In the supposedly Free World, huge public protests on Wall Street to protest the $700 billion bailout plan to benefit the renegade bankers, financiers and companies who caused the crisis, has not even been mentioned by the mainstream media! This indicates the pathetic state of American media; it is also the True Face of American democracy. A few belated reports of protests were allowed to filter through after Congress failed to pass the bailout bill, to explain why it fell through. Not a single media house has called for sacking, let alone jailing, the scoundrels who have brought the nation to this pass.
But as the Bible says, the mills of god grind slowly and they grind exceedingly fine. Thus, the crisis that could have broken out earlier or later, actually occurred only on the eve of the Presidential elections, and made it difficult for Congress to ignore the mood of the people. With elections just five weeks away, the House members felt it prudent to listen to voters rather than party leaders. The $700 billion package was dumped, mainly because politicians found it too big to digest.
Essentially, the package gives too much to Wall Street and too little to the endangered home-owners; people naturally feel the government is giving their tax dollars to financial brigands and giving them nothing in return. After all, if Wall Street has debts, so do home-owners; people will find themselves on the streets (untold numbers are already sleeping in cars, but media won’t tell you), while Wall Street salivates over the size of the bonuses it can squeeze out of the bailout!
As one compares the Crash of 2008 with the Great Depression of 1929, one cannot help but wonder how America dislodged the heritage of Roosevelt and allowed the likes of Goldman Sachs, Heritage Foundation, and George W. Bush, Jr., to steal the commanding heights of economy and polity. Megasthenes noted that in ancient India the state regulated the economy and owned all natural resources; this is now the dominant trend of the emerging international order, what is called sovereign wealth funds (Russia, China, Venezuela, Central Asia). As America grapples with the current crisis, it would do well to ponder that if government insurance and government tax credits are needed to rescue bad bonds, what is the virtue of a free market?
As a first measure, instead of saving the banks, government should save the home-owners by refinancing their failing mortgages. This is what FDR did, and he saved about a million families from foreclosure, and ensured that no middleman made money in the process. This can’t be done by a Treasury Secretary who still thinks he’s CEO of Goldman Sachs. America should also rethink the policy of handing over the State to unelected corporates after every election.
If tax money is given to rich cads free, why should people pay their mortgages since the banks have already charged them as taxpayers when the government took over Freddie and Fanny? Similarly, there is no logic in people paying credit card dues because the bank has already received a bailout. How can people be charged twice – as taxpayers and individuals? How can banks benefit twice – from a bailout and from defaulting debtors? Do usurious classes have special privileges in Uncle Sam’s cabin?
As Americans go to the polls in November, they might like to ponder if they want to continue to foot the bill – roughly $ 700 billion annually – for wars in Iraq and Afghanistan that benefit only the swindlers on Wall Street? If they can’t stand the body-bags coming out of Baghdad, do they really want more coming from Teheran? And don’t forget the problems with a nuclear Pakistan. Yes, that’s a Crusader US – Islamic Pak conflict, not an Indo-Pak one. Surprised? Truth is stranger than fiction.
Serious Americans are convinced the American people are victims of the biggest fraud in the country’s history. New York, the Big Apple, the financial empire it represents, is a mirage. It always was, but now it is visibly so. Americans are coming to terms with the fact that they cannot eternally corner and consume more than their share of the planet’s produce; they cannot eternally borrow more than they earn and defer payment eternally. There is a tide in the affairs of men, the Bard said, and their karmic retribution is nigh.
Iranian President Mahmoud Ahmadinejad has been proved right – America has no credible economy, it just prints money and sends it to the market. Ridiculous as it sounded a year ago, it is now undeniable that the imploding economy was held together by a ‘fiat currency’ called the Federal Reserve Note, concocted by an international banking cartel called the Federal Reserve. The Federal Reserve, it needs to be emphasized, is not an American Government Bank in the sense that the Reserve Bank of India is; it is private, and prone to the same deregulation sickness that is now taking the economy down. Delinked arbitrarily from the gold standard, the Federal Reserve printed over $4 trillion in new money, fuelling inflation, price rise, and the collapse of the dollar.
Whichever way one looks at it, the Crash of 2008 is upon America, and correspondingly on the rest of the world, depending upon the level of globalisation or insulation. The Crash marks the reincarnation of America as a more modest power, a far cry from the Sole Superpower that trampled over the globe two decades ago.
Hopefully, India’s imitative elite, instead of expressing juvenile adoration for President George Bush who has ruined his people, will, like the heroine of A Midsummer Night’s Dream, cease to love a donkey and return to the real world. Traditional Indian economic values emphasize thrift and fiscal responsibility; and avoiding the debt trap by living within your means.
Indian emulation of American values has been a failure from the first day. Repeated news items in the press regarding recovery agents using strong-arm tactics to take back a car whose dues have not been met; recruitment of hijras or drummer boys to shame defaulters to pay up, all point to the complete failure of the consumer debt paradigm. Yet banks have assiduously pushed the ‘loan culture,’ and the elite is in denial.
The UPA tried hard to put hard-earned savings and pensions into the hands of foreign banks and insurance companies – all of which would have been gobbled up by the vultures on Wall Street, without so much as a burp. Indians need to recognize that they have had a very narrow escape, and get their priorities in order.
We must begin by de-colonizing our minds, if I may borrow the evocative phrase of Dr. Koenraad Elst. We need to de-legitimise the notion that an unaccountable private sector knows best, and has the right to take our money and plunge society and country into a financial abyss, which is precisely what happened to America at the hands of its unelected financial elite, represented by Fed Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson.
Critics say America’s greedy corporates used the events of 9/11 to make changes in the legal system and tax code. Paulson tried to force Congress to accept a plan that would not solve the financial crisis, but would consolidate the gains of a tiny hyper-wealthy class, made from looting the US economy after 9/11. Ordinary American taxpayers would bear the brunt of the losses resulting from the collapse of the housing bubble.
And the realists (earlier they were called cynics) say that more bad news is inevitable. There is, for instance, about $60 trillion (repeat, $60 trillion) worth of insurance contracts written by companies like AIG against the risk of exotic derivative bonds going bad. Well, lots of exotic products are going to go bad. And a far greater fiscal crisis is said to be looming, involving promises made through Medicare and Social Security.
Worse, the truth of the deeper ideological aspect of the scams will never be fully known, as most computers containing critical data will be scrapped during the inevitable bankruptcies like that of Lehman Brothers. Unless, of course, FBI moves in and seizes all computers. As America looks for culprits behind the current mess, India should reject the borrowed wisdom of the unwise.
The author is Editor, www.vijayvaani.com
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