support Hillary Clinton. Lachman’s sole substantive argument against Hormats’ support for deregulation is that if she were to adopt his policy recommendations it would inhibit efforts were H. Clinton to be elected to reduce inequality.

“Hormats, who was the undersecretary for economic, energy and environmental affairs from 2009 to 2013, has advocated for the deregulatory approach that was begun by the Reagan administration and continued by former President Bill Clinton. Progressives say this deregulatory strategy contributed to widening income inequality….”

Lachman is correct about the content of Hormats’ policy positions. But here are the key factors I would urge readers (and potential campaign supporters and voters) to consider that arise from these positions.

  1. The problem with Hormats is not that he will upset “progressives.” The problem is that he is incompetent, dishonest, and supports policies that have devastated and will continue to devastate our Nation and the people of the world. Hormats has been wrong on every important economic issue – for decades. That should upset everyone regardless of their politics.

The insoluble problem is that every time Hormats’ policies cause a disaster and his dogmas are falsified he doubles-down on his failures. He does so because he is so dogmatic and intellectually dishonest that he refuses to learn from even his most catastrophic mistakes – and because his policy disasters enrich him and his peers – the elite banksters.

The enormous problem with Hormats’ policies is not that his policies “contributed to widening income inequality” (though they did) – but that they blew up the financial system, our Nation’s economy, and the global economy. In the U.S. 9.3 million Americans lost their jobs and roughly six million jobs that would have been created absent the Great Recession were not created. The leading economic estimate is that the U.S. will lose $24 trillion in GDP as a result. The job and GDP losses are far larger in Europe due to the insanity of self-inflicted austerity. If Hormats had been able to secure his desire to inflict austerity on America our job and GDP losses would have at least doubled.

Worse, Hormats’ policies blew up the financial system because they made it so “criminogenic” that it produced the three great fraud epidemics by bankers (appraisal, “liar’s” loans, and secondary market fraud) that hyper-inflated the bubble and caused the catastrophic fraud losses that drove the financial crisis.

Worse still, while he had a front row seat to these frauds epidemics as Goldman Sach’s Vice Chairman, he not only failed to warn the Nation about them but encouraged ever more criminogenic heapings of the three “de’s” – deregulation, desupervision, and de facto decriminalization.

And, still worse, Hormats continues to push for those same policies because while they were a catastrophic failure for our Nation and the world, they make him and his peers (many of them criminals) immensely wealthy – and will do so in the future when his policies again crush our Nation in an orgy of fraud by the banksters. Hormats doubtless supports (formal) legal civil rights (as opposed to the reality), which makes him a member in good standing of the Rubin-wing of the Democratic Party, but his economic policies are to the right of the UK Tories’ policies that Paul Krugman correctly eviscerates for their economic illiteracy.

I will discuss only two examples of Hormats’ incompetence as an economist, neither of which Lachman explores. First, he championed and aided the “Scandalous Seven.”

  1. Hormats’ continuing support for the three “de’s” and his support for President Clinton’s reappointment of Alan Greenspan and President Obama’s reappointment of Ben Bernanke to head the Fed. There are seven U.S. public officials who embraced the three “de’s” and are most culpable for creating and refusing to stop the criminogenic environment that produced the three most destructive epidemics of financial fraud in history. Those fraud epidemics hyper-inflated the bubbles, drove the financial crisis, and caused the Great Recession.  Clinton, Gore, Rubin (with a dishonorable mention to his protégé Larry Summers), Greenspan, President George W. Bush, Bernanke, and Timothy Geithner are the U.S. officials who failed so spectacularly in the run-up to the crisis that they deserve their inclusion on my list of the Scandalous Seven. I am talking here about the public sector. The elite bankers who led the fraud schemes are even more culpable for they were made wealthy by their fraud schemes.  

The terrible thing about the seven officials is that none of them had to be bribed in any overt fashion that could ever lead to even an investigation much less a prosecution. (The finance industry, of course, finds ways to richly reward its political cronies.) The Scandalous Seven felt wonderful about their actions in creating and then ignoring the criminogenic environment. Like Hormats, their embrace of the three “de’s” was open, not furtive. Three of the officials were Republicans and four were from the Rubin-wing of the Democratic Party. Geithner is a special case who became a nominal Rubin-Democrat to get his position as Treasury Secretary in the Obama administration.

Lachman’s discussion of the Hormats’ support for Greenspan and deregulation emphasizes that Greenspan “is loathed by progressives.”

“Similarly, in a discussion of whether former Federal Reserve Chairman Alan Greenspan should be reappointed by then-President George W. Bush, Hormats said Greenspan, who is loathed by progressives, had done ‘a terrific job.’

‘He enjoys respect on both Main Street and Wall Street,’ Hormats said. ‘In short, he’s really been one of the great financial leaders in American history.’

In the same conversation, Hormats argued that while Greenspan had facilitated a positive economic climate, other factors, including deregulation, were also responsible for private sector growth.

‘[Greenspan] has power, but what’s really driving this economy is the dramatic change that’s taking place in the private sector in this country,’ he continued. ‘We’ve had government deregulation, which has held.’”

A technical note, Lachman is quoting from an NPR transcript and the audio is no longer available on the web site. I suspect that the last word, “held,” should read “helped.”  Lachman does not explain why “progressives” loath Greenspan – or why such loathing should be limited to “progressives.” If “progressives” loath Greenspan for bad reasons then this represents a defect on their part, not a failure by Greenspan or Hormats. In the same interview Lachman is quoting, Robert Reich issued a vibrant endorsement of Greenspan’s reappointment by Clinton that included one of the funniest (unintentional) descriptions of Greenspan: “Alan Greenspan is a pragmatist, an empiricist.” When it came to regulation to stop the fraud epidemics, I show below that Greenspan was still Ayn Rand’s faithful cultist. He was dogmatic and rather than an “empiricist” he religiously refused to allow real data to be presented.

Here are the primary reasons Greenspan (and Bernanke) make my list of the Scandalous Seven.

  • The Fed had the unique authority under HOEPA (enacted in 1994 under Clinton) to ban all “liar’s” loans – regardless of whether they were originated by federally insured lenders. As the name implies, such loans were known to be pervasively fraudulent and it was known that lenders and loan brokers overwhelmingly put the lies in liar’s loans. Greenspan, and then Bernanke, refused to use this authority to stop an obvious, massive epidemic of “accounting control fraud. The FBI’s senior agent in charge of dealing with mortgage fraud, Chris Swecker, warned in September 2004 that there was an “epidemic” of mortgage fraud developing and predicted that it would cause a financial “crisis” – and Greenspan refused to stop the fraud epidemic. Greenspan’s colleague, Governor Gramlich, warned Greenspan of the developing epidemic of bad loans and urged him to send the Fed examiners in to the sleazy bank holding company affiliates that were pumping out hundreds of thousands of fraudulent loans. Greenspan refused not only to stop the fraudulent loans – he refused to send the examiners in to find the facts. When Richard Spillenkothen, the Fed’s top supervisor, requested to brief the full Fed board on the fact that every major bank involved with Enron had eagerly aided and abetted Enron’s accounting fraud and tax evasion the senior leadership of the Fed was enraged – at its supervisors! While Spillenkothen does not name individual names, this could not have occurred without Greenspan’s active support.

When another Fed supervisor, Sabeth Siddique, several years later presented the Fed board and Regional Bank Presidents with data from the Nation’s largest banks showing that they were moving massively into making loans that were known to be pervasively fraudulent and exceptionally likely to default the Fed split into a civil war in which the supervisor was subjected to “personal” attacks – for providing data from the banks to the Fed!

“Some people on the board and regional presidents . . . just wanted to come to a different answer. So they did ignore it, or the full thrust of it,” [Federal Reserve Governor Bies] told the Commission.

Within the Fed, the debate grew heated and emotional, Siddique recalled. “It got very personal,” he told the Commission. The ideological turf war lasted more than a year, while the number of nontraditional loans kept growing….” (FCIC 2011: 20-21).

This is significantly insane. The Fed leadership, under Greenspan and Bernanke, was so dogmatic and passionate in its hatred for regulation, supervision, enforcement, and prosecution and so rabid in its faith in “markets” and the inherent sainthood of financial CEOs that it conducted an unholy war against its own supervisors and reality.  Simply providing data from the industry to the leaders of your agency became a CLG for Fed supervisors (“career limiting gesture”).

It is important to recall four other matters in this context. We (OTS-West Region) figured out liar’s loans in 1991 – and drove them out of the S&L industry, which was the limits of our statutory powers (unlike the Fed after the passage of HOEPA in 1994). We got it right because unlike Greenspan and Bernanke we were reality-based regulators eager to get the facts. So we listened to our examiners (as we had in 1984 about prior epidemics of accounting control fraud). The loans were not yet called “liar’s” loans by the industry and there was very limited experience with “low documentation” loans but our examiners realized that failing to underwrite the borrower’s income had to lead to “adverse selection” and produce severe losses. We realized that only fraudulent CEOs running accounting control frauds would make liar’s loans.  Greenspan and Bernanke had no need to reinvent the supervisory wheel and the disastrous loss data on the 1990-1993 experience with liar’s loans was available to them.  Banning liar’s loans was one of the easiest calls any regulatory could make. There was zero upside to liar’s loans – they harmed every honest borrower.

The second fact is that Greenspan was no virgin when it came to accounting control fraud. As I explained above, Charles Keating, the most notorious S&L fraud, used him as a lobbyist to recruit the five U.S. Senators who became known as the “Keating Five” when they met with us on April 9, 1987.

The third fact is that in addition to the FBI’s 2004 warning that the developing mortgage fraud “epidemic” would cause a financial “crisis” if it were not stopped the appraisers had created an extraordinary warning in the form of a public petition explaining that fraudulent lenders were deliberately creating a “Gresham’s” dynamic (in which bad ethics drives good ethics from the markets and professions) by extorting appraisers’ to inflate the value of homes pledged as collateral – something only a fraudulent bank or loan broker officer would do. The following astonishing fact is revealed (but also buried) well into the report of the Financial Crisis Inquiry Commission (FCIC): “Swecker, the former FBI official, told the Commission he had no contact with banking regulators during his tenure” (FCIC 2011: 164, emphasis added). As a former financial regulator I am almost reduced to tears every time I read that sentence.

  1. Put yourself in the position of Greenspan, Bernanke, Geithner, and Bush – all in office when Swecker made his very public warnings in the media and his Congressional testimony in 2004. There is no possible excuse for their total refusal to act against a crime wave led by elite banksters. Worse, their obscene attacks on supervisors to prevent them from presenting these senior officials with the reality of the three raging fraud epidemics demonstrates that they were not simply cowards unwilling to stop a wave of crime by their powerful cronies. These four officials’ war on the facts was so intense because they knew that if they ever let reality intrude it would falsify their ideological dogmas and render disgraceful their slavish lifetime devotion to the banksters.

