Foreign Money, National Security, And The Midterm Elections

By Simon Johnson

Campaign contributions by non-citizens are a huge issue lurking behind the midterm elections; they will be even more important in 2012.  Think about the economic dynamics:

  1. Americans have a long-standing and well-founded aversion to foreign involvement in their politics, and it is well-established that this can happen in part through corporate “commercial” structures.  Thomas Jefferson objected to Alexander Hamilton’s plan for a national bank in part because he feared this would become a stalking horse for the British in some form (see Chapter 2 of 13 Bankers for the context).  Dubai Ports World was not allowed to invest in the United States – for reasons of perceived national security.  You may or may not think that case was handled well, but we have the CFIUS process to vet foreign direct investment for good reason.
  2. The Supreme Court has determined that corporations can make political contributions virtually without limit, apparently not understanding or not caring that (a) management has a fiduciary responsibility to shareholders, (b) globalization means more foreign shareholders on average (for privately held companies and funds, as well as publicly traded companies), and (c) at the margin, key strategic shareholders – the people who provide extra capital when the chips are down – increasingly tend to be foreign.  Think about the role of Sovereign Wealth Funds in providing funds to our banking system in 2007-08, or the fact that Citigroup goes cap-in-hand to Saudi Arabia every decade or so.
  3. During the Reagan years and again, even more, under the Second President Bush, the US ran a large current account deficit – reaching 6 percent of GDP before the 2008 crisis (and still around 3 percent of GDP).  You may think this a technical detail that is largely irrelevant to the political process, but you would be wrong.  We finance our current account deficit with capital inflows from abroad or, to put that more plainly: Foreigners buy and hold financial assets in the United States.  Some of those assets are US government obligations but traditionally and increasingly non-US people have also acquired claims on corporate entities – including common or preferred stock.

There are good economic reasons to allow foreigners to buy financial assets in the United States.  We like to invest around the world and a high degree of reciprocity is only reasonable. 

The US dollar is the “reserve currency” of choice – for the past 50 years this is where countries and careful individuals have chosen to keep their rainy day funds.  This was a core idea behind the international trading system constructed after 1945.  You may not like it, but what alternative exactly would you propose?

And there is nothing wrong per se with running a current account deficit – although it would be much better if we used the inflow of foreign capital to finance investment, rather than (as in the Bush years) tax cuts that just further encourage overconsumption.

Irrespective of how you feel about foreign capital inflows in economic terms, you have to face the political reality.  As foreigners accumulate claims on the United States, they will increasingly diversify into corporate assets (in fact, this is the advice they get from their Wall Street advisers).  Some of these corporate assets explicitly come with voting rights – but those are supposed to be voting rights over the corporation (or investment fund), not voting rights in political elections.

We have effectively enfranchised foreigners in US elections.  This is clearly and absolutely not what the drafters of the Constitutions had in mind.

This dissonance between our claimed political values and the political reality will grow over time – unless you think our current account deficit will swing into surplus at any time in the future, the net inflow of foreign capital will continue.

The only way to deal with this is to require complete disclosure by all corporate entities (and similar “veils” like investment funds of any kind) regarding the contributions they make to any organization or individual involved in political messaging or campaigning.

To be sure, this would be onerous.  Thomas Jefferson and his colleagues would have wanted it no other way.  The US Constitution was not drawn up to protect the rights of foreign citizens.  It defines who is and who can become an American – and the rights and responsibilities of those who would like to rule the United States.

And however you prefer to define our legitimate national security interests, how are they consistent with letting foreign citizens influence or even determine the outcome of our elections?

114 thoughts on “Foreign Money, National Security, And The Midterm Elections

  1. I think that the “complete disclosure by all corporate entities” is the key in determining if the foreign investment is substantial and therefore unacceptable in U.S. elections. We have to look forward and ask ourselves ‘what’s next’? Investment of foreign governments in U.S. elections to undermine U.S. interests?

    The media in our country has become more aggressive when it comes to stories about corporations and political donations.


  2. The possible solutions are three:

    1. (painful) Restrict foreign investment cutting off a (currently) much needed source of capital.

    2. (complex) “ … require complete disclosure by all corporate entities (and similar “veils” like investment funds of any kind) regarding the contributions they make to any organization or individual involved in political messaging or campaigning.” and somehow limit their political influence and power.

    3. (hard) Make our economy strong enough that we don’t need to go overseas, hat in hand, looking for loans and equity investments.

  3. Unfortunately, the only real cure is to overturn the Court’s unfortunate mistake. Supreme Courts are not perfect, as is obviously the case this time.

    This will have to wait until the current court majority changes. Until then our only options are really ‘workouts’ that mitigate the threat to democracy posed by this incredible judicial error.

  4. “The media in our country has become more aggressive when it comes to stories about corporations and political donations.”

    But not aggressive enough to widely report that in the Citizen’s United decision, “an 8-1 majority upheld the disclosure laws as vital to democracy. That part of the ruling has gone largely ignored.” (David G. Savage, “Coroporate campaign ads foil Supreme Court prediction,” McClatchy-Tribune News Service, October 26, 2010.

    Simon Johnson could have noted this in his post, but did not.

    I don’t think disclosure is the answer, but we need it yesterday.

    For a longer term solution, see

  5. Please note my comment above: by an 8 to 1 majority the current Court IN Citizens United vs. the FEC “upheld disclosure laws as vital to democracy.”

  6. I think foreigners financing elections is nothing new for us in the UK. The Conservative party is pretty mysterious about how it raises funds and it has long been speculated that it is reliant for funding on people from abroad.

    Sadly, I think that the US is catching up with the rest of us and millionaires who have avoided paying tax in a jurisdiction seem to think that should not preclude them from influencing the choices made/available to real tax payers.

    I hope that you find a way of stopping this – people should know who is telling them stuff and who is paying for it.

  7. The best way to restrict foreign money in campaigns is to limit the time a person can hold office. I happen to like the suggest that congress and the senate should be pick like jury duty. A person cannot be placed back into the pool for three years after service. I know I would eliminate any retirement program for these jobs. We do not need a retirement system for a job that we do not want the person to hold too long.
    Once you get rid of the professional political type then you will see the need for election money will dry up. Our founding fathers were very much against foreign involvements. They have been again and again proven to be smart. We would not have endless wars if we just stay out of the middle east. Surely we can cut down or find other sources of energy.

  8. ‘Globalization’ is slowly but methodically changing alliances. Increasingly, the global investment-class must unite as machines devalue labor. For all of its advantages, capitalism has a basic flaw where wealth distribution is concerned. As the current trends play out, there is an inevitable conclusion that pits the owners of the resources and the production wherewithal against non-owners. But these lines will not be drawn according to national boundaries, the economic interests of the international investment-class will unite their political interests and especially so in the nations with the largest global market-share being traded within their national boundaries(USA).

    It is critical to understand that it is not an oligarchy that threatens the freedoms of the non-owners, it is instead an unprecedented form of democratic tyranny. It follows therefore that through the influence that comes with consolidated wealth, that through the corporate framework, the investment-class will further its goals through affiliations with foreign investors.

    The investment-class is indoctrinating voters with 401(k)s. This type of retirement funding, as opposed to pension plans, increases risk but minimizes opposition to the corporate tyranny. The US is in fact gradually becoming a national stronghold for investors from all nations, and the US is being engineered to allow MNCs a safe-haven via the inclusion of the majority into the fold of the investment-class. Then too of course this alignment of economic interests has not just the protection of the most unrivaled military in the history of humankind, but a vast global network of intelligence agencies and military outposts. And none of this is by accident. This too is why the global investment-class tolerates dollar hegemony and the like, US ‘national interests’ have transcended our nation in a way that is unlike any previous international alliance.

    The social turmoil during the Viet Nam era made it perfectly obvious that US global domination would require two crucial changes in our social engineering:

    1) A much larger segment of the population must benefit from investing so as to align economic interests with political objectives in keeping with ‘national interests’.

    2) The remaining population (non-investors) must be allowed fewer options and opportunities so as to present military service as a more attractive alternative. This downgrading of wages and options for the working-class was of course also consistent with the need to improve our competitive standing in the global markets. (This reasoning is however diluted somewhat by the fact that for US exports to be more competitive, the incomes of all US citizens should have been equally stagnant. But of course that would not allow a larger segment of the population to be brought into the compliant fold of the investment-class).

    The social engineering of an imperialist democracy is fairly easy to understand in retrospect, but a very complex combination of dynamics were required to configure the population in its current form. Agricultural subsidies for example played a very important role in manipulating the value of labor and in creating trade dependencies. Manipulating the entire global economy and the governments of countless nations was necessary to position the US so as to prepare for a time when the value of labor made the existing paradigm untenable. But there is no oligarchy in the USA, what exists instead is much more powerful, dangerous, self-serving and exploitative, and harmful, and with the potential to be much more controlling than it is as resources become increasingly scarce and as labor continues to lose value. Naturally, this democratic tyranny relies heavily on its converts being uninformed in combination with satisfied to an extent in financial terms.

