Constitutional Convention Can Not Be Controlled


Constitutional Convention Can Not Be Controlled

by Tom DeWeese


clip_image002As Americans become more frightened by the disastrous direction our government is taking, and more frustrated that elected representatives are not listening to them, the demand is growing for drastic action. In recent months the action most heard in state houses across the nation is a rising call for a new Constitutional Convention (Con Con).


Supporters somehow think a Con Con is the solution to saving our Republic. They want to amend the Constitution to force a balance budget. They want to shore up ambiguous language to make the meaning clear. They want to assure there is no doubt what America is and should be. For most pushing such an agenda, their intentions are honest.


Their solution will be a disaster for one simple reason – no one can control a Constitutional Convent. It doesn’t matter how well intentioned its purpose. It doesn’t matter how well planned. It doesn’t matter what the actual resolution says and the people think they are approving. A Con Con has no oversight or rules other than those made by the actual participating delegates themselves. There are no rules for selecting delegates.


Once a ConCon is called for by the legal number of states, as laid out in Article V of the Constitution, It is the duty of Congress to call for one. Period. That’s as far as it goes. In this day, when Nancy Pelosi, as Speaker of the House was able to twist enough arms to force through the Health care plan against the wishes of a strong majority of Americas; when the current Congress was able to flimflam the American people into believing it had really cut the budget; when these same people are the ones who will set the rules for a Con Con, from establishing the delegate- selection process, to dictating who will be qualified to be delegates, how on earth can anyone support such a disaster in the making. A Con Con will result in one thing- our precious Constitution laid out on an operating table to be dissected and bludgeoned by Dr. Jekyll.


But still, a growing number of “conservative” leaders across the country and in the media are joining the chorus for the need for a ConCon. Some actually claim that they aren‟t calling for an out and out Constitutional Convention, rather for an “Article V Convention. There is no such distinction. To suggest that some other category exists that isn‟t as serious or dangerous than a Con Con is simply an untruth.


Here are the facts. The main groups pushing for a Con Con are the American Legislative Exchange Council (ALEC), a conservative association of state legislators; and a new group calling itself the 10 Amendments for Freedom, Inc, chaired by William Fruth, President of POLICOM Corporation, which provides independent economics research.


While ALEC is working behind the scenes to build support for a Con Con among state legislators, Fruth and his 10 Amendments for Freedom group has moved into the public eye to sell the Con Con idea to mainstream America. In March, 2010, Fruth kicked off his campaign by mailing out a slick, expensive package to conservative leaders and to over 7,000 state legislators. The package contained a book written by Fruth entitled “10 Amendments for Freedom.”

In the book, Fruth lays out an argument for the need for, not just a balanced budget amendment, but a total package of 10 Amendments to the Constitution including, the balanced budget; repay the national debt in 50; government transparency; line item veto; term limits for Congress; control illegal immigration; English-speaking nation; no foreign law shall bind us; government restraint (preventing the the Federal Government from growth beyond constitutional powers; and finally, an amendment declaring “in God we trust.” Of course, there is no doubt that these amendments have great appeal for most conservatives, answering their growing frustration and fear of government expansion.


Arguing that Congress “will not likely take any action to cause the 10 Amendments for Freedom to become law of the land,” Fruth calls for all ten amendments to be packaged by state legislatures to be passed in a resolution calling for a Constitutional Convention. His package would include specific instructions to Congress as to how the delegates would be selected and outlining rules that would be enforced to assure only the ten amendments would be voted on.

Arguing the advantages of the Con Con, Fruth says, “Can you imagine the excitement in the nation leading up to the Convention? Schools will have to dust off history books which teach how our nation was founded. Many people for the first time will read the Constitution. The issue will be discussed at length, exposing what happened to our country over the years.”


Fruth then scoffs at our fears of a Con Con and efforts to stop it. He says, “Simply, it is not reason” any recommended changes must be approved by three-fourths of the states.

These are the arguments now being presented to every single state legislator and Governor in the nation as Fruth and ALEC put on a full-court-press to call for a Constitutional Convention. While the intention may be an honest desire to reign in the power of government, the fact remains that every one of these arguments for a Con Con is wrong.


The fact is, once 34 states petition Congress to convene a Constitutional Convention, the matter is completely out of the States‟ hands. There is absolutely no ability to control what the delegates do in the convention. Attempting to instruct delegates to discuss only a specific issue like a balanced budget – or the whole package offered by the 10 Amendments for Freedom group — is absolutely impossible. Instead, once the convention starts, the delegates become super delegates which can take any action they desire concerning the Constitution. In short, at the convention the Constitution can be literally change any section, or even the entire document if they desire.


What proof do I offer? Here are the exact words of Article V of the Constitution: “…on the application of the Legislatures of two thirds of the several States, (Congress) shall call a Convention for proposing Amendments, which…shall be valid to all Intents and Purposes, when ratified by the Legislatures of three fourths of the several States.”


Article V gives absolutely no guidelines as to how it will be run, how delegates can be selected and who can do the selecting. Once the 34 states make the request, the entire matter is in the hands of Congress to decide. It does not matter if the states passed resolutions as Fruth proposes, containing absolute guidelines for delegate selection. The Constitution provides no rules – it is up to Congress to decide how delegates are selected and what qualifications they will have. The guidelines proposed by Fruthable to assume there can be enough delegates sent to a convention who will propose amendments which „repeal the bill of rights‟ or „legalize socialism.‟ Even if they did, the amendments would never be ratified,” concludes Fruth.


Anticipating opposition to his scheme for a Con Con, Fruth says that those who opposed the effort in the 1980‟s, to call for a Con Con for a balanced budget amendment, told the American people that the delegates at the convention can “change the Constitution any way they want.” Argues Fruth, “We know that is not true.” He says, “it is both irresponsible and disingenuous for anyone to publicly say that the convention can change the Constitution.” And he says, “any recommended changes must be approved by three-fourths of the states.


These are the arguments now being presented to every single state legislator and Governor in the nation as Fruth and ALEC put on a full-court-press to call for a Constitutional Convention. While the intention may be an honest desire to reign in the power of government, the fact remains that every one of these arguments for a Con Con is wrong.


The fact is, once 34 states petition Congress to convene a Constitutional Convention, the matter is completely out of the States‟ hands. There is absolutely no ability to control what the delegates do in the convention. Attempting to instruct delegates to discuss only a specific issue like a balanced budget – or the whole package offered by the 10 Amendments for Freedom group — is absolutely impossible. Instead, once the convention starts, the delegates become super delegates which can take any action they desire concerning the Constitution. In short, at the convention the Constitution can be literally change any section, or even the entire document if they desire.

What proof do I offer? Here are the exact words of Article V of the Constitution: “…on the application of the Legislatures of two thirds of the several States, (Congress) shall call a Convention for proposing Amendments, which…shall be valid to all Intents and Purposes, when ratified by the Legislatures of three fourths of the several States.”


Article V gives absolutely no guidelines as to how it will be run, how delegates can be selected and who can do the selecting. Once the 34 states make the request, the entire matter is in the hands of Congress to decide. It does not matter if the states passed resolutions as Fruth proposes, containing absolute guidelines for delegate selection. The Constitution provides no rules – it is up to Congress to decide how delegates are selected and what qualifications they will have. The guidelines proposed by Fruth carry absolutely no weight in the final process – even if every state passes the exact same resolution including those rules. Again, Article V simply says that when 34 states have called for a Con Con the Congress “shall call a Convention…” Period. And there is more legal proof in support of the argument that delegates are not bound by an instructions or resolutions from the states.


First, of course, is the famous letter written by former Supreme Court Justice Warren Burger to Phyllis Schlafly, President of Eagle Forum. In the letter Burger writes, “… there is no effective way to limit or muzzle the actions of a Constitutional Convention. The convention could make its own rules and set its own agenda. Congress might try to limit the convention to one amendment or to one issue, but there is no way to assure that the convention would obey. After a convention is convened, it will be too late to stop the convention if we don’t like its agenda. The meeting in 1787 ignored the limit placed by the confederated Congress…”


And there is more legal documentation proving that Congress or the states can control the agenda of a Con Con. Corpus Jurus Secundum is a compilation of State Supreme Court findings. The following is the collection of findings regarding the unlimited power of the delegates attending a Con Con. (From Corpus Jurus Secundum 16 C.J.S 9) “The members of a Constitutional Convention are the direct representatives of the people (1) and, as such, they may exercise all sovereign powers that are vesting in the people of the state. (2) They derive their powers, not from the legislature, but from the people: (3) And, hence, their power may not in any respect be limited or restrained by the legislature. Under this view, it is a Legislative Body of the Highest Order (4) and may not only frame, but may also enact and promulgate, Constitution. (5). The foot- note numbers after the citation quoted reference the particular cases from which the citations were made. (1) Mississippi (1892) Sproule v Fredericks (11 So. 472); (2) Iowa (1883) Koehler v Hill (14N.W. 738); (3) West Virginia (1873) Loomis v Jackson (6 W. Va. 613); (4) Oklahoma (1907) Frantz v Autry (91 p. 193); (5) Texas (1912) Cox v Robison (150 S.W. 1149).