The fourth fact is that within months of Bernanke’s ascendancy to running the Fed he knew from the MARI/MBA report that the available data showed that 90% of liar’s loans were fraudulent. He refused to use HOEPA to ban liar’s loans.

  1. Greenspan also makes the list for his dogmatic position expressed to CFTC Chair Brooksley Born that preventing fraud was never a legitimate basis for regulation.
  1. The real problem is the Clintons.

First, H. Clinton chose Hormats – in 2009 – to be her key economic adviser at State at a time when, for the reasons I just explained, it was inescapable that he three “de’s” (championed by Hormats) had produced the three most damaging financial fraud epidemics in world history, destroyed the global financial system (it was resurrected only by massive public bailouts by the Treasury and the Fed), and caused the Great Recession.

Hormats was still pushing the three “de’s” under H. Clinton. She knew this before she recruited him to be one of her top lieutenants at State. Hormats proceeded to continue to shill for the three “de’s” at State – with no known reprimands from H. Clinton. As I have often noted, economics has the very useful concept of “revealed preferences.” Lachman’s focus is on Hormats’ revealed preferences, but the key is that we are observing H. Clinton’s true preference. She picked a known, serial incompetent who was a disaster in his supposed area of expertise (finance) and so dogmatic, intellectually dishonest, and dedicated to the interests of his fellow 1% that he continues to double-down on his failures. Lachman warns H. Clinton that to curry favor with progressives “She Might Want To Distance Herself From This Economic Adviser.” But that is not what any progressive should want. Progressives (and everyone else) should be demanding that she repudiate, not merely “distance herself from” Hormats’ dogmas. It does nothing good for the world if H. Clinton is able to deceive people by making it appear that she has ditched disastrous deregulatory dogmas by keeping Hormats at a “distance” while she actually maintains those same dogmas.

What H. Clinton should be doing, in alliance with Senator Warren, is leading the charge demanding that the Obama Administration honor the whistleblowers who made public the massive frauds by Citi, JPM, and Bank of America’s senior managers and prosecute the banksters. That would be great substantively for America and smart politics. The Clintons have been conspicuously silent about the banksters and the fraud epidemics they led that drove our crises. She could fix that in 15 minutes – if she wished to.

Second, as I explained above, the Clinton administration enthusiastically embraced the three “de’s” through the “Reinventing Government” movement. Al Gore led the charge. I have written about this extensively. Reinventing government was expressly designed not to prosecute elite corporate criminals. Yes, the Bush administration that followed was even worse, but it was Clinton who began what Tom Frank aptly terms The Wrecking Crew. I got out as a regulator when the “Reinventers” ordered us to refer to the industry we were supposed to regulate as our “customer” – and to treat banks and bankers as if they were “customers.” I personally witnessed this directive, and the administration’s chief goon in charge of its oxymoronic “Reinvention” proudly cites that directive as one of his top accomplishments and prints praise of his supposed bravery in insisting on that directive.

Hormats was not a powerful adviser to the Clinton administration. Bob Rubin, Goldman Sachs’ CEO, was the paramount adviser on economic matters. Hormats is simply one of dozens of Rubinites that infested the Clinton and Obama administrations. But blaming the three “de’s” on Rubin is unfair, for B. Clinton and Gore were sincerely and zealously committed to deregulation, desupervision, and the de facto decriminalization of elite white-collar crime. Neither was seduced by Rubin. H. Clinton knows as much as any person alive about the Rubinites’ pathologies. She recruited Hormats because he was a Rubinite, not because he deceived her.

At one point, all six of Obama’s most senior economic advisers where Rubinites. (They are still overwhelmingly Rubinites.) Obama and H. Clinton have chosen Rubinites as their dominant economic advisers not through some sinister, secret infiltration engineered by Rubin, but because Obama and the Clinton represent the Rubin-wing of the Democratic Party.

Third, H. Clinton chose Hormats as a top adviser not because of his “expertise” – she knows he has been consistently, horrifically wrong about every important economic policy issue on which he has opined in the last 20 years – but as a signal to the donors, the elite bankers. The signal is that I have always been with you and will always be with you, regardless of the bleating of the Democratic-wing of the Democratic Party.

I have explained Hormats’ incompetence when it came to regulation. I will add briefly related displays of incompetence in what he purports to be his fields of expertise.  First, he wants to cut the already inadequate safety net for the purpose of reducing budget deficits. Consider his testimony before the House Budget Committee on June 26, 2007. The setting was a friendly one. The Democrats controlling the Committee held a hearing to embarrass the Bush administration. The Democratic meme was that unlike virtuous Clinton, Bush had taken us deep into deficit – and much of our national debt was owed to the Chinese (cue dramatic, pulsating minor key music foreshadowing disaster). I know that many “progressives” would think that such a hearing was fantastic – good politics plus hoisting the Republican’s fiscal conservatives on their own petard.

I’ll simply refer readers to my colleagues’ explanations of why the “Red Peril” fearmongering is nonsense. It is terrible economics and Democrats shouldn’t try to score political points by spreading economic lies – even if the Democrats are right that the Republicans do so routinely.

I think that the hearing and Hormats’ testimony demonstrated the idiocy and dishonesty of many Democrats. Recall the date of the hearing – the U.S. was racing into the Great Recession. It officially began in the Fourth Quarter of 2007. By the time Hormats testified roughly five nonprime lenders were failing every week and housing prices had been falling for over a year in many markets. The U.S. needed to be running far larger federal budget deficits to begin to counter the coming recession. Instead, we had Hormats testifying that July 26, 2007 would be a great time for the U.S. to simultaneously “boost savings at home,” cut safety net payments (Social Security, Medicare, and Medicaid), and return the federal budget to surplus. Each of these actions would have further reduced already inadequate demand and caused the Great Recession to come sooner, be deeper, and last far longer – because that is what austerity does when you add it to a recession.

Hormats:  Not Cutting Grandmother’s Social Security Will Get Her Nuked

Hormats was just getting started with his plan to ruin America. He claimed that we had to adopt these three self-destructive policies that would hurl us into an earlier, deeper, and longer recession (and therefore increase the budget deficit) to protect ourselves from a terrorist WMD attack.

“Because we know that one of the stated objectives of terrorists is to cause massive disruption in the U.S. economy, such financial vulnerabilities could lead potential perpetrators to feel that they can do a great deal of damage not simply by their initial act, but also because of the secondary and tertiary economic disruptions that would occur because of the subsequent turmoil in a more vulnerable financial environment. In finances as in military affairs, vulnerability frequently invites aggression.”

Hormats’ position was refuted by an earlier speaker that looked a whole lot like Hormats who only about 30 seconds earlier testified that “It is worth recalling that the country had recorded four years of budget surplus before 9/11….” Indeed, it would have been “worth recalling” by Hormats who only 30 seconds later claimed that we could greatly reduce the risk of terrorist attacks if we ran budget surpluses. Hormats displayed at this hearing that he is not simply incompetent, he is a shill willing to say anything, no matter how loony, to please the Democratic politicians who might again make the mistake of appointing him to office.

In the same testimony, Hormats also indicated that he is a “finance expert” who is clueless about the actual financial system of a nation with a sovereign currency, i.e., the U.S.

“Alexander Hamilton recognized from the very beginning that America’s financial strength was vital to its security. If the country did not manage its finances well, he reasoned, it would not have the resources needed to defend itself in time of war and it would lose credibility in the eyes of creditors, making borrowing in time of war or other national emergency all the more difficult.

Over two centuries have passed since Hamilton held office, but these principles are just as relevant today.”

Well, no, not even close. On a more technical detail, his “Red Peril” scenarios assume that the U.S. can only fund itself through issuing bonds. My colleagues have explained in loving detail in NEP why Hormats’ claims demonstrate that he does not understand even the most basic aspects of how money actually works. I do not demand that Hormats agree with MMT, but he does have to understand the actual operations by which money can be created to be minimally competent in his field. As I explained, one does not make a Rubinite an adviser because one is seeking competence.

April 20, 2015 Posted by | Corruption, Timeless or most popular | , , , , , , , , , , | 1 Comment

Slain Ukraine Politician Led the Picketing of US Embassy in Kiev a Day Before Killed

Russia Insider | April 20, 2015

A day before he was murdered on April 15th Oleg Kalashnikov had organized the protest at the US Embassy in Kiev on April 14th.

Oleg Tsarov, his collegue from the former Party of Regions and a fellow dissident Ukraine politician wrote on his Facebook:

I BLAME THE US FOR THE DEATH OF MY FRIEND

Another one of my friends, Oleg Kalashnikov, was killed. I’m very sorry. We were friends. I knew his family. Repeatedly I tried to convince him to leave Kiev. In response, he told me that if everyone leaves, then who will fight.

I constantly tell my friends, remaining in Ukraine, that the organization of protests is futile. This power does not argue with its opponents, it eliminates them. Many of my friends were arrested, some disappeared, others were killed.

Oleg was one of the organizers of the last protest at the U.S. Embassy: people gathered and stood in silence outside the Embassy. Oleg didn’t leave, did not give up. He died. He was killed.

The latest (April 14th) demonstration at the US Kiev Embassy:

April 20, 2015 Posted by | Full Spectrum Dominance, Solidarity and Activism, Video | , | 1 Comment

Everything you ever wanted to know about the OKC bombing in under 5 minutes

OKC – A Conspiracy Theory

Corbett Report | April 19, 2015

TRANSCRIPT AND SOURCES: https://www.corbettreport.com/?p=14347

April 20, 2015 Posted by | Deception, False Flag Terrorism, Timeless or most popular, Video | , , , | Leave a comment

Contrary to mainstream media portrayals, Latin America remains wary of U.S. government

By Gabriel Hetland | NACLA | April 20, 2015

Mainstream media accounts of the seventh Summit of the Americas, held last weekend in Panama, provide a deceptively rosy picture of U.S.-Latin American relations, echoing the official viewpoint of the U.S. government. In the mainstream account, the U.S. government’s decision to alter its policy towards Cuba by reestablishing diplomatic relations and working to ease—though not end—the fifty-four-year-old U.S. embargo has dramatically transformed U.S.-Latin American relations. At the summit, President Obama declared, “The days in which our agenda in this hemisphere presumed that the United States could meddle with impunity, those days are past”.

Obama is right: the era of uncontested U.S. domination in Latin America is over. This is not, however, because the U.S. has suddenly realized that Latin American nations deserve to be treated with respect and dignity. While the region’s leaders have universally praised Obama for his recent actions with respect to Cuba, Latin America remains profoundly wary of the United States. This is not simply because of “history,” as Obama would have the world believe. Rather, it is because of Washington’s continuing efforts to assert its dominance over Latin America. The most flagrant recent example of this came on March 9, 2015, when the White House made a strategically disastrous decision to label Venezuela an “unusual and extraordinary threat to U.S. national security.”