    But of course non-owners also have the option of uniting across national borders and the corporate model has a very exposed weakness to boycotts. We could also of course try to fight foreign influence in our political arena, but foreign financial support of our corporate tyranny would simply be applied surreptitiously, as has been the case thus far. And I suspect that in their wisdom the Supreme Court Justices understood this inward ‘leakage’, and they therefore thought it best to shine more light on the playing field so as to give the underdogs a fighting chance. Exposing foreign influence on our democracy and making the danger better understood by the global population is in fact the only way move the game along. Progress can only occur if a great many more counter-balancing citizens are able to understand what is happening to the world, and this issue of foreign financial support for a democratic tyranny, does have some rather obvious implications that should be telling indeed.

    That our Supreme Court should find it necessary to expose a danger by unleashing its full potential for harm, explains a great deal about how the MSM has failed to provide our democracy with its most vital component… truth. This ‘unleashing’ of corporate greed also suggests that our Supreme Court Justices realize that the existing tyranny is too entrenched to allow for anything other than a bold maneuver. It is inspiring though that truth always seems to find its own way into the struggle.

  9. @rayllove: Very interesting perspective on Citizens United. Admit I have not considered this as a possible underlying motive for the decision. For this to be successful, disclosure must be demanded/enforced. I, for one, am not holding my breath.

  10. Well the Supreme Court has changed what the Abraham Lincoln wanted for America

    They decided that the country is :now:
    conceived in Liberty, and dedicated to the proposition that all companies and foreign lobbyist are created equal. And Screw the people>
    That this nation, under God, shall have a new birth of freedom — and that government of the companies and foreign lobbyist, by the companies and foreign lobbyist, for the companies and foreign lobbyist, and screw the people, shall not perish from the earth.

  11. Mr. Johnson wrote:

    “…how are they consistent with letting foreign citizens influence or even determine the outcome of our elections?

    Concerns over foreign influence diverts attention from those who really run the country. Score one for the vampire squids.

    “Misdirection is a form of deception in which the attention of an audience is focused on one thing in order to distract its attention from another.”

  12. cedar,

    I disagree, respectfully. Disclosure will come as a gesture by the Government to feign solidarity. It is just too attractive as a campaign offering. It will probably be necessary for both parties to offer themselves as a protection from corporate influence. It will not be given freely though, it is too valuable for that as a propaganda tool.

    As for the underlying motive, nothing else adds up. The Justices are not greedy, if they were they would have chosen different lives. They are too old for greed anyway and, they have reached the pinnacle of their field, so ambition plays no role here. And they are not by any means limited in intelligence. Nor does it seem likely that even a less than intelligent person would have any trouble recognizing the threat inherent to corporate tyranny. And they things were was merely obfuscating the threat, (think Jack Abramoff etc.). The only choice was to put the problem out in the open.

  13. 1. Simon is absolutely correct.

    2. Speaking of the intersection of national economic and security concerns, the recent Yemeni cargo bomb incident points the way to the most expedient way to address our trade imbalances – that is, enhance port security, cargo inspections, and enforcement of import safety standards, and make importers pay the cost. Not only would this make domestic production more attractive, the threat of terrorism provides the geopolitical cover necessary to avoid a trade war, and such a policy would fill a gap US consumers are feeling anyway (in addition to the terrorism threats, see recent stories on Chinese exports of toxic baby formula and toys manufactured with lead-based paint).

    I appreciate the argument that tariffs are harmful to free trade and thus tend to reduce social welfare, but in ensuring that our trading partners meet our security and safety standards, this proposal serves a social good. Moreover, I would argue that society is already paying a price for these concerns; in that sense, the proposal increases economic efficiency by internalizing the cost within the act of importation. Furthermore, such a policy could be more realistic politically than anything else on the table right now.

  14. “And there is nothing wrong per se with running a current account deficit – although it would be much better if we used the inflow of foreign capital to finance investment, rather than (as in the Bush years) tax cuts that just further encourage overconsumption.”
    There you go again, Simon. The external account (current and capital) on this occasion moved to compensate balance the internal imbalance between spending and domestic production. It is inaccurate to merely say “overconsumption”; the overspending was the combination from the government, individuals and businesses — whether it was consumption or investment. (And at that time the spending probably seemed to make “good” sense to those people, so maybe we should look at the policy environment — and the policy-makers, both elected and appointed — as bearing some of the responsibility for the meltdown.)
    You are too good an economist to make a careless statement.

  15. I don’t know what Professor Johnson is worried about…. Justice Roberts, Justice Alito, Justice Scalia, Justice Thomas, The Tea Party, and Rand Paul have got this all straightened out finally. Remember people: It’s the Constitution and individual liberty. They’re showing this woman right here….

  16. The only way to deal with this is to require complete disclosure by all corporate entities (and similar “veils” like investment funds of any kind) regarding the contributions they make to any organization or individual involved in political messaging or campaigning.

    I’m afraid we’ll need to go further than that.

    Nothing short of expunging itself “corporate personhood” will suffice. It’s incoherent to accept corporate personhood but object to Citizens United. If people believe in corporate persons, or at least tolerate the existence of this anti-human doctrine, then corporate speech, and far more, logically follows.

    The framers of the Constitution clearly intended to restrict corporations to the strictly delimited, constrained role they were conceived to play at the time. Any redemption of this Constitution we the people may try to undertake, for example by a new Convention, must explicitly restore the proper role for these unnatural, extraconstitutional, and by now unconstitutional, entities.

  17. Here’s some really good photo journalism from the LA Times on the “Rally For Sanity”. Some of them quite humorous. My favorite is the last link with the boy looks about age 10.

    Kind of beats uneducated psychos from the Tea Party holding up signs with Hitler mustaches and misspelled slogans, doesn’t it??? And OH MY GOD…. I think I might have even spotted a Muslim female in there somewhere. Good thing Newt Gingrich wasn’t there. Mr. Gingrich might have seen it as his personal duty to do a full body search along with a cavity check.

  18. How many Republicans does it take to change a light bulb?

    One Republican who has only “dabbled in witchcraft” and a foreign country to finance the operation!

  19. I doubt that – if there is enough money – you set up a revolving door between office holders and private employment. Oh wait, it’s already set up.

    Since it is harder for reformers to get into office because they don’t have the level of resources, we need to give them the opportunity to stay there and get experienced and better at the job.

    We already have term limits – it’s called elections.

  20. Del,

    By my logic, you and Simon are each wrong.

    The Bush tax cuts were made possible during 2 wars because the US Government was being funded by the Chinese, and of course other nations, buying dollar related assets with their trade surplus dollars, and, with dollars spent abroad by the US military, tourists etc. The tax cuts thereby maximized US based capital formation which of course in turn maximized the purchasing of global and domestic assets. But where this really gets clever is that it kept the Chinese, and other nations with surplus dollars, from utilizing these dollars and thereby competing with US investors in the global markets. The interest paid on T-bills is in fact a cheap way to recycle capital while also favoring our ‘national interests’.

    Naturally, these foreign inflows ultimately played a key role in the bubble formations. But this is the dollar hegemony that foreigners have been complaining about for decades. We hear very little about these complaints here in the states but it is easy to understand why foreign governments see this as a way of giving the US an unfair advantage in the global market-share game. Here is a link with plenty of complaints:

  21. Yes, you might be right about the Court’s intentions. That kind of desperate tactic may be the only way to free ourselves — which is why I think all liberals and democrats should join the tea party and back Palin. That would change the game.

  22. Should we be including the 1996 money from the Chinese Military? So is this just an issue because of possible Republican gains in Congress?

    1996 United States campaign finance controversy
    From Wikipedia, the free encyclopedia

    The 1996 United States campaign finance controversy, also known as Chinagate, was an alleged effort by the People’s Republic of China to influence domestic American politics during the 1996 federal elections.

    The issue first received public attention in early 1997, with news that a Justice Department investigation had uncovered evidence that agents of China sought to direct contributions to the Democratic National Committee (DNC) in violation of U.S. laws regarding foreign political contributions.[1] The Chinese government denied all accusations. Twenty-two people were eventually convicted of fraud or for funneling Asian funds into the United States elections, and others fled U.S. jurisdiction. Several of these were associates of Bill Clinton or Al Gore.

  23. The Citizens United decision was an enormous mistake, and not just because of the foreign angle.

    Monetary payments are not speech. Particularly where the payments are consideration for some sort of (explicit or implicit) quid pro quo. If we are to take the court’s ruling to its logical conclusion, then bribery and the hiring of contract killers are not crimes, they are protected speech. That’s nonsense.

    Corporations should only have the minimal amount of legal standing (e.g., to own property, enter into contracts, file suits) necessary to conduct their operations. Extending political rights, such as the right to free speech, to them is an absurdity.

