Through a series of supposedly random but arguably deliberate chain of events, America is poised to jettison 220 years of a free market system called capitalism, in favor of the tried and failed system of socialism. This writer, and others, are now starting to question how we reached this point.
Last summer, as McCain and Obama were in the midst of their campaigns to capture the presidency, a series of events dramatically changed the focus of the campaign from Iraq to the economy. From that point on, Obama took the lead and eventually won the presidency.
June 26, 2008: Democrat Chuck Schumer leaked a memo questioning the solvency of IndyMac bank. This memo precipitated a run on IndyMac which led to its failure. Federal regulators pointedly cited U.S. Sen. Charles Schumer, D-N.Y., in explaining the bank’s failure. “The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York.”
This event, coupled with the Lehman Brothers collapse in September, marked the beginning of the current economic meltdown and provided the ammunition for massive government intervention in the private market.
July 12, 2008: The federal government takes control of the $32 billion IndyMac Bank. *
Sept. 6, 2008: Fannie Mae begins its downward spiral, which will end with a crash in November. This crash was avoidable, as the problems with Fannie Mae and Freddie Mac were identified in June of 2006, when 15 Republicans on the Senate Banking Committee introduced legislation to address the problem. Democrats, led by Barney Frank, killed the reform efforts
Sept. 15, 2008: Obama and McCain are virtually tied in their race for the presidency. Out of no-where, in the space of less than 2 hours, the Federal Reserve noticed a tremendous drawdown of money market accounts in the U.S. to the tune of $550 billion. Rep. Paul Kanjorski of Pennsylvania said that if authorities had not closed the banks, $5.5 trillion would have been withdrawn from US banks, which would have caused the collapse of the US within 24 hours.
This seminal event marked the ascendancy of Obama’s candidacy, and eventually resulted in his election as president.
Fast forward to this week. The markets reacted to Obama’s proposal to bail-out mortgages and Senator Christopher Dodd’s talk of nationalizing banks by reaching 11-year lows.
Obama continues to stoke the fears of imminent crisis, actually using the word ‘crisis’ a total of 26 times in one speech.
Enter George Soros. The infamous one-worlder, billionaire George Soros adds his voice to the media doomsayers by opining that the world financial system has effectively disintegrated, adding that there is yet no prospect of near-term resolution to the crisis.
Soros said the turbulence is more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.
He may be right. The series of ‘inadvertent errors’, deliberate obstruction, political shenanigans, behind the scenes manipulation of the money markets and non-stop calls for immediate infusions of taxpayer cash have brought the U.S. to its knees.
With one voice, politicians, economists and ‘experts’ agree by unspoken consensus that government is the only solution. No one points out the fact that every single step taken so far by the government has exacerbated the problem, effectively bringing America one step closer to centralized government control. Which, coincidentally, Obama favors.
I am not an economist. But I will challenge any expert to dispute the fact that if President Obama took to the airwaves tomorrow and announced the Bush tax cuts would be extended and a capital gains tax cut was under consideration, the markets would immediately turn around.
That no-one is proposing this common sense solution is alarming. That no free market solutions are even under consideration is more alarming. That no-one is questioning who was responsible for the Sept. 15 run on money market accounts, or why the media was silent on it, lends credence to the possibility that our current economic crisis might not have been the result of a series of random events.
The economic meltdown is undoubtedly responsible for Obama becoming president. It is also responsible for the current consideration of socialistic solutions, if not outright socialism. Without a doubt, this crisis has strengthened the Democratic party. Yet to connect the dots and suggest that this crisis isn’t a result of capitalism gone bad risks branding this author with the title of paranoid conspiracist.
Color me paranoid. Was this current crisis manufactured? I don’t know. Does the possibility exist? You decide.
* Six months later, Jan 2, 2009, a seven-member group of investors agreed to buy the remnants of failed lender IndyMac for $13.9 billion. Other investors included a fund controlled by billionaire George Soros’ Fund Management.