Media accounts of the Summit of the Americas acknowledge that Latin American leaders have expressed displeasure with this action. The New York Times reported that, “Several Latin American nations have criticized recent United States’ sanctions against several Venezuelan officials it has accused of human rights violations.” This statement, however, is so deceptive that it warrants an official retraction by the Times. “Several” Latin American nations did not criticize U.S. sanctions on Venezuela. Latin American nations universally condemned U.S. sanctions against Venezuela. On March 26, 2015, the Community of Latin American and Caribbean States (CELAC), which represents all 33 countries in Latin America and the Caribbean, issued a statement rejecting U.S. sanctions on Latin America and calling for the reversal of the executive order issued on March 9. As Eva Golinger wrote, “Even staunch U.S. allies such as Colombia and Mexico signed onto the CELAC statement.” In a remarkable display of how out of touch the U.S. government has been when it comes to Venezuela, even the anti-government opposition in Venezuela rejected the view that Venezuela constitutes a threat to the US, issuing a statement that, “Venezuela is not a threat to any country.

The U.S. government deserves a modicum of measured praise for its recent decision to backtrack on its criticism of Venezuela. In the lead-up to the Summit, a White House official declared that, “The United States does not believe that Venezuela poses some threat to our national security”. This about-face is significant, since it demonstrates the truth of Obama’s statement that the U.S. can no longer “meddle with impunity” in Latin America.

It is important to understand why this is the case.

It is not because the U.S. has stopped trying to “meddle with impunity.” In addition to the recent sanctions on Venezuela, there are many other recent examples of U.S. “meddling” in Latin America. For instance, the US has vocally and openly supported the Venezuelan anti-government opposition’s strategy of regime change. The George W. Bush administration supported the 2002 coup against Hugo Chávez. Both the Bush and Obama administrations have provided the opposition millions of dollars on an annual basis. The Obama administration provided tacit support for the 2009 coup in Honduras, first refusing to label president Manuel Zelaya’s unconstitutional removal from office a “coup,” and then legitimizing a post-coup government led by the forces that orchestrated Zelaya’s removal. Even though most Latin American nations refused to recognize the results of an election widely viewed as fraudulent, the White House gave the government its stamp of approval. Obama cannot claim that these actions are “history” or that they occurred “before [he] was born.”

It is now harder for the U.S. to “meddle with impunity” because Latin American nations have made substantial progress over the last fifteen years in increasing their ability to effectively assert national and regional sovereignty. This can be seen in the increasingly important role that intra-Latin American organizations that exclude the U.S. and Canada, such as the Union of South American Nations (UNASUR) and CELAC, now play in regional affairs. By contrast, the role of the Organization of American States (OAS), which includes the US and Canada, has diminished considerably.

Recent mainstream media accounts of Latin America acknowledge the region’s increasing independence from the U.S., and note that this is one of the factors that pushed the U.S. to change its stance towards Cuba. These accounts do not, however, properly acknowledge the fact that Latin America’s increased independence is due to the actions of “anti-U.S.” leftist leaders, like the late Hugo Chávez, and, just as importantly, the popular movements that brought these leaders to power and have kept them in office.

The Obama administration deserves the credit it has received, including from many Latin American leaders, for its decision to alter the U.S.’s anachronistic, ineffective, and imperious policy towards Cuba. The transformation of U.S.-Cuba relations must, however, be seen for what it is: a U.S. attempt to maintain influence in a region that has shown its ability to act independently. Latin American nations remain quite wary of the U.S. government. Unless Washington shows the ability to consistently respect Latin American sovereignty—most of all in countries, like Venezuela, that it disagrees with—skepticism about U.S. actions is likely to remain, with U.S. influence in the region continuing to decline. Given the evidence that the U.S. has not yet kicked its nasty habit of treating Latin America as its backyard, this should be seen as a good thing for the people of Latin America.

April 20, 2015 Posted by | Deception, Mainstream Media, Warmongering | , , , | Leave a comment

Biased Reporting on Syria in the Service of War

By Rick Sterling | CounterPunch | April 20, 2015

It has been confirmed that TV journalist Richard Engel’s kidnapping/rescue in norther Syria in late 2012 was a hoax. NBC management knew the story was probably false but proceeded to broadcast it anyway.

There are at least two good things about “Engelgate”.

* It is clear evidence of mainstream media bias in their reporting and characterization of the conflict in Syria. The kidnapping was meant to show that “bad” Assad supporters had kidnapped Richard Engel only to be rescued by the Western/Turkey/Gulf supported “good” rebels. NBC management knew the scenario was dubious but promoted it anyway.

* Engelgate is also proof that Syrian anti-government rebels consciously manipulated western media for political gain. An elaborate ruse was performed to demonize the Syrian government &supporters and to encourage more support for the anti-government rebels.

Some analysts have noted that the Engel/NBC deception is more serious than that of Brian Williams. In the Williams case a TV journalist was puffing himself up; in the Engel deception, public policy involving war and bloodshed was being influenced.

Will this confirmation of deception lead to any more skepticism about reports from and about Syria? Will there be any more critical or skeptical look at stories that demonize the Syrian government and favor the western narrative? We have a test case right now.

HRW report on “Chlorine Gas Attacks”

On April 13, Human Rights Watch (HRW) issued a report “Syria: Chemicals Used in Idlib Attacks”. It begins: “Evidence strongly suggests that Syrian government forces used toxic chemicals in several barrel bomb attacks in Idlib”. HRW Deputy Director Nadim Houry accuses the Syrian government of “thumbing its nose at the (UN) Security Council and international law yet again”.

We note that the reported chlorine gas attacks took place in the exact same area where Richard Engel was kidnapped. As shown in the map below, the Engel hoax took place near Maarat Misrin. The alleged Chlorine attacks took place in the adjacent towns of Binnish, Qmenas and Sarmin. The rebel/terrorists were aware of the political ramifications of the kidnapping and rescue hoax in 2012. And now, in 2015, they are very aware of the political implications of the use of chlorine gas.

Certainly, opposition fighters have the motive and the incentive to implicate or “frame” the Syrian government in the use of chlorine gas. Do they have the means? This area is very close to the border with Turkey. Just as opposition brought in Richard Engel and many other western journalists via Turkey, so could they bring in chlorine gas or just about any other weapon.

Eight Significant Problems with the Report

Let us now look at specific problems with the HRW report.

1. The HRW report relies heavily on testimony and video/photo evidence from a biased source known as “Syria Civil Defence”. This organization is not what one might assume. Syria Civil Defence was funded and created by UK and USA. Initial training was provided in Turkey by former British military officer and current contractor based in Dubai. In the past year Syria Civil Defence has been rebranded as “White Helmets” by “The Syria Campaign” which itself is the creation of corporate PR firm. Syrian Civil Defence (aka White Helmets) is heavily into social media and actively campaigning for a No Fly Zone. The HRW report does not include any of the preceding information on Syria Civil Defence, its origins and obvious bias. Shouldn’t “evidence” received from them be considered with a skeptical eye?

2. The photos and videos referenced in the HRW report are unconvincing. Many of the video links in the HRW report do not work. However, many of the videos can be viewed at the Syrian research wiki A Closer Look at Syria. (See the discussion page of the Alleged March 16 Chlorine Attack for video links and comments regarding anomalies in the videos.)

Video of the three dead children is tragic but it’s questionable how they actually died. Scenes from the medical clinic indicate illness but not the cause. Scenes showing the “proof” of a “barrel bomb” containing “chlorine cylinders” is highly dubious. Some of the scenes are almost comical with one person in full hazmat gear, another with mask and another casually with hands in pocket and no mask at all. Then we have someone talking to camera with a bulldozer and some scrap metal on the ground. Then there is the figure holding what they report as a container with a “red liquid”. See sample photos at bottom.

3. The HRW report includes assertions without reference or evidence. For example, “Syrian forces have previously dropped barrel bombs embedded with cylinders of chlorine gas.” and “Syrian government’s previous use of chlorine, suggest this chemical.” What is the source and evidence to support these debatable assertions?

4. The HRW report includes false assertions. For example, the report says “First responders saw and filmed remains of barrel bombs, which can only be delivered by aircraft.” This is not true. Bombs can be exploded on the ground and rebel/terrorists routinely fire gas cylinders from launchers on the ground. See photo below. The implication that chlorine gas attacks can only be done from the air is, of course, nonsense. Chemical warfare and chlorine gas attacks, as excecuted in World War 1, were entirely done from ground based projectiles.

5. The HRW report ignores the issue of motivation and incentive. Normally an investigation will consider the issue of motivation and who benefits from an event or crime. In this case, the Syrian government has nothing to gain and everything to lose by using chlorine gas. Especially after the UN Security Council made a specific resolution regarding use of this industrial gas, why would they arouse world ire and hostility against themselves by using this weapon? Why would they do that when they have conventional explosive weapons which are more deadly? On the other hand, the ones to benefit from such an accusation against the Assad government are the armed opposition and other proponents of a No Fly Zone in northern Syria. How better to frame an adversary in the arena of public opinion? These considerations are curiously lacking in the HRW report. Perhaps that is because the conclusions of the report are at odds with common sense and objective inquiry.

6. The HRW report attempts to buttress new accusations by referring to old and discredited accusations. After the highly publicized events in Ghouta in August 2013, “Human Rights Watch concluded that the evidence strongly suggested that Syrian government authorities used the nerve agent Sarin in attacks on two Damascus suburbs”. Since that time, the HRW analysis has been effectively discredited. Seymour Hersh wrote a two part series of articles which concluded that the chemical attack in Ghouta was by anti-government rebels assisted by Turkey. Another investigative reporter with a proven track record, Robert Parry, directly addressed and discounted HRW’s analysis. Parry concisely summed up the HRW analysis as a “junk heap of bad evidence”. Even the head of the UN Inspection Team, Ake Sellstrom, has acknowledged that the early predictions of missile distance were mistaken. Why has HRW not reviewed and updated its analysis, which they rushed out ahead of the UN report? Instead, it seems they are relying on an old faulty report to justify a new faulty report.

7. The HRW report ignores history of Nusra/Al Queda usage of chemical weapons. The HRW report ignores the evidence that Nusra rebels previously used chemical weapons. For example, UN investigator Carla del Ponte reported there was “strong, concrete evidence” pointing to Nusra rebels having used sarin. There were numerous credible reports of Nusra and other rebel/terrorist organizations possessing sarin.

8. The HRW report ignores the fact that Nusra rebels had control of the major chlorine gas producing factory and stockpile in northern Syria. As reported in a Time magazine article, the major chlorine gas producing factory in northern Syria was over-run and seized by Nusra rebels/terrorists in late 2012. The owner of the factory said “if it turns out chlorine gas was used in the attack, then the first possibility is that it was mine. There is no other factory in Syria that can make this gas, and now it is under opposition control.” The factory owner reported there were about 400 steel cylinders of chlorine gas, one Ton each, captured by Nusra/Al Queda along with the factory.