Clearly, the position put forth by Fruth, and ALEC, that state legislatures can pass a resolution dictating the rules of the Con Con is simply wrong.


Delegate selection is another dangerous trap waiting to spring. Again, Article V provides no guidelines. The process is left for Congress to decide. That means the current Congress could control the entire delegate selection. Under the rules that Congress could set, States may not even be represented. If the states are allowed to choose delegates, then what would be the method? Again, Congress will decide. Will the governor or the state legislature appoint delegates? Or could it be a bicameral panel or blue ribbon commission? Or could it be a plebecite – a vote of the people? If so, then who would be eligible to vote? Would it be all eligible voters? Or taxpayers only? Or would we possibly, in the interest of “enfranchisement,” allow all citizens, and potentially foreign nationals (illegal immigrants) to vote for this “special election?” There are no guidelines and anything is possible.


And what would be the qualifications to be a delegate? Would it be exclusively lawyers? A mix of professionals? So-called “proportional representation” of all special interest groups – NGO‟s? Will some be excluded because of “extreme” convictions? Of course, according to the Federal Department of Homeland Security, “extreme convictions” includes those who want to protect the Constitution. So, what will the criteria for eligible delegates be? All of these choices would be made by Congress.


But again, none of that will matter, according to those calling for the Con Con. William Fruth argues that no matter what such a convention does, it still must be ratified by two- thirds of the states, making it very difficult to do bad things against the will of the people. A history lesson is in order.


There has been only one Constitutional Convention in the history of the nation – that was in 1787. At the time, the nation was held together by the Articles of Confederation. The states were having a difficult time performing commerce among themselves. So it was decided to hold a Constitutional Convention to simply discuss how interstate commerce might be better organized. As the delegates were selected, delegations from a majority of states were given specific orders by their states to discuss nothing else beyond the commerce issue.


However, some delegates including James Madison had a very specific agenda planned for the convention and as soon as the delegates arrived at Independence Hall in Philadelphia, they closed and locked the door, pulled down the shades and met in secret for a month. When they were finished, they had created an entirely new nation. We were very lucky that the convention was attended by men like Ben Franklin and George Washington and Madison. They produced the most magnificent document ever devised for the governance of man.


Today, we have entrenched power forces led by the likes of Barack Obama, Nancy Pelosi and Harry Reid.


And we have notoriously weak leaders like current House Speaker John Boehner and Senate Minority Leader Mitch McConnell who rarely miss a good compromise to keep the peace. These are the people who will decide the rules for the convention, including delegate selection. Do you trust them to follow the rules dictated by state legislatures? Do you think Pelosi and Reid would pass up an opportunity to set their own rules to guarantee a Constitution to their liking?


And there is more. Concerning the argument that no matter what the delegates produce, the states still must ratify it – thus serving as a safeguard to tomfoolery, consider this fact: The Articles of Confederation required that any changes be ratified by 100% of the states. That was the document that was the law of the land – until something else was put into place. But, when the new Constitution was put to the states for a vote of ratification, suddenly they needed only two thirds to approve it. Why? The fact is, Article V of the new Constitution was used – even before the Constitution which contained it was approved. Now, what do you think Reid and Obama and company would do with that precedent? What if the new document produced by the Con Con said ratification only required a vote of Congress – or of some special commission? The precedent of 1787 says that could happen. So much for protection by the states.


And rather than an excitement in the nation with a rebirth of study of the Constitution, as Furth envisions, there would in fact be a long, hard, ugly and expensive battle over the process, guaranteed to leave the nation split along ideological lines. It‟s not difficult to envision civil unrest, riots or even civil war as a result of any re-writing of the current Constitution.


These are the reasons why I, and many others around the nation, adamantly oppose a Constitutional Convention at this time. We fear a Con Con because the subject matter cannot be controlled. And if the worst happens, there is no guarantee that we can stop ratification. There has never been a worse time in the nation‟s history to consider changing this grand document. The Con Con delegates could literally put the Constitution on an operating table and use their scalpels to slice it up, creating an entirely new form of government. That new document, as precedence has shown, could be enforced without ratification by the states. Remember, our current Constitution was not ratified by the rules set forth in the Articles of Confederation, but by an Article V that wasn’t yet law of the land. Now that the precedence is there, it can happen again. The Pelosi‟s of the nation, proven to have the power and the will to twist any issue or initiative as they desire, are rubbing their hands together at the prospectof a Con Con.


No doubt there is great need for several of the amendments Fruth and his group propose. But he seems to ignore the fact that there is a powerful, organized opposition. Again, I call your attention to the continuing battles over Health Care, taxes, illegal immigration and massive government spending. These are child‟s play compared to what will happen in a Con Con. Do Americans really want to risk that in these uncertain times? Every freedom-loving American must stand up against this misguided call for a Con Con. Tell your state legislators NO.


Why didn’t we listen to them?

Our founding fathers intended for us to live in a country where power was highly decentralized.

Why didn’t we listen to them?


Corporatism Is Not Capitalism


7 Things About The Monolithic Predator Corporations That Dominate Our Economy That Every American Should Know


The American Dream    October 22, 2011

Right now, there is a lot of talk about the evils of “capitalism”.  But it is not really accurate to say that we live in a capitalist system.  Rather, what we have in the United States today, and what most of the world is living under, is much more accurately described as “corporatism”.  Under corporatism, most wealth and power is concentrated in the hands of giant corporations and big government is used as a tool by these corporations to consolidate wealth and power even further.  In a corporatist system, the wealth and power of individuals and small businesses is dwarfed by the overwhelming dominance of the corporations.  Eventually, the corporations end up owning almost everything and they end up dominating nearly every aspect of society.  As you will see below, this very accurately describes the United States of America today.  Corporatism is killing this country, and it is not what our founding fathers intended.


The following is the definition of “corporatism” from the Merriam-Webster dictionary….

the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction

Corporatism is actually not too different from socialism or communism.  They are all “collectivist” economic systems.  Under corporatism, wealth and power are even more highly concentrated than they are under socialism or communism, and the truth is that none of them are “egalitarian” economic systems.  Under all collectivist systems, a small elite almost always enjoys most of the benefits while most of the rest of the population suffers.

The Occupy Wall Street protesters realize that our economic system is fundamentally unjust in many ways, but the problem is that most of them want to trade one form of collectivism for another.

But our founding fathers never intended for us to have a collectivist system.

Instead, they intended for us to enjoy a capitalist system where true competition and the free enterprise system would allow individuals and small businesses to thrive.

In an article that was posted earlier this year on Addicting Info, Stephen D. Foster Jr. detailed how our founding fathers actually felt about corporations….

The East India Company was the largest corporation of its day and its dominance of trade angered the colonists so much, that they dumped the tea products it had on a ship into Boston Harbor which today is universally known as the Boston Tea Party. At the time, in Britain, large corporations funded elections generously and its stock was owned by nearly everyone in parliament. The founding fathers did not think much of these corporations that had great wealth and great influence in government. And that is precisely why they put restrictions upon them after the government was organized under the Constitution.

After the nation’s founding, corporations were granted charters by the state as they are today. Unlike today, however, corporations were only permitted to exist 20 or 30 years and could only deal in one commodity, could not hold stock in other companies, and their property holdings were limited to what they needed to accomplish their business goals. And perhaps the most important facet of all this is that most states in the early days of the nation had laws on the books that made any political contribution by corporations a criminal offense.

Our founding fathers would have never approved of any form of collectivism.  They understood that all great concentrations of wealth and power represent a significant threat to the freedoms and liberties of average citizens.

Are you not convinced that we live in a corporatist system?

Well, keep reading.

The following are 7 things about the monolithic predator corporations that dominate our economy that every American should know….

#1 Corporations not only completely dominate the U.S. economy, they also completely dominate the global economy as well.  A newly released University of Zurich study examined more than 43,000 major multinational corporations.  The study discovered a vast web of interlocking ownerships that is controlled by a “core” of 1,318 giant corporations.

But that “core” itself is controlled by a “super-entity” of 147 monolithic corporations that are very, very tightly knit.  As a recent article in NewScientist noted, these 147 corporations control approximately 40 percent of all the wealth in the entire network….

When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 percent of the total wealth in the network. “In effect, less than 1 percent of the companies were able to control 40 percent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

Unsurprisingly, the “super-entity” of 147 corporations is dominated by international banks and large financial institutions.  For example, JP Morgan Chase, Goldman Sachs, Morgan Stanley and Bank of America are all in the top 25.

