[Peace-discuss] Tell Me Lies

[C. G. Estabrook]

He's desperate. He doesn't want to have to look for work next year in a ruined 
economy.


On 7/26/11 3:46 PM, C. G. Estabrook wrote:
> [Obama tells (and repeats) a flat-out lie about SS checks.  And he must know 
> it's a lie.]
>
> July 26, 2011
> *Under Cover of "Crisis"
> Obama's Ambush on Entitlements
> *By MICHAEL HUDSON
>
> You know that the debt face-off is as staged as melodramatically as a World 
> Wrestling Federation exhibition when Obama makes the blatantly empty threat 
> that if Congress does not "tackle the tough challenges of entitlement and tax 
> reform," there won't be money to pay Social Security checks next month. In his 
> debt speech last night (July 25), he threatened that if "we default, we would 
> not have enough money to pay all of our bills -- bills that include monthly 
> Social Security checks, veterans' benefits, and the government contracts we've 
> signed with thousands of businesses."
>
> This is not remotely true. But it has become the scare theme for over a week 
> now, ever since the President used almost the same words in his interview with 
> CBS Evening News anchor Scott Pelley.
>
> Of course the government will have enough money to pay the monthly Social 
> Security checks. The Social Security administration has its own savings -- in 
> Treasury bills. I realize that lawyers (such as . Obama and indeed most 
> American presidents) rarely understand economics. But this is a legal issue. 
> Obama certainly must know that Social Security is solvent, with liquid 
> securities to pay for many decades to come. Yet . Obama has put Social 
> Security at the very top of his hit list.
>
> The most reasonable explanation for his empty threat is that he is trying to 
> panic the elderly into hoping that somehow the budget deal he seems to have up 
> his sleeve can save them. The reality, of course, is that they are being led 
> to economic slaughter. (And not a word of correction reminding the President 
> of financial reality from Rubinomics Treasury Secretary Geithner, neoliberal 
> Fed Chairman Bernanke or anyone else in the Wall Street Democrat 
> administration, formerly known as the Democratic Leadership Council.)
>
> It is a con. Obama has come to bury Social Security, Medicare and Medicaid, 
> not to save but kill them. This was clear from the outset of his 
> administration when he appointed his Deficit Reduction Commission, headed by 
> avowed enemies of Social Security Republican Senator Alan Simpson of Wyoming, 
> and President Clinton's Rubinomics chief of staff Erskine Bowles. Obama's more 
> recent choice of Republicans and Blue Dog Democrats to be delegated by 
> Congress to rewrite the tax code on a bipartisan manner -- so that it cannot 
> be challenged -- is a ploy to pass a tax "reform" that democratically elected 
> representatives never could be expected to do.
>
> The devil is always in the details. And Wall Street lobbyists always have such 
> details tucked away in their briefcases to put in the hands of their favored 
> congressmen and dedicated senators. And in this case they have the President, 
> who has taken their advice as to whom to appoint as his cabinet to act as 
> factotums to capture the government on their behalf and create "socialism for 
> the rich."
>
> There is no such thing, of course. When governments are run by the rich, it is 
> called oligarchy. Plato's dialogues made clear that rather than viewing 
> societies as democracies or oligarchies, it was best to view them in motion. 
> Democracies tended to polarize economically (mainly between creditors and 
> debtors) into oligarchies. These in turn tended to make themselves into 
> hereditary aristocracies. In time, leading families would fight among 
> themselves, and one group (such as Kleisthenes in Athens in 507 BC) would 
> "take the people into his party" and create a democracy. And so the eternal 
> political triangle would go on.
>
> This is what is happening today. Instead of enjoying what the Progressive Era 
> anticipated -- an evolution into socialism, with government providing basic 
> infrastructure and other needs on a subsidized basis -- we are seeing a lapse 
> back into neo-feudalism. The difference, of course, is that this time around 
> society is not controlled by military grabbers of the land. Finance today 
> achieves what military force did in times past. Instead of being tied to the 
> land as under feudalism, families today may live wherever they want -- as long 
> as they take on a lifetime of debt to pay the mortgage on whatever home they buy.
