Guest guest Posted January 6, 2006 Report Share Posted January 6, 2006 S Thu, 5 Jan 2006 21:49:28 EST Subject: A must read Thanks for this article, Gordon. (gbet) This is one of the most important articles I have read this year. I put it in the top three. It is a must read for everyone. It's a little difficult to get through some of it, but it's worth it to continue. I've made bold and bigger print in some areas to emphasize points. If you get a little bored, please keep reading. Your life may depend upon it. You need to send this on to bush people also. Economics 101 would help to understand this, but this guy does a good job explaining it even without. You simply MUST read this. I sometimes say if you have time for only one article today, this is the one. I'll say if you have time for one article this year, this is the one. S ******* When he was asked what Bushonomics was, Senior replied by saying -- Bushonomics is the continuous consolidation of money and power into higher, tighter and righter hands. And this is how the Bushonian agenda was advanced in 2005... It was George Bush Senior, who said that the people are nothing more than fodder for the schemes and ambitions of those that govern them. American author Sinclair Lewis said that fascism would come to the United States wrapped in a flag and carrying a cross http://www.almartinraw.com/ We're All Republicans Now. We're Either Rich Republicans. Or We Are Banana Republicans... by Al Martin (1-2-06) The year 2005 has been another stellar year for the top 20% of the United States of America. It can also be reported that the goal, or the " magic number " has finally been reached. That number relates to what George Bush Senior said in 1992 †" the goal of having the top 1% of the nation controlling 70% of all the private wealth in the nation. That number is even a little deceptive because that private wealth also includes " public wealth " because of the concentration of holdings of U.S. Treasury and government obligations by the top 1% of the nation. However Bushonomics should be lauded for accomplishing its agenda. People should be reminded of what George Bush Senior said (which we have mentioned many times before) in the famous interview of November 1992. When he was asked what Bushonomics was, Senior replied by saying -- Bushonomics is the continuous consolidation of money and power into higher, tighter and righter hands. And this is how the Bushonian agenda was advanced in 2005... Certainly the magic numbers has been reached. We have heard James Baker, George Schultz, Henry Kissinger, et al, mention this. And, as of now (the start of 2006) the top 1% of the nation (75% of which is Republican) now controls 70% of all of the private wealth in the nation, along with a disproportionate share of the public wealth. This has been accomplished, of course, by the mandate of Bushonomics, which is to continuously transfer wealth from the bottom 80% to the top 20%. The original Reagan-Bush Regime started the mechanism of wealth transfer through disproportionate tax cuts. The Bush-Cheney Regime increased the tempo by making tax cuts as disproportionate as they have ever been in the history of taxation in the United States. As such, all Bushonian tax cuts, individual so as to separate them from corporate, proffered under the Bush-Cheney Regime, including the most recent 70 billion, 68% (or more than 2/3rds) of the economic value of those tax cuts have inured to citizens earning more than $250,000 per annum, or with a net worth exceeding $5 million. And how this has been accomplished is through a " trickle-up " mechanism, which is at the very heart of Bushonomics. A trickle-up mechanism is accomplished, first, by disproportionate tax cuts, where the top 20% of the nation benefit at the expense of the bottom 80%, whose taxes are not cut as much. Or, in some cases, citizens earning less than $76,837 per annum have actually seen their aggregate tax burdens rise, due in part to the continuing maintenance of the AMT alternative minimum tax. This obviously transfers wealth. But it isn’t the way most people think. How the wealth is transferred is by creating a vacuum at the top. If you consistently diminish the aggregate tax burden of the top 20%, it’s like squeezing a bubble or bulb. You create a vacuum. As the bulb is released, money from the bottom 80% is drawn up in to fill the vacuum. That is literally how it works. What expands that vacuum is the fact that the bottom 80% is paying an increasingly greater proportion of the aggregate tax burden of the nation relative to their incomes. Therefore, their bubble gets squeezed as well. As their bubble gets released, it’s money flowing out of them into the hands of the top 20%. What disproportionate tax cuts do is effectively use the tax revenues paid by the bottom 80% of the nation to provide subsidies for the top 20%. Furthermore, under this regime, of course, the Federal Reserve has cooperated marvelously (there is no other way to put it) by maintaining, and still maintaining, despite 13 Fed rate