#2 This dominance of the global economy by corporations has allowed global wealth to become concentrated to a very frightening degree.

According to Credit Suisse, those with a household net worth of a million dollars or more control 38.5% of all the wealth in the world.  Last year, that figure was at35.6%.  As you can see, it is rapidly moving in the wrong direction.

For a group of people that represents less than 0.5% of the global population to control almost 40 percent of all the wealth is insane.

The dominance of corporations is also one of the primary reasons why we are witnessing income inequality grow so rapidly in the United States.  The following comes from a recent article in the Los Angeles Times….

An economic snapshot from the Economic Policy Institute shows that inflation-adjusted incomes of the top 1% of households increased 224% from 1979 to 2007, while incomes for the bottom 90% grew just 5% in the same time period. Those in the top 0.1% of income fared even better, with incomes growing 390% over that time period.

You can see a chart that displays these shocking numbers right here.

#3 Since wealth has become concentrated in very few hands, that means that there are a whole lot of poor people out there.

At a time when technology should be making it possible to lift standards of living all over the globe, poverty just continues to spread.  According to the same Credit Suisse study referenced above, the bottom two-thirds of the global population controls just 3.3% of all the wealth.

Not only that, more than 3 billion people currently live on less than 2 dollar a day.

While the ultra-wealthy live the high life, unimaginable tragedies play out all over the globe every single day.  Every 3.6 seconds someone starves to death andthree-quarters of them are children under the age of 5.

#4 Giant corporations have become so dominant that it has become very hard for small businesses to compete and survive in the United States.

Today, even though our population is increasing, the number of small businesses continues to decrease.

According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.

This is the exact opposite of what should be happening under a capitalist system.

#5 Big corporations completely dominate the media.  Almost all of the news that you get and almost all of the entertainment that you enjoy is fed to you by giant corporations.

Back in 1983, somewhere around 50 corporations controlled the vast majority of all news media in the United States.

Today, control of the news media is concentrated in the hands of just six incredibly powerful media corporations.

#6 Big corporations completely dominate our financial system.  Yes, there are hundreds of choices in the financial world, but just a handful control the vast majority of the assets.

Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets.  Today, the top 10 banks control 77 percent of all U.S. banking assets.

The “too big to fail” banks just keep getting more and more powerful.  For example, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assetsequivalent to approximately 60 percent of America’s gross national product.


#7 Big corporations completely dominate our political system.  Because they have so much wealth and power, corporations can exert an overwhelming amount of influence over our elections.  Studies have shown that in federal elections the candidate that raises the most money wins about 90 percent of the time.

Politics in America is not about winning over hearts and minds.

It is about who can raise the most cash.

Sometimes this truth leaks out a bit in the mainstream media.  For example, during a recent show on MSNBC, Dylan Ratigan made the following statement….

“The biggest contributor to Barack Obama’s presidential campaign is Goldman Sachs. The primary activities of this president relative to banking have been to protect the most lucrative aspect of that business, which is the dark market for credit default swaps and the like. That has been the explicit agenda of his Treasury Secretary. This president is advocating trade agreements that allow enhanced bank secrecy in Panama, enhanced murdering of union members in Colombia, and the refunding of North Korean slaves.”

Later on, Ratigan followed up by accusing both political parties of working for the bad guys….

“But I guess where I take issue is, this president is working for the bad guys. The Democrats are working for the bad guys. So are the Republicans. The Democrats get away with it by saying, ‘Look at how crazy the Republicans are; at the Democrats pretend to care about people.’ BUT THE FACT IS THE 2-PARTY POLITICAL SYSTEM IS UTTERLY BOGUS.”

Wow – nobody is actually supposed to say that on television.

Today, most of our politicians are bought, and most of them actively help the monolithic predator corporations accumulate even more wealth and even more power.


In fact, as I wrote about recently, the big Wall Street banks are already trying tobuy the election in 2012.

Fortunately, it looks like the American people are starting to wake up.  According to one recent survey, only 23 percent of all Americans now trust the financial system, and 60 percent of all Americans are either “angry” or “very angry” about the economy.

Unfortunately, many of them are joining protest movements such as Occupy Wall Street which are calling for one form of collectivism to replace another.

The American people are being given a false choice.

We don’t have to choose between corporatism and socialism.

We don’t have to choose between big corporations and big government.

Our founding fathers actually intended for corporations and government to both be greatly limited.

The following is a famous quote from Thomas Jefferson….

“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

Unfortunately, things did not turn out how Jefferson wanted.  Instead of us controlling the corporations, they now control us.

This next quote is from John Adams….

“Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”

But who dominates our economy today?

The big banks.

Perhaps we should have listened to founding fathers such as John Adams.

Lastly, here is another quote from Thomas Jefferson….

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”

How prescient was that quote?

Last year, over a million American families were booted out of their homes by the big banks.  The financial institutions actually now have more total equity in our homes than we do.


Unemployment is rampant, but corporate profits are soaring.  The number of Americans on food stamps has increased by more than 70 percent since 2007, and yet the incomes of those at the top of the food chain continue to increase.

We need a system that allows all Americans to start small businesses, compete fairly and have a chance at success.

Instead, what we have is a corporatist system where the big corporations have most of the wealth, most of the power and most of the advantages.

We need to get the American people to understand that corporatism is not capitalism.

Corporatism is a collectivist system that allows the elite to accumulate gigantic amounts of wealth and power.

The answer to such a system is not to go to a different collectivist system.

Rather, we need to return as much power as possible to individuals and small businesses.

Our founding fathers intended for us to live in a country where power was highly decentralized.

Why didn’t we listen to them?



… This is an election year … just follow the $$$ …


… Could there be any correlation between these two …



… This is an election year … just follow the $$$ …

… Yeah … It’s really that simple…

… OK … but the solution is solely in our hands …



… We need to elect only those to Congress and our State Legislature who will enact enforceable rules demanding full disclosure and transparency ..

… Yeah … It’s really that simple…



Until there is full disclosure


… Until there is full disclosure and transparency on who funded this study … where it was conclip_image002ducted … under what protocol … over what duration of time … using what subjects … under what conditions … count me as a “doubting-thomas” …

… Do you really believe the world wide “high-tech” cell phone and computer industry would honestly want you to know you were endangering your health by using their devices …

.. I don’t think so …

… This is not a notion we want to contemplate is it …

… This is not a notion we want to contemplate is it 



Could China take the United States down without ever firing a shot?


How has the United States boxed itself into an extremely dangerous corner by becoming increasingly reliant on our historic adversary, the Communist Chinese, for critical resources!

As one example, the United States faces the ever-present potential for China to dump the US treasury bonds it already owns on the global financial markets, or to boycott our treasury auctions all together.

Either of these scenarios would have the devastating effect of pushing U.S. interest rates significantly higher, severely damaging an already struggling economy, while increasing U.S. government borrowing costs to unsustainable levels.

China is well aware of the leverage that this reliance on them provides.

Also, as discussed here in the past, China could limit its export of rare earth elements that are critical raw materials in the production of a wide variety of products. including U.S. weapons systems.

Although China possesses only 30% of known global deposits of rare earth elements in the ground, it accounts for 97% of the world supply.

And again, China is very aware of this fact and the leverage that it provides to them.

Both this U.S. financing piece and the natural resource piece would allow China to inflict a severe economic and national security blow to the United States without them ever firing a military weapon!

First, some prior articles from TPC looking at the issue of the Chinese using the global leverage it possesses!


October 14, 2010: China isn’t just about the money

October 21, 2010: Update:’ China and rare earth elements part deux

December 29, 2010: Rare earth elements and China: Flash back and now flash ahead

January 19, 2011: US/China summit: It’s go time

January 20, 2011: Tit for tat as Apple Computer is targeted

February 17, 2011: China once again signals plan to limit rare earth element exports

Ironically China was mentioned just yesterday morning in the context of the United States depending on past enemies, present enemies and pseudo current friends for critical raw materials and cash.

China, in addition to the aforementioned cash is also the worlds primary supplier of rare earth elements that are so critical to the manufacture of our strategic defense weapons and of various consumer goods…"

Finally, China and rare earth elements right now!

Dateline Beijing, October 20, 2011:

“China’s biggest producer of rare earths is suspending production for one month in hopes of boosting slumping prices of the exotic minerals used in mobile phones and other high-tech products.

This week’s move by Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech might fuel tensions with the United States and Europe. They have questioned Beijing’s decision announced earlier to limit exports while it tries to develop its own manufacturers of magnets and other products made of rare earths…

“…Baotou Steel accounts for 60 percent of China’s rare earths production "so the impact on the market supply will be substantial," said Sun Fan, a rare earth analyst for Goldstate Securities in the southern city of Shenzhen.

Sun said that Baotou Steel also plans to buy rare earths to support prices.

"The dual measures of suspension and purchase will offer support for the rare earth prices and make the prices gradually pick up in the future," Sun said.

In China, prices of some rare earths have fallen sharply since June.

The price of neodymium oxide has declined 34 percent to $157 per kilogram, while europium oxide is down 35 percent at $2,904 per kilogram, according to Lynas Corp., an Australian rare earth producer.

Beijing is merging its rare earths producers to tighten control over production, sales and pricing.

It announced in June that Baotou Steel would become the only miner, refiner and seller of rare earths in the northern region of Inner Mongolia, a production center. It said 35 other companies there would be merged or closed…” (Source)



… Not the America you had in mind is it …?

… Not the America you had in mind is it …?


Police State Fascism Is Now Rampant: Martial Law Is Next!


10-25-2011 Barnett  …



It is the invariable habit of bureaucracies, at all times and everywhere, to assume…that every citizen is a criminal. Their one apparent purpose, pursued with a relentless and furious diligence, is to convert the assumption into a fact. They hunt endlessly for proofs, and, when proofs are lacking, for mere suspicions. The moment they become aware of a definite citizen, John Doe, seeking what is his right under the law, they begin searching feverishly for an excuse for withholding it from him. ~ H.L. Mencken

"If You See Something, Say Something" is the detestable slogan of the Department of Homeland Security (DHS). This is nothing more than a campaign by this monstrous government bureaucracy to pit citizen against citizen due to false fears instilled in the people by that same bureaucracy. The government is spying on everything we do, and it is now fooling the fools into spying on themselves. This is the ultimate in serf-like behavior.

Currently, the state of Tennessee is acting as a testing ground for the federal government’s assault on the citizen’s right to privacy. TSA goons dressed in state sanctioned garb, and heavily armed "law enforcement" cretins with drug sniffing dogs, are harassing the people of Tennessee on interstate highways and bus stations. They are doing this of course all in the name of stopping terrorism. It is interesting how these state simpletons can at the same time terrorize the general populace while protecting them from terrorism.

The object of this charade of course is not to stop terrorism, but to intimidate (terrorize) the people, and to habituate them, so that they will come to expect and accept this kind of treatment in order to be "safe." This indoctrination training by the state is meant only to beat down the individual into submission, so that state thugs can gain more control. This is not a new concept, but in the U.S. today, police state abuses are not only greatly increasing in numbers, but also are becoming more invasive as every day passes.

The mainstream media claims that Tennessee is the first state to fight terrorism statewide, but illegal checkpoints are now being set up all across the country. The DHS now claims the right to stop and harass anyone, ask for their "papers," and search them within 100 miles of any U.S. border. This invasive and illegitimate nonsense affects over 190 million citizens, or about two thirds of the entire population. The very abusive conduct by these agents of the state is not restricted to Tennessee, it is evident nationwide. Checkpoints are everywhere it seems, and the numbers are increasing.

Warrantless searches are already common at airports, and take place also at train stations, bus terminals, and subway systems, but once this fully expands to our roads and highways, there will be no limits left. Those who choose not to fly so they can escape the groping, radiation, and humiliation of airport "security" dished out by the evil TSA, may now find themselves at risk of this same type of treatment when they simply choose to take a Sunday drive. We are quickly becoming consumed by this fascist state called America!

Another news report tells of warrantless searches taking place in Flint, Michigan. Roadblocks are set up, and drug-sniffing dogs are turned lose to check the vehicles of unsuspecting motorists. The Genesee County sheriff has set these up at least seven times this month. Actually, warrantless searches are now common, everyday events, and many get the blessing of the very corrupt U.S. Supreme Court. Last May in an 8 to 1 ruling, the Supreme Court gave a green light for police to break into anyone’s home should they "think" that the resident was hiding evidence. Justice Samuel Alito said that "Residents who attempt to destroy evidence have only themselves to blame" when police bust down their door. This moronic thinking completely negates the idea of freedom.

Cars can now be searched in many instances without the officer having to obtain a warrant. This is happening often, and in addition, the private property of those stopped or arrested by low IQ state agents of force is in many cases stolen via the search and seizure process. Many police departments are funding their entire operations by thievery. This should come as no surprise to anyone, as policemen as a group commit as many violent crimes per capita as does society, so is there any difference between police and criminals? Actually, the police and all government agents are much more dangerous than the common criminal!

According to the National Police Misconduct Statistics and Reporting Project, the police commit more violent crimes of assaults, sexual assaults, murder, and fatal excessive force, per capita than the rest of society. Those who are commissioned to "protect and serve" do nothing of the kind. Given that the numbers of police crimes reported are in my opinion far undercounted, the problem is much worse than is imaginable.

We are all now subject to search and seizure without warrant. We are subject to groping, sexual assault, and radiation by the TSA. Our homes can be invaded, and our pets or family members killed without cause. The advent and acceptance of the Taser has allowed the state’s gendarmes to brutally inflict pain, suffering, and sometimes death to anyone they choose, and usually without consequence.

And now, these same tactics will be used on our roads and highways, which means that lowly citizens across the entire country will be accessible to these hoodlums.

Police and government agents, including the military, are training and preparing for civil unrest. What do they know that the masses don’t? They have military equipment, even in some cases tanks, and they are receiving ongoing military training. They are actively and sometimes brutally, going after dissenters brave enough to assemble. This preparation by the Leviathan state is now happening nationwide, especially in the larger cities. New York City has been especially aggressive in its civil unrest planning. This does not bode well for our future. It is a blatant show of force, and the intent of the Department of Homeland Security, and all its police partners across the country is total control of the citizenry.

Our situation is worsening by the day, and the state apparatus is preparing to fight against its own citizens here at home. This is a precarious situation that could spiral out of control, and we are terribly close in my opinion, to being in an uncontrollable police state environment.

When this happens, the obvious next step will be Martial Law. Once that stage is reached, it may be too late to stop the coming onslaught of the totalitarian state. This is a serious threat, and one that could result in violence and chaos in the streets of America. All need to be aware of this progression, and all need to prepare to stop it. Anything less will result in a complete loss of what little freedom we have left, and our lives may be forever harmed.

The state is always and forever the enemy of the people. It has nothing, it creates nothing, it produces nothing, and it lives and survives by looting, stealing, beating, and murdering. It is time to remove the power the state holds over us, and to try liberty instead of slavery. I say its time to abolish the state!

… All authentic power resides solely in the people … We just need to legitimately exercise that power …

America’s Unique Fascism

… Is this the path we willingly choose to pursue …?

…Yeah, turn a deaf ear and a blind eye … that really helps …



America’s Unique Fascism


Mises Daily: Friday, October 21, 2011 by Anthony Gregory


"The dirty little secret is that there has been a bipartisan project of corporatism, the economic underpinning of fascism, for almost a century."

Five years ago, antiwar liberals calling the Bush administration fascist were labeled as kooks, marginalized by their own party leadership, accused by conservatives of treasonous thoughts worthy of federal punishment, even deportation. A few years pass, the policies hardly change, and the political dynamic turns upside down: tea-party conservatives accusing the Obama regime of fascist impulses are compared to terrorists, accused of being racists, told that their hyperbole is a real threat to the country’s security.

The establishment derides both groups for their fringe outlook on America, convinced that the United States is anything but a fascist country. After all, isn’t America the nation thatdefeated fascism in the 1940s? Sensible conservatives and liberals agree with that.

The unappreciated reality is that when the patriot Right and radical Left refer to the US system as fascistic, they have part of the truth but not the whole analysis. This is due to the blinders both sides wear concerning state power. Moreover, the criticisms sometimes fail to take account of America’s very unique strain of fascism. This political program is distinct in every nation, always taking a different form but with some general themes in common. US fascism is a most insidious mixture of the key ingredients while maintaining the necessary nuance to snooker the masses, the media, and the respectable folks across the spectrum.

The FDR-Bush Program of Economic Corporatism

First, and this is key, we must look at the economic system. The left-liberals are proud to have had a role in creating its social-democratic elements. The conservatives are proud of America’s towering financial and military institutions. Republicans and Democrats all pretend America has a free-enterprise system, attacking greedy profiteers while crediting themselves for the benefits of capitalism, blaming laissez-faire for all our problems while dissonantly congratulating themselves for having supplanted it with sensible regulation and safety nets once and for all.

The dirty little secret is that there has been a bipartisan project of corporatism, the economic underpinning of fascism, for almost a century. The regulatory bureaus, the banking establishment, agricultural policy, telecommunications planning, even the welfare state all enrich corporate interests, but at the ultimate direction of the state. One could say this arrangement was foreshadowed in Lincoln or even Hamilton. But it was during the World Wars and New Deal that the nation embarked upon something decisively fascistic.

Hitler, Mussolini, and the other fascists all employed a general approach of co-opting the market through huge governmental takeovers of industry while maintaining the pretense of private property. Along with this came interventions that would be considered socialistic in other contexts. Lew Rockwell very nicely summed up the economic programs of Hitler, which mirror the great prides of Progressive politics of the 20th century:


He suspended the gold standard, embarked on huge public works programs like Autobahns, protected industry from foreign competition, expanded credit, instituted jobs programs, bullied the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national healthcare and unemployment insurance, imposed education standards, and eventually ran huge deficits. The Nazi interventionist program was essential to the regime’s rejection of the market economy and its embrace of socialism in one country.


Much of this agenda was adopted in the United States during World War I, and then brought back to life in the New Deal. John T. Flynn, a leftist who initially supported Franklin Roosevelt then became disenchanted with the president’s program of central planning, described the 1930s atmosphere of political ideology in his seminal work The Roosevelt Myth:


There was indeed a good deal of tolerance for the idea of planning our capitalist system even in the most conservative circles. And a man could support publicly and with vehemence this system of the Planned Economy without incurring the odium of being too much of a radical for polite and practical society.


"The United States boasts one of the most significant corporatist arrangements in the world in its alliance between the Federal Reserve and the big banks."

There was only one trouble with it. This was what Mussolini had adopted — the Planned Capitalist State. And he gave it a name — fascism. Then came Hitler and adopted the same idea. His party was called the Nazi party, which was derived from the initials of its true name, but it was dedicated to fascism….


Whatever it was, it was the direct opposite of liberalism. It was an attempt, somewhere between Communism and capitalism, to organize a stable society and to do it by setting up a State equipped with massive powers over the lives and fortunes of the citizens…. Yet this curiously un-American doctrine was being peddled in America as the bright flower of the liberals. Of course they did not call it fascism, because that had a bad name…. They called in the Planned economy. But it was and is fascism by whatever name it is known.

In specific, FDR’s National Recovery Administration was fashioned after the industrial policy of Mussolini. Flynn explains:

[Mussolini] organized each trade or industrial group or professional group into a state-supervised trade association. He called it a corporative. These corporatives operated under state supervision and could plan production, quality, prices, distribution, labor standards, etc. The NRA provided that in America each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a Code Authority. But it was essentially the same thing. These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA. This was fascism.


Such an analysis of the New Deal as fascism is not only found in the Old Right or their libertarian successors. Historian Thaddeus Russell’s great chapter "Behold a Dictator: Fascism and the New Deal" in his new book A Renegade History of the United States comes from a leftist perspective and arrives at much the same conclusions. Many of the greatest progressive intellectuals and business elites of Roosevelt’s time were especially enamored of Mussolini’s regime.


The men who made the New Deal were driven by dreams of a machinelike society, in which all members, from the leaders of government to the lowliest workers, would be parts designed, built, and employed entirely for their function within the whole apparatus. But to their dismay, these men found that most Americans rejected such dreams, except during times of crisis. The First World War was the first such crisis.… But then came the peace and prosperity of the 1920s, a long time of waiting for another national emergency that could make their fantasies of social order come true.


This mirrors Robert Higgs’s ratchet-effect thesis and the insights found in his books Crisis and Leviathan and Depression, War, and Cold War, in regard both to the general expansion of state power during crises and the particular ways World War I and the New Deal solidified a state that Higgs has, with a nod to Charlotte Twight, referred to as "participatory fascism."


What makes FDR’s role in American fascism so insidious is that as the greatest 20th-century liberal president who led America to war with the Nazis, he is often characterized as the prototypical US antifascist. The great Smedley Butler, a brilliant critic of America’s merchants of death, was very concerned that reactionary forces along with the military came close to dethroning FDR and creating a fascist regime. But one must ask, could anyone tell the difference? What would the anti-FDR fascists do — wage total war? Nationalize the economy? Put American citizens into concentration camps based on race? Create a permanent military-corporate establishment? To discuss a possible fascist coup in the years of Franklin Roosevelt is to ignore that it in fact happened — a "revolution within the form," as Garet Garrett described it.


Also insidious is the great respect most Republicans have for FDR, whether it’s acknowledged or not. Reagan was a devout New Dealer who never abandoned this orientation when he became governor or president. George W. Bush’s entire economic program was also thoroughly Rooseveltian — expanding Medicare to the benefit of the pharmaceutical companies, an "ownership society" (how fascist does that sound!?) intended to shore up the real-estate and finance sectors, an attempt to corporatize Social Security (thereby saving FDR’s domestic triumph, itself a copy from a Prussian program of the 19th century), the bipartisan bailouts of financial institutions, steel tariffs, further nationalization of education, and all the rest.

"Even our homes are private property only insofar as it serves the interest of the state."

The Democrats, for their part, continue with the fascist economics they adopted four generations ago, and it leads to a good deal of confusion as they are the "liberal" party. Yet when Obama plans to force individuals to buy private health insurance, picks corporate giants to head up regulatory offices, schemes to create a phony market in carbon credits, and widens the revolving door between Wall Street and the Oval Office, he along with his party is only continuing down the road of their Mussolinian predecessors.

One of the most horrifying parts of fascist economics, autarky, has even been mimicked by all presidents since Nixon in their crazed calls for "energy independence." We also see it in the hysteria about jobs being oursourced. Today it often has an environmental spin, and there is not the beating on the podium and screaming of Lebensraum, but the protectionism and codependency between favored American businesses and the omnipotent state, all with a nationalist focus, are nevertheless there for anyone to see.

It could be countered that many other nations have corporate states as well. Perhaps they too have fascist tendencies. Yet there are a few corporatist features singular to the United States. As the holder of the world’s reserve currency, and given that money is half of most economic transactions, the United States boasts one of the most significant corporatist arrangements in the world in its alliance between the Federal Reserve and the big banks. The US government, in absolute terms, claims the largest of all regressive welfare programs in the form of Social Security. It is likely the global leader in intellectual-property enforcement, both in domestic and international terms, with most nations trailing considerably behind in this increasingly draconian form of corporate privilege. As the grandest Leviathan preying over the world’s richest nation, the US corporate state is in its own class.

Flynn’s insight that the economic structure of America’s planned economy is fascist whatever label we affix to it is echoed in a much more recent and popular authority. In an episode ofSouth Park, Kyle the idiosyncratically precocious kid has this great exchange with his father:

Kyle’s dad: "You see Kyle, we live in a liberal-democratic society, and democrats make sexual harassment laws; these laws tell us what we can and can’t say in the work place, and what we can and can’t do in the work place."

Kyle: "Isn’t that fascism?"

Kyle’s dad: "No, because we don’t call it fascism."

Up and down the economy, at all levels of government, bureaucrats and planners dictate details in nearly all areas of economic behavior, with the principle that some sectors should simply be free of government intrusion having been totally discarded. If we have large swaths of economic liberty in America, and we do, this is by accident, or merely due to the state’s institutional limits in being able to run everything. The ideological thrust of US economic policy is that we may live our commercial lives freer than in many places, but all upon the good graces of the state, its cartels, licensing boards, and regulatory apparatuses. Even our homes are private property only insofar as it serves the interest of the state, which claims the right to seize anything we own if it bolsters the tax receipts garnered through the state-business nexus. The business environment adheres to a rapidly expanding litany of commercial codes, many of them designed not even by legislature but by executive or judicial fiat. Taken together, this is the essence of economic fascism.

Warmongering Nationalism

A major feature of the fascist powers in the 1930s and 1940s was their belligerence. Without the militarism and war making, these regimes may have never drawn the ire of the United States and its allies, we are often told, and it’s probably true. It is thus bizarre to hear conservatives voice concern about America’s slide toward fascism without acknowledging this central aspect. The United States is the most militarily belligerent nation since World War II, with a very competitive résumé from decades before that. The United States appears to have been at war with more nations than any other. The United States has dominated the world in bombings, with no other nation coming close, certainly not in the last six decades. Taking the estimates of civilians killed due to US wars of aggression, strategic bombings, and sanctions on food and medicine, the death toll easily surpasses ten million.

The United States spends more on national offense than the rest of the world combined. There are now five wars raging — in Afghanistan, Pakistan, Iraq, Yemen, and Libya — and it is treated as normal, not an extraordinary state of affairs at all. And it isn’t one. About every generation the United States has had a major war — 1812, Mexico, Lincoln’s War, Spanish-American, World War I, World War II, Korea, Vietnam, the Gulf War, and the war on terrorism.

"There are now five wars raging — in Afghanistan, Pakistan, Iraq, Yemen, and Libya — and it is treated as normal, not an extraordinary state of affairs at all."

In the overwhelming majority of the world’s nations we can find US bases. Virtually no state is treated neutrally; all are favored and bribed, bullied and manipulated, or invaded with the goal of conquest. Many of the most bloody regimes and insurgent forces in the world have been allied to the US government, from Stalin’s Russia to Pol Pot’s Cambodia, from the proto-Taliban in Afghanistan to Saddam Hussein’s Iraq. The United States has trained dozens of states and armies in the arts of torture and terror. One year the United States will opportunistically side with a ruthless dictator, only to backstab him — often at the very moment he is least menacing to the rest of the world. These foreign activities are all characteristic of a fascist power.

At home, American culture is saturated by militarism, and it is not a modern anomaly. The flag, national anthem, presidency, Constitution, relationship between the federal government and the states, the major welfare programs, prohibition, police policies, weaponry and conduct, the very territory that defines US boundaries — it can all be clearly traced to war. America is not the only state infected by this militarist taint, but it is the most prominent such nation today with pretensions of peace loving to have an undisturbed history of war making, virtually none of which the current national culture looks upon with shame.

Although the United States has long had a militaristic fever, we have seen it reach absurd proportions in recent years. Robert Higgs, in his recent interview with Jeffrey Tucker, put it very well:

One hears lately, unfortunately, at sporting events, at baseball games, at football games, certain interludes of worship for the armed forces. I find it disgusting myself because I like baseball and I don’t want my baseball to be spoiled by intrusions of nationalistic fervor and worship of the armed forces. To me baseball is glorious for being a peaceful activity. We don’t have to kill people to find excitement in life.

It is the same way in the churches, in the media, in the business sector. The armed forces are honored and privileged, enjoying a very high official status, even as the injured who return from war are typically mistreated by the very institutions on whose behalf they risked their lives. A returning soldier is a higher form of life than a common citizen. But in the midst of the state’s institutions, he is still just a used-up cog, the repair of which is often not worth it to the machine.

Militarism is not as nakedly on display as in Germany at the height of the Nazi invasion of the Soviet Union, yet we must also consider the continuity. The United States has been steadily militaristic for most of the last century, and much of the previous one. It is unapologetically so, even when there is some subtlety to it. Although the cultural Right is much more militaristic, the Left is also dominated by love of the armed forces. Franklin Roosevelt, hero to most of the Left, was father of the modern military-industrial complex as well as nuclear weaponry. Left-liberals love claiming the legacy of America’s most beloved war, and they love the myths that surround that state undertaking for having unified the culture and brought America out of the Depression. World War II supposedly demonstrates the efficacy of central planning, as well as the necessity to kill untold numbers of innocent people, on occasion, which is why both statist wings of the American political class love it so dearly.

It is almost impossible to get very high in the national culture with a radically antiwar outlook, to say nothing of an antimilitary one. There is much that is taboo to say in American life, but principled critiques of war making, based on the common-sense morality concerning questions about the taking of innocent life, are probably at the top of the list.

Economically, the so-called defense industry stands as a giant. Major defense contractors have infrastructure in nearly every state, and their hands in virtually every sector of government — from TSA and the Department of Agriculture to the IRS and Homeland Security, from NASA and the Food and Drug Administration down to the New York Police Department. Very few critics of this regime get very far in the mainstream.

The Leader Principle with a Twist

In the United States, any natural-born citizen can grow up to be the president, we are often reminded, demonstrating once more, as if any more evidence were needed, that America is the greatest nation in history, its people the chosen people to lead the world. America is proud to advertise itself as the king of democracies. There is no religious test to be president. There is no familial restriction. Every four or eight years, we see the peaceful transfer of power — unprecedented, demonic power — and Americans can thus say with pride that more than any other nation in the world, "the people here really are the government — the greatest government there ever was."

Yet when that American citizen is in office, he (or she, as I’m sure we’ll see soon enough) is basically God on earth. Is there a minor or major problem with America’s economy, or the world’s? The president shall respond. Is school violence or sex on television becoming a problem? The president will send one of his officials to fix it. Is injustice transpiring overseas? The president shall see to it immediately. Healthcare, energy, immigration, social peace, crime, marriage, international trade — nothing is to be tackled without the consultation or active involvement of the president.

One would think the president works a 75-hour day, given his supposed capacity to heal the sick, fix the market, bring democracy to Afghanistan, stamp out drugs in Mexico, secure the auto industry, stand as a role model, unify the nation, end racism, teach all children — not a one left behind — to read, decide when to launch nuclear weapons and which other nations are worthy of having them, save Americans from natural disasters, fix the weather, and get everyone into homes with ever-increasing sale values at ever-declining costs.

This is such an important, holy office, that the president never travels anywhere without a vast legion of bodyguards, medical personnel, executive officials, and dozens if not hundreds of others. No one else in the world has ever had such a personal army. Wherever the president travels, the local population must surrender its petty business and witness entire neighborhoods overtaken by the head of state’s coterie of pampering assistants and armed guardians.

Americans are enamored of the flawed, everyday persona of the president. They loved Reagan for losing his temper. They adored Clinton for his foibles. They liked it that Bush was a guy with whom you could have a beer, that Obama listens to the same music that they do. They love the idea that, unlike in other fascist regimes, the president can be anybody. And that person can then opt to torture and kill anyone on earth, or destroy any third-world nation on his (or her — it must be emphasized) say-so.

When it comes to power — the actual control the president has over resources and his capacity to destroy human life — no other fascist leader has ever approached what is at the US president’s fingertips. No other political office has lasted so long with so much Caesarian prerogative. No other political position was ever believed by so many to have the power to do so much good. In America, the president is a deity — which, paradoxically, is why so many political opponents take it so personally when someone they dislike has the office. Some Americans don’t want to see the greatness of their country tarnished by a perjurer like Clinton or a doofus like Bush. They might even question the officeholder’s legitimacy, as with Obama. But this is because the office is so revered. The presidency itself is upheld as the commanding office of the nation, the secular savior of the world. It is the godhead of America’s democratic omnipotence. It is a sacred position. The fact it is an elected office occupied by imperfect souls only bolsters its unparalleled grandeur. To say the leader principle isn’t alive and well in this country is to define the concept too narrowly.

A Peculiar Blend of Multicultural and Racial Statism

But the United States doesn’t round people up on the basis of ethnicity and gas them, the protest comes, and so surely it is not fascist. The United States isn’t based around the concept of racial superiority. Although the Nazis were surely obsessed with racist nationalism, not all fascist systems are. Nevertheless, fascism has been associated with racism and so it is important to acknowledge how this plays into our analysis.

"To say the leader principle isn’t alive and well in this country is to define the concept too narrowly."

In the United States, PC multiculturalism can at times be as overbearing as old-fashioned bigotry. People have lost their jobs for harmless comments. Others are denied opportunities in academia because they don’t have minority status. This does not rise to the level of Nazi hatred, for sure, although we can remember that the anti-Jewish crusade began as an affirmative-action program, based on the concern that Jews were overrepresented in places of influence.

More important in US fascism is the role multiculturalism plays in guarding against the accusations of violent prejudice. The US government already addressed racial strife, our textbooks say. If racism remains, it is a problem with the culture and private sector — not the egalitarian state. The war machine and federal government were the saviors of blacks. LBJ, the same man who slaughtered millions of Asians, signed the Civil Rights Act, and so the federal government has been elevated to the status of being the final solution to racism, the redemption of America’s past sins. The all-out assault on property rights involved in civil-rights legislation is itself a form of antiracist fascism, yet to say so is to be met with incredulous perplexity, at best.

Under the official code of American ideology, almost nothing is worse than being a racist, which is why the tea party is smeared this way and why Al Gore is comparing global warming skeptics to the racists of a previous generations. It is why the conservatives, too, try to use racism accusations to discredit liberals who dare criticize Clarence Thomas, Condoleezza Rice, or Herman Cain.

At the same time, the American state continues to divide people by race. It imprisons blacks at an alarming rate so that there are now more black men in the correctional system than there were enslaved in 1850. The state is still the greatest oppressor of ethnic minorities, who still get the worst of the police state’s violence. Because much of the state’s war on blacks and other minorities is in the form of regulatory and welfare practices wrongly thought to help the poor and minorities — welfare, public housing, government schools, licensing, minimum-wage laws, coercive unionism and so on — very few Americans identify the problem of racist statism comprehensively. Leviathan is a bad deal for whites as well as blacks, elevating only the political class at the expense of all.

Although the United States is more culturally tolerant of immigrants than most nations, here too we see racial politics mixed with statism to produce violence against individual rights. Indeed, the specter of mass deportation of peaceful people, the effort to crack down on all business relationships involving an illegal, and the underlying nationalism involved in the demarcation between the rights of legal residents and aliens all speak to the fascism involved in the US system. Immigration was once a much more locally handled, market-regulated matter. With the central state in charge of racial politics and the creation of national identity, liberty for all suffers.

It is the warfare state, however, where American racism is the worst, the most sanctioned, and the most dangerous. Interestingly, the empire uses both political correctness and racism to enhance its power: for example, criticizing US ties with Israel is smeared as anti-Semitism while disregard for the rights of Arabs feeds US wars abroad. Although anticolonialism and even antiracism have long been part of war propaganda, the outright hate of foreigners has always served the interests of the militarists, from the vilification of the Spanish and the dehumanization of the Filipinos to the demonization of the Germans in World War I to the gruesome caricatures of Japanese found everywhere in the 1940s and today’s disgusting treatment of Muslims.

Americans actually take seriously ideas to forbid the construction of mosques in some areas, proving that intolerance of groups based on race and religion is a very real threat. On a related note, religion plays a fascinating part of American fascism, as both devout Christians and secular liberals see the state as a divine institution. For the fascist Left the state is its secular God. For the fascist Right the US government is an arm of God’s holy will. Fear of godlessness was key in the Cold War, just as fear of fundamentalist Muslims fuels the war on terror and fear of unusual Christian sects has led to their deprivation of rights at Waco and elsewhere.

The worst is seen in the United States’ treatment of foreigners, blown apart in war as if they are vermin. An important point here is the other fascist regimes have been historically discredited, and the modern incarnations of these nation-states don’t speak with pride about their past. Modern Germany is not at all boastful of its National Socialist era. With America it is different. This is the state and statist culture that wiped out the Indians, kept blacks enslaved, dropped atoms bombs on Japanese civilians and put their American counterparts in concentration camps — and yet these historical injustices, however much lamented today, do not bring into question the overall legitimacy of the American state that boasts an uninterrupted lineage of sovereignty that encompassed all these atrocities.

The United States smacks of pride for its centuries of governance, despite the many millions enslaved and crushed under its boot. We should not be surprised that modern American political culture continues to treat foreigners as though they are subhuman. When Pakistani children die in US drone wars, or Mexicans die by the tens of thousands purely because of US drug policy, it is all seen as a price well worth paying — if it is even acknowledged at all. The prevailing dichotomy that there are Americans, worthy of rights, and there are others, totally dispensable in achieving US goals, is a construct easily befitting of national socialism.

American fascism has managed a wondrous trick, using old-fashioned racism as well as officially defined antiracism to shore up its power. Washington’s civil-rights crusade as well as inhuman disregard for "the other" in perpetuating its totalitarian violence overseas reinforce each other in a most nefarious way, blinding people to the danger of mixing racial politics with total power no matter what the aim. Its wars abroad are always for equality, democracy, humanity. Its domestic state balloons with power to combat social strife. But from Wounded Knee to Guantánamo, the truly disenfranchised have another story to tell.

A Socially Moderate Police State

Social conservatives generally find accusations of US fascism to be preposterous — offensive when Republicans reign and absurd when Democrats rule — partly because from their perspective almost all manner of cultural liberalism, decadence, political correctness, sexual permissiveness, and so forth cannot be escaped, not in the public schools, the FCC-licensed big media, the government-endorsed view of mainstream society. They see Christianity pushed out of the schools and public sphere, including in local city Christmas events, and believe if there is any tyranny in America it is of a left-wing variety.

Although bourgeois American culture has been co-opted by state institutions, particularly through militarism, it is true that the counterculture too has been absorbed by American civic ideology. It is a good thing that state harassment of people outside the mainstream of sexuality has been minimized, but it is important to note that just because the United States is more "socially tolerant" than in past times doesn’t mean it’s freer, even when it comes to personal rights. It is crucial to note that just because presidents admit to trying pot and the government finances condoms for students and museums devoted to rock music does not mean liberalism of a genuine sort has triumphed.

The public schools are a microcosm of the issue. Many see in them cesspools of deviancy, libertinism, a total disrespect for old culture, conventionally defined family values and hierarchy, or even the traditional conception of the role for schooling: reading, writing, arithmetic. Yet these institutions are thoroughly fascistic, hierarchical according to ageism and an arbitrary placement of authority in teachers and administrators. They have come to resemble low-security prisons, complete with metal detectors, armed guards, and summary searches. Students are spied upon and regulated even in their time away from class. Young children are suspended and punished over the smallest of offenses, even handcuffed and told they’re heading to prison, never to see their parents again. It is no coincidence, probably, that America’s school system and the Nazi regime both had vital origins in Bismarck’s Prussia. The Right looks at our schools and sees decadence and debauchery. Yet there is also spirit-crushing authoritarianism.

To emphasize the socially liberal flavor of the American police state is not to say that the fringe is always tolerated by society, much less government. The persecution of sex workers continues and those involved in certain verboten consensual sexual activities — such as teenagers caught sending each other nude photos in class — can face years of jail and the institutional shame of being labeled "sex offenders" for their victimless behavior.

"American fascism has managed a wondrous trick, using old-fashioned racism as well as officially defined antiracism to shore up its power."

The greatest cause of prison growth and one of the worst abuses of liberty in America has been the war on drugs. Although America prides itself for being more liberal than its Muslim enemies on the question of alcohol, it incarcerates hundreds of thousands of people whose only substantive offense was against the state-imposed norms of pharmacologically induced brain chemistry. And even as the prospect of marijuana legalization seems bright, those who continue to be marginalized — psychedelic, heroin, and illegal-stimulant users — will continue to be subjected to imprisonment, which in America often effectively means frequent beatings, inter-inmate slavery, and rape. Moreover, the reach of the US drug war is global — there is nothing really like an international crusade against victimless crimes akin to America’s bullying of most of the world to go along with its drug policy, as it has done in increasing levels of intensity for a century.

Drug oppression doesn’t stop at recreational users and outcast addicts, either. The Food and Drug Administration has devastated millions of families with its totalitarian dictates, depriving hundreds of thousands of needed and effective medicines, cutting countless lives short. Its cozy relationship with some of the big pharmaceutical firms reminds us of the economic component of this fascist arm of the American state. But the underlying principle that in America you do not own your body sufficiently to decide whether to take a substance — whether cocaine or experimental cancer medications — is a fascist pretension if ever there was one. Meanwhile, those deemed "mentally ill" also face numerous severe restrictions on their civil liberties, although Thomas Szasz has done a wonderful thing in greatly reducing this element of American fascism.

The state doesn’t break down our doors to lock up all political dissidents or liquidate racial minorities by the thousands, so it is sometimes assumed our system is nothing like fascism, although we should remember that Mussolini’s state wasn’t as bad as Hitler’s, and even Hitler’s regime didn’t develop into an exterminationist project right away. Although the US government isn’t as totalitarian in practice as some states have been, we must look at the potential power just waiting to be unleashed. In a mundane sense, America’s police-state tentacles are indeed more ubiquitous and grandiose than anything that has ever existed on the planet.

The surveillance state is unprecedented, without even the façade of due process involved in spying that existed before 9/11. The government seeks to monitor all. Antigovernment critics are indeed tracked and at times arrested. Whistleblowers are detained and mistreated. Torture is normalized. Indefinite detention without cause is a bipartisan, unchallenged policy. America boasts the largest incarcerated population, both per capita and in absolute terms, on earth. The death penalty persists, rare among industrialized, modern nations, and a policy without which, we must remember, industrial-style genocide is essentially impossible.

The police presence increases year by year, and becomes ever more dangerous. Thousands of American citizens have been killed by police in the last decade alone. Ethnic minorities, the youth, illegal immigrants, and other classically alienated groups are especially vulnerable. But no one is safe. There are a hundred SWAT raids a day. No matter what someone’s station in life, there is the threat of being jailed for an unbelievably petty offense, injured during a traffic stop, or shot by a police officer. No matter how wealthy someone is, there is a threat that a regulatory technicality or contrived offense like "obstruction of justice" can land one in a federal pen. Incidents such as the Waco massacre and the roundup of weapons at Katrina reminds us of how universal the threat to liberty is, regardless of demographics.

Just because you can watch half-nude women on afternoon television or gay men kissing on the streets of nearly any major city does not mean America is free, as complacent liberals might think, much less too free, as conservatives often suggest. Just because most dissidents are left alone doesn’t mean there is no police state, for that would be convenient indeed for the police statists: the idea that people ought not complain so long as they have the right to do so.

America’s Unique Fascism

"American fascism is one of a kind. Its economic system is neither free enterprise nor pure egalitarian socialism, but more akin to a buffed-up, modernized, globally dominant Mussolinian corporate state."

American fascism is one of a kind. Its economic system is neither free enterprise nor pure egalitarian socialism, but more akin to a buffed-up, modernized, globally dominant Mussolinian corporate state. Its militarism rivals and in many senses exceeds any of history’s fascist regimes, in power, uninterrupted belligerence, and sheer size. Its presidency is the most revered and powerful führership in world history, despite and actually due to its democratic nature. America’s racial nationalism is unusual but very real, combined with pretensions of antiracism. Its police state enslaves and punishes, at home and abroad, in ways that would make Franco or Perón envious, even as it allows for a relatively wide range of social liberty.

When Keith Olbermann called Bush a fascist in 2008, the conservatives thought it seditious and threatening. When Glenn Beck began sounding the alarm in 2009 that America was moving toward fascism, the progressives thought it crazy and dangerous. Both of these statements were not hyperbole, however. If anything, antiwar lefties and populist rightists only know the half of it when they use the dread "F" word, since they fail to note how intimately much of their own favored agenda falls in line with what they despise.


… Make no mistake it is happening here …

… Make no mistake it is happening here …


On Hitler’s Mountain: It Can Happen Here

Ms. Hunt, a self-identified political liberal and pacifist, is a former executive of various U.S. and international environmental organizations, who currently resides in Washington, D.C. Now a U.S. citizen, she was born in 1934 in Berchtesgaden, Bavaria, where Adolf Hitler set up his headquarters and his mountain retreat, the Eagle’s Nest.

In fact, in one of her most compelling stories, at the age of three, Hunt recalls sitting in Hitler’s lap during a 1941 village visit, “suspiciously studying his mustache, his slicked-back, oily hair… while at the same time acutely seeing the importance of the moment.” Her father was one of the first German soldiers drafted and one of the first to die. Hunt was only 11 when the war ended, but her “eyewitness” account does provide much personal insight into life under the Nazis.

Another German Lady Remembers  Last month I met an 83-year-old American lady and her husband, a veteran of World War II, both from Nevada. Because she spoke English with a German accent, we got to talking and I soon learned that at an early age she had been sent to the Sudetenland to a Hitler Youth Camp for girls.

When the war ended, in the mass confusion she had literally been turned loose from the camp, and with other girls, she became a refugee walking hundreds of miles in an effort to find her family. She recalled sleeping in the woods, starvation and scavenging garbage from the trash of American GIs, one of whom hit her in the back with a rifle butt, an injury from which she still suffers today. She eventually found her mother.


With all this in her past, this elderly lady is a proud American who loves her adopted country. When we discussed Hunt’s book about her childhood in Nazi German, I asked whether she thought that something akin to the Nazis and Hitler could happen in America. Without any hesitation she replied: “Of course it could; it is what I fear most about America today.”

Could It Happen in America?  Imgard Hunt also addressed this very question in her book when she was asked: “Could a Hitler happen here in America? If you think so what would be the circumstances? Are there aspects of life in the United States that would prevent a Hitler from rising here?”

Here is her disturbing response, and something to consider in the context of American politics:

“I thought a great deal about that while I wrote my book.    “Yes, an American version of a Hitler dictatorship is possible – but not the Holocaust. A dictatorship in America would arrive largely unnoticed and insidiously, with the pretense of a free democracy intact. The prerequisites would be that the executive, legislative, and judicial functions would be in the hands of one party, headed by a man on a mission who surrounds himself only with the like-minded.

“The media would be largely controlled by that party or by sympathetic owners. The military would be obedient and heed the leader’s orders against their better judgment, while the moneyed interests would be well protected. A powerful, shrewd, and sophisticated propaganda machine ready to lie to people and manipulate their minds – a propaganda machine like that of Dr. Goebbels – would quickly increase the danger of voices of reason, diverse opinions, and criticism.


Suspending the Constitution     “The trigger that could tip the scale dangerously in such a direction might be a monstrous economic disaster or more fear-inspiring terrorist attacks providing the excuse to suspend or ignore the Constitution and to declare emergency powers like Hitler did in 1933 after the fire in the Reichstag. There might be a group or groups that would be demonized and become an excuse for extreme measures. In Germany it was the Jews. Here it might be terrorists or Muslims.

“And yes, I believe we are seeing danger signs all around us, from the Homeland Security Act that diminishes civil rights and increased surveillance to scare tactics that increase fear, acceptance of torture of prisoners, and acceptance of a war based on lies. Add to that litany the increasing political power of an intolerant, ideology-driven, fundamentalist right wing and we have a scenario that could spell the end of democracy as we know it.

“There are of course enormous differences between the United States now and Germany then. For one, the ultra-fascist, violent Storm Troopers (S.A.) who staged the Kristallnacht and spread violence before and after Hitler’s power grab do not now have an American equivalent. In addition, the extreme fear of an imminent Communist revolution that haunted the Germans in the twenties does not exist.

Most importantly, the American people, unless they become completely brainwashed by their government and their fundamentalist religious leaders, are used to living in a democracy, to questioning, speaking up, protesting, marching, blowing the whistle, and pointing the finger.

“If we want to keep America free we must continue to do just that.”  Something to ponder seriously, dear readers.

Reprinted with permission from The Sovereign Investor.

Prepping for chapter 11



Is Bank of America                                             preparing for Chapter 11


Wed, Oct 19 2011 …

Bank of America has managed to step into thekimchee several times over the past couple of months, an achievement that only warms the hearts of crisis communications professionals.  First came the abortive settlement of $10 billion or so in put-back claims by some large investors.  The State of New York and anyone else paying attention intervened.  Settlement is now mostly muertoin political terms, although the big investors are still paying the big lawyers to soldier on in hope of forcing a settlement on all parties.  Only in New York are such things possible.

Then came the decision by Bank America CEO Brian Moynihan to impose a $5 per month fee on ATM transactions, this in response to the Dodd-Frank law which cuts about half of the profits for big banks in the electronic payments market. Consumers reacted in rage to the announcement, which arguably helped to catalyze the Occupy Wall Street movement.  Truth is that the big bank’s cartel control in payments is under assault by more than Congress.  Think technology, Apple and Google, and stay tuned for a future post on the payments revolution.  Steve Jobs does get the last laugh on the big banks.

Most recently Bank America drew attention to itself by disclosing that it had moved all of the derivatives footings from its Merrill Lynch subsidiary to the lead bank, Bank of America N.A. Bloomberg ran the first story, reporting “BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit.” This report led to comments and reports claiming that the Fed, by allowing this move, had somehow impaired the national patrimony and violated Section 23A of the Federal Reserve Act.  Section 23A is among the more bizarre parts of the Fed’s enabling law and governs transactions between banks and affiliates.

Bill Black of University of Kansas City told me that the Bank America move was not merely an administrative exercise. “Here, B of A was not the counterparty,” says Black.  “The 23A issue is moving an exposure [from Merrill Lynch] that is in trouble to the insured institution, apparently at book value, from an uninsured affiliate.  That should be an easy call: ‘No.’  The Fed cares about BHCs and is institutionally primed to say yes to this kind of deal, while the FDIC is institutionally primed to protect the FDIC insurance fund.”

While I am sympathetic to concerns about potential losses to the FDIC bank insurance fund, the fact is that FDIC can reject any contract between any party and a failed bank.  Truth to tell, however, such changes in the counterparty for OTC derivatives exposures are not that surprising for people who follow the securities industry.  Goldman Sachs, Morgan Stanley, et al have moved their swaps business “in the bank” long ago.  As Bloomberg notes, 99% of all of JPMorgan’s swap book flows through the lead bank.  And yes, the Merrill business was particularly exotic, but keeping it in Merrill running through the smaller, FDIC insured Merrill depositories would probably be more of a risk to the Bank America group.

So the real question is why now?  Susan Webber of Aurora Advisers, in her Yves Smith nom de plume on Naked Capitalism, commented on the motives behind and timing of the change:

You can argue that this is just normal business, the other big banks have their derivatives operations largely in the depositary. But BofA has owned Merrill for over a year and a half, and didn’t undertake this move until it was downgraded. Goldman and Morgan Stanley remaining big players in this business and don’t have a large depositary. If this was all normal business, BofA would have done this a while ago, and not in response to market pressure, and they would have gotten the FDIC on board. The way this was done says something is amiss.

Correct.  To my earlier post regarding the need for a restructuring at BAC, “Housing, debt ceilings & zombie banks,” the move to put the derivatives exposures of Merrill Lynch under the lead bank could be preparatory to a Chapter 11 filing by the parent company.  The move by Fannie Mae to take a large junk of loans out of BAC, the efforts to integrate parts of Merrill Lynch into the bank units earlier this year, and now the wholesale shift of derivatives exposure all suggest a larger agenda.

I don’t have any access to inside skinny, but what I see suggests to this investment banker that a restructuring may impend at Bank of America.  In the event, that is good news in a sense that this continuing distraction to the financial markets will be headed for a final resolution.



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