>
> And instead of society paying land rent and tribute to conquerors, we pay the 
> bankers. Just as access to the land was a precondition for families to feed 
> themselves under feudalism, one needs access to credit, to water, medical 
> care, pensions or Social Security and other basic needs today -- and must pay 
> interest, fees and monopoly rent to the neo-feudal oligarchy that is now 
> making its deft move from the United States to Ireland and Greece.
>
> The U.S. Government has spent $13 trillion in financial bailouts since Lehman 
> Bros. failed in September 2008. But . Obama warns that thirty years from now, 
> the Social Security fund may run a $1 trillion deficit. It is to ward it off 
> that he urges dismantling the plans for such payments now.
>
> It seems that the $13 trillion used up all the money the government really 
> has. The banks and Wall Street firms have taken the money and run. There is 
> not enough to pay for Social Security, Medicare or other social spending that 
> the Blue Dog Democrats and Republicans now plan to cut.
>
> Not right away. The plan will be to "paper over" the current crisis by 
> delegating the plans to a "Deficit Reduction Commission #2," appointed from 
> Congressional members.
>
> Finally, we have "Change we can believe in." Real change is always surprising, 
> after all.
>
> The faux crisis
>
> Usually a crisis is needed to create a vacuum into which these toxic details 
> are fed. Wall Street does not like real crises, of course -- except to make 
> quick computer-driven speculative gains on the usual fibrillation of today's 
> zigzagging markets. But when it comes to serious money, the illusion of a 
> crisis is preferred, staged melodramatically to wring the greatest degree of 
> emotion out of the audience much like a good film editor edits a montage 
> sequence. Will the speeding train run over the girl strapped to the tracks? 
> Will she escape in time?
>
> The train is debt; the girl is supposed to be the American economy. But she 
> turns out to be Wall Street in disguise. The exercise turns out to be a 
> not-so-divine comedy. Obama offers a plan that looks very Republican. But the 
> Republicans say no. There is an illusion of a real fight. They say Obama is 
> socialist.
>
> Democrats express shock at the giveaway being threatened. Many say, "Where is 
> the real Obama?" But it seems that the real Obama turns out to be a Republican 
> Wall Street imposter in Democratic clothing. That is what the Democratic 
> Leadership Committee basically is: Wall Street Democrats.
> This is not as much of an oxymoron as it may sound. There is a reason why 
> today's post-Clinton Democrats are the natural party to undo what FDR and 
> earlier Democrats stood for. A Democratic Senate never would stand for such 
> giveaways to Wall Street and double-cross of their urban constituency if a 
> Republican president would propose what . Obama is putting before them.
> Here's what the next Republican presidential candidate can say: "You know that 
> whatever we Republicans want,  Obama will support us. If you don't want a 
> Republican policy, they you should vote for me for president. Because a 
> Democratic Congress will oppose a Republican policy if we propose it. But if. 
> Obama proposes it, congress will be de-toothed, and cannot resist."
> It's the same story in Britain, where the Labour Party is called upon to 
> finish up the job that the Conservatives start but need New Labour to subdue 
> popular opposition to privatizing the railroads and a Public/Private 
> Partnership financial giveaway for the London tube line. And it's the same 
> story in France, where a Socialist government is supporting the privatization 
> program dictated by the European Central Bank.
>
> Round up the usual fallacies
>
> Whenever one finds government officials and the media repeating an economic 
> error as an incessant mantra, there always is a special interest at work. The 
> financial sector in particular seeks to wrong-foot voters into believing that 
> the economy will be plunged into crisis of Wall Street does not get its way -- 
> usually by freeing it from taxes and deregulating it.
> Obama's first fallacy is that the government budget is like a family budget. 
> But families can't write IOUs and have the rest of the world treat it as 
> money. Only governments can do that. It is a privilege that the banks would 
> now like to obtain -- the ability to create credit freely on their computer 
> keyboards, and charge interest for what is almost free, and what governments 
> can indeed create for free.
