Derivatives, Fascism and the Almighty Dollar

Easy money and foreign investment have kept corporate America, including Freddie Mac and Fannie Mae liquid.  In Japan, where the interest rate has been zero for many years, investors borrow for nothing and invest in long term equities which has kept the real estate market booming.  Japan is beginning to raise rates at the same time interest rates are rising in Europe and America as a reaction to the inflation caused by the increase of the money supply (printing money out of thin air).  Other countries take their trade surplus dollars and buy treasury bonds and dollars (to buy oil with).  This comes to about $3 billion a day flowing into the U.S., keeping the 30 year mortgage at record low levels even as the Fed continued to raise rates.  But Japan is beginning to raise rates.  Iran is switching oil to the Euro.  Asian countries which have historically supported the dollar are beginning to diversify their portfolios (meaning they are buying less dollars).   Nearly everyone agrees that it is not a sustainable trend for America to absorb over 80 percent of the world's savings to pay for our trade and government deficits, now amounting to over a trillion dollars a year!

Lies, Damned Lies and Statistics

As we pointed out in a previous article, the government has manipulated the figures to such an extent that the economy appears to be robust and growing instead of being in the precarious house of cards it is.  If we used the same reporting standards as we did years ago, unemployment would be 12 percent rather than 4.8.  The real consumer price index (CPI) which measures inflation would be at least 8 percent instead of the 1 to 2 percent "core" inflation the government reports.  The GDP growth would be negative instead of the 3 to 4 percent claimed by the government and the true deficit would be in the trillions rather than the anemic $319 billion reported.  Federal obligations would be measured at 51 trillion dollars instead of the $9 trillion reported (as the national debt).  The on and "off the books" expenditures for wars in Afghanistan and Iraq would have cost in excess of a trillion dollars instead of the $450 billion claimed.

While the wages of the average American have fallen in the past four years straight, the wealth of American billionaires grew to $2.6 trillion, up 18 percent.  Ten percent of Americans control 70 percent of the wealth.   Hearings are going on regarding tax reform again.  The talk is that 3% of salary would go into stock market funds, going up to 6%.  Just like Seymore, the man-eating plant, in the musical "The Little Shop of Horrors" that would be enough to keep the Stock Market and Corporate America pumped up for years to come as real take home pay continues to dwindle.  It should be obvious to Americans that decisions regarding energy, taxes, education, health and war are made for the benefit of corporate America - not the average American!  It is probably no accident that many Science Fiction movies of the past have the world being run by a few powerful corporations. (e.g. The President's Analyst, the Running Man, Max Headroom, Soylent Green, Logan's Run, Blade Runner, the Matrix, the Terminator, Farenheit 451, not to mention Brave New World and 1984, etc.).

Another word for corporations running a nation is "corporatism" - better known as "fascism".    What's good for big business (Exxon, Shell, Bechtel, Halliburton, etc.) is now seen as good for America.  It doesn't matter if jobs are outsourced to other countries.  Corporate America makes more than ever with the cheap labor.  They like using Chinese factory labor and Indian help desks, accounts and engineers.  We are talking about greedy global economic elites who don't care a bit about the American worker.  Who benefits from the wars?  Who benefits from the oil shortage?  (last year the oil companies made a record $150 billion in profits!!!)  What programs are being funded (military) and what programs are being cut (social safety net entitlement programs, health, education, retirements, even veteran's benefits)?  All you have to do is follow the money to see where the priorities lie - with the individual or the corporate state.

©2008 Peter James for Congress |