The article included the following prescient comments, delivered when chlorine gas usage was first reported: “To Faris al-Shehabi, head of the Aleppo Chamber of Industry and a strong government supporter, it was obvious from Day One that the rebels had their eyes on the gas. “Why else would they capture a factory in the middle of nowhere? For the sniper positions?” he asks sarcastically while meeting TIME in Beirut, where he is traveling for business. “We warned back then that chemical components were in the hands of terrorists, but no one listened.”

Was HRW not aware of these important facts or did they think them not relevant?

Conclusion

Hopefully the Engel/NBC hoax will increase public skepticism and critical examination of claims by Syrian “rebels” and their advocates. It should also lead to more scrutiny of media stories, human rights group reports and the words and actions of U.S.government officials.

Unfortunately, since the exposure of the Engel/NBC hoax, Western media and US diplomatic staff have not reduced their bias. A forthcoming article will expose lies and blatant bias on Syria by Robert Siegel of NPR and Ambassador Samantha Power, head of the U.S. Mission to the United Nations.

As for Human Rights Watch, their previous bias and “revolving door” with U.S. Government was criticized in a devastating letter to HRW from numerous Nobel Peace Laureates.

It would be a positive sign for HRW to change their staff policy as proposed by the Nobel Laurate group. It would mark another dramatic and positive sign for HRW to reconsider their report on Chlorine Gas Attacks in Syria taking into account the serious shortcomings identified in this article.

As it stands, the biased and faulty conclusions of the HRW report are much more serious than either Engelgate or the Brian William pretense. The HRW report is receiving wide coverage and is being used to justify actions which might move the region closer to even greater war and bloodshed.

PHOTOS REFERENCED IN ARTICLE

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Engel Hoax (Maarat Misrin) and “Chlorine Attack” (Binnish, Sarmin)

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Nusra Video of “Syria Civil Defence.”

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Syria Civil Defence Evidence in HRW Report.

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Nusra Video – Tragic but what really happened?

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Syria Civil Defence: Masked, Unmasked and Hazmat viewing “Barrel Bomb Fragments”

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Syrian opposition loading modified gas canisters into “Hell Cannon.”

Rick Sterling is a founding member of Syria Solidarity Movement. He can be reached at rsterling1@gmail.com

April 20, 2015 Posted by | Deception, False Flag Terrorism, Mainstream Media, Warmongering | , , , , , , , , | 1 Comment

The Siege – cultural resistance in Palestine

International Solidarity Movement | April 20, 2015  

Jenin, Occupied Palestine – The room was overflowing with people who had come to witness the opening of the play The Siege. Pushing our way through the throng we managed to find some seats, squashed in the middle of a diverse and lively audience. We were sitting in the Freedom Theatre, a Palestinian community-based theatre and cultural centre located in Jenin Refugee Camp in the northern part of the West Bank. Started in 2006, the theatre’s aim is to generate cultural resistance through the field of popular culture and art as a catalyst for social change in the occupied Palestinian territories. So, after two months of rehearsals, they were finally ready to show us their eagerly anticipated new play.

Poster for the play

Poster for the play – The Freedom Theatre

The day started off with a theatrical memorial for Juliano Mer-Khamis, one of the founders of the Theatre School who was shot and killed in 2011 by a masked gunman. We then watched Journey of a Freedom Fighter; a documentary that recounts the story of Rabea Turkman, a talented student of the theatre who turned from armed resistance to cultural resistance. He was subsequently shot by the Israeli army and died a few years later as a result of his injuries.

Inspired by the true story of a group of freedom fighters, now exiled across Europe and Gaza, The Siege tells of a moment in history that took place during the height of the second intifada in 2002. The Israeli army had surrounded Bethlehem from the air and on land with snipers, helicopters and tanks, blocking all individuals and goods from coming in or out. For 39 days, people were living under curfew and on rations, with their supply of water cut and little access to electricity. Along with hundreds of other Palestinians, monks, nuns and ten activists from the International Solidarity Movement, these five freedom fighters took refuge in the Church of the Nativity, one of the holiest sites in the world.

The play gives some insight into what it was like to be trapped inside the church, surviving on so little, with the smell of decaying dead bodies in the building, shot by Israeli snipers. It brings out the hard choice they were faced with between surrendering or resisting until the end. However, no matter what they chose, they were given no other option than to leave behind their family and homeland for ever, as all the freedom fighters – in reality 39 – were deported and have not been able to come back since.

The play exceeded all expectations! Everyone seemed amazed by what they had just witnessed. We talked with Osama, a student and a friend from the Freedom Theatre School who was brought up in Al Azzeh refugee camp, in Bethlehem. His words were lost in the power of his emotion. “I would have loved to play in that show!”, he finally managed to share. Only 12 at the time when the tanks entered his city, the show related so much to his childhood and brought back many memories of that time in his life. He recounts how the loud bang, heard at the start of the play, was a reenactment of the shot that had pierced the city’s water tank. This sound is still strongly engrained in his mind as it was the start of the long and difficult days that the inhabitants were about to face. “We are under occupation, but we are not weak. We stand up with what we can, be it our bodies, our voices or our guns!” – Osama believes in armed resistance as one of many ways to fight the occupation. And as an actor, it is important for him to represent these resisters in “another way, a good way. We die because we want to live!”

Alaa Shehada, the assistant director of the play, explained a bit about the making of The Siege. During their research period, they had gone over to Europe and interviewed 13 refugees in order to hear their stories first hand. They even managed to get an interview with one of the 26 refugees in Gaza. He explained how this story is not just about what happened during 2002, but is a microcosm of the whole Palestinian struggle. It reveals the continuous Israeli propaganda that has been going on since 1948, representing the Palestinians as terrorists through false accusations. In this particular situation, the Israeli army blamed the fighters for having attacked the church and holding the monks inside it. This has later been proven to be a lie. The truth being that the monks had allowed the fighters in and they were working together during the whole time of the siege. Ultimately, during the 67 years of Israeli occupation, even with the whole world watching, there has been no justice for the Palestinian people. 50% of Palestinians are refugees from their own country and still have not been given the right to return.

At the Freedom Theatre, Cultural Resistance is their way of defying the occupation. Ahmed Jamil Tobassi, one of the actors from the show, explained that among many other things, theatre creates a context that can support other forms of resistance. It revives stories, gives people a way of expressing themselves and ultimately frees the mind. The idea of cultural resistance is to work alongside other forms of resistance, not against. Yet “if you cannot start by deconstructing the occupation within yourself, how are you going to be able to free the country from the bigger, external occupation?” argues Jonatan Stanczak, managing director of the Theatre.

During the months of May and June, this play will be touring the United Kingdom, a country the theatre group has not yet been too. It is also as a message for the British to take responsibility for their prominent role in the ethnic cleansing of Palestinians and the ongoing occupation.

You can get more information on the dates and the play on the Freedom Theatre UK Friends website: www.thefreedomtheatreukfriends.com

Frida and Jenny.

April 20, 2015 Posted by | Ethnic Cleansing, Racism, Zionism, Solidarity and Activism, Subjugation - Torture, War Crimes | , , | 1 Comment

Leaked emails reveal Hollywood execs at work for Israel

By Alastair Sloan | MEMO | April 20, 2015

Top Hollywood bosses enjoy a strong relationship with the Israeli government and various pro-Israel lobbying groups across the United States, according to a cache of Sony internal emails leaked to Wikileaks and published for the first time last week.

The emails reveal a dinner between Sony executives and Prime Minister Benjamin Netanyahu; the presenter of American X-Factor chiding actress Natalie Portman aggressively for her views on Israel; meetings between top entertainment chiefs and the Israeli consulate-general; close ties between Sony’s Co-Chairperson and various pro-Israel lobbying groups; and film chiefs planning, in detail, a new documentary about the rise of anti-Semitism in Europe, about which the emails also reflect rising concern.

Amy Pascal, Co-Chairperson of Sony Pictures Entertainment from 2006 until 2015, was signed up to regular email updates on the security situation in Israel, from a right-wing pressure group called The Israel Project. The group was described by Jewish Daily Forward in 2010 as a Zionist group which, “Stokes Fear of Islam for Political Profit.” The Israel Project has been admonished by the more liberal pro-Israel lobby group J-Street for taking a pro-settler stance. The daily emails sent to Pascal by The Israel Project had subject lines like “Protect Israel from a Nuclear Iran”, “Fighting Anti-Israel Hate” and “Hamas Agrees to Ceasefire then Breaks It, Again”. Most of the emails, which were being sent as often as once a day, contained requests for financial donations.

Pascal also received an email from the Anti-Defamation League, an anti-Semitism watchdog with close links to the Israeli government, thanking her personally for being amongst eighteen entertainment executives whose names were displayed prominently in an ADL advert in Variety, The Jewish Journal, and The Hollywood Reporter. The advert quoted Golda Meir from 1957: “We can forgive them [the Palestinians] for killing our children. We cannot forgive them for forcing us to kill their children. We will only have peace with them when they love their children more than they hate us.” The quote was prefaced with additional commentary from ADL: “As talk turns to the future of Gaza, these haunting words of Golda Meir are as current as today’s headlines. She could have been talking about Hamas.”

Another leaked email exchange shows Pascal, who has since left Sony, being invited to “an intimate salon style discussion” at a J-Street supporter’s home, in August 2014. The email emphasised that a special guest would be in attendance, J-Street President Jeremy Ben-Ami. Pascal declined the invitation as she was on holiday in Vietnam, but responded, “I’m in for next steps and want to know how to get myself educated [sic].” J-Street bills itself as a “Pro-Israel, Pro-Peace” organisation and is regarded as the liberal element of the US pro-Israel lobby.

Another email that Pascal received and responded to shows an organisation called Creative Community for Peace, “a group of influential music execs… which battles the BDS movement… which tries to stop artists performing in Israel” reminding Pascal that they had taken her and her husband on a trip to Israel back in 2007.

“At that time,” wrote David Lonner, a top Hollywood executive and Advisory Board Member for CCP, “the war with Hezbollah had just ended and our community had exhibited a great deal of apathy and some ignorance on what Israel was up against.” Lonner added: “My hope in the end, was that if there was another crisis, we would not be silent. 7 years have passed since our trip and tragically we are in another crisis with Hamas.”

Lonner than claimed that CCP worked with Rihanna, Paul McCartney and Alicia Keys when international pressure nearly prevented them from playing concerts in Israel. The email asked for Pascal’s and her husband’s signatures on another appeal, this time to “support Israel” during the Toronto Film Festival. Pascal replied to the email, “Count on both us.” [sic]

Pascal and her husband Bernard Weintraub also received a personal invitation to attend a private event in September last year with the Israeli Consul-General, according to another email in the leaked archive. Held at the home of media lawyer and marketing tycoon Michael Kassan, the event was billed as “A Special Briefing on the Situation in Israel by David Siegel, Consul General of Israel in Los Angeles, and Jay Sanderson, President and CEO of The Jewish Federation of Greater Los Angeles.” The evening included “cocktails and hors d’oeuvres,” and guests were advised to wear “Business Casual Attire.”