  24. Dixie cups are as American as Apple Pie. But now every time I pick one up I think …”KOCH” Brothers Industries and tea Party Politics because the price of that cup includes a political contribution that I do not have any choice to contribute or withhold.

    Yes shareholders will have to swallow political campaigning as a potential influence peddling cost of doing business, but the “price” of any item from such a corporation is going to reflect that as well. Is it fair that when I purchase an everyday item (over and over as a hidden “BARRON” tax…) I am contributing to a cause I may not want to support?

    There are many sides to this complex crisis of choice and democracy of people, for people and by people. The hidden cost of tyranny pressed upon the victims is one of the greatest cruelties of aristocracies in history. The thought that it can happen hee to us in contemporary America is outrageous and unconscionable.

  25. I was taught in grad school that there’s a difference between and individual/physical entity and a legal entity. I’ll have to ask for my money back.

  26. The Court’s decision in this case is utterly vile, yet predictable. The most powerful can now control the message. The super rich, the corporations and special interests can dominate the market, consuming available messaging time to push their agendas and suffocate opposing views. And, they can do so in complete secrecy. This amounts to an Orwellian takeover of the media by the most powerful corporations and cartels, and even foreign entities, all hidden from American voters. We have fallen a long, long way. And it will get much worse in 2012. Our democracy has been sacrificed to the greedy. The new religion looks a lot like fascism, and the new gods are multinational corporations. We the people have lost dearly. This democracy will not survive in a sea of voter apathy. Organize Now.

  27. To say that we already have term limits, called elections is wrong. Why? You forget about the power of incumbency and the difficulty of marshaling enough resources to enter a campaign. Incumbents put up barriers to prevent people from running against them through the party apparatus and state laws make it very difficult to run an independent campaign. Add to this the large amount of money required to run ANY campaign (~$10-50K at the local level, ~$500K to run for county executive, ~$1M for a congressional seat, etc)along with gerrymandered seats and you get barriers that prevent 99% of the people from running for political office. An 8-12 yr term limit would prevent anyone from staying in office long enough to amass enough power to prevent others from running. It would also ensure enough new thinking in the system to prevent our government from becoming ossified.

  28. To say that we already have term limits, called elections is wrong. Why? You forget about the power of incumbency and the difficulty of marshaling enough resources to enter a campaign. Incumbents put up barriers to prevent people from running against them through the party apparatus and state laws make it very difficult to run an independent campaign. Add to this the large amount of money required to run ANY campaign (~$10-50K at the local level, ~$500K to run for county executive, ~$1M for a congressional seat, etc)along with gerrymandered seats and you get barriers that prevent 99% of the people from running for political office. An 8-12 yr term limit would prevent anyone from staying in office long enough to amass enough power to prevent others from running. It would also ensure enough new thinking in the system to prevent our government from becoming ossified.

  29. From wikipedia,

    “Just War Theory (or Bellum iustum) is a doctrine of military ethics of Roman philosophical and Catholic origin[1][2] studied by moral theologians, ethicists and international policy makers which holds that a conflict can and ought to meet the criteria of philosophical, religious or political justice, provided it follows certain conditions.

    Just under certain conditions goes back at least to Cicero.[3] However its importance is connected to Christian medieval theory beginning from Augustine of Hippo[4] and Thomas Aquinas.[5] The first work dedicated specifically to it was De bellis justis of Stanisław of Skarbimierz, who justified war of the Kingdom of Poland with Teutonic Knights. Francisco de Vitoria criticized the conquest of America by the Kingdom of Spain. With Alberico Gentili and Hugo Grotius just war theory was replaced by international law theory, codified as a set of rules, which today still encompass the points commonly debated, with some modifications.[6] The importance of the theory of just war faded with revival of classical republicanism beginning with works of Thomas Hobbes.

    The Just War theory is an authoritative Catholic Church teaching confirmed by the United States Catholic Bishops in their pastoral letter, The Challenge of Peace: God’s Promise and Our Response, issued in 1983. More recently, the Catechism of the Catholic Church, in paragraph 2309, lists four strict conditions for “legitimate defense by military force”:

    1. The damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;

    2. All other means of putting an end to it must have been shown to be impractical or ineffective;

    3. There must be serious prospects of success;

    4. The use of arms must not produce evils and disorders graver than the evil to be eliminated. The power of modern means of destruction weighs very heavily in evaluating this condition.”

    I believe that with the “interpretation” of “free speech” handed down by the Supreme Court in Citizens United vs. the FEC, we can kiss “rule of law” goodbye as one of the means, referred to in #2 above, to avoid armed conflict.

    But “terrorizing” the predators/aggressors is FAR from finished as a “means” – as a matter of fact, it’s just getting started.


    and I do mean NOTHING

    strikes terror in the fevered, degenerate, and retarded-by-sin minds of global drug lords and war lords

    than “we the people” stopping to USE their $$$.

    It was fiat to begin with, so what “power” does it have NOW after the spending spree on war and trashing Spaceship Earth (commodity “war”?) even MORE than it already is trashed through WAR over “isms”.


    can there be anything MORE delusional than going to war over ISMS?!

    When the first convention met – they KNEW – call it common sense – that at some point, “government” would turn against its own people.

    Constitutional Convention and BURN THE PATRIOT ACT.

    Of course, the issuing of new $$$ follows…


    I can “feel” the terror – psychos, especially, all have ONE phobia that freezes their ability to count on the “protocols” being inviolate and infallible….

    So #2 has NOT been exhausted and #3 is a hard cold MATHEMATICAL and scientific FACT – there IS a serious prospect of success….think about it….

    I’ll go on believing that the Supreme Court judges did not approve the “dog ate my homework” puerile excuse some people have throw out as a distraction here…scheesh, food fight, anyone?

  30. Simon suggests that there is a equality among nations in this post:

    We finance our current account deficit with capital inflows from abroad or, to put that more plainly: Foreigners buy and hold financial assets in the United States. Some of those assets are US government obligations but traditionally and increasingly non-US people have also acquired claims on corporate entities – including common or preferred stock.

    There are good economic reasons to allow foreigners to buy financial assets in the United States. We like to invest around the world and a high degree of reciprocity is only reasonable.

    This is a false equality. There are self inflected actions which are changing this drastically against America. The current Administration, despite campaign promises to create a level playing field for Americans to compete internationally, has continued and intensified IRS persecution of overseas Americans and so-called US persons.
    1. Americans abroad are the only nationality who are subject to dual taxation – once inthe country where they work and once in the US. Germans, Japanese and Chinese workers outside their countries do not have this distinct disadvantage.
    2. Foreign investors who are designated “US persons” may be subject to US taxes even if they no longer reside in the US. Think foreign students who once came to the US for graduate studies and went home
    3. Estate taxes of these US persons may be due on the TOTAL estate of the family. So if one German member of a family went to Harvard to study, all of his brothers and sisters may be liable for US estate taxes on their German family home when the pater familias dies.

    This is going to chill the desire of individual investors to invest in the US. They will invest in China, India, Russia and other growing economies.

    This will not chill the Sovereign Wealth Funds investments, since they are corporations that will never pay estate taxes of course… just one more weird twist of the knife for us “natural persons.”

  31. Fed Expected To Pump Up To $1tn Into US Economy

    Sunday 31 October 2010 – – excerpts

    “Fed chairman Ben Bernanke is likely to extend quantitative easing by as much as $1tn on Wednesday. Crucial meetings of the UK, European and Japanese central banks follow on Thursday and Friday.

    The Fed’s decision on Wednesday will also cheer stock markets, which see so-called quantitative easing (QE) as a way to lower long term borrowing costs and boost the earnings of corporations.”

  32. Psyche ops isn’t conducting a “counter-revolutionary” WAR just in Iraq and Afghanistan – the exact same tactics have been deployed against the “middle class” here on home ground.

    187,000 “contractors” is/was the larger army, and that number does not include secret “homeland security” personnel assigned to protect

    TBTF “banks”

    by throwing 40 million born and bred USA citizen

    FAMILIES out of their family homes….

  33. It is high time that we begin the process of demanding a direct democratic vote by the people of the United States of America themselves in appointment “candidates” vor the Supreme Court. No other office is so blatantly CAPTURED by ideological bias and crony politics. Think of the potentials we have for the balance of power. Why should the executive office, in our day and age, have the awkward advantage of stacking the courts? This is for LIFE! We leave this to random chance in the sense that we never quite know how much any single president will influence this powerful branch of American power and authority. And we leave this and our constitution in the hands of chance? In this technological age the capacity and capability of having an occasional special election should not be considered an obstacle. Instead, we should be wondering whether…given the choices we have had over the past decade for presidents, do we really want to leave this to the fickle finger of political enterprise? Especially now that Corporate moguls have taken over the political finance machine,…do you want their ONE man appointing the people who will interpret YOUR constitution?