increases, what is known as an easy-money policy, which allows plenty of liquidity in the system, so that asset values rise, even though the demand, or the number of people being able to afford an appreciating asset is declining. The value of the assets, nonetheless, can continue to rise even though the number of people who can afford to purchase them can fall. The reason why that can happen is that the ability to finance the purchase of the item has been made easier. So, let's say, for instance, that you are in the top 20% of the nation and your house was worth $500,000 in 1990, but today it’s worth, let's say, $2.5 million. Let’s also say that the available pool of people, in terms of numbers, that could purchase that house for $2.5 million has fallen, which it has. Obviously that happens as more wealth moves into the top 20%, which contains fewer people, than the bottom 80%. However, although the available pool of buyers has shrunk, their ability to purchase and finance that house, because of the maintenance of an easy-money, low-interest-rate policy, has increased, thus giving an individual buyer greater buying power, which offsets the actual decline in the aggregate numbers of potential purchasers. Essentially the same theorem works with almost any tangible item of value. It could be securities, debt instruments, commodities, or real estate. However this is due to the combination of disproportionate tax cuts combined with an easy-money policy -- the maintenance of an easy or liquid money policy combined with exceptionally low interest rates relative to the underlying rate of inflation, i.e., exceptionally low real interest rates or interest rates minus inflation. This is what Bushonomics I under Bush Senior started to do in 1988. This was a very similar type of period. When they saw the end of the asset boom coming, they began to squeeze the lower 80% even harder by fostering even more disproportionate tax cuts and more restrictive bankruptcy laws. This having been done in 1988 was also done again in 2005. To further facilitate the transfer of wealth, the Bush-Cheney Regime, as of October 17, 2005, had the bankruptcy laws changed, which the banking industry had been repeatedly asking for. In return the banks were forced to give nothing back. In exchange for Democratic support of the Bushonian bankruptcy law, the Democratic proposal mandated that banks would have to roll back certain fees and interest rate structures †" but this was abandoned because the Republicans had the support to pass it without the Democrats. (sharin's note - no more checks and balances -- we are a one-rule country -- what we learned in government class was very dangerous -- the loss of balance of checks. The republicans the dumbed down in this country voted for screwed citizens royally with this bill) Effectively, what this does now is it makes it more difficult to declare bankruptcy. If you want to declare Chapter 7, or liquidating bankruptcy, you are going to be forced to pay back with what's called a hard debt of at least 30%. That was one of the big changes. This then also puts fresh restrictions on bankruptcy, thus reducing the number of people that can find shelter in bankruptcy proceedings and forcing those people to pay back more than they would have otherwise, which further discourages citizens who have been de facto victims of Bushonomics from declaring bankruptcy. One of the consequences of Bushonomics, as we saw in the 1980's and early 90's, and as we are seeing again under Bush Cheney, is that personal bankruptcies rise precipitously. Remember, when this regime came to power, personal bankruptcies were averaging 1.4 million per annum. They will reach 2.6 million in 2006, as estimated by the American Bankruptcy Institute. Indeed, under this regime, 10 million citizens (a record number for any 5-year period) have filed for bankruptcy. Small business bankruptcies have also reached 3.5 million. Insofar as bankruptcy is one of the consequences of Bushonomics, readers should note that, of the 10 million citizens who have declared bankruptcy, 83% of all personal bankruptcy filers have been in the bottom 50% of the economic population. That, frankly, is an astounding statistic. The regime, is further concerned now about people being able to pay their debts, in that it is maintaining an aggressive job exportation policy. What the Democrats had tried to do was to proffer some sort of 'softening of the blow of Bushonomics' legislation by trying to offer outs of the new bankruptcy legislation, which is now bankruptcy law. That failed. What was the Bushonian response? To re-institute the use of body writs to threaten people who do not pay their bills, or in essence, turning the nation back to the times of debtor prisons. That is the Bushonian response, as it always has been -- to look at the bottom 50% of the population as nothing more than rabble, rabble that must be controlled. It was George Bush Senior, who said that the people are nothing more than fodder for the schemes and ambitions of those that govern