I certainly don’t like conspiracies, but I’ve wondered the same thing… Just how much do the Democrats want to reverse the market dive? How much do they and the leftist/socialist agenda benefit from a market meltdown? Just look how a series of events plunged the market and the financial system into crisis.
The fiancial crisis was well known and was set-up to fail at some point by the Congress and the policies they passed. I don’t know, but I’m not hopeful for change. I think the fix is in. On a positive note, this collapse is exactly the over-reach that will cause (hopefully) a large portion of the U.S. to awaken ….
It’s time to make a choice. A free-market system with limited government in a federalist system, or a central overloard goverment… aka, socialism.
I’ve been kind of thinking that their intent is to completely collapse the U.S. economy and then socialize the whole thing as savior to the rescue.
The fed and the treasury knows who pulled 550 billion from the money markets in the us. They need to make this information public. we need to know who is manipulating our markets for political purposes.
I have been thinking a lot about this very thing. It’s obvious that the purpose of the “Stimulus” is to take us further into the teeth of the storm and not out of the recession.
The fact that there are people that honestly believe that this bill could “work” says a whole lot about what they don’t know about economics. It will “work.” It will “work” to bring about socialism.
Now, as to whether this was planned. I think it was. It wasn’t a plan that one would have to work too hard at. When a ball is already rolling downhill, it doesn’t take that much effort to make it roll in a particular direction if you know what you are doing and have control of enough money and power to do it.
But, the only way to implement complete socialism would be to prohibit/discourage any free enterprise at all, which seems to be Obama’s next step according to his promise of tax increases.
People are capitalist by nature. No matter how hard you pump money to unproductive people, its going to find its way back into the hands of those who are productive. The only way to stop this flow is by law or at the point of a gun.
This is an experiment to try and see if socialism can be implemented by economic force instead of violent force, which is the method that has been used up until now.
The socialists have a problem though and that is that they believe that collectivism is the natural state of people and on that they are dead wrong. It is the fatal flaw in their plan.
So, unless they are prepared to enforce this economic policy at the point of a gun, it’s not going to work in the long run. Unfortunately the damage that will result from all of this will be substantial.
It’s worse than you think Kay.
This post sounds remarkably like the thesis of the book “Shock Capitalism” by Naomi Kline; namely, that private interests use real or manufactured crises to their own advantage, and enrich themselves.
Which brings me to the larger issue, that there are populist undercurrents on both the left and the right who see the world through the same lens- that the big powerful interests are in control of the world, and taking care only of their own needs, while ignoring the needs of the common people.
I don’t buy into the theory to the degree suggested by the post, but I would suggest that when powerful interests gain the favor of the government, they naturally exploit it for their own ends, whether those interests are George Soros, Blackwater, or Citibank.
But I doubt that they can all neatly be laid on either side of the partisan aisle. I don’t recall hearing any of the capitalistl cheerleaders at the Wall St. banks shunning government welfare, insisting on letting the free market work itself out. I don’t hear anyone at Halliburton crying out for more open competitive bidding for taxpayer dollars.
I think it is worth noting that Eisenhower warned us about just this sort of thing- he called it the military-industrial complex, but it could just as easily be called the financial-governmental complex, the incestuous mingling of private interest and public power and money.
So is this a battle between capitalilsm vs socialism, or between entrenched interests vs the public interest?
You did not go back far enough. It actually started in July 2007, when Congress passed a 40% increase in the Minimum Wage.
This Act increased employers’ labor costs, not only for new-hires, but also for those making well above a 50%-premium above minimum wage levels.
Un-employment started to spike in June 2008 when new-graduates found that employers were unwilling to pay those boosted wages to hire the un-skilled and to pay other employees to train them.
Those “trained” employees, who had been hired a the previous Minimum Wage and had earned wage increases as they learned job-skills, also had their wages boosted by more than 40% because they were more valuable than the unskilled minimum-wage new-hires.
A graphic example of this is in the fast-food industry in and around Chester County.
Most fast-food employees are hired at, or near, minimum wage.
As they learn the necessary skills they earn wage-increases.
In June 2007, Arbys was advertising “5 for $5”. By August ist was “5 for $5.99.” It is now “5 for $6.99.”
P.S. The minimum wage in Mexico remains @ $5.00 per DAY!
This means that the U.S. is now 40% more attractive to Mexicans.
Much as it sounds inviting as a “conspiracy”, I couldn’t disagree more. First of all, it requires too many players to pull off. Second, this goes back a decade and a half and took many simultaneous events to create the perfect storm to get here.
In short, you’re giving agenda driven pols too much credit for foresight and brains. And they have not enough of either to orchestrate such a long term scam.
This didn’t start with campaigns and social welfare agendas. It started with lending, was made almost irreversible by soaring real estate prices. Real estate and assets form the foundation for collateral and assets for credit and lending. With no credit lending, the business world comes to a halt.
When US housing became nothing but packaged, over leveraged promissory notes – spread globally thru the banking world – the die was cast. And that was a long time ago. Even a revamping of the GSE’s in 2005 and 2006 would not have stopped it. It may, however, have made the repercussions less global, and less severe.
But this is no “contrived crisis”… unless you can come up with a single mastermind marionette with decades of vision and lots of puppeteer strings thru several admin, govt departments, and Wall Street.
It is, I suggest, a stupid move that got compounded by more stupid moves and people with NO long term vision.
But, as Rahm Emanuel would say, why waste a perfectly good crisis to advance a political agenda? They didn’t plan it. Just running with the ball after a fumble.
Just one girl’s opinion.
Maybe they should make a movie and call it “loose change”.
The Democrats were incredibly irresponsible. Both with saying the wrong things in public and attempts at social engineer housing through the FMs.
I will concede they climbed all over the TARP program proposal when the opportunity arose because they knew it would convince the public the economy was horrible and the backlash for the economy and the bailout would go against the Republicans.
But this structured conspiracy nonsense makes me feel like I just walked into Kos.
“This didn’t start with campaigns and social welfare agendas. It started with lending, was made almost irreversible by soaring real estate prices.”
But it did! And one was the cause of the other. The Community Reinvestment Act is by its nature a social welfare program. Given teeth by Clinton, it had bankers doing away with any criteria at all in lending in an effort to not to discriminate.
The loans that had to be written to accommodate people with little or no income multiplied as others got in on it. This led to a boom of buyers which drove the price of real estate artificially high.
It’s not inconceivable that this is the result of a loosely organized effort to bring about a socialist experiment. It’s not structured as in people sitting down in a room and planning to take over the world. It’s an infection of an ideology that has been passed down in major universities, particularly noticeable in journalism and education.
There are many people who truly believe that a socialist state would be a paradise where everyone would have everything need and be happy, eradicating all forms of social problems.
The decisions they make are influenced by this belief and they are continually working toward building this utopia.
The “structured” part of the plan could have been as recent as last summer. Anyone willing to look closely at the economic situation could have seen this coming–some saw it coming long ago. And Obama agenda is a pretty obvious manifestation of this “plan”–if it ever existed–it does now, and has been signed into law.
Kay, your second comments have echo’ed my post on the Perfect Storm of Housing and Lending events from Sept 22.
My comment that you picked was more in reference to Nancy’s short term overview that she used to suggest a “contrived” crisis. Which is why I said I believe she gives anyone too much credit to mastermind this massive chain of events that goes back so far in time, spanning many admins, Congresses and Treasury Depts. They just aren’t that organized or visionary.
Certainly I would agree that Carter’s CRA is, by nature, somewhat social welfare. Although were I to argue semantics, I would be more apt to liken it to affirmative action. Social welfare is generally constructed to benefit all, and not originally created specifically to target particular neighborhoods and economic classes.
But you get no argument from me, as you would know if you read my older post, that the CRA with the Rubin/Clinton “bite”, followed by the same duo mandating those CRA compliance regulations to all banks prior to any merger via the Gramm-Leach-Bliley Act, are certainly the first dominos to fall.
In fact, when doing some research today on just why Obama and crew are bent on dangerously attempting to reinflate the housing bubble, I ran across a very good historical overview at FreedomWorks that starts back in 1913 with the creation of the income tax.
As to taking us further into the teeth of the storm… I am not convinced this is a deliberate act of sabatoge as much as it is a deliberate act of stupidity. There are economists that support much of this stimulus, as well as those that oppose, citing inevitable failure. I tend to side with the latter. But not all of the former are necessarily conspiracists as much as they are opportunists.
In the end, those that benefit from a false attempt to keep home prices inflated – Obama’s next quest with HASP – are going to be those whom Obama purports to despise. And I’m not sure Obama sees this … to use his favorite word… “clearly”.
” I don’t recall hearing any of the capitalistl cheerleaders at the Wall St. banks shunning government welfare, insisting on letting the free market work itself out”
There is a difference between capitalism and crony capitalism
Started as a series of blunders committed by a confederacy of dunces. CRA, passed by Carter, dormant during Reagan, pushed by Clinton, reforms blocked by Democrats during Bush. Schumer leaking the IndyMac memo. Chris Cox at SEC letting auditors enforce “mark-to-market” without any safe harbor provision.
The only event that creates suspicion is the massive withdrawl. That’s when the Administration started talking about how close we were to “the wheels coming off.” Yeah? Details, please. Who did it. How’d they do it? How could a bank withdrawl – of any size – threaten the entire US banking system and what are we doing to fix that bug?
If Soros got his buddy Schumer to leak the memo to drive down IndyMac’s stock price so Soros could swoop in and buy it, that’s one thing. Believeable, run-of-the-mill venality.
If Soros also engineered the withdrawl to crash the system and guarantee Obama’s election, how and why? Qui Bono?
The withdrawl is the key. Somebody has to know about this. Who? And why are they being so close-mouthed?
@Joe Doakes:
Stop talking about inconvenient facts, Joe. Don’t you know this was all the fault of President Bush and the GOP, whose utterly disastrous leadership for the past 8 and 6 years, respectively, were the *sole* causes of our economic demise? Blast told me so, so it must be true and absolutely no other causes factored into it. Nope, all Bush and GOP. Period.
Google. . .
Cloward-Piven Strategy & Orchestrated Crisis
&
Shadow Party
In light of Barrack’s “Break-Out” seasons on economic & health-care solutions etc., Google. . .
The Delphi Technique
These “theories” can be researched at
http://www.FreeRepublic.com
and
http://www.AmericanThinker.com
and
http://www.FrontPageMag.com
Just because Red-Diaper-Baby Obama was not there when the CRA began, does not necessarily mean that he would not want to fully exploit the crisis it would eventually foster.
Hurry, hurry, hurry, rush, rush, rush before the masses catch on.
What did both Rahm and Hillary, today, say about exploiting crises?
Different government programs are conceived so that they will grow, metastasize and eventually become the proverbial straw that breaks the camel’s back, breeding a crisis to hype.
Why do we continue to owe $65 trillion for Soc.Sec. and Medicare with no solution in sight?
Why can’t we introduce competition into education?
Why is there an ignorant refusal to control the southern border while Mexico is on the verge of collapse?
Gorelick’s Wall and the Able Danger memory-hole?
Since Wall Street is neck-deep in this bad-paper mess, which btw, could be mitigated by simply changing mark-to-market rule, the present crisis kill’s three needed birds w/ one stone.