Another top Sony executive, Michael Lynton, was also emailed by Israeli intelligence operative and veteran film producer Arnon Milchan, arranging for him to have an “intimate dinner” with Prime Minister Benjamin Netanyahu. The dinner was later held at Milchan’s private home in Malibu.

One of the most extraordinary exchanges in the leaked emails came as Hollywood executives discussed Ken Loach’s call for “a complete cultural boycott of Israel”. “Enough with this pathetic limousine liberals ignorant bs,” responded Ben Silverman, Executive Producer of hit shows like The Office, Ugly Betty and The Tudors.

Silverman then claimed that Gazans watching Loach’s films will “be lined up and shot in the street for doing so.” He asserted that anyone

“with a wife, daughter, mother or sister knows the evil anti woman rhetoric of the sharia Islamists and it is time to draw attention to the fact that you can have a voice and a choice in our democracies and you can have nothing but hate in their monarchies and dictatorships who thrive on censorship that would never allow their works to be shown. Let’s go gents. We can’t lie down. We must stand up.”

Hollywood star Natalie Portman is copied on the email. She complained that she doesn’t want her personal email address shared with a group of people she doesn’t know. Ryan Kavanaugh, a well-known producer, reported billionaire and Variety magazine’s 2011 “Showman of the Year,” then reproached her sarcastically.

“Sorry. You are right jews being slaughtered for their beliefs and cannes members calling for the boycott of anything Israel or Jewish is much much less important than your email address being shared with 20 of our peers who are trying to make a difference. my deepest apologies.

I know that you don’t care so I’ll leave it alone, but I had lunch yesterday with Israel consulate general who brought J street up to me. He was so perplexed confused and concerned when he heard you supported them that he begged me to connect you two. I told him how you felt, you didn’t want to hear from or speak to anyone who disagrees with your position. Three times he said “buts she’s Jewish and smart.”

Just thought you should know”

In another round-robin email, Hollywood executives discussed making a documentary about the recent resurgence in anti-Semitism. The well-respected independent film producer and agent Cassian Elwes suggested,

“How about we all club together and make a documentary about the rise of new anti-Semitism in Europe I would be willing to contribute and put time into it if others here would do the same. Between all of us I’m sure we could figure out a way to distribute it and get it into places like Cannes so we could have a response to guys like Loach. Perhaps we try to use it to rally support from film communities in Europe to help us distribute it there.”

Copied in on the email are dozens of Hollywood names, including Natalie Portman and fellow actress Scarlett Johansson, executives at Lionsgate Productions, MGM and Fox, X-Factor presenter and producer of “Keeping up with the Kardashians” Ryan Seacrest, and several high profile actors’ agents. One unidentified executive called the proposed documentary “A brilliant idea.” Also copied is Amy Pascal of Sony, who writes “Me too,” in response.

Jason Binn, the owner of luxury shopping website Gilt, then offered to promote the film to its nine million members and the three million readers of his luxury magazine DuJour.

Glenn Feig, owner of the entertainment law firm Reder and Feig, offered pro bono legal services for the planned documentary, before copying in his client Ram Bergman, producer of the upcoming Star Wars Episode VIII and Star Wars Episode IX, and the thriller Looper, which starred A-Listers Bruce Willis, Emily Blunt and Joseph Gordon-Levitt.

Also copied in on the email discussion about the upcoming film is Elliot Brandt, who was named in September 2014 as National Managing Director for the America Israel Public Affairs Committee (AIPAC), a pro-Israel lobbying and political financing organisation. The emails reveal anxiety amongst the predominantly Jewish film executives regarding the rise of anti-Semitism.

One round-robin email, sent out by Bart Rosenblatt of Code Entertainment, is entitled “Too close to home.” It details a hate crime at Emory University in October 2014 in which swastikas were scrawled onto a Jewish fraternity house. Executives also emailed each other articles from The Guardian newspaper saying that anti-Semitism “was at its worse since the Nazis”, and an article claiming that Germany is now a no-go area for Jews.

Producer Ryan Kavanaugh wrote

“We can continue to be silent and pretend this isn’t happening because it is not in our country yet. We can ignore the anti-Semitism akin to pre ww2 Germany… now lining the streets of London, France, Germany and around the world. We all may think we’re protected here in the free US. We are not. It had now hit our doorstep and yet we remain silent?”

Another producer, Ron Rotholz, argued that

“many lines are being crossed … it’s a new reality for us. The tacit and subtle recognition of Hamas as a legitimate government with legitimate policies and a legitimate charter, by Western governments is a hate crime on a global scale”

Rotholz also called out the UK’s National Union of Students:

“In the UK as you well know there has been a shocking rise in anti-Israel and anti-Semitism on university campuses here, both in terms of faculty and students and student orgs such as the potent and powerful NUS ( Natl Union of Students which holds great weight within the natl. Labour Party ).

The NUS has a long history of anti-Israel leadership and policy and their rhetoric and policies have become much more aggressive in the last year or so … The intimidation of Jewish students, and those who support Israel in UK universities both by administrators, faculty and students is widespread, commonplace and alarming … it’s a dire situation and quite shocking in a nation which prides itself on tolerance and civility.”

Those working on the anti-Semitism documentary also discussed who should present the film. One producer said that the project would need “a really good director who on the face of it doesn’t seem completely biased, so that we can show something that gets the message across without making it seem like propaganda.”

Organisers also planned to lean heavily on European institutions to make the film, anticipating good support. One executive wrote,

“I think we will get full cooperation from the impt media in europe, the eu, the current conservative govt. in the uk, the current govt in france, angela merkel in germany, many academics ( def at Oxford, Cambridge, LSE ) and of course, major jewish orgs in the uk france germany and in most eu countries … This documentary is an essential tool for spreading our message.”

Hollywood has often been accused being the propaganda arm of the Israeli government. These leaked emails appear to confirm that this is indeed the case.

Please follow on Twitter @AlastairSloan for more updates.

April 20, 2015 Posted by | Ethnic Cleansing, Racism, Zionism, Mainstream Media, Warmongering | , , | 4 Comments

Report: Israel Willfully Targeted & Murdered Gaza Children

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IMEMC | April 20, 2015

A new report by Defense for Children International-Palestine, titled “Operation Protective Edge: A War Waged On Gaza’s Children”, has displayed documented events proving that that Israel deliberately murdered Palestinian children during its last offensive on the Gaza Strip, this past summer.

According to the report, the number of children killed in the offensive on Gaza last summer hit 535, a majority of them under the age 12. Another 3,400 children were injured – over 1,000 maimed for life. They need vital medical care which is unavailable because of Israel’s lawless siege – ongoing aggression by any standard with full US-led Western support.

Operation Protective Edge was the sixth Israeli military offensive on Gaza in the past eight years, and raised the number of children killed in assaults on Gaza to 1,097 since 2006, the Palestinian News Network informs. Between December 2008 and January 2009 Israeli forces killed at least 353 children, as well as a further 33 children in November 2012.

According to the report, Israel considers all civilians legitimate targets. However, international law defines this as a war crime.

DCIP’s report said that “2014 was a year that brought violence, fear and loss (to Gaza).” The Israeli military offensive” lasting 51 days from early July to late August killed about 530 Palestinian children. Nearly 3,400 other children were wounded – many from illegal terror weapons. Over 2,200 Palestinians died – mostly defenseless civilians.

“Investigations undertaken by (DCIP) into Palestinian child fatalities during Operation Protective Edge found overwhelming and repeated evidence of international humanitarian law violations committed by Israeli forces. These included direct attacks on children, and indiscriminate and disproportionate attacks on civilian homes, schools, and residential neighborhoods.”

The report included stories and testimonies from witnesses of the war in Gaza, documenting targeting places that should have been provided children with shelter and safety were not immune from attacks from Israeli forces.

“Missiles fired from Israeli drones and warplanes, artillery shelling, and shrapnel scattered by explosions killed children in their homes, on the street as they fled from attacks with their families, and as they sought shelter from the bombardment in schools.”

One of many examples affected Rawya Joudeh and four of her five children. An Israeli drone attack murdered them in cold blood – “as they played together” in the family’s Jabalia refugee camp yard.

Around half the number of children Israel killed came from attacks on residential buildings. A nighttime and ground assault on the residential Gaza City Shuja’eyya neighborhood killed 27 children. It injured at least 29 others.

The report stated that Israeli occupation forces are “regularly implicated in serious, systematic and institutionalized human rights violations against Palestinian children living in the Occupied Palestinian Territory.”

The report looked back at the Israeli military offensive known as Operation Summer Rains, between June 28 and September 30, 2006, around “289 Palestinians were killed, of whom 65 per cent were children, and over 1,261 injured in the Gaza Strip, of whom 189 were children.”

Results show that Israeli military “incursions and shelling as well as direct military attacks have damaged school and health facilities.” Nearly eight years later, by simply updating the figures in these statements, the same language could be used in the Secretary-General’s next annual report to detail the situation for Palestinian children in 2015.

Evidence of Israel’s high crimes in the report was completely overwhelming. It shows repetitive unaccounted aggression against Palestinian children.

DCIP called for an immediate end to the current regime of collective punishment, targeted assassinations, and regular military offensives.

View Full Report Here

Defense for Children International Palestine is an independent, local Palestinian child rights organization based in Ramallah dedicated to defending and promoting the rights of children living in the West Bank, including East Jerusalem, and the Gaza Strip. For over 20 years, DCIP investigated, documented and exposed grave human rights violations against children; held Israeli and Palestinian authorities accountable to universal human rights principles; and advocated at the international and national levels to advance access to justice and protection for children. They also provide direct legal aid to children in distress.

April 20, 2015 Posted by | Ethnic Cleansing, Subjugation - Torture, War Crimes | , , , | Leave a comment

NATO ‘Tornado’ military drills in Estonia to use laser training system

RT | April 20, 2015

The US Army has joined Estonian soldiers in NATO ‘Tornado’ drills just before the largest training in Estonia’s history, the Siil war games. A laser training system will be used for simulating actual battle.

“On Monday, nearly 2,000 soldiers of the First Infantry Brigade of Estonian Defense Forces, as well as divisions of US paratroopers, will begin five-day Tornado drills, which will demonstrate the level of their readiness for larger Siil [Hedgehog] military exercises,” the General Staff of the country’s Defense Forces said in a statement.

The Siil war games involving up to 13,000 soldiers will be held in early May.