>
> "Now, every family knows that a little credit card debt is manageable. But if 
> we stay on the current path, our growing debt could cost us jobs and do 
> serious damage to the economy."  But economies need government money to grow 
> -- and this money is provided by running federal budget deficits. This has 
> been the essence of Keynesian counter-cyclical spending for more than half a 
> century. Until the present, it was Democratic Party policy.
>
> It's true that Pres. Clinton ran a budget surplus. The economy survived by the 
> commercial banking system supplying the credit needed to grow -- at interest. 
> To force the economy back into this reliance on Wall Street rather than on 
> government, the government needs to stop running budget deficits. The economy 
> will then have a choice: to shrink sharply, or to turn almost all the economic 
> surplus over to banks as economic rent on their credit-creation privilege.
>
> Obama also pretends that credit ratings agencies are able to act as mascots 
> for their clients, the large financial underwriters, by making the entire 
> economy pay even higher interest rates on its credit cards and banks. "For the 
> first time in history," . Obama dissembled, "our country's Triple A credit 
> rating would be downgraded, leaving investors around the world to wonder 
> whether the United States is still a good bet. Interest rates would skyrocket 
> on credit cards, mortgages, and car loans, which amounts to a huge tax hike on 
> the American people."
>
> The reality is that running a budget surplus would increase interest rates, by 
> forcing the economy into captivity to the banking system. The Obama 
> administration is now deep into its Orwellian rhetorical phase.
>
> During Obama's speech I could not help feeling that I had heard it all before. 
> And then I remembered. Back in 2008, Treasury Secretary Henry Paulson sought 
> to counter Sheila Bair's argument that all FDIC-insured depositors would be 
> able to ride out the September crisis, with only the reckless gamblers losing 
> the gains they hoped to make on their free credit. "If the financial system 
> were allowed to collapse," he warned in his Reagan Library speech, "it is the 
> American people who would pay the price. This never has been just about the 
> banks; it has always been about continued prosperity and opportunity for all 
> Americans."
>
> But of course, it is all about the banks. Wall Street knows that to get 
> sufficient Congressional votes to roll back the New Deal, Social Security, 
> Medicare and Medicaid, a Democratic president needs to be in office. A 
> Democratic Congress would block any Republican president trying to make the 
> kind of cuts that Obama is sponsoring. But Congressional Democratic opposition 
> is paralyzed when President Obama himself -- the liberal president par 
> excellence, America's Tony Blair -- acts as cheerleader for cutting back 
> entitlements and other social spending.
>
> So just as the City of London backed Britain's Labour Party in taking over 
> when the Conservative Party could not take such radical steps as privatizing 
> the railroads and London tube system, and just as Iceland's Social Democrats 
> sought to plunge the economy into debt peonage to Britain and Holland, and the 
> Greek Socialist Party is leading the fight for privatization and bank 
> bailouts, so in the United States the Democratic Party is to deliver its 
> constituency -- urban labor, especially the racial minorities and the poor who 
> are most injured by Pres. Obama's austerity plan -- to Wall Street.
>
> So Obama is doing what any good demagogue does: delivering his constituency to 
> his campaign contributors on Wall Street. Yves Smith has aptly called it 
> Obama's "Nixon goes to China moment in reverse."
>
> The Republicans help by refraining from putting forth a credible alternative 
> presidential candidate. The effect is to give Obama room to move far to the 
> right wing of the political spectrum. Far enough so that it is his own 
> Democrats who are most intent on scaling back Social Security, not the 
> Republicans.
>
> This is done most easily under pressure of near panic. This worked after 
> September 1008 with TARP, after all. The Wall Street bailout melodrama should 
> be viewed as a dress rehearsal for today's debt-ceiling non-crisis.
>
> [Michael Hudson is a former Wall Street economist. A Distinguished Research 
> Professor at University of Missouri, Kansas City (UMKC), he is the author of 
> many books, including Super Imperialism: The Economic Strategy of American 
> Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A 
> History of Theories of Polarization v. Convergence in the World Economy. He 
> can be reached via his website, mh at michael-hudson.com.]
>
>
>
> This body part will be downloaded on demand.
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