    Think about it and talk about it. We need to elect our supreme court Judges ourselves. If we are to have a real Constitutional Convention…let’s not mess with the current language…let’s change the structure of how Supreme Court Judges are elected !!!

  34. The underlying issue is campaign finance reform. I recall Simon Johnson has called for a constitutional amendment to achieve this aim. As a Canadian observing the American election cycles, I wonder how much of the U.S. economy (GDP) is dependent on election campaigning.

  35. I have hardly any idea what the great majority of these comments are about. They seem to be an amorphous farrago of apparitions, corporate moguls, hobgoblins, inward leakages, Orwellian takeovers, and indoctrinated voters whose 401Ks are a worm that insidiously invades their left brain and tells their right hand to pull the lever for the Sultan of Brunei.

    Oh, right, it’s halloween.

  36. Here’s the final report of Senate Committee involved with the 1997 Special Investigation in Connection with 1996 Federal Election Campaigns

    Final Report on the Special Investigation:

    Corporations are not the only source of campaign cash. Sadly, a lot of US nuclear technology appeared in the Chinese military arsenal in the years after the 1996 election.

    Lest we forget ..

  37. @tom dee. You say “Our founding fathers…have been again and again proven to be smart.”

    Like you, I have often been impressed with the wisdom and foresight of our founding fathers.

    But then I remember that most of them owned slaves, and their wives were legally their property also. And I think of how hard all those slaves and wives worked so that the great men could think great thoughts.

    And I think about how initially, only white men who owned property could vote in our great democracy. And I think about how many people fought and worked so hard for SO many decades until unpropertied men and then African Americans and finally even women could vote.

    Yes, the founding fathers were smart, but not infallible. And they knew it. Do you, tom dee?

    Meanwhile, I agree with you about finding other sources of energy.

  38. @rayllove:

    This worship of the Supreme Court Justices is quite astounding. Do you worship the dissenters to Citizens United as much as you do those in the majority?

    And if you worship the Supreme Court so assiduously, did you notice that within the Citizens United decision they voted 8 to 1 that full disclosure of campaign fund sources is essential to democracy?

    Campaign Finance Links
    National Disclosure and Research Resources

    *Support Open Secrets!

    Annenberg Public Policy Center
    The site of the University of Pennsylvania-affiliated research center provides information on the role of advertising and the media in federal politics, including the use of ‘issue ads’ in campaigns.

    Campaign Disclosure Project
    A collaboration of the UCLA School of Law, the Center for Governmental Studies and the California Voter Foundation, the project classifies and evaluates campaign disclosure laws of the 50 states, and designs and promotes a set of uniform standards and model laws.

    Campaign Finance Information Center
    The Investigative Reports and Editors’ site contains archives of campaign finance stories from around the country, databases, lists of experts, links and other reporting tools.
    * Center for Public Integrity
    The non-partisan investigative research group’s site provides reports on the money behind state and federal elections.

    * Federal Election Commission
    This site contains images of hard copies of campaign finance reports by candidates, parties and PACs and other information from the U.S. agency that oversees campaign finance laws.

    * Internal Revenue Service’s 527 Group Disclosure Site
    This site contains campaign finance reports filed by groups organized under Section 527 of the tax code.

    * Project Vote Smart
    This site juxtaposes campaign contributions for more than 13,000 candidates and elected officials nationwide with voting records and evaluations by special interest groups.

    * National Institute on Money in State Politics
    The nation’s most complete resource for information on money in state politics (governors, ballot initiatives, state legislators and more) — much like does on the federal level.


    Thomas: Congress’ Official Site
    Includes searchable databases for bill status, sponsors of legislation, and committee actions. Congressional Record online, plus links to member and committee home pages, are also here.

  40. No, it’s a small issue which no doubt will occupy some people who refuse to think clearly about the big issues. If your primary concern is about foreign influence on American government, you should worry about 1) the sovereign debt held by China, 2) the oil in the Middle East, and 3) go back to 1) and 2). If you don’t like the Supreme Court ruling, you should argue against it on Constitutional grounds instead of trying to attack it with paper swords.

  41. @David Petraitis: “This will not chill the Sovereign Wealth Funds investments, since they are corporations that will never pay estate taxes of course… just one more weird twist of the knife for us “natural persons.”

    Oh, please don’t worry. Really rich “natural persons” do not pay estate taxes. They offshore their assets to take care of that.

    The problem with corporations is not that they don’t pay estate taxes, it’s that they never DIE.

  42. Simon, great article as usual. This falls right into the pattern seen recently where the “globalists” (of whom the wealthiest of American citizens and corporations are the leading members). We not only have substantial oligarchies flexing their political muscle in the US, but, as can be plainly seen without looking beyond our own noses, everwhere there is money. These oligarchies have true and deep global roots, and the ones beyond our borders see the liberalization of investment restriction (and thus campaign finance laws) in the US as benefiting them as well as their sworn partners here. Thus we have a new feudalism spreading across the globe. There is no “conspiracy” theory necessary to qualify this, but only a defacto circumstance. The conspirators (perhaps “unintended”) are having a hay day in the present (and probably future) global political environment. We even see this playing out in the over and intentional international arenas, like the WB, IMF, UN, G-20, WHO, CFR (here) and virtually every other globally vested body of conspiratorial bedfellows. How can we and the Russians agree so strongly on and “embargo” against Iran, and hve Russian building and maintaining reactors there? How does BP destroy the Gulf and somehow get prime drilling rights off Libya? Etc. etc., etc. The list is long and growing. And the Citizens United case will see to it that it moves ever faster, until the US, like many of its allies will become nothing to its citizens but a pit mine for human sweat, while the richest get richer and more dominant by the day. I am saddened by this. It puts me in mind of of the famous T. S. Eliot poem, the Hollow Men, and the world, somehow not too far into the future will probably end as Eliot speculated: “Not with a bang, but a whimper.”

  43. Sadly, in this case, the Supremes proved that they are subject to the whims of the polticians who appointed them, and realized, even as they cast their opinions, that the result would not upset anyone on either side of the aisle (although many on the left seem to protest, they are just blowing smoke).

  44. When talking about peddling, your and foreigners, private and corporate, influences, remember that the peddling could happen on-shore, like in the US Congress, or offshore, like in the Basel Committee.

    If you doubt it consider that it is the Basel Committee that has decided that a US bank when lending to a small unrated business or entrepreneur (100% risk-weight) needs to hold 5 TIMES more capital than when lending to a triple-A rated client (20% risk-weight)… and it is equally the Basel Committee that decides that if a bank lends to a triple-A rated sovereign (a God like 0% risk-weight) then it needs no capital at all.

    And that in the more than 2.000 pages of the recent financial regulatory reform approved by the US Congress there is not one single mention of the Basel Committee.

  45. Bayard,

    Instead of continuing to promote their power, are you ever going to go after their PHOBIAS…?

    It’s all a head game, right?, the whole terror thingy.

    USA already FOUGHT that war – brother against brother – sister against sister – sister against brother – well you get the drift

    and watered USA soil with 400,000 lives – highest body count yet…

    There will be no form of slavery on this land.

    Get it?

    All anyone needs to do is to read the “hoax protocols” to be CERTAIN of how depraved the “globalists” are and how they are only about doing what is in those protocols

    and JUST WAR #3 morphs into an endless LIST of what

    OTHER forms of “government” have a “serious prospect of success” OTHER THAN THEIRS WHICH is to use MSM to call us stupid 24/7….

    The CURRENT rich man’s idiot sons PSYCHOS-in-charge with their faster rabid raccoons nipping at your virtual ankle…

    “shall not pass”…

    Your choice to continue to worship them.

    I’m sticking with terrorizing them – the head game…have we taken a peek at what kind of apparatziks “work” inside global corporations these days and how “compentant” they are…? If we did, the illusion and delusion would become utterly laughable…

  46. Overturning the Court’s mistake most certainly does not have to wait for a change in the court majority. It could and should be done in Congress and the states, first with a constitutional amendment restricting the rights of persons to human persons, and second with rigorous campaign finance reform. Admittedly given the recent behavior of the Congress, this might take almost as long as changing the Court, but that is not a reason not to work for it.

  47. Letter to Editor:


    Russian gas company Gazprom gives political money to the Republican Attorney General of Virginia according to comments 88, 177, 225 etc. by “Snapple” on:

    “Chamber Of Commerce Receives At Least $885,000 From Over 80 Foreign Companies That May Be Used to Attack Democrats”:
    Most of the contributions are from India, but there are also contributions from Canada, Switzerland, England, the Netherlands, Germany, Australia, France, Bahrain, Dubai and Singapore. They are making contributions because they want to move American jobs to their countries.


    “Video proof David Koch, the polluting billionaire, pulls the strings of the Tea Party extremists”
    The Koch brothers own Koch Oil Company.

