what if? - REALLY, "WHAT IF?"

NYTimes | WE typically blame Washington for not doing more to help the economy grow. But what if we have it backward: What if it is the weak economy that is driving the failures in Washington?

That is what Benjamin Friedman, a Harvard economist who has studied the way slow growth frays societies and strains politics, thinks. “We could be stuck in a trap,” he told me last week. “We could be stuck in a perverse equilibrium in which our absence of growth is delivering political paralysis, and the political paralysis preserves the absence of growth.”

Consider how different our politics might be today if the economy had not collapsed in 2008 and not been mired in sluggish growth ever since. A ballpark estimate suggests that if the economy were to grow one percentage point more than expected in each year over the next 10, the deficit would shrink by more than $3 trillion. That would be more than enough to set the ratio of our debt to our annual economic output on a comforting downward trajectory. Moreover, it would happen without making cuts to a single program, like Medicare or food stamps, or without raising a single dollar of additional tax revenue. Even a much smaller boost to growth — say one-tenth of a percentage point per year, or even half that — would make Congress and the White House’s burden hundreds of billions of dollars lighter.

And consider how much better deficit reduction might feel to families in a growing economy, compared with a limping one. The recovery in the past year has delivered only sluggish wage growth, with much erased by inflation as more of a worker’s paycheck goes to paying for more expensive groceries, tuition bills and gas. The end of a payroll tax holiday was only one small portion of the fiscal deal the White House and Republican leaders brokered at the turn of the year. Yet it was enough to wipe out a full year’s worth of wage gains entirely.

Indeed, even before the economic crisis, middle-class incomes had stagnated, with the economy’s gains primarily going to a thin sliver of wealthy families. Then, of course, the crisis hit, forcing millions into unemployment and millions more into poverty. Given that reality, Democrats have fought for making the George W. Bush-era tax cuts permanent for 98 percent of households. Republicans have argued that nobody should have to shoulder the burden of tax increases at all.

“Everything is easier to do if the economy is growing,” says William G. Gale of the Brookings Institution. “If you want to cut spending, it is easier to do in an environment where people think they are going to have robust income growth and aren’t as dependent on government. In terms of taxes, growth gets you not just more income to tax, but taxpayers moving into higher rates.”

extreme weather grows in frequency and intensity around the world

snow blankets Jerusalem

NYTimes | Britons may remember 2012 as the year the weather spun off its rails in a chaotic concoction of drought, deluge and flooding, but the unpredictability of it all turns out to have been all too predictable: Around the world, extreme has become the new commonplace.

Especially lately. China is enduring its coldest winter in nearly 30 years. Brazil is in the grip of a dreadful heat spell. Eastern Russia is so freezing — minus 50 degrees Fahrenheit, and counting — that the traffic lights recently stopped working in the city of Yakutsk. 

Bush fires are raging across Australia, fueled by a record-shattering heat wave. Pakistan was inundated by unexpected flooding in September. A vicious storm bringing rain, snow and floods just struck the Middle East. And in the United States, scientists confirmed this week what people could have figured out simply by going outside: last year was the hottest since records began. 

“Each year we have extreme weather, but it’s unusual to have so many extreme events around the world at once,” said Omar Baddour, chief of the data management applications division at the World Meteorological Organization, in Geneva. “The heat wave in Australia; the flooding in the U.K., and most recently the flooding and extensive snowstorm in the Middle East — it’s already a big year in terms of extreme weather calamity.” 

Such events are increasing in intensity as well as frequency, Mr. Baddour said, a sign that climate change is not just about rising temperatures, but also about intense, unpleasant, anomalous weather of all kinds.

sanity is the ability to live within the laws of nature

denverpost | In November, I watched the two parts of Ken Burns’ new documentary film, “The Dust Bowl.” The film presents a lesson for us today.

When farmers first arrived in the large area surrounding the Oklahoma Panhandle, the ground was covered with hardy buffalo grass that firmly protected the soil from erosion by the wind. Then each farmer acted freely and independently to do what was economically best for him. He plowed up the buffalo grass and planted wheat. The more land he plowed and planted, the greater was his income. Almost a decade of very low rainfall dried up the land, but the farmers hung on, plowing up even more land and hoping that there would be rain next year. Most important, there were no government agencies interfering with the freedom and independence of the farmers by trying to promote conservation or to limit the acreage of buffalo grass that was being plowed. The collective action of all of the individual farmers, each acting in his own best interest, resulted in the buffalo grass being stripped from enormous areas of the Great Plains. When the wind started blowing over the exposed soil, the dust began its assault on all living things in the area and beyond. The suffering was so severe as to be difficult to imagine.

A few doomsday voices pointed out the destructive consequences of the elimination of the buffalo grass over such a large area but these voices were ignored by the farmers who resented any suggestion that their agricultural practices were responsible for the disaster. The relief and public works programs initiated by President Franklin Roosevelt provided some immediate help to the suffering people, allowing them to hang on a bit longer.

The lesson I got from this is that when you have large numbers of individuals practicing free enterprise in an unregulated society, with each individual (or today it could also be each company) acting in his or her (or its) best interest, the result can be disastrous to all. The great recession that started around 2008 is only the most recent example of this. These are examples of the “Tragedy of the Commons” in real life just as Garrett Hardin portrayed it.

The long-term solution of the Dust Bowl problem came only after the Federal Government purchased large areas of farmed grassland and replanted these areas in grass to create national grasslands. What the free and independent farmers had destroyed, the “socialistic” Federal Government restored.

ocean currents and sea ice

mit | Each winter, wide swaths of the Arctic Ocean freeze to form sheets of sea ice that spread over millions of square miles. This ice acts as a massive sun visor for the Earth, reflecting solar radiation and shielding the planet from excessive warming.

The Arctic ice cover reaches its peak each year in mid-March, before shrinking with warmer spring temperatures. But over the last three decades, this winter ice cap has shrunk: Its annual maximum reached record lows, according to satellite observations, in 2007 and again in 2011.

Understanding the processes that drive sea-ice formation and advancement can help scientists predict the future extent of Arctic ice coverage — an essential factor in detecting climate fluctuations and change. But existing models vary in their predictions for how sea ice will evolve.

Now researchers at MIT have developed a new method for optimally combining models and observations to accurately simulate the seasonal extent of Arctic sea ice and the ocean circulation beneath. The team applied its synthesis method to produce a simulation of the Labrador Sea, off the southern coast of Greenland, that matched actual satellite and ship-based observations in the area.

on the deep-state politics of legalization...,

wonder why the top always bottoms out as lizards/dragons/reptillians?

Here are the words of the creator of this piece, Don Harkins:

Over the last several years I have evolved and discarded several theories in an attempt to explain why it is that most people cannot see truth -- even when it smacks them in the face. Those of us who can see “the conspiracy” have participated in countless conversations amongst ourselves that address the frustration of most peoples' inability to comprehend the extremely well-documented arguments which we use to describe the process of our collective enslavement and exploitation. The most common explanation to be arrived at is that most people just “don't want to see” what is really going on.

Extremely evil men and women who make up the world's power-elite have cleverly cultivated a virtual pasture so grass green that few people seldom, if ever, bother to look up from where they are grazing long enough to notice the brightly colored tags stapled to their ears.

The same people who cannot see their enslavement for the pasture grass have a tendency to view as insane “conspiracy theorists” those of us who can see the past the farm and into the parlor of his feudal lordship's castle.

Finally, I understand why.

It's not that those who don't see that their freedom is vanishing under the leadership of the power-elite “don't want to see it” -- they simply can't see what is happening to them because of the unpierced veils that block their view.

All human endeavors are a filtration process. Sports is one of the best examples. We play specific sports until we get kicked off the playground. The pro athletes we pay big bucks to watch just never got kicked off the playground. Where millions of kids play little league each spring, they are filtered out until there are about 50 guys who go to the World Series in October.

Behind the first veil: There are over six billion people on the planet. Most of them live and die without having seriously contemplated anything other than what it takes to keep their lives together. Ninety percent of all humanity will live and die without having pierced the first veil.

The first veil: Ten percent of us will pierce the first veil and find the world of politics. We will vote, be active and have an opinion. Our opinions are shaped by the physical world around us; we have a tendency to accept that government officials, network media personalities and other “experts” are voices of authority. Ninety percent of the people in this group will live and die without having pierced the second veil.

The second veil: Ten percent of us will pierce the second veil to explore the world of history, the relationship between man and government and the meaning of self-government through constitutional and common law. Ninety percent of the people in this group will live and die without having pierced the third veil.

The third veil: Ten percent of us will pierce the third veil to find that the resources of the world, including people, are controlled by extremely wealthy and powerful families whose incorporated old world assets have, with modern extortion strategies, become the foundation upon which the world's economy is currently indebted. Ninety percent of the people in this group will live and die without having pierced the fourth veil.

The fourth veil: Ten percent of us will pierce the fourth veil to discover the Illuminati, Freemasonry and the other secret societies. These societies use symbols and perform ceremonies that perpetