News & Analysis
How US Fascism Comes Out on Top Via 'Too-Big-to-Fail'?
'Too Big to Fail' Clearinghouse Hunt .. Regulators have notified some payment and clearing firms that they face a review to determine whether their failure could pose a risk to the economy. The Financial Stability Oversight Council, comprising top financial regulators and created by the Dodd-Frank financial-overhaul law, last month sent letters to so-called financial-market utilities—the minutes didn't specify which or how many—saying they are being considered for designation as systemically important. The council disclosed it had sent the letters in minutes from its last meeting, released Wednesday. – Wall Street Journal
Dominant Social Theme: Important businesses cannot be allowed to fail. If, in fact, government must prop them up and take them over, then so be it. Look how well GM is doing!
Free-Market Analysis: Is this how fascism comes to America? It would seem a steady drip, drip, drip of frenetic government activism is concretizing the fascist state the way lime solidifies cement.
Even in the 1980s under the Reagan administration, the media mythos of the US emphasized its marketplace affiliations. The idea was that US civilization was succeeding because it was market based. But this rhetoric seems to have been abandoned in the 2000s.
The US sociopolitical stance, more and more, is one of "bigness" in which large entities are seen as successful or important no matter the reality of their evolution or current status.
It is a kind of trick, of course. Those with access to the levers of power will always be able to create large facilities. The issue is actually the competence of these facilities and whether they fulfill the purposes for which they were created.
Many modern, large-scale entities, especially those with government affiliations, are anything but competent. This is an entirely logical perspective. Large entities are usually advantaged ones. And the more artificial advantages an entity receives, the less apt it is to be exposed to market forces.
The less operative market forces are, the more inefficient and hapless the enterprise becomes – entailing yet more bailouts and special advantages. It is soon a vicious circle, a feedback loop of incompetence and even futility.
Has it been planned that way? The Anglosphere power elite that wants to run the world via global government is not apparently interested in stability or efficiency. Its handful of immensely powerful and wealthy leaders are interested mainly in DESTABILIZATION, from what we can tell. Bigness is yet another resource within their tool kit.
The more the West – and the world – is destabilized, the easier it will be, seemingly from their point of view, to impose world government. Starving, homeless, sick, war-weary populations are apt to put up less resistance to a New World Order than healthy, engaged citizens.
If one was to try to build a New World Order – global government – the logical manifestations would be hunger, misery, pestilence and violence. The causative agent would be bigness – of every kind. The bigger the better – especially if that bigness is buttressed by a bureaucracy supported by taxes and divorced from competition.
And what better way to inculcate bigness than to declare that certain hitherto private entities are "too big to fail"? It is a perfect dominant social theme. These power elite-generated fear-based promotions are intended to separate middle classes from wealth and power while reinforcing globalist agencies.
In fact, the idea that certain businesses are "too big to fail" is merely an extension of the propagandistic effort that gave us our current catastrophic central banking economy, worldwide. State-monopoly central banking is supposed to be an antidote to economic collapse. But always, the power elite will make arguments that are entirely opposed to the reality it wants to inculcate.
If the elites are arguing that government regulations and government funding will somehow make private enterprise more stable, you can be sure the reverse is true. The modern world is based on this sort of sick propaganda, which constantly informs people of solutions that generate exactly the opposite results from those that are putatively intended.
This kind of propaganda-as-program was unleashed on the West at least a hundred years ago, from what we can tell. In hindsight, it seems increasingly evident that those who campaigned for monopoly central banking (like JP Morgan himself) probably had a hand in the Panic of '07 that ultimately led to the passage of the Federal Reserve Act 1913.
Since that time, US government intrusion into all sectors of private enterprise has only grown. Various government activities are routine now that would have generated an outcry even in the 20th century a decade or two ago.