    The source of the video of David Koch [oil billionaire] running the Tea Party is Taki Oldham [].   
    “Oldham infiltrated some of the movement’s key organising events, including the 2009 Defending the Dream summit, convened by a group called Americans for Prosperity. The film shows David Koch addressing the summit. “Five years ago,” he explains, “my brother Charles and I provided the funds to start Americans for Prosperity. It’s beyond my wildest dreams how AFP has grown into this enormous organisation.”” 


Big Oil, Dirty Coal, and their allies have spent more than $990 million to influence the politics of the 111th Congress and to elect a whole slate of climate deniers and shills for big polluters this November.”

    “Beck, who owns a media company worth more than $32 million dollars and an experimental Mercedes Benz, essentially told his working class viewers to give their wages back to their employers.”

  48. Carla,

    “worship”, I suppose that someone with so much reliance on hyperbole is very young so I shall be gentle here. To start with I feel that full disclosure is essential so I am unable to make sense of your second paragraph.

    As for my ‘worshiping’ the dissenters to the Citizens United decision, it was a tough call. And I am able to understand that we live in a complicated world and that, ironically, is expressed in the 5-4 decision. So by the criteria that you presumably use, that would mean that we have 4 good Justices, and 5 evil Justices. My criteria is more complicated but maybe it is enough to say that I learned that I don’t regard those who I disagree with as conspirators in some evil plot. This essentially precludes the sophmoric contradiction that you have accused me of regarding “worship”.

    I simply think, for too many reasons to list here, that the correct decision was made.


    “In the course of the original oral argument, then-Deputy Solicitor General Malcolm L. Stewart, representing the FEC, claimed that under the Austin decision, the government would have the power to ban books, if those books contained even one sentence expressly advocating the election or defeat of a candidate, and were published or distributed by a corporation or union.[11] Under intense questioning from the Court, Stewart further argued that under “Austin” the government could ban the distribution of political books over Amazon’s Kindle, or prevent a union from hiring a writer to author a political book.[12]”

    “Justice Scalia joined the opinion of the Court, but wrote a separate concurrence, joined by Justice Alito and by Justice Thomas in part.[20] Scalia addressed Justice Stevens’s dissent, specifically with regard to the notion that the court’s decision was not supported by the original understanding of the First Amendment. Scalia stated that Stevens dissent was “in splendid isolation from the text of the First Amendment. It never shows why “the freedom of speech” that was the right of Englishmen did not include the freedom to speak in association with other individuals, including association in the corporate form.” He further considered the dissent’s exploration of the Framers’ views about the “role of corporations in society” to be misleading, and even if valid, irrelevant to the text. Scalia principally argued that the first amendment was written in ”terms of speech, not speakers” and that “Its text offers no foothold for excluding any category of speaker“.”

    Sometimes though it is as simple as not having a definable place to ‘draw the line’.

  49. When a clear pattern can be shown that the ruling-class has found a method of indoctrination that solidifies their hold on unassailable power, it is ‘zeitgeist’. For example, before the crash in 1929 a mere 2% of the population benefited directly from the ownership of stocks and bonds, and before the recent crash that had risen to 50%, spooky, zeitgeist.

    But when economists cite collective behavior as the cause of such crashes, ‘animal spirits’ for example, that is an acceptable excuse for the failure of the ruling-class to rule effectively. Not ‘spooky’, but instead the result of people being like stupid ‘herd creatures’.

    When this should all get a little spooky though, is at that moment when one realizes that the rulers ‘are’ the selfish herd, acting collectively with little more than carefully selected half-truths to guide them.

  50. It was a sad day when the U.S. supreme court voted that policticans do not have to disclose campaign funding from corporations. There is a very obvious conflict of interest arising if the politican later should be involved in making a law affecting the corporation.
    For example the massive finacial corporations and the bailouts.
    A good solution would be to cap the amount of money any one corpoation can donate to an individual politican.
    The Roman empire had rich ‘patrons’ who ‘sponsered’ politicans in return for favors. The plebs didn’t get a look in.


    Who sits on the Boards of these megalithic consortium wealth clubs? Check out just Blackstone and even Carlyle Group. Chinese have invested in them, The various Arab league elites are all in on the ownership. They do business from Dubai as a central locii for international private equity. They own various hedge Funds and private equity, hotel chains (great way to launder your dirty clothes…etc. a highway haven for travel…etc); offshore and god knows what “club deals”… semi-conductors and real estate beyond reason; billions in lobbying…Peter G. Peterson Institute for International Economics typically “advises” congress what to do or think (for that matter); the Perter G. Peterson Foundation attempting to get a handle on middle clas pension funds through a tax exempt front group orchestrated “grassroots” (how original) propaganda machine to drive for (of all things from a Private Equity Guru) “fiscal responsibility” ( the debt they fostered is now the cause of why the middle class should give up the luxury of security as a “legacy” we can’t afford)…and last but not least we get BlackRock (yes it was in fact started by Blackstone…look it up); literally managing our currency for the Federal Reserve…and what?
    You want this influence to be considered equal to my voice and my measly vote? Talk about reductionism and domination!

    Incidentally: I get the impression that free market ideology and capitalism is considered the hallmark of America. I thought a written constitution, equality, liberty and justice in DEMOCRACY was actually the principle of independence and America? I couldn’t find anything about corporation, merchant priorities; banking superiority, capitalism or free market monetary idolatry in the Declaration of Independence or the rights of man inclusions to the Constitution or Bill of Rights amendments. I am however, beginning to think that maybe…just maybe…the NRA has been right all along! Maybe we had better protect our right to bare arms against this type of “pirate acquisition” and profiteering in the name of America and Freedom!

  52. when you speak of “OFFSHORE” why do you ignore rate of changes (dramatic increases) of offshore finances (our own Cayman Islands and the scatter plot multiples in the Caribbean and Atlantic; as well as the rest of the world’s offshore financial hideouts? At least Basel is relatively out in the open! After all: The power influence you are complaining about are all really doing all the dirty work with the hidden money and Basel Accord, at best, is only handmaidens to that power finance network.

  53. “At least Basel is relatively out in the open!”

    Do you know something we don’t?

    Who were the ones in the Basel Committee who approved the Basel II? If so give us their names.

    Who were the G1o ministers who in June 2004 signed off on Basel II and thereby approved that a bank could leverage its already wishy-washy capital 62.5 to 1 when lending to a triple-A rated company? If so give us their names.

    Or are we supposed to think you are just an apologizer for the Basel Committee?

  54. Bayward Waterbury: Disclosing “discovery” and “foundation” to what can only be called private wealth sabotage of the systemic global network of sustenance is not “conspiracy” theory…it is called “…I’m mad as hell and I am not going to take it anymore…” (Network: 1976).
    Do yourself a luxury / leisure favor and go rent that movie. It’s ALL (surprisingly) in there! Watch carefully as the plot includes a claim that the Petrodollar and Middle East Arabs were buying everything in America. A joy to watch today. The speech by Ned Beattie to Peter Finch is priceless, and Paddy Chayefsky was a genius with a premonition clearly 30 plus years ahead of his time. See that with the original 1985 WALLSTREET and you preety much cover the Baseline Scenario of our times!

    My favorite line is Robert Duvall… in a parody and ironic take on the historic man without a country…laments when he believes he will be fired that {(from memory..)} …yesterday I was a chosen son, a sun god…Look at me now
    …”I’M A MAN WITHOUT A CORPORATION!” cleaver line!

    Regards: Bruce E.Woych

  55. Prof. Johnson is howling at a red herring. Foreign stockholders have no more influence over corporate America than American stockholders, the overwhelming majority of whom have long since been disenfranchised by the Managerial Revolution, an established turn aptly lamented by bards of nostalgia such as John Bogle. Corporations are persons, legally speaking, management is the brain and profit is the mania. The nationality of the manager dictating our lives and our politics does not matter; indeed, concern for which smacks of xenophobia. What matters is that the capitalist business machine is a de facto psychopath out of human control but bent on controlling what’s left of the human world. Reform that, Mr Johnson!

  56. @ Asteroid Minor___Ref: Link adjustment left side-bar…Profile / Individuals — scroll to 4th /5th down (interesting personal mix of data?) Sheldon/Adelson

  57. I like it. Same kind of BS they’ve been running on us for years, regulatory hoops that are misdirections for mercantilist policy. Go for it. Turn the @#$ tables a little!

  58. here’s your homework Ted:

    The World Central Bank: centeralbahnplatz – Basel the Bank of International SettlementsThe Bank for International Settlements
    Address: The Tower of Basel – Centralbahnplatz 2, 4051, Basel, Switzerland
    This page is the fruit of research for the UK Green Party’s economics group for their 2001 mini-conference in Manchester.
    The BIS is the most obscure arm of the Bretton-Woods International Financial architecture but its role is central. John Maynard Keynes wanted it closed down as it was used to launder money for the Nazis in World War II. Run by an inner elite representing the world’s major central banks it controls most of the transferable money in the world. It uses that money to draw national governments into debt for the IMF.
    BIS Official Website
    The Bretton Woods Project
    05Aug03 – Rich Jannsen – Bank watching in Basel
    The BIS – Ruling the World of Money – Edward Jay Epstein
    Carrol Quigley quote – the bankers’ plan
    The Network – Alfred Mendez
    Global Financial Institutions – Mark Evans
    Board of Directors – July 2001
    1983 – Trading With The Enemy – A Bank for All Reasons

    Unraveling the Basel Capital Accord
    Antony Sutton – B.I.S. — The Apex of Control

  59. I was so incredibly angry when the Supreme Court legitimized the “Great Payoff”. DC bails out Wall Street, all the big turds keep their positions. The big turds, in response, share their stolen wealth.