1. Destruction of personal capital.
2. It allows congress to almost destroy whats left of free-market capitalism. . .
3. . . . all the while giving the left insipid talking points to non-factually discredit the free-market since much of the financial hyper-activity occurred on Wall Street, although the nub is still faulty Fed policy.
The fact that this nucleus of bad Fed paper, which was undeniably guaranteed by the corrupt Fed’s GSEs, can be so easily dismissed as cause, is that for one, capitalism has been so thoroughly trashed by all things Left and that two, the economically ignorant lemmings have been preconditioned by monopolistic government schools to lack any independent, critical thought.
The very same government school system that employs the Delphi Technique for an Outcome-Based education.
Nah, nothing going on here. . . MoveOn errr, move along.
thaDeetz
@thaDeetz:
Beck discussed recent polling, 24% of those polled think the government is spending it’s own money, unbelievable!
Missy,
That’s the result of 40 years of government schools.
All this conspiracy theory is about as credible as the 9/11 conspiracy theories. At the end of the day certain banks got greedy. It undestandable that people would want to buy their own homes. They got suckered in – thinking the market was going to always go up so they went for these deals where they didn’t have a deposit. The banks took stupid risks for short-term gains. The regulators were asleep. George Soros is a capitialist who wants to make money. All these secret socialist conspiracies are worthy of McCartyism.
This was posted in what appears to be an ultimate conspiracy blog in May of 08. What alarms me are the predictions listed within the body of the thread, particularly the first two. They are providing links, but most of the links go back to previous blog posts made by the same person and I couldn’t find any other credible sources.
There was a secret session in Congress in March of 08 regarding FISA, Dennis Kucinich protested debating in closed session, the video is available through C-SPAN. If, they discussed the collapse of the economy in that session a year ago, that means they all knew it was coming.
Is this a stopped clock is right twice a day thing? Or, could a portion of it really have been leaked by members of Congress and creative conspiracists went crazy with the rest? Bizarre.
More:
http://dprogram.net/2008/05/21/as-america-collapses-us-government-secret-plans-revealed/
@GaffaUK:
“They got suckered in”
As dictated by Community Reinvest Act, quotas had to be met under threat of the Clinton DOJ, with ACORN leading the way. I have firsthand knowledge of ACORN’s tactics. For one, our retiring Office Mgr. was quite aware of their intimidation. In addition, his replacement that we hired was an Asst. Mgr. from the local, regional bank we did business with. To them, ACORN was a four letter word, persona non grata.
“George Soros is a capitialist who wants to make money.”
This would not be the first time Soros shorted a market that resulted in a total market melt-down.
He had done the same to Briton, I think was the country, back in the 90’s.
As per Rep. Kanjorski: $550 Billion Disappeared in “Electronic Run On the Banks” on Thursday 9/11/08 that resulted in the Fed. suspending the transfers and closing those accounts.
http://www.youtube.com/watch?v=_NMu1mFao3w
Prior to the run, McCain was ahead in most polls.
So where is my tin-foil hat?
No, I am not a “Truther” in terms of an ‘inside-job’.
However, the Able-Danger issue was rather unceremoniously put to rest.
And let’s not forget, in the 90’s, Ms. Gorelick oversaw one of those failed GSE’s. She pocketed something just south of $90 million.
I’m just sayin’ either these folks are catastrophically inept or they are following the orchestrated crisis model to a T.
@Nancy Morgan:
In terms of 40 years of Government Schools. . .
search. . .
John Taylor Gatto
&
Charlotte Iserbyt
Our government schools have been doing an excellent job at what they were designed to do.
@theDeetz
As unpleasant as it is to see certain investors make millions during bad times through falling markets – doesn’t mean they caused it. I’m sure in most cases – they opportunistically profited from it.
@GaffaUK:
Soros, by his own words, noted nazi collaborator, is a marxist in capitalist clothing.
He is certainly not disinclined to sell out his own mother.
Your simple dismissals strike me as naive or either Fabian.