The invasive practices of "Homeland Security" are just on example. Hardly a day goes by without some new and obvious outrage: a child is tasered, an elderly woman with cancer is strip-searched at the airport, innocent people are shot when a SWAT team raids the wrong house looking for marijuana cigarettes.
But as obvious and horrid as these episodes are, the main evolution of government intrusion takes place within the context of sociopolitical policies. When bigness and its justifications are enshrined as statist polity, then fascism itself has becomes the dominant "ism."
This is what is happening now in the United States. Fascism is taking over capitalism not just within the context of a business evolution but as a matter of course. This is no accident, in our view. Its expansion has been falsely justified and then enshrined as law. Here's some more from the article:
A lot of attention has been paid to the law's provision directing regulators to give the designation to big banks and other financial firms, but it also includes a similar process for clearing and payments firms. The law automatically considers any bank with $50 billion or more in assets systemically important. Regulators haven't yet designated any other financial institutions thusly ...
The letters, sent in January, indicate regulators completed the first of a two-stage process to decide which financial-market utilities warrant tougher regulation. In the first step, regulators look at information they already have, such as an institution's exposure to counter-parties and links to other financial institutions, to determine which entities merit further scrutiny ...
Later, the council will vote on individual clearinghouses; a two-thirds majority is required to designate one as systemically important. Those that are ultimately designated so face heightened regulatory requirements and scrutiny. But they could gain new access to some of the Federal Reserve's loans, including the discount window.
It is hard even to begin to unpack the untruths in these three paragraphs. Clearinghouses are a necessary part of the financial process, but guaranteeing clearinghouses with federal money merely ensures that sooner or later there will be a cataclysmic financial disaster. (Ask any thinking person whether there is any facility in the world – government or otherwise – that can guarantee solvency and the answer should be "no.")
Now, those who have created central banks will argue that indeed government – or its agents – can ensure solvency but this is not true. A central bank can inflate away catastrophe via money printing but at some point that same money printing passes the costs of catastrophe onto hapless citizens who are burdened with higher prices and higher taxes as a result.
One trades financial instability for social instability. That's what is happening now, in fact. Extend the trend logically and one begins to perceive that while the financial system has been "stabilized" the social system has been DE-stabilized.
From the point of view of the power elite, social instability is perhaps preferable to financial instability. We reply: Be careful what you wish for.
Then there is the issue of regulation. Every regulation is a price fix, transferring wealth from those who have created it to those who have not and are unable to utilize it as efficiently. Regulations DISTORT economic activity and usually have results that are the opposite of what is intended.
Too-big-to-fail legislation is toxic on every level. It marries government to private industry, drains competition from the marketplace and ensures that the most important elements of the modern financial system are further constrained by regulatory fiat.
Of course, one could argue that the modern system – one that has been built on the monetary fraud of central banking – is not worth saving anyway. We would agree with that, in fact. The current financial system not only deserves to collapse, it DID collapse three years ago.
The dollar reserve system, from our point of view, is already dead. From what we can tell, central banks – at the behest of their controlling power elite – have injected some US$50 TRILLION into the system worldwide.
These horrible numbers are actually incomprehensible. The larger financial system is effectively frozen. It has not been allowed to shed its failing elements, and one could argue, in fact, that these failing facilities have been enshrined at the heart of the system's decisive economic dysfunction.
In other words, the very entities that are the most important to the system's current operation are the ones that should be allowed to fail. They exist only because the system – worldwide – is a kind of elite command-and-control operation that has little or nothing to do with free markets.
But as the current central banking system becomes more and more dysfunctional, the costs of keeping it going are rising exponentially. As we have pointed out, the current environment has a manifest logic, and it's not a pleasant one.
There is no economic justification for "too-big-to-fail" except the brutal logic that government funds must compensate for private failures. This will work for a while, but not forever. Eventually, the dysfunction will be too big even for governments' large pockets. In the meantime, we will have "isms" – specifically, growing fascism in the US. Europe, we would argue, is headed in the same direction.