    Oh, how I look forward to karma’s response.

  60. USA is littered with professional, competent “small business” contractors who clean up the messes

    for AAA corporations

    and what is NEW

    is that NO ONE who does emergency save-the-day work

    is getting PAID.

    USA is littered with people not getting paid by “corporations”, including all the apartment corporations who NEVER give back security deposits…

    Civil engineers, nurses, providers of heavy machinery – the list is as varied and endless as “middle class” labor that is still trying to keep REALITY on track.

    It’s disgusting that the checks aren’t being cut…who ARE these people…?!

  61. Does it not occur to you that the justices who voted in favor of the decision might honestly believe that having unabridged freedom of speech means allowing people of great means to funnel campaign money in any amount through the corporations they control? Their philosophy might be such that it’s not the People’s business to concern itself with who’s money gives them what amount of influence relative to another. I disagree strongly with such a philosophy as, obviously, others do, but I also know that many hold it, and I think that some Supreme Court members do as well. I think it’s the simplest answer here.

  62. Simon, I don’t know squat about the finer points of economics, cows maybe but not economics!
    Now it seems to me that we are mistaken in thinking our dollar is a 100% great advantage as the global reserve currency?

    Now before you gurus heap too much scorn, hear me out.

    As a non-global national currency we could vary our monetary policy without finding all our neighbours on the same path? Currently we are in the same difficulty as the Euro. We can’t improve our national problem because every other country moves in lockstep.

    Would’nt it be better if a truly independent (of all nations) global currency was established and all countries independently position themselves so that monetary policies do not place non-trading (speculative) pressures on trade flows?

    Greece has this problem in the EU and I suggest we have a similar problem re the global situation.

    Could there be some value for us in this? If this gets any room I will try another idea.

    Ok I’ve got my head down so start firing.

  63. “Once you get rid of the professional political type then you will see the need for election money will dry up.”

    On the empirical data, completely, utterly incorrect. Term limits means that institutional knowledge moves from the politicians to the lobbyists. You just make the problem worse.

  64. You are so wrong. You have a choice to buy a different brand of dixie cup or use non disposables or some other substitute.
    When taxes are forcibly taken from my check to pay for government employees whose AFSCME dues go to support Democrats and lobby for more government largess, that is truly a political contribution that I have no choice on.

  65. Notabanker,

    Without the reserve currency advantages, The USA, based on economic performance alone, would be little more than a large version of Greece, counter-factually speaking of course.

    The foreign trade surpluses and other dollar holdings that are recycled back through the US in mostly T-bills is a clever way of minimizing competition from foreign investment. This ‘recycling’ takes vast sums of dollars out of foreign hands and puts this capital in US hands at a very low cost. This ‘dollar hegemony’ also allows the US the devious option of manipulating its currency value according to what best favors US interests at a given time. Now, for example, by devaluing the dollar, the value of foreign held dollars will drop and this transfers US debt to foreigners. This because dollars will buy less and of course the bulk of global trade is conducted in dollars.

    Charles deGaulle referred to reserve currency status as:”exorbitant advantage”. I suppose that partly explains how a nation that consumes far more than what it produces, while only 4% of the global population, is still able to obtain more than half of all global market-share. Not to suggest that parasitic designs are what a nation should aspire to, but instead that reserve currency advantages are at the center of all efforts to dominate and control global affairs.

    Naturally, economists abound who will argue otherwise, but… for every economist on one side of most issues there is another on the opposing side. Yet most of them would have us believe that all of their ‘wisdom’ is based on accounting identities.

    ‘Ambition is blind’ is a phrase that can very iluminating when it comes to most economists.

  66. BLACKstone / BLACKrock / BLACKwater

    … goes well with the “art-deco” architecture of the Federal Reserve HQ.

  67. Funny, when I pay taxes and republicans are in congress and the white house and running the Supreme Court like a personal favors mill, I might feel a little resentful of my taxes. Billions spent on abstinence education despite knowing it doesn’t work? Creation science institute funding? Unchecked, unbridled military spending to Republican owned corporations that traffic in child prostitutes and drugs? Government drug running and corruption? October Surprise and Kissinger’s sabotaging the Paris Peace accords in 1968 for domestic political power?
    Republicans have no place to complain about anything and they are lucky (and America is unfortunate) that Clinton and Obama both failed to investigate the treason and degenerate lunacy that is Republican domestic and foreign policy on moral grounds. Whited sepulchres all.

  68. Mr. DAn242

    Taxes from your check are (like it or not) legislated by elected representatives that are duely authorized to support the working order of this free society under a democratic process that is the accepted way we distribute power in this country.

    The check you receive reflects all costs including those taxes and would simply be reduced if those taxes were not a factor of doing business.

    The hidden cost of paying for influence peddling or literally buying special privilege is not a market efficient practice. It is meant to distort the market towards less choices by controlling the politcal process through other means of self service…
    I am not just whistling Dixie here because we are talking about a massive amount of pricing throughout all of Corporate America that would be coerced into competing for political privileges; and we would be corrupting the political candidates by making them all prostitutes to corporate CEO pimps.

    I take acception to your reluctance to support civil service workers and other public sector employees that constitute the working backbone of American infrastructure. An essential infrastructure, I might add, that facilitates the privilege of private business and keeps the foundations of commerce a network of cooperative social utility.

    I have met some disgruntled people who act like they are supporting America with their tax burdens. Certainly we must keep a critical eye on our money because even government has crooks eager to command easy money by abusing power. Much of the time, however, this cracker jack complaint comes from people who benefit directly but refuse to carry their fair share of the load.

  69. PER KUROWSKI: GOOGLE BCCI for a great deal more. It precipitates the “Texas Strategy for Looting” the S&L
    SCAM, the Sub-Prime Gov. Mortgage backed Derivatives extravaganza and is generally the template for organized financial corruption in Real Politik “Globalization” dirty club deals. Check it Out!

    Subject: BCCI forerunner and model: Official US Documentation

    FAS Note: This December 1992 document is the penultimate draft of the Senate Foreign Relations Committee report on the BCCI Affair. After it was released by the Committee, Sen. Hank Brown, reportedly acting at the behest of Henry Kissinger, pressed for the deletion of a few passages, particularly in Chapter 20 on “BCCI and Kissinger Associates.” As a result, the final hardcopy version of the report, as published by the Government Printing Office, differs slightly from the Committee’s softcopy version presented below.–Steven Aftergood

    The BCCI Affair
    A Report to the Committee on Foreign Relations
    United States Senate
    Senator John Kerry and Senator Hank Brown
    December 1992
    102d Congress 2d Session Senate Print 102-140

    2. Introduction and Summary of Investigation
    3. The Origin and Early Years of BCCI
    4. BCCI’s Criminality
    5. BCCI’s Relationship with Foreign Governments, Central Banks, and International Organizations
    6. BCCI in the United States – Initial Entry and FGB and NBG Takeovers
    7. BCCI in the United States – Part Two: Acquisition, Consolidation, and Consequences
    8. BCCI and Law Enforcement – The Justice Deparment and the US Customs Service
    9. BCCI and Law Enforcement – District Attorney of New York
    10. BCCI and Its Accountants
    11. BCCI, The CIA and Foreign Intelligence
    12. The Regulators
    13. Clark Clifford and Robert Altman
    14. Abu Dhabi: BCCI’s Founding and Majority Stockholders
    15. Mohammed Hammoud: BCCI’s Flexible Frontman
    16. BCCI And Georgia Politicians
    17. BCCI’s Lawyers and Lobbyists
    18. Hill and Knowlton and BCCI’s PR Campaign
    19. Ed Rogers and Kamal Adham
    20. BCCI and Kissinger Associates
    21. Capcom: A Case Study of Money Laundering
    22. Legislative and Policy Recommendations
    23. Appendix – Matters For Further Investigation, Witnesses and Writs

  70. Sorry I cannot find any connection between the BCCI problem and what I am objecting about the Basel Committee for Banking Regulations which operates under the roof of the Bank if International Settlements.