them. And I labeled all citizens that are in the bottom 50% as OFU's (One Fodder Unit). That’s my invention. Treasury Secretary Snow was pleased to report that the Regime, through a carefully crafted package of tax incentives for business and industry, met its goal, under its official job exportation program. Remember, this is the first regime ever in the history of the nation to have an official jobs exportation program. Secretary Snow has announced with great delight that the regime has met its goal of exporting 500,000 manufacturing, factory, other types of service jobs, principally clerical jobs, etc. throughout the nation, and that, indeed, further tax incentives for business and industry will be provided in 2006 and the regime will now seek in 2006 to expand the jobs export program to 700,000 in order to increase the productivity of the economy. Because, as Secretary Snow correctly points out, productivity, which had peaked in the second quarter of `04, has been declining ever since. One way to increase, certainly, or the most direct way, the Bushonian way†" what has always been the preferred Republican way of increasing productivity -- is to mount a job export program, or to encourage jobs to move overseas. For those who don’t understand productivity, it’s very simply put: If you have 20 people on a factory assembly line, you take one out and you speed the line up 5%. That’s what productivity’s all about. This certainly requires an understanding of Economics 101, but the regime's need to continuously increase productivity is because of the other half of the productivity report, or statistic, which is called per-unit labor cost. If you're going to maintain an exceptionally easy money policy that creates inflation, you have to act to continuously drive down that inflation. The way that is most commonly done or had been done in the past is through the maintenance of a strong dollar policy, something this regime was unable to maintain, in that the dollar has lost 40% of its international exchange value since this regime has come to power. Now, much of that has not been interest rate differential, as the regime likes to say. Much of it has been, simply put, a loss of confidence in the U.S. dollar by savvy foreign holders of dollars, due to Bushonomics, A falling dollar is, in itself, inherently inflationary. Therefore, Bushonian regimes are left with very few tools to keep a lid on inflation. One of those tools is to continuously increase the rate of productivity, which, in turn, continuously decreases per-unit labor cost †" and to ensure that wage growth, ex of inflation, doesn’t increase, as well as to ensure that wages do not create any pressure on inflation, something that the regime has been very successful at, and successful again in 2005. As of December 2005, year over year, real wages (wages net of inflation) have been absolutely zero. In other words, zero-percent growth rate in wages over the past 12 months. The regime has done a remarkable job in keeping down wage growth, wherein, now, over the past 5 years, real aggregate, 5-year real wage growth, is now a minus number. And that's a remarkable job for a regime to stay in power and be able to do that: to diminish wages of the bottom 50%, to increase the net aggregate tax burden of the bottom 50%. That can be explained by understanding that Bushonian regimes have always been kept in power by the continuous creation of foreign diversions, like wars. It should be noted that American author Sinclair Lewis said that fascism would come to the United States wrapped in a flag and carrying a cross. And isn’t that what we've seen under this regime? As George Bush Sr. used to say -- We should thank God for our flag. Oh, how many Bushonian sins it hides! The restructuring of the Republican Party has taken an unprecedented turn under this regime. What the regime has done, as we have mentioned before, is to totally obliterate what was left of the old Republican factions -- the old party wings within the party. Ever since 1980, of course, the moderate and liberal Republican wings have been squeezed to the point of evisceration. The liberal wing of the Republican Party no longer exists, and the moderate wing is on life support. If you don’t believe that, ask Senator Grassley or Senator Snow. The regime has used patriotism to split the party into new factions and to create what is essentially 3 new or re-packaged factions. Much of the grassroots Right and Christian Right have now been repackaged into this rabid Pro-Bush Faction. It is literally a distinguishable wing within the party, and it is now the predominant wing because the regime has been very crafty in putting it together. They have taken voters that constitute about 30% of the nation, which we call the Fippies, Nifwics and Rens. To explain that again, the Fippies are the fear, ignorance and prejudice brigades. And their erstwhile cousins, the Nifwics, are the naive flag-waving crowd, supported by their chums, the Rens, right-wing religious nuts. They’re about 30% of the vote. The Republican Party has formulated control over this new little bloc by using the flag. That’s how they were able to get the PATRIOT Acts passed despite the fact it is within this working class that Republicans have suffered because of Bushonomics. However, the regime is able to maintain the line: " We are at war. We must expect sacrifices. " There is still a third of the population, the flag-wavers, that are prepared to accept that. Combined with the Rens, the right-wing religious nuts, which, nationally, can deliver perhaps, maybe 6 to 8% of the vote and you add onto that the traditional corporate vote combined with the top 20%, which is what I would call the Republican money vote, whose ranks have swelled under this regime, and you find out that what the regime is consistently able to deliver is between 50 and 53% of the vote. Forget the polls. I’m just saying what they can deliver in the voting booths. It is after all a moot point that the Republicans run the voting machine companies. The conspiracy theorists like to say the Republicans run the voting machines and thus the voting process. That’s true. That’s a true conspiracy. What I'm saying is they need that. They can actually only deliver in the voting booths 50 to 53%. And that’s on a good day. They need the ability to control voting machines, to control the voting process, to be able to manipulate potentially up to 3% of the vote nationwide to ensure that they could maintain majority. The politics of the nation have certainly changed under Bushonomics. The PATRIOT Acts have turned the Constitution on its head, turned it upside down, inside out, whatever words you want to use. Now what we have is a regime that, public support notwithstanding, doesn’t have to really concern itself anymore with political opinion polls or even, or as Henry Kissinger once put it, " the inconvenience of a vote. " And PATRIOT Act I solidified the power of the regime (of the President, more specifically) to cancel or postpone elections permanently through the declaration and continued maintenance of a National State of Emergency -- which we are still under, and have been under since October 14, 2001. It removed the 90-day reporting requirement to Congress, and vested in the hands of the President the ability to maintain a state of emergency and/or state of martial law forever without consulting Congress, without any vote by Congress. It further extended the 1947 War Power Act authority of the President to cancel or postpone the election, which, prior to the PATRIOT I Act, a President could only do for up to 90 days without the consent of Congress under a defined set of parameters, such as war, civil unrest, economic calamity. It was a very defined set of parameters in which the President could invoke the War Powers Act. Those have all been now swept aside. PATRIOT I has swept aside all of those parameters and condensed the language to so that the President of the United States has the sole ability A) To instigate a state of national emergency, B) To maintain it without notification of consent of Congress forever, and C) once said state of national emergency has been so declared, the President has the absolute and unfettered right, ex of congressional approval or judicial consent, to permanently postpone elections. Thus, armed with the power, the regime no longer has to be concerned about public opinion polls. You would note that, despite public opinion polls showing support for the regime at less than 40%, the regime has not caved in. The regime has not come to any compromise with the Democrats or moderate Republicans on any of its economic agenda. It claims that it will continue to prosecute war in Iraq forever, or until such time as it deems otherwise, despite the $100 billion per annum expenditure. It also maintains that it will continue to proffer tax cuts for the Republican Rich. As we have said before, it is safe to use that term, in that 68% of all citizens who earn more than $250,000 per annum are Republican. Therefore the majority classified as being rich, according to the Internal Revenue’s own guidelines, are Republican. Therefore it is statistically correct to use this term -- the Republican Rich. It has been said that no matter what, we’re all Republicans now. If we're not Rich Republicans, we’re Banana Republicans. And that is also a key advance in the agenda of Bushonomics. We're all Republicans now, Rich or Banana. What would you rather be? A Rich Republican or a Banana Republican? (Subscribers to InsiderIntelligence.com have chosen to be Rich Republicans.) We must be mindful that we are in the end of the game for the Republic of the United States as now constituted. We have repeatedly reiterated the comments of Comptroller General Walker, who stated that if the Bush Regime were re-ensconced for a second term, which it now has been, that the United States’ continuing ability to service its debt post Q-2 2009 would be severely jeopardized. And the regime certainly is acting like this. Some people misinterpret what the regime is doing as desperation. Like they're trying to get through the final tax cuts, the final last stab, the last push to consolidate wealth and power within the hands of the top 10% -- more specifically, the hands of the top 1%. That’s not necessarily true. They would only be acting with desperation if they knew that they had to face elections. Since they now have the sole control as to whether to even hold elections or not, they're not acting in desperation. What they’re doing is acting within the confines of economic reality. They know that the Fed is raising rates. They know that the Fed is going to become less accommodative in terms of monetary policy next year, that the Fed has gradually shrunk money supply, the Fed is acting to remove liquidity from the system. As this liquidity is removed, the housing bubble is now bursting, which is a whole separate problem, which, frankly, threatens to unravel the entire American economy by 2007. And you hear increasing concerns about this out of Wall Street certainly. But what the regime is doing, it is sucking or transferring as much wealth from the bottom 80% to the top 20% -- as economic liquidity allows. It is not any political concern, as some people like to think. How could it possibly be political concern when they control whether even elections will be held or not? However, they are certainly planning for the future. You’ve heard remarks by our new Deputy Reich Fuehrer, Michael Chertoff, that the Homeland Security wants to house or detain 3 million people on federal work camps to be located on federal lands. Watch the language, and it tells you a lot. Chertoff is no longer even bothering with the facade of linking it to terrorism. He’s now saying that it is a future economic necessity because the government has to have the ability to absorb millions of the economically displaced through Bushonomics. We are seeing the increasing economic displacement. Hurricane Katrina exposed a lot of this. The fact that the government classified the people as refugees originally, and then as internal economically displaced exiles. The fact that they were already set up to quickly move 400,000 into military bases (FEMA camps) and the fact that they were able to do it quickly shows the organization and effort that’s been committed to the housing of economic detainees. And now -- do you ever hear anything more about these 400,000? You never hear anything about them. They just disappeared. So what happens when you can't disperse the useless eaters anymore? That's what Chertoff is referring to. When you can’t disperse them anymore in the bowels of wherever, you need a large-scale CILF (Civilian Inmate Labor Facility) program to act as a place to house the economically dispossessed. And that's exactly what they're building, a WPA-style work camp or Civilian Conservation Corps (CCC). It's funny and it's ironic that this Bush Regime, which is so anti-Roosevelt, is effectively following the FDR model. The difference is that Roosevelt inherited the collapsed economy, while this Regime is the one whose economic policies are fostering the collapse. That's the primary difference. What these CILFs are becoming is more economically oriented. That is the reason why Chertoff interrupted the Department of Interiors lease program. He said that they have got to be located on economically productive lands. That's a key sign of what kind of people they intend to be putting in these things. In conclusion, the top 20% of the nation should be cheering and looking forward to another year of Bushonomics in 2006, wherein the net aggregate tax burden for the top 20% of the nation will continue to fall. Meanwhile the net aggregate tax burden for the bottom 50% will continue to rise. Furthermore, another cheery news for the bottom 50% is: Anybody with credit card debt knows that, as of November 1, the new Bushonian mandated contraction of credit card cycles went into effect, which, in some cases, means as much as double credit card payments. They’ve done this effectively by edict, despite Democratic opposition. The Office of the Comptroller of the Currency (and even the Treasury itself ) has been concerned about record consumer installment debt levels in this country created because of Bushonomics -- as people deplete their savings and withdraw equity from their homes in order to maintain consumer spending. This has created, as we know now, RECORD debt levels in this nation. Beyond anything that could have been previously imagined. And how does the regime respond to debt which its own economic policies have created? It has done so by contracting credit card payment, or loan, cycles, thus increasing the amount of the monthly payment. If you've got a credit card and the debt is based on a 36-month cycle, you contract that to 24, your monthly payment increases. Furthermore, despite even some nervousness by senior pro-Bush faction Republicans (for instance, Congressman Burton and Congressman Baker) about how the regime has allowed banks and financial institutions to increase fees to consumers. Not only credit card fees, but bank fees and everything in between. Even Congressman Baker said that senior Republicans, pro-Bush faction Republicans are becoming nervous about this. In some cases, people are paying $75 late fees on a $75 payment. But you listen to Cheney, and he said -- We have, of course, removed any remaining restrictions on the imposition of fees and surcharges. They have modified the usury rate to allow a lifting of that rate. And he said, -- No, this will continue. So 2006 will be another banner year for Bushonomics. And, of course, it will be another banner year for InsiderIntelligence.com traders and rs. The fiscal deterioration being caused by Bushonomics will continue apace. There is an end to this, as Comptroller General Walker has alluded to. The nation does, indeed, face financial collapse some time past 2009. Even the regime is aware of it and is acting accordingly†" the change in debt instruments, the re-institution of the 30-year bond†" because they know none of this debt’s ever going to be paid back. They know that, ultimately, in order to monetize debt, they’ll have to create a round of inflation unprecedented in the nation. The Bushonian age of CILFs for the economically dispossessed, of increased credit service cost, unlimited, with no right of redress, with the ability now to indefinitely detain citizens even that may be economically dispossessed, with the tightening of bankruptcy rules, the re-institution of body writs, where now you can go to prison for not paying your bills, the reduction of the so-called social safety net, the continuing collapse of the American pension system. You'd best be making money now. You'd better be knowing what to do with that money because you don’t want to be living in the country in 2009 not having any money. This is what history teaches us about those who survive in an economically collapsed environment. Namely, the wealthy, who everyone presumes would be the survivors in a post-economically collapsed and politically repressed environment are not necessarily the wealthy, unless they know what to do with their money. The ultimate survivors, if you look back through history, are the traders. They are the down-in-the-dirt traders, those who have the innate knowledge of how to buy and sell something of economic value and turn a profit. They are the ultimate survivors. When everything else begins to fall apart, when business and industry is depressed, it is the ability to buy something for $100 and sell it for $105. It is the classic trader. Those with the innate knowledge to understand what the economy around them has done and the ability to buy and sell something of economic value and continue to turn a profit by it. If you look throughout history, it has been the traders that have always been the survivors. Jews and Phoenicians come to mind. There's a good analogy. Because Phoenicians, of course, no longer exist. But the Jews over 2,000 years have migrated across the planet. They have experienced both economic collapses within nations, economic collapses within regions and theaters, geographically and politically speaking. And yet they have always survived. They have always had the ability to turn a profit. And what are they by nature? They are traders. Despite the jokes and denigration about Jews, perhaps it's time we ought to look up to them. Remember -- they have been the traders of this planet, and they have been the survivors, no matter what has happened. They have lived through economic repressions, political repressions, and military overthrows. No matter what has happened, it is that innate knowledge that will prepare the citizens of the USA to survive the future. The long and short of it is for the average citizen: If you don't know how to make money, you’ve got to learn because you don't want to be living in this country after 2009 with no money. * AL MARTIN is an independent economic-political analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. As a former contributor to the Presidential Council of Economic Advisors, Al Martin is considered to be a source of independent analysis for financially sophisticated and market savvy investors. After working as a broker on Wall Street, Al Martin was involved in the so-called " Iran Contra " Affair as a fundraiser for the Bush Cabal from the covert side of government aka the US Shadow Government. His memoir, " The Conspirators: Secrets of an Iran Contra Insider, " (http://www.almartinraw.com) provides an unprecedented look at the frauds of the Bush Cabal during the Iran Contra era. His weekly column, " Behind the Scenes in the Beltway, " is published weekly on Al Martin Raw.com, which also publishes a bimonthly newsletter called " Whistleblower Gazette. " Al Martin's new website " Insider Intelligence " ( http://www.insiderintelligence.com ) will provide a long term macro-view of world markets and how they are affected by backroom realpolitik. Quote Link to comment Share on other sites More sharing options...
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