Remove competition from the marketplace and you end up with a collection of enterprises that perform inconsequential functions incompetently. More importantly, you end up with a federalized private sector and a series of disastrous "public-private" partnerships.
The result is ruin – ruin of every kind. Militarism thrives in a fascist environment. So does a certain kind of ignorance, civic dysfunction and increasingly poverty and civil violence. Chaos looms. Of course, out of chaos ... order. A New World Order. That's obviously the plan.
But as we often point out, we would tend to believe that what we call the Internet Reformation will make the elite's main dream rather hard to achieve. The more that the powers-that-be plot to increase the dysfunction of the Western world and especially America, the more push back is generated, in our view. It may turn out that ordinary people in the Internet era are far more resistant to fascism – statism – than elites currently believe.
Conclusion: Will the world-spanning plans of the Anglosphere be realized? Just as too-big-too-fail is ultimately an insupportable concept, so is the idea of world government. They are both based on enormous economic fallacies and carry within their implementation the seeds of their own destruction.
Posted by dave jr on 02/04/12 11:14 AM
The DHS or any other Fed police power was not created to protect the minority, and even if it did, would still be unconstitutional. The Fed is authorized to provide for the common defence from foreign threats only. All other police powers were to be reserved to the States.
Posted by rossbcan on 02/04/12 09:08 AM
you are recommending enforcement of "rule of law":
Click to view link
as opposed to "rule of corrupt, rationalizing man on the bench"
Posted by VincentCataldi on 02/04/12 06:51 AM
We in the US do Not have a Democracy, wee have a Democratic Republic : the first is "Mob Rule" (50% + 1), the latter protects rights of minorities. We MUST now engage to protect rights and assets of minorities, the majorities, and to save/protect our unique, ingenious "Democratic Republic" itself, as I see it now.
Regarding the Federal Reserve Bank - not federal, not reserved, too big to fail, SO - in accordance with this statement "Dominant Social Theme: Important businesses cannot be allowed to fail. If, in fact, government must prop them up and take them over, then so be it. Look how well GM is doing!"
- The FED - take them over, then audit all dealings using DHS resources and 'powers', conduct trials for treason where required/appropriate.
War is Hell on Earth, ask the victimized masses, robbed of pensions, savings, investments, etc.. This non-conventional war is not a National Security issue, the Security and survival of all on Earth are directly involved begging we (US) engage.
Posted by speedygonzales on 02/04/12 12:22 AM
"Democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.
The average age of the world's greatest civilizations from the beginning of history, has been about 200 years.
During those 200 years, these nations always progressed through the following sequence: from bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependency; from dependency back again to bondage."
Attributed to Scottish History Professor at University of Edinburgh Sir Alexander Fraser Tytler (1747-1813)
Democracy can be explained as "two wolves and a lamb, voting on what to have for dinner" or "A political system calculated to make an intelligent minority subject to the will of the stupid." Friedrich Nietzsche (1844 - 1900)
Posted by dave jr on 02/03/12 10:28 PM
Thankyou for that eloquent post.
It is a survivial necessity, due the nature of predators to expand the hunting ground. The 'small' who have learned to live while withdrawing consent, will be equally amusused watching the top down consumption after their beloved globalization is realized.
Posted by rossbcan on 02/03/12 12:40 PM
"is too small to succeed also true?"
Yes, a decreed (rule of man) "truth", based on assuming the incorrect "might is right" fallacy.
In general, all of us, including the ignorant hubris of arbitrary power are being smited by the attrition costs of opposing natural law which enforces the converse, leading to a general epiphany and hopefully social / economic renaissance that power is a bottom up (the small summing to the big), as opposed to top-down (the big using "new math" to decree that the individually small, but collectively unstoppable power is, small) phenomena.