  71. Per Kurowski: I did post above with material critical of the Bank of International Settlements, but if you can’t see a model for corruption in BCCI than perhaps you are not looking for fraud and corruption or the abuse of financial power. I have always found it interesting that the pro-Reagan gangsters swore by a “law and Order” agenda but ultimately could not tolerate “regulations” themselves. If deregulation did anything it proved that an overarching committee of oversight potentials is essential to rein in greed, perverted incentives and moral hazards of scope and scale. One model example might be the World Bank: it has certainly done some very good work but without global scrutiny it came to be actually blamed for problems it was meant to solve:
    see; (full quote)
    “A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO imperialism, and that its intellectual contributions function to blame the poor for their condition.[27]
    One of the strongest criticisms of the World Bank has been the way in which it is governed. While the World Bank represents 186 countries, it is run by a small number of economically powerful countries. These countries choose the leadership and senior management of the World Bank, and so their interests dominate the bank.[28]
    The World Bank has dual roles that are contradictory: that of a political organization and that of a practical organization. As a political organization, the World Bank must meet the demands of donor and borrowing governments, private capital markets, and other international organizations. As an action-oriented organization, it must be neutral, specializing in development aid, technical assistance, and loans. The World Bank’s obligations to donor countries and private capital markets have caused it to adopt policies which dictate that poverty is best alleviated by the implementation of “market” policies.[29]
    In the 1990s, the World Bank and the IMF forged the Washington Consensus, policies which included deregulation and liberalization of markets, privatization and the downscaling of government. Though the Washington Consensus was conceived as a policy that would best promote development, it was criticized for ignoring equity, employment and how reforms like privatization were carried out. Many now agree[citation needed] that the Washington Consensus placed too much emphasis on the growth of GDP, and not enough on the permanence of growth or on whether growth contributed to better living standards.[30]
    Some analysis shows that the World Bank has increased poverty and been detrimental to the environment, public health and cultural diversity.[31] Some critics also claim that the World Bank has consistently pushed a neoliberal agenda, imposing policies on developing countries which have been damaging, destructive and anti-developmental.[32][33]”

    (ft. nt. explanations can be accessed from the link

  72. your tax dollars at work – CLASSIC anti-insurgency campaign is what “election night” has turned into – straight out of the war lord’s Pentagon manual…nice, huh? So much theft…steal “taxes” from honest labor to print up books about how to make us “stupid”…

    40 million USA born and bred families fall into the classic World Health Organization “refugee” category…homeless via someone else’s “ism” enforced through an “army”

    looks like another anti-slave war is in the works…

    yes, they had it right – the “right to bear arms” – imagine if we were not all “loaded for bear”…

    Two can DEFINITELY play the psychobabble “terror” game – should not we wonder why we haven’t even “thought” about it…too easy? I terrorized someone today – his “religion” would not allow him to get on an elevator with a much taller-than-him blonde Viking type :-) – it totally spooked him that it would just be him and me in that metal box going to the garage level…

    Made my day to KNOW how easy it’s going to be – the anti anti-insurgency campaign



    All things return to dust – especially without the hand of care – who, exactly, will continue to pay rent to the slum lords who have “real estate beyond reason”?

    “….I was around St. Petersburg when I saw it was time for a change….”

    Keep waiting for them to come out in the open about who their “Lord” is…

  73. Yesterday on New Hour, they were all between the age of 19 to 28 years old, the soldiers who were killed in Afghanistan.

    The grandchildren of Moon Walkers getting killed in the Kyber Pass – the Opium trail.

    Makes you want to hurl something when they screech about the “debt” being handed down to the “grandchildren”

    because someone had enough cash in USA to get a broken arm set right at the clinic…and not because of the Kyber Pass “war”…

    Really?! The WAR is not an issue that stupid USA house-flippers care about?!


  74. ARTIST: Bob Dylan
    TITLE: All Along the Watchtower
    Lyrics and Chords

    “There must be some kind of way out of here”
    Said the joker to the thief
    “There’s too much confusion
    I can’t get no relief
    Businessmen they drink my wine
    Plowmen dig my earth
    None of them along the line
    Know what any of it is worth”

    / Am AmG F FG / :

  75. But of course with its ludicrous standards for poverty the WB manages to give the impression that the ‘system’ works for all concerned while also keeping labor markets in a constant state of oversupply. This is no easy task, and, without agricultural subsidies being used in all of the developed nations, (in violation of WTO regulations), (unabashedly), this would be impossible. It is odd though that this level of cooperation only seems to exist when these institutions are benefiting those who control them.

  76. Annie. That is indeed something I have tried to understand. Why would a country which seems so willing to send its sons and daughters to die in foreign countries then be so willing to follow that misguided risk-aversion promoted by the Basel Committee and that, of course, only led to create a huge crisis because of excessive investments in what was perceived as not risky AAAs?

    A verse of a Swedish Psalm reads: “God, from your house, our refuge, you call us out to a world where many risks await us. As one with your world, you want us to live. God make us daring!”

    “God make us daring!” That is indeed a prayer that the members of the Basel Committee do not even begin to understand the need for.

    Is the home of the brave losing its bank “cojones” because of the wimps in the Basel Committee?

  77. I believe that stomping on a woman’s head is how the Wrecking Crew stuffed enough of themselves into the legislative branch to write “laws” to protect their stolen money…which leads to #3 of Just War Doctrine – it’s a total WASTE of time to rely on their moral capacity – absolutely no chance of success there.

    And that’s the read between the lines of “foreign” investment – that USA sons and daughters (more foreigners are getting in on the act, huh?, as a way of getting citizenship) are the WORLD’s “police” – so Basel is the fish head that runs the muscle…

    And they seek out the PSYCHOS, er, “strong man” in the “banana” countries to do business with…

    The Kyber Pass – that’s so far of a fall from “grace” that nothing resembling “grace” could have ever been there in the first place – oh wait, here comes a bible-thumper to prove me wrong…

    An article that boils down to a virtual blog protest against “the pot calling the kettle black” is all we have to work with as a “philosophy”…very sad…

    They TRASHED Spaceship Earth…so yeah, they don’t know what it is worth…and I’ll have to “seek” the one or two free FM radio stations to find music that is NOT misogynistic rap…

    trashed the airwaves, also…



    tHIS IS SIMPLY NOT TRUE. Foreign lobby money is rampant and (despite the fact that this post will not allow me to place to links to its basic history)…Korean fundamentalist interests own and operate (at a well substantiated loss) the Washington Times. Owning the “times” of any status is an impingement upon the name and reputation of the Times Newpapers of high standards and intellectual import. The Washington Times, instead, has been a propaganda machine at best, and has run with billions of dollars pumping up its survival. (Google it: wiki…).

    Foreign Interests have a massive play in our politics!

  79. RAYLOVE: OF COURSE IT ALL GOES OVER TO OPPORTUNISTS. I have noticed that no matter what system that is put in place to correct a problem, it ends up turning over and gets transformed into a new set of circumstantial problems. These major organizations were formulated by people who fought a war and wanted to solve problems. They were almost immediately set upon by the “ancient regime” of self-appointed nobility along with everyone else that wanted “spoils” of war. There have been good people who get involved, but you can bet the farm that the bad guys are in there calling themselves the good shepherds!

    So now we enter phase two. Austerity politics where the thieves blame the victims and the devil sells us flies to eat. Go figure!

    Here’s a link about the twists and turns of reality swindling and how good intentions get flipped. It’s called Bootleggers and Baptists and it is based upon a true set of historic circumstances and events. the opther link is more devious and welf explanatory. Its about that “fly” sale I mentioned!

  80. SORRY: THAT’S 2010 (IRONIC OR PROPHETICALLY ELECTION DAY). It is in the papers but it is worth going to the search page on google to see this fiasco over the last few decades and the people it served!

  81. THANK YOU Earle.florida…I was beginning to despair and feel very much alone. The facts are just too far out and the American mindset is so much in denial; fabricating market-news fiction and deep structure the narrative…communication is actually close to impossible. Two different metalanguages exist. One professional and the other popular. Try to explain what is happening and it is like speaking to people in a trance.

  82. You’ve been with the professors
    And they’ve all liked your looks
    With great lawyers **) you have
    Discussed lepers and crooks
    You’ve been through all of
    F. Scott Fitzgerald’s books
    You’re very well read
    It’s well known

    Because something is happening here
    But you don’t know what it is
    Do you, Mister Jones?


  83. Re: @ Bruce E. Woyce…

    “the weight of deception will collapse upon itself with nothing more than a dark shadow biting down hard on morrows misdeed”
    “there is no originality quantifying this anomaly, only infinite duplicity as defined by parochial deminsions of eschatology thoughtlessness”
    “the endless unbounding of trite exegesis verbage manifested only by subcultured primordial reason, inane of all conventional wisdom”
    “dreams echoing in a vacuum of interminable propensity, unfettered planes of space and time rummaging as they must to the awakening of random consciousness”
    “thou die cast gives no creedance of sages past but gyrating as of a topsy`turvy eccentric pendulum, capituating in a warped, and voicless chambered sphere of recycled demagoguery”
    “thou justice lies inside this paradox visualized only as a prism of catharsis, this pyrrhic victory of inescapable decadence”

  84. earle.florida: fascinating cornucopia of enchantments (or disenchantment…as the case may be), but to remain somewhat pragmatic I thought you would like to attach this historic fact to the otherwise unbridled Dylan:

    MR. JONES:
    In 1949 Alfred Winslow Jones formed the first Hedge Fund. Jones received his Doctorate in Sociology from Columbia University in 1941. In researching and writing a 1948 Fortune article on the current trends in investing and market forecasting, Jones concluded that he had a better system for managing money. In 1949, he raised $100,000 ($40,000 of which was his own money) and began putting his theories to practice in a general investment partnership.

    Operating in almost absolute obscurity for seventeen years, Jones’ success was finally brought to the public eye in a 1966 Fortune Magazine article titled “The Jones That Nobody Can Keep Up With”.

    In addition to detailing Jones’ unique investment strategy, the article revealed that his partnership had outperformed the best performing mutual fund that year by 44% and the best five-year performing mutual fund at the time by 85%, net of all fees. This attracted the attention of wealthy individuals seeking better returns on their investments and professional investors willing to sacrifice big salaries for profit participation in the portfolios they managed. By 1968, there were approximately 200 hedge funds including funds established by legends like George Soros and Warren Buffett.

    Over the ensuing years the hedge fund industry plodded along with its ups and downs until the early 1990’s, when the financial press once again began trumpeting the returns achieved by hedge fund legends like George Soros (Quantum Fund) and Julian Robertson (Tiger Fund and its offshore sister Jaguar Fund). Many hedge funds no longer resembled the classic long/short equities model developed by Jones. For example, Soros made his big killing in the currency markets and Robertson employed modern financial derivatives such as futures and options, which didn’t exist when Jones started his fund. With lots of new hedging tools and a tide of favorable publicity, the hedge fund universe exploded. By the year 2000, estimates of as many as 4,000 hedge funds of all shapes, sizes and investment disciplines existed.

    (current): (quoted text):

    Estimates of industry size vary widely due to the absence of central statistics, the lack of an agreed definition of hedge funds and the rapid growth of the industry. As a general indicator of scale, the industry may have managed around $2.5 trillion at its peak in the summer of 2008. ….Recent estimates suggest that hedge funds have more than $2 trillion in AUM.[4] A recent survey of hedge fund administrators indicates single manager hedge funds have over $2.5 trillion in assets under administration ($AuA)[5]
    Largest hedge fund managers

    The 25 largest hedge fund managers had $519.7 billion in assets under management as of December 31, 2009. The largest manager is JP Morgan Chase ($53.5 billion) followed by Bridgewater Associates ($43.6 billion), Paulson & Co. ($32 billion), Brevan Howard ($27 billion), and Soros Fund Management ($27 billion).[6]
    Proposed U.S. regulation

    Hedge funds are exempt from regulation in the United States. Several bills have been introduced in the 110th Congress (2007–08), however, relating to such funds. Among them are:

    * S. 681, a bill to restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation;
    * H.R. 3417, which would establish a Commission on the Tax Treatment of Hedge Funds and Private Equity to investigate imposing regulations;
    * S. 1402, a bill to amend the Investment Advisors Act of 1940, with respect to the exemption to registration requirements for hedge funds; and
    * S. 1624, a bill to amend the Internal Revenue Code of 1986 to provide that the exception from the treatment of publicly traded partnerships as corporations for partnerships with passive-type income shall not apply to partnerships directly or indirectly deriving income from providing investment adviser and related asset management services.
    * S. 3268, a bill to amend the Commodity Exchange Act to prevent excessive price speculation with respect to energy commodities. The bill would give the federal regulator of futures markets the resources to detect, prevent, and punish price manipulation and excessive speculation.

    None of the bills has received serious consideration yet.


  85. So as not to imply any negativity to Mr. Jones it should be added that he spent the last years of his life with the Peace Corp and attempted to create an “exchange system” of volunteers from the international community to interact with our own domestic context of American poverty. His bio / history here:

  86. Milton Friedman “DEFENDING GREED AS A SYSTEM OF ECONOMIC EFFICIENCY” in an old clip from 1979 / Phil Donahue interview.

    Perhaps disturbingly fascinating, the Google search page airs this moment with open commentaries that claim the passage totally browbeat Donahue into submission with this absolutely malicious and self-aggrandizing distortion of historic revisionism. GREED IS GOOD comes back to haunt us on Wall Street but here is the devil’s apprentice himself laying it on the table in 1979.

  87. @ Bruce___Thankyou for the links, and the interesting reads on Hedge Funds. I’m very partial to the “Peace Corp” with all the good they’ve done throughout the world. Now getting back to your last sentence: “None of these bills have received serious consideration yet”…I’ll begin with a little off beat nostalgia – Paul Warburg was the master strategist, and coordinator of Jekyll Island, and the ultimate framer of “The Federal Reserve Banking System Law” of 1913. He was known as the “Daddy Warbucks”, a caricature in “Little Orphan Annie” comic strips. Another interesting character from the Jekyll Island charade was J.P. Morgan – the capitalist with the long handlebar mustache and the outragous cigar in the “Monopoly Game” centerpiece. Paul Warburg was a partner with Kuhn, Loeb & Co., and representative to the biggest “Money Meister” in the known financial universe “The Rothschild Family”! Then there were the Morgan’s, Pincus, and Rockefeller’s. These names I mentioned control the world’s banking network too this very day in New York, Paris, London, Peking, Moscow, Africa, Germany, France the Netherlands and beyond. This all was conceived on Jekyll Island approximately “Ninty-Eight Years” ago. This is the fun part quoting Warburg…he was right, and they could fix it up later. The “Federal Reserve Act” since it has been passed has been amended over 100 (since 1993 date of article) times. Everyone of those provisions were removed, and more have been added which greatly expand the power and reach of the Federal Reserve System to create money out of nothing. With this kind of professional strategy and deception these people were real professionals and the public didn’t stand a chance. It is no surprise that popular (*remember that Wilson became incapable of running the White House so his second wife made all the decisions while the White House was literally turned into an infirmary – unbelievable but true?)support was finally gained for the bill and on December 22, 1913 the bill was passed by Congress and the creature from Jekyll Island finally moved into Washington,DC. Thus as the story unfolds for the Federal Reserve Banking System, it unfolds also for the aforementioned U.S. Regulations: S 681; HR 3417; S 1402; S 1624; and S 3268 always to be scuttled by the powers to be of foreign entities controllong our democracy since 1913 ( Jackson, Lincoln, Kennedy? ) Ref: (dated material ~ 1993)

  88. Does it really matter if the Overclass is foreign instead of WASP? Either way, the middle class loses.

  89. (Full Speech here):

    Click to access Farewell_Address.pdf

    January 17, 1961 ( Excerpt): Eisenhower’s Presidential Farewell Speech
    “Our military organization today bears little relation to that known by any of my predecessors in
    peacetime, or indeed by the fighting men of World War II or Korea.
    Until the latest of our world conflicts, the United States had no armaments industry. American
    makers of plowshares could, with time and as required, make swords as well. But now we can no
    longer risk emergency improvisation of national defense; we have been compelled to create a
    permanent armaments industry of vast proportions. Added to this, three and a half million men
    and women are directly engaged in the defense establishment. We annually spend on military
    security more than the net income of all United States corporations.
    This conjunction of an immense military establishment and a large arms industry is new in the
    American experience. The total influence-economic, political, even spiritual–is felt in every city,
    every State house, every office of the Federal government. We recognize the imperative need for
    this development. Yet we must not fail to comprehend its grave implications. Our toil, resources
    and livelihood are all involved; so is the very structure of our society.
    In the councils of government, we must guard against the acquisition of unwarranted influence,
    whether sought or unsought, by the military-industrial complex. The potential for the disastrous
    rise of misplaced power exists and will persist.
    We must never let the weight of this combination endanger our liberties or democratic processes.
    We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the
    proper meshing of the huge industrial and military machinery of defense with our peaceful
    methods and goals, so that security and liberty may prosper together.
    Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has
    been the technological revolution during recent decades.
    In this revolution, research has become central; it also becomes more formalized, complex, and
    costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal
    Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of
    scientists in laboratories and testing fields. In the same fashion, the free university, historically
    the fountainhead of free ideas and scientific discovery, has experienced a revolution in the
    conduct of research. Partly because of the huge costs involved, a government contract becomes
    virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds
    of new electronic computers.
    The prospect of domination of the nation’s scholars by Federal employment, project allocations,
    and the power of money is ever present–and is gravely to be regarded.
    Yet, in holding scientific research and discovery in respect, as we should, we must also be alert
    to the equal and opposite danger that public policy could itself become the captive of a scientific-technological
    It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new
    and old, within the principles of our democratic system–ever aiming toward the supreme goals
    of our free society.”

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