The MILES (Multiple Integrated Laser Engagement System) system will be used during the Tornado exercise for training purposes, with different versions of MILES systems available to US and international militaries. The system uses lasers and blank cartridges to simulate actual battle. Soldiers carry small laser receivers, placed over their outfits, which detect when the soldier has been illuminated by a firearm’s laser. Each laser transmitter meanwhile mimics the effective range of the weapon on which it is used.

The presence of US soldiers in the Baltic region is a part of the military operation Atlantic Resolve, a demonstration of US commitment to NATO members across Eastern Europe through international training and security cooperation.

NATO has been building up its military presence along Russia’s western border in the wake of the conflict in southeastern Ukraine. Moscow has repeatedly warned that NATO’s growing expansion towards Russian borders could only escalate tensions and destabilize regional security.

“The Alliance exerts pressure on the Russian Federation and the deployment of additional military capabilities along our borders is nothing but an attempt to assist military pressure on Russia,” Russia’s permanent representative to NATO, Alexander Grushko, said in February.

The Russian General Staff said on Thursday there was a sharp increase in the intensity of NATO troops training near the borders of Russia last year, with a clear anti-Russian orientation of these activities. According to Lieutenant General Andrey Kartapolov, NATO’s operational and combat training activities grew by 80 percent in 2014.

“During this period, NATO created a grouping of its member states’ forces in the Baltic States, consisting of over 10,000 troops, about 1,500 armored vehicles, 80 planes and helicopters and 50 warships,” Kartapolov stated, adding that strategic bombers from the US Air Force were used to perform strategic tasks during those exercises.

He also said the US plans to supply its Eastern European allies with JASSM-ER long-range aviation cruise missiles, which will enable NATO warplanes to hit targets 1,300 kilometers inside Russian territory.

The head of the Main Operation Directorate of the General Staff has warned that in the case of a military conflict, critical facilities on the territory of “almost the entire European part of Russia will be vulnerable to NATO’s air attack, with the flight time of the missiles reduced by half.”

April 20, 2015 Posted by | Militarism | , , , , , | 1 Comment

Egypt’s President Sisi meets with CIA chief in Cairo

Press TV – April 19, 2015

Egyptian President Abdel-Fattah el-Sisi has held talks with CIA Director John Brennan amid Cairo’s heavy-handed clampdown on opponents of the country’s military-backed government.

According to a statement released by the Egyptian government, Sisi and Brennan discussed regional issues, terrorism and “ways of enhancing bilateral relations” in their Sunday meeting in the Egyptian capital Cairo.

The two sides agreed to continue “consultation and coordination on issues of mutual interest,” the statement added.

The announced visit by the CIA chief to the North African country came less than two weeks after the US Defense Security Cooperation Agency announced plans to sell air-to-surface missiles worth of $57 million to Egypt.

Egypt’s first democratically-elected president, Mohamed Morsi, was ousted in July 2013 in a military coup led by Sisi, the then army commander.

Since Morsi’s ouster, Egypt has been the scene of massive anti-government protests, with continuous clashes between security forces and the supporters of the former president, backed by the Muslim Brotherhood movement.

The new rulers in Egypt have come under pressure from human rights groups over their harsh crackdown on Brotherhood members and supporters.

The Egyptian administration’s suppression has led to the deaths of more than 1,400 people and the arrest of 22,000 others, including some 200 people who have been sentenced to death in mass trials.

However, Egypt’s former dictator, Hosni Mubarak, and a few of his senior officials have been acquitted of all charges leveled against them over the killing of protesters in the country’s 2011 revolution.

April 20, 2015 Posted by | Subjugation - Torture | , , , , | Leave a comment

When F-35 Joint Strike Fighter Goes Operational this Summer, it won’t Work any better than 40-Year-Old Thunderbolts

By Steve Straehley | AllGov | April 20, 2015

The money-suck known as the F-35 Joint Strike Fighter will go into service this summer with the Marine Corps with less ground attack capability than the 40-year-old plane it’s meant to replace, Pentagon officials say.

The F-35 has cost nearly $400 billion since the beginning of the program in 2001 and is estimated to cost $1 trillion over its lifetime. However, it won’t have night-vision capability, will be able to carry only two air-to-ground missiles and will be able to stay over a target area for 30 minutes maximum, Michael Gilmore, director of operational test and evaluation at the Defense Department, told the House Armed Services Committee on Tuesday.

“If F-35 aircraft are employed at night for combat, pilots will have no night vision capability available due to the restriction on using the current night vision camera,” Gilmore said in written testimony to the committee. In contrast, the 1970s-era A-10 Thunderbolt, known as the Warthog, can remain over a battlefield for up to 90 minutes and augment its four air-to-ground missiles with fire from a cannon in its nose.

“This [F-35 variant] reminds me of something before the A-10, not something after the A-10,” Rep. Martha McSally, (R-Arizona), a freshman lawmaker and former Warthog pilot, said according to Stars and Stripes.

As Congress decides whether to appropriate money to buy more F-35s from contractor Lockheed Martin, the Government Accountability Office (GAO) released a report (pdf) this month that outlines problems with the program. “[E]ngine reliability is poor and has a long way to go to meet program goals. With nearly 2 years and 40 percent of developmental testing to go, more technical problems are likely,” the report said. It also outlined grounding of the F-35 fleet, the need for additional inspections and software failures.

Air Force brass have long coveted more F-35s, to the point of releasing misleading statistics on the A-10 and telling lower-level officers that talking about the Warthog to members of Congress is “treason.”

How those new planes will be paid for is another question. The program will cost taxpayers from $12 billion to $15 billion a year through 2030. Yet the GAO report points out “It is unlikely that the program will be able to receive and sustain such a high and unprecedented level of funding over this extended period, especially with other significant fiscal demands weighing on the nation.”

Despite the late date and billions flushed into the program, some are calling for the Pentagon to bail out of the F-35. “However, we are past that decision point,” Rep. Loretta Sanchez (D-California) said. “We just need to make this program work.”

To Learn More:

First Version of F-35s Will Not Outdo A-10 in Battlefield Capabilities (by Travis J. Tritten, Stars and Stripes )

GAO Confirms Increased F-35 Production Is a Terrible Idea (by Mandy Smithberger, Project on Government Oversight)

F-35 Joint Strike Fighter: Assessment Needed to Address Affordability Challenges (pdf) (Government Accountability Office)

A Reminder: U.S. Pays One Quarter of Israel’s Defense Budget (by Noel Brinkerhoff and Steve Straehley, AllGov )

Air Force Doctored Statistics about Friendly Fire and Civilian Deaths to Get Rid of A-10 Attack Jet (by Noel Brinkerhoff, AllGov )

Air Force General Says Talking to Congress about A-10 Attack Jet is Treason (by Steve Straehley, AllGov )

Trillion-Dollar F-35 Jet Fighter Has 13 Flaws (by Noel Brinkerhoff and David Wallechinsky, AllGov )

April 20, 2015 Posted by | Corruption, Deception, Economics, Militarism | , , | Leave a comment

Finance Capital and Debt Through the Ages

By Michael Hudson • Unz Review • April 19, 2015

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Karl: Welcome to the Renegade Economists with your host, Karl Fitzgerald. This week we’re stepping back in time, way back some 10,000 years BC into the world of archaeology, Egyptology and Assyriology. Yes, it’s time for another special with Professor Michael Hudson. That’s right, Michael Hudson back on the show, he’s got a new book called Labor in the Ancient World and I asked him to give us a bit of a précis on the background to his very interesting process. Hang on for another riveting conversation here on 3CR’s Renegade Economists.

Michael Hudson: It’s a symposium of a group put together at Harvard University of the leading Assyriologists and Egyptologists and Mycenaean Greek specialists as well as archaeologists on how early societies mobilised the labour force, especially for large public building projects such as temples, city walls and other infrastructure.

Karl: And this is published through whom?

Michael: It’ll be published by ISLET, the Institute for the Study of Long-term Economic Trends. We just finished the type setting actually today and we’re sending it to Amazon to be put on their list, it’ll probably be available in about two weeks.

Karl: “Labor in the Ancient World.”

Michael: Yes.

Karl: And does that have some sort of Harvard connection?

Michael: We founded this project over 20 years ago at the Peabody Museum, which is their archaeology and anthropology department. We wanted to do a series of books on how modern economies and practices began. Our first colloquium was in 1994 on Privatization in the Ancient Near East and Classical Antiquity; our second volume was on Urbanization and Landownership in the Ancient Near East, about how cities were created and how landownership and real estate patterns developed into a market for real estate. The third volume was on Economic Renewal in the Ancient Near East, about how debt cancellations restored the land to its citizen-cultivators to provide a means of self-support for the free citizenry.

These colloquia grew so popular that we added a fourth volume, Creating Economic Order: Record-Keeping, Standardization and the Development of Accounting in the Ancient Near East, on the origins of money and account keeping from Mesopotamia to Mycenaean Greece and Egypt. And then ten years ago we had our fifth colloquium on Labor in the Ancient World. There have been so many revolutions in archaeology and Assyriology and even Egyptology in the last ten years that we’re only publishing this volume now, to be completely up-to-date.

Karl: So the Ancient Near East, how many thousand years ago was it? Just put us in the picture.

Michael: We begin the volume in 10,000 BC in Göbekli Tepe in Turkey where you have very large city-like ceremonial sites, larger than Stonehenge, huge sites that took hundreds of years to build with huge stone megaliths, even in the pre-pottery Neolithic. They didn’t yet have metal to carve these stones. They didn’t even have pottery. But they had in Göbekli all sorts of huge carvings in a seasonal site where people would come together on ceremonial occasions, like midsummer. We researched from Turkey in 10,000 BC to Sumer in the third millennium BC, Babylonia in the second millennium BC, the building of the pyramids, and we have the actual bills and accounting statements for what’s paid to labour to build the pyramids.

We found they were not built by slaves. They were built by well-paid skilled labour. The problem in these early periods was how to get labour to work at hard tasks, if not willingly? For 10,000 years there was a labour shortage. If people didn’t want to work hard, they could just move somewhere else. The labour that built temples and big ceremonial sites had to be at least quasi-voluntary even in the Bronze Age c. 2000 BC. Otherwise, people wouldn’t have gone there.

Karl: Michael, how did you actually track this? What were you reading to get this information?

Michael: Everybody who comes to the colloquium is a specialist in their period. For instance, Carl Lamberg-Karlovsky is the archaeologist dealing with Göbekli Tepe in Turkey. My co-editor for this volume, Piotr Steinkeller, is Babylonian specialist in cuneiform. We have two Egyptian specialists in hieroglyphics, and two Mycenaean Greek specialists for Linear B. Each scholar throughout all of these five volumes was a specialist in each time period and each geographical area on which we’re concentrating.

Karl: Were you reading clay tablets, cuneiform?

Michael: They read the clay tablets if they’re from Mesopotamia. They read the notations and carvings in the Egyptian pyramids on the inside of the big rock blocks that made the pyramids. Teams would carve or write the home town they came from. We also have royal inscriptions.

We found that one reason why people were willing to do building work with hard manual labour was the beer parties. There were huge expenditures on beer. If you’re going to have a lot of people come voluntarily to do something like city building or constructing their own kind of national identity of a palace and walls you’ve got to have plenty of beer. You also need plenty of meat, many animals being sacrificed. Archaeologists have found their bones and reconstructed the diets with fair accuracy.

What they found is that the people doing the manual labour on the pyramids, the Mesopotamian temples and city walls and other sites were given a good high protein diet. There were plenty of festivals. The way of integrating these people was by public feasts. This was like creating a peer group to participate in a ceremonial creation of national identity.

Karl: Back in those times, how would they have realised when this festival was on, how was communication spread that this was the time to come together?

Michael: We discussed this in the second volume of our series, Urbanization & Land Use in the Ancient Near East. They did it by the solar and lunar calendar, by counting the moons leading up to solar solstices or equinoxes. The great ceremonial sites from Stonehenge to Turkey were based on the particular equinox or solstice. Chieftains usually would be the calendar keepers. Going all the way back to the Ice Age around 29,000 BC Alex Marshack, one of our members, published The Roots of Civilization reporting on the carved bones he found with notations for the phases of the moon. The job of the chieftain was to keep the lunar calendar, trace the waxing and waning of the moon to calculate how long the month would be, and to decide that, “Ah, in this month, six months after the equinox, here’s where we have to get together and have everybody come to the gathering and begin working on the big site”.

The pyramids and other ancient monuments were built by free labor, not by slaves

Karl: I’m still trying to grasp this Michael. Would all these labourers come together in a centralised place to build this giant statue or pyramid based on some sort of goodwill?

Michael: Well, to begin with, you would have a beer party to get everybody friendly. You would have big feasts, and also these were the major occasions for socialization. All over the world, communal feasts were the primordial way to integrate societies.

Obviously somebody was in charge of designing these monuments. We don’t know whom, but they would supervise the cutting and carving of the stones. These had to be brought over large distances, just like in Stonehenge. The groups would quarry them and cut them. Maybe the cutters and designers were the same people. And in Göbekli we’re dealing in a time before they’d invented steel or metal. Many of the stones had to be cut and designs carved just by chipping away with other stones. It obviously was a very laborious type of work.

Corvee labor was supplied on the basis of landholdings

Later, by about 2,000 BC, populations were growing more dense. There also was a shift from the temples, which originally organised most of these mega-projects, to the palaces that developed out of them around 2750 BC. Their scribes developed accounting practices to schematise and organise this labour coming together. To coordinate this in an equitable, almost schematic way, land tenure was allocated on the principle that whoever had such-and-such a plot size had to supply a given number of labourers to work on the public infrastructure. So what we found as a by-product of the labour volume is that the origins of land rights were defined by the tax payments – the corvée labor obligation.

To get the right to a given land of a given size, you had to promise on such-and-such dates to provide this much labour for the corvée project. It’s a French word, because a corvée tax in the form of labour instead of money payments lasted all the way down through the 18th Century in France. It was typical in mediaeval Europe before you had a money economy. Everybody who had their own subsistence land or their own land holdings of one form or another, or their grazing lands, would have to supply X number of labourers to the big building project.

Karl: That’s quite some discovery. So you’re saying that labour was provided as an in-kind payment for taxation based around calendars to build these giant monuments?

Michael: Yes. Each of our archaeologists, Assyriologists and Egyptologists has found this for every period of the Bronze Age and the Neolithic.

Karl: And so we’re still rather on a voluntary level, there was no quantifying –

Michael: There weren’t that many people in the world in 10,000 BC, 3000 BC or even 2000 BC. If a government got too oppressive, or when they would raise the contributions or taxes too high, people would just flee to another area. Or if they were too much indebted the debtors would flee, as they did from Babylonia around 1600 BC. We are talking about free labor, not slave labor.

Karl: So they built a social contract around these feasts, around this sense of belonging by being at this public works event. It sounds like a fascinating way to keep society on track and organise labour so that civilisation would develop on some level. Have you found any indication on that managerial class and how they developed through the chieftains?

Michael: First the priesthoods, then the accountants and scribes. The calendar keepers were usually the chiefs (there may have been “sky chiefs” and “war chiefs” separately, or perhaps their roles were combined as dynastic rulers developed). Most of the religions were cosmological. They wanted to create an integrated cosmology of nature and society (“On earth, as it is in heaven”). Administration was based on the astronomical rhythms of the calendar, lunar and solar cycles. For instance, you typically find a society divided into 12 tribes, as you had in Israel and also in Greece with its amphictyonies. In a division of 12 tribes, each could take turns administering the ceremonial centre for one month out of the year.

The physical design of cities also was based on the calendar. Big cities would have 12 gates. Most cities had maybe four gates, representing the four seasons or the four quarters of the Earth. The outline of the land and the Earth was based on a calendrical cosmology, much like a mandala.

Ceremonial sites such as Stonehenge also were calendars in miniature, designed so that the light would fall on the stones in a particular way on a solstice or equinox. We have this going back into the Ice Age around 30,000 BC. Alex Marshak’s article in our volume on urbanisation found that these sites already in the Ice Age were usually sited on waterways, so that everybody could get to them. They often were sited with mountains in the background and in between them the sun would shine in a particular way on the equinox or on the solstice in a particular alignment that occurred just at that calendrical time. They were recreating the cosmos on Earth.

Karl: You’re on 3CR’s Renegade Economists, this week with distinguished Research Professor Michael Hudson from Michael-Hudson.com and we’re discussing his new colloquium book “Labour in the Ancient World”. We’re tracking back some 10,000-odd years, hearing about how civilisation was developed. Michael, this is a fascinating discussion. I’m interested, of course, here on the Renegades, about this role of land tenure, and how that influenced citizens’ role in society. From what I’ve read out of your new book, it sounds like land holdings played a huge role in the status of a participant in one’s society.

Ancient citizenship, voting rights – and social obligations – were based on landholding

Michael: In America down to the time of the Revolution in the 18 th century, and in early Australia I assume also, in order to be a citizen and vote, you had to be a landowner. And all the way back in Rome and earlier times, Mesopotamia, Babylonia, Sumer, citizens had to have their own land. In Rome each citizen’s voting rights were defined by the land area he owned. I say “he” because only the males were citizens. It was a patriarchal society, with voting rights proportional to the size of one’s landholdings.

Much as today, debt was a major factor concentrating landholdings. Finance always has been the great lever to appropriate the land rent and interfere with widespread land ownership. If you owe money on a mortgage and you can’t pay, you can be evicted. That began to happen already around 2000 BC in Babylonia.

But the process was limited and reversed, because when creditors evicted land-tenured citizens, this caused a problem for rulers. The former landholder no longer was a citizen – and if he’s not a citizen, he can’t serve in the army.

One’s rank in the army down through Roman times was defined by how much land one had. If you had just a basic subsistence plot, you were in the infantry. If you had a lot of land, you were able to support yourself in leisure, have a horse and participate in the cavalry, practicing military training and buying your armour and weapons. You find much the same thing in Japan. All over the world, citizenship, landownership and one’s rank in the army were linked together.

Karl: Yes, the English military had the same arrangement. So you can see a point that if you own lots of land, you want to defend it, so these landowners need to be involved to defend their land. How times have changed.

Michael: They weren’t merely defending; they were also aggressive. There was continual warfare. Attacking and defending also had a financial dimension. In Greece a military manual in the 3 rd century BC was written by a man who took the pseudonym of Tacticus – not Tacitus as in Rome, but Tacticus for tactics. He wrote that if a general planned to attack a city, he should promise to cancel the debts and free the slaves, in order to get the debtors to come over to his side. And if you’re defending a city, you also promise to cancel everyone’s debts and free the slaves. That’s how you get people on your side.

Coriolanus did that in Rome, and Zedekiah in Judah. But both rulers went back on their word as soon as the fighting was over. However, in Babylonia we have more or less regular debt cancellations whenever a new ruler would take the throne. This is in our third volume, Debt & Economic Renewal in the Ancient Near East. Babylonian rulers would proclaim andurarum and misharum, their words for a Clean Slate. David Graeber picked up this historical analysis in Debt: The First 4000 Years, discussing it from an anthropological point of view.

These proclamations did three things – the same three things you find in the biblical jubilee year (which used a cognate word, deror): These acts liberated the debt servants and let them return to their family of origin; they canceled all the personal debts that were owed (but not commercial business debts); and they returned the land rights or crop rights to debtors who had pledged them to their creditors. These royal proclamations restored order by making things the way they were in an idealised past. It was a situation where everybody was supposed to own their own self-support land to provide their means of subsistence free of debt. That was their idea of economic balance.

This is the opposite of debt serfdom reducing more and more people to debt peonage, obliged to pay their income to creditors. If they finally lose their job, they lose their home and their house and the banks get to keep it. That practice would have depopulated the ancient world. If that would have happened, debtors would have just got up and left, or they’d go over to the enemy when other armies would attack. You’d have defections. So reversing personal debts preserved widespread landownership and liberty from debt.

Karl: Right, so reiterating, the Clean Slate would build that social contract with the ruler and help continue the goodwill that led to this massive public development that was voluntarily provided tax in-kind, usually in labor. It sounds fascinating that people would just defect and move to another country under another ruler if the debt stayed too high, even back in those times when we weren’t anywhere near as mobile as today.

Michael: We have all sorts of documents around the 14th and 13th centuries, especially about the hapiru, bands of debt fugitives and others, who some people translate as Hebrews. Rome was said to have been founded by exiles and runaways, mainly runaways from debt who created their own society there. Flight from debt goes way back.

Bronze Age “divine kingship” gives way to classical creditor oligarchies

Karl: Given the history of Clean Slates and the jubilee, how did agrarian debt develop? And how did the conflict of interest between creditors and rulers play out?

Michael: It played out differently everywhere. There was a constant tension from the Bronze Age through classical antiquity between rulers trying to maintain a society under their control, and local headmen trying to get power for themselves. The big question was who would run society and draw up its rules. Would it be the priesthood and military rulers at the top of the pyramid, or creditors and warlords grabbing peoples’ land and trying to create their own control? Strong rulers like Hammurabi were able to centralise rule. He proclaimed andurarum upon taking the throne, and numerous times thereafter, down to his 30th year of rule. When he was sick and dying, his son Samsuiluna also proclaimed misharum to restore order to start his own reign in balance. But then you’d have Intermediate Periods with a free-for-all in which local leaders gained autonomy. And they simply disobeyed royal Clean Slates.