Watch, be morbidly amused as the collective small AGAIN disposes of the big. Not because they intend to, plan to or even know the issues, but, by the mere fact of making individual pro-survival choices which, by definition does not support and, therefore destroys non-survival forces:
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It's not nice to mess with mother nature. Which is why elites forcefully insist that "others" bear the consequences of their choices. The consequences are inevitable, only those who face them is at issue.
Not only does "absolute power corrupt, absolutely", it also destroys those who foolishly attempt to wield it, by insulating them from environmental forces (blowback) and, therfore making them vulnerable to the "unthinkable", their false godhood being unable to protect them.
Posted by EdwardUlyssesCate on 02/03/12 10:44 AM
"Is this how fascism comes to America? It would seem a steady drip, drip, drip . . ."
There was a song, released back in 1973 called "Creepin'," by Grand Funk Railroad. This was two years after Nixon closed the gold window.
Feel that our lives are in the hands of FOOLs,
Loosin' their cool, it's us that they rule.
Too many people sittin' dead on their ass,
They ain't got no class, people, this time must pass.
Woah, oh ... Lord, I don't want to be their FOOL no more.
Hey ... I don't want to be their FOOL no more.
Open eyes, but you're sleepin',
You best wake up 'fore tomorrow comes creepin' in.
'Fore tomorrow comes creepin' in.
Forty years later, guess they were right all along.
Click to view link
Posted by Abu Aardvark on 02/03/12 09:50 AM
I already posted this in the "Gold Standard Is Good?" thread ...
Swiss daily "Tages Anzeiger is running two articles today that made my hair stand on end:
"When money rusts - Many central banks are sitting in a liquidity trap. In order to escape, the US FED falls back on an old idea: Demurrage money ... Bernanke wants to convince businesses that, for the foreseeable future, inflation will be higher than interest rates. Those who hoard money will be left holding the bag, because the real interest rate isn't close to zero, but below.
The hoarded money will be worth less in two years than it is today. US businesses are sitting on a mountain of cash of around $ 1,700 Billion. Now the FED gives them a strong incentive to spend at least a part of it in order to create jobs.
With this monetary policy Bernanke seizes on an old idea. It originates from Silvio Gesell, a very successful merchant of German-Argentine nativity"
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Posted by rossbcan on 02/03/12 09:47 AM
Bear in mind that, in our action precedes consequence reality that "failure" is a consequence of the actions (choices) leading to it. Thus, the statement "too big to fail" translates, in "realspeak" to: unaccountable, irresponsible for OWN actions.
This is the same old algorithm of servitude of our slavers (private gain, public loss) based upon decreeing the ownership of who profits by actions and, who loses by facing the consequences of actions over which they had no part, nor control. In other words, institutionalized injustice:
Justice Defined: We are all free to profit or suffer and learn (adapt to excellence) by facing the consequences of our OWN choices. Injustice is to be forced to suffer the consequences of choices of unaccountable (irresponsible) others..
"The danger is not that a particular class is unfit to govern. Every class is unfit to govern. The law of liberty tends to abolish the reign of race over race, of faith over faith, of class over class." ~ Lord Acton
Posted by dave jr on 02/03/12 09:37 AM
Too big to fail? Too fat to diet? Is too small to succeed also true?
This is another typical example of doublespeak where cause and effect is reversed. Bigness is made possible by not failing. Bigness is the desire, so failure has to be covered up.
Those who speak this way are hiding the truth about their agenda, because if known, it would be viewed as vile and repugnant.
Posted by josejoe on 02/03/12 09:24 AM
dannyB-i was talking about the emptiness of goldman sachs 5 yrs ago. this politically propped up cancer started this whole mess.
Posted by Danny B on 02/02/12 11:56 PM
Here's an interesting article.
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As far as too-big-to-fail, the jury is still out. Jim Sinclair says that the 5 biggest U.S. banks will fail very soon.
Click to view link
Obviously, it's a possibility. But, everyone figures that there will always be a "save" from somewhere on high. Maybe not?? GOV is pretty limited in it's actions.
One month before Lehman Bros collapsed "out of the blue", no other bank would accept their collateral. The bankers all drink together and they have a general knowledge of the condition of their competitors.
Here's a few quotes from the Daily Reckoning;
"Last week, nine Goldman insiders scurried away from their stock as fast as the law would let them.
They cashed out $20 million worth of stock at an average price of $107.44. This is the very same stock (NYSE:GS) that Goldman - on behalf of its shareholders - spent $21 billion buying over the last five years. The average price of those purchases was about $171 per share.
Here's our question: Why is Goldman's stock a 'Buy' for shareholders at $171 a share, but a 'Sell' for insiders at $107 per share?
Something's wrong with this picture. Or, to change metaphors, something's rotten with this onion. Let's peel it back until we find the source of the stench.
First data point: Goldman's revenues and earnings are falling even faster than its reputation. Two weeks ago, the company reported a whopping 58% drop in fourth quarter earnings, compared to 2010."
"This latest quarterly report punctuates a troubling three-year trend. Goldman's full-year net income hit a record $13.4 billion in 2009, then slipped to $8.4 billion in 2010 before tumbling to $4.4 billion last year."
"As noted above, Goldman's management spent $21 billion of the shareholders' capital buying GS stock in the open market at an average price of $171 a share. Today, the stock sells for $111. On a mark-to-market basis, therefore, Goldman's stock buy-back 'investment' has produced a loss of about $7.3 billion for shareholders - or more than the company's total net income during the last five quarters! That's the bad news. The good news is that these share purchases helped support the share price so that the top nine guys at Goldman could sell their stock for $20 million."
If GS insiders don't want to hold GS stock, what do they know that GS stockholders don't know? If GS insiders would trash GS earnings just to get a "few" more bucks for their personal stock holdings, that doesn't imply much confidence in the future of GS.
The Greek tragedy will definitely have repercussions here. Big, bad, bald, Ben Bernanke says that he will continue ZIRP to protect America from any European fallout.
Click to view link
So, when the Greek default takes out the French banks who have been in terrible shape anyway, the collapse of French banks will take out New York banks.
BBBB Bernanke can't possibly cover a $ hundred trillion,, or so of CDS on failed European debt with just ZIRP.
Portugal has gone past % 7. They will melt down a lot faster than Greece did because everybody has already read the script. Italy is standing on-deck for their turn.
GS may have decided to take what money they can get and BAIL .
Posted by Panchito42 on 02/02/12 10:38 PM
To help put this article ()in perspective, here are some very pertinent thoughts:
Whereas in socialism, as minutely and accurately put by Clodomyro Almeyda --the Foreign Relations Bolshevik minister in the cabinet of the equally Bolshevik Salvador Allende, president of Chile in the early 1970s-- in full-fledged socialism "... the government must own all the ways and all the means of all the production and all the distribution of all goods and all services in society, so that the government rightly becomes the only proprietor and only employer.
Fascism, being nothing else than, and just a step away from, half-baked socialism, has some variants: in fascism the government must co-own --or at least control tightly to either boost or bust-- select ways and select means of select production and select distribution or select goods and select services in society, so that the government becomes the most significant proprietor and employer, as well as the kingmaker and Grim-Reaper of enterprises in society. There are, of course, other characteristics that differentiate the two, but not pertinent here.
Obama belongs in one of the main strains of Marxism-Leninism, namely, Western-Marxism, one of whose traits is "pragmatism" in whose name Western-Marxists resort to using fascism as a convenient steppingstone toward full-fledged socialism, which, in turn, they deem --as absolutely every single Marxist on the planet does-- as only a convenient steppingstone toward communism.
Thus, don't be confused when Obama resorts to fascist measures, such as, for example, making the government co-own General Motors and Chrysler.