From 1200 BC to about 750 BC in the Mediterranean you have a Dark Age. Apparently you had not only very bad weather around 1200 BC – maybe a small Ice Age and drought – but the weather and crop failures led to mass migrations and invasions. The palaces of Mycenaean Greece were burned and syllabic writing disappeared for nearly 500 years. Then, when you have alphabetic writing emerging, the person whose title originally meant “local branch manager” of the palace workshop suddenly appears as the basileus, the ruler. But mostly you have landholding aristocracies holding the population in debt serfdom (like the Athenian hektimoroi, “sixth parters” liberated by Solon in 594 BC). It was much like the post-Soviet kleptocrats when Red Managers gave themselves control of their companies. When central power falls apart, local headmen take over. The dissolution of royal power led to privatization – including the privatization of credit, taking it and its rules out of royal hands. So Clean Slates stopped.

Much the same thing occurred in England. After the Norman invasion you had the Magna Carta when the autocratic King John tried to grab all the economic surplus for himself. The landowning barons wanted to break free. The Magna Carta limited what kings could tax without landlord agreement. The barons said, in effect, “The rent that we formerly paid to support the royal army, we henceforth will keep for ourselves. Also, we won’t pay the debts we owe to the Jews, so that we can keep our land.” The founding constitution or legal documents of almost every nation have to do with the relationship between finance, land tenure and its tax liability, and the relationship between centralised power and local power.

You could say that the progress of civilisation for the last thousand years, since feudal times, has been a dissolution of autocratic feudal power toward more democratised power. The problem is that land has been democratised on credit. So instead of owing money to landlords, homeowners now owe money to their bankers.

Creditor stratagems to evade the law and religious sanctions

Karl: That is the challenge of the ages isn’t it? Looking through these writings of yours, it becomes clear that this battle between credit and the sovereignty of this democratic process has been an ongoing challenge. In antiquity, did the vocabulary distinguish interest from usury?

Michael: No. It was only in the 13th century that Thomas Aquinas and the Schoolmen distinguished between interest and usury. Any taking of interest was considered usury in antiquity. That’s why some people tried to ban it, mainly for consumer interest. When the distinction was made, usury was supposed to refer to consumer loans, and interest was for bona fide commercial loans. These usually involved shipping to foreign buyers or transferring payments from one country to another, for instance when barons left to fight in the Crusades. The Latin word for such foreign exchange fees was agio, a premium.

Bankers managed to get around Christian sanctions against usury by saying, “Okay, it’s not interest, it’s a fee. It’s a foreign exchange fee.” They would pretend to make a foreign exchange transaction, and pay for the currency convertibility. If you’re converting Australian pounds into dollars, you have to give a few percentage points to the banker. In medieval times, interest was concealed as a foreign exchange fee and as interest or, for real estate, as rent – much as in today’s Islamic finance. This was called “dry exchange,” because it occurred on dry land. No sea transport was involved.

Karl: So when we look over the history of this era and its battle between credit and the ruling elite, the challenge was to maintain land ownership within your community and keep your people there, making sure that they had some share in the benefits of working together. This sort of independence of people being able to live off their land seems to have become a battle between democratic principles and creditors.

Michael: That’s basically so. Early common law had blockages against the things that creditors could foreclose on – the widow’s ox, the blacksmith’s anvil and basic tools of one’s trade and self-support. If you were a creditor and wanted to get somebody else’s land, you needed a legal stratagem.

In Babylonia and neighbouring Indo-European speaking communities such as Hurrian-speaking Nuzi, customary land tenure rights were only transmissible within a family or clan. The aim was to enable kinship units to supply their basic needs. The creditor’s stratagem was to get himself adopted by the debtor as number one son, as his heir. When the debtor died, the number one son, the creditor, would inherit most of the land, as if he were part of the kinship-based community. A Babylonian proverb reflects this practice: “A creditor has many relatives.” These subterfuges that creditors used are much like the small print that bank lobbyists write into today’s bankruptcy laws to stack matters in their own favor. Creditors and Wall Street have always been subtle in finding end runs around laws, obeying the letter of the law but changing the spirit of the law.

The U.S. political outlook: the Democrats and Hillary Clinton’s 2016 run

Karl: Changing gears, let’s speed into the current American situation with Elizabeth Warren and the Democratic ticket. I saw this week that she’s come out fighting against banks and their threat to reduce donations to the Democratic Party if she doesn’t tone things down. Did your blood boil when you read that Michael?

Michael: Not at all. The Democratic Party in America is the party of Wall Street. A Republican administration could never get away with turning over power to Wall Street, because as long as they’re in power, the Democratic opposition will block them from doing it. Although the Republican Party is almost entirely funded by lobbyists, the Democratic Party is the one that has the power to unblock the giveaways to Wall Street. Most of this is done under former Clinton Treasury Secretary Robert Rubin who got rid of the Glass-Steagall Act, blocked regulation of bank derivative gambles, and inaugurated the wave of deregulation and outright criminalization of banking.

The Glass-Steagall Act was repealed in 1999, when the Clinton Administration also blocked regulation for bank speculation in derivatives. It took only eight years for the most criminal organisations, Citibank and Bank of America (which bought the junk mortgage writer, Countrywide Finance) to bring down the economy. The head of Citibank was Rubin, after having freed it from regulation. What the press called the Rubino Gang wrote fake mortgages – they’re called “liar’s loans” or “Alt-A,” based on false declarations of income and false property valuations (the liars were the banks and the mortgage brokers) and sold them to gullible investors like German Landesbanks that were naïve enough to believe that Wall Street wouldn’t try to cheat them. The junk mortgage bubble was one of the biggest ripoffs in history.

You can read what my UMKC colleague Bill Black has written recently on Naked Capitalism and the University of Missouri Kansas City site, New Economic Perspectives on the Citibank criminogenic organisation. The Democrats under Obama have blocked any prosecution of financial criminals. Not a single bank crook has been thrown in jail after over $4 trillion had been stolen and bailed out by the Federal Reserve’s wave of Quantitative Easing. The crime wave of Wall Street and real estate in the last decade has endowed an entire ruling class for the next century in America.

They’re as criminal as the Russian kleptocrats, because they’re in total control of the government. They’ve used their power to re-define the meaning of a “free market.” To them, a free market is one completely free of government regulations to control banking, and free of any criminal prosecution, because they have their factotums in the Justice Department. The head of the Justice Department is Eric Holder, whose job is to protect Wall Street. He resigned recently in favour of a successor, Loretta Lynch, who also is a non-prosecutor of Wall Street’s.

So essentially the real estate and mortgage system in America has been criminalised in the way that Bill Black has been describing in four wonderful articles that he’s published in the last week on Naked Capitalism. Hillary is fully on board with the Rubinomics gang.

Finance capitalism is dominating and stifling industrial capitalism with debt deflation

Karl:Excellent Michael, I’ll look forward to reading those. That’s the horror story of banking, but I like the fact that you’ve dug into the archives and found one of the bright spots for the finance industry, and that was the Saint-Simonian banking ethos. Can you remind our listeners what that was all about, and how we hope the finance sector might evolve?

Michael: In the 19th century the Industrial Revolution was really taking off. The great financial question was how to create a banking system that would help industrialise countries to bring them into the modern era. Before the 19th century – ever since antiquity – you don’t find banks lending to build factories or other means of production. Loans were made against property pledged as collateral, or were made largely to export goods once they were produced. But banking before the 19th century did not actually fund tangible capital investment. James Watt wasn’t able to get the money for his steam engine from a bank, except by mortgaging his property and borrowing from friends.

Saint-Simon founded a school of reformers in France that realized that in order to industrialise the nation, catch up with England and overtake it, it had to move banking beyond its medieval stage. Instead of making lending to businesses in exchange for interest payments – which can force them into bankruptcy when sales turn down, bank loans should really be made on the basis of profit sharing. This is how commercial loans were made back in Babylonian times. Saint-Simon’s idea was to make banks more like mutual funds. Their fortunes would rise or fall with those of their business clients.

The main country that adopted this industrial banking principle was Germany as well as other central European countries. Their banks invested in their customers as stock owners as well as acting as creditors. They acted basically as the forward planning arm of industry, working with governments to promote export sales abroad.

Until World War I most futurists, from Karl Marx to regular businessmen, expected banks to take the lead in planning society. But after Germany lost World War I, the world reverted to Anglo-American banking. This was basically short-term hit and run. Banks still don’t make loans for industrial development. They do lend for raiders and mergers to take over companies, and also to ship exports. But they’re not set up to actually fund industrial capital formation. So society has fallen back in the last hundred years to the opposite of what classical economists and what 19th-century futurists expected banking to become.

Although we do have a centrally planned society, it is centrally planned by Wall Street, the City of London, Frankfurt and other financial centres. This planning is extractive, not productive. It seeks to extract interest payments, to profiteer from takeovers and gambles, and to make capital gains on stocks and real estate speculation. But it’s not designed to industrialise economies. That’s why most of the world outside of China is in a period of economic shrinkage and de-industrialisation.

Karl: So to wrap things up Michael, what can we learn from the Ancient Near East? Perhaps you can tell us how you got interested in this historical topic going way back through these cuneiform readings of clay tablets.

Michael: For me, the advantage of studying the ancient Near East is to see how different economies through history have dealt with the phenomenon of debts that are too large to be paid. Right now you’re having in the Eurozone with its arguments against Greece saying that if its government can’t pay its debts to the IMF, European Central Bank and the rest of the troika, it has to submit to austerity, even if its population is forced to emigrate. That is what much of the Greek population is doing. Shrinkage and emigration is what has to be paid for not being able to cancel debts – in this case public debts. The ancient Near East couldn’t afford the Eurozone’s pro-creditor stance, because it would have been depopulated and been conquered by neighbouring countries that didn’t submit to such austerity.

The advantage of studying the ancient Near East is to see a contrast with today. I got into this originally when I was working with the United Nations Institute for Training & Research (UNITAR) in 1978 and ’79. We had a meeting in Mexico and I gave a lecture on what I’d found when I was Chase Manhattan banks’ balance-of-payments economist. The Third World couldn’t pay the foreign debts it had run up. This was a few years before Mexico declared it couldn’t pay in 1982. There was such a fuss and denials by the banks that countries couldn’t pay that I decided to write a history of how societies had dealt with situations where debts couldn’t be paid. I got all the way back to classical antiquity and the Jewish lands, and then found that there wasn’t any economic history of the early Near East. The economic and financial details were scattered through many journals.

In 1984, I went up to Harvard and a decade later we decided to put together a group to study the origins of economic organization, category by category, to trace how ancient economies developed the origins of modern economic civilisation. The five books you cited earlier were the result, as well as many articles you put in my website.

Karl: Well Michael Hudson, thank you very much for joining us here on the Renegade Economists’ radio show yet again, that must be about our fifteenth interview I reckon.

Michael: Good, thank you.

April 20, 2015 Posted by | Book Review, Economics, Timeless or most popular | , , , , , | Leave a comment