Not to leave them off the hook, also some on the side of free-entrepreneurism resort to fascism, e.g., GW Bush with his TARP.
Posted by planet on 02/02/12 08:42 PM
Too big to fail is an excuse to pour money into the companies controlled by those who are buying up company after company . And does the public care? No. What do we have to say about it. The Federal Reserve controls our economy and money system and they will do whatever it takes as far as they are concerned to keep it in operation and not lose control of it. Once they lose control of it, and a man like Ron Paul comes along who wants to do away with the Federal Reserve, they may lose their centuries of work to control the world through financiaal control.
Posted by Don from the Republic of Lakotah on 02/02/12 08:26 PM
Offtopic break: find the meme.
U.S. Treasury, Labor Departments Act to Enhance Retirement Security for an America Built to Last
Executive Actions Broaden Options, Increase Transparency for 401(k) Savers
Click to view link
Top 1% of Mobile Users Consume Half of World's Bandwidth, and Gap Is Growing
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Posted by alexsemen on 02/02/12 07:48 PM
I have a very strong remedy for your misery.
If you like to know please contact me when you are not hallucinatory !!
I would like to say to you that you are "ludicrous" but I'm afraid that one of your two neurons left is already damaged !
Posted by W.Palmer on 02/02/12 07:35 PM
"The Financial Stability Oversight Council... ... " That sounds very grand.
I wonder where the address of that might be, or do they share an office somewhere... .
They can't squeeze anymore council's, boards, committees, in government can they? ... surely not. No they wouldn't.. there's an austerity program on now.. Yes?
Posted by alexsemen on 02/02/12 07:33 PM
DB : This music I realy like it !!
To Big to fall is Angela Merkel's fascist corporation Germany , lead by the Deutsche Bank ( you know who they are) , with the German tribe at any moment in the history: 'born to be killers" and the perpetrators of the Machine as God and niew religion of metalman !
Posted by josejoe on 02/02/12 06:28 PM
i hope you can all get a copy of richard maybury's latest EWR. it is right on-as usual! feb-2012
Posted by seer on 02/02/12 05:55 PM
Prior to WWII the USA had some of the highest tariffs in the world. Fascism began in WWI and has continued via the military-industrial complex. Reality is not the black and white picture presented by the DB. In 1841 German economist List blasted England for preaching free trade for other countries while having achieved its economic status through high tariffs and extensive subsidies. In 1939 Japan kicked GM and Ford out of the country and Bailed out Toyota in 1949. Right up to the 1990s China's average tariff was over 30%. Even after the early 1990's India's average manufacturing tariffs were above 30%. Chile which is hailed as a free trade example suffered a terrible financial crash in 1982 and the whole economic sector was Nationalized. In 1820 Britain average tariff rate on manufacturing imports was 45-55%. Free trade is not working for developing countries which were growing 2x as fast when they exercised protective tariffs. History is on the side of the regulators in that most of today's rich countries regulated foreign investment when they were on the receiving end-China being this day's poster child. It took Nokia 17 years to earn any profits in its electronics division. If Nokia had not been protected it would most likely have been taken over or investors would have demanded it shut down its losing electronics division. In the early 1980's the USA rescued Chrysler Corporation. Britain nationalized Rolls Royce in 1971, British steel in 1967, British Aeospace and British Leyland in 1977 (all to save these industries). Singapore Airlines is a state owned enterprise. So this statement is simply NOT True in all cases: "Remove competition from the marketplace and you end up with a collection of enterprises that perform inconsequential functions incompetently. More importantly, you end up with a federalized private sector and a series of disastrous "public-private" partnerships."
To believe the elites will allow the Game to be revamped is fairy tale thinking. I agree with Simon Johnson (MIT) that these behemoth Banks need to be split into smaller firms which are NOT to big to fail.
Reply from The Daily Bell
Fascism in the United States likely began shortly after the Revolutionary War, was perfected after the Civil War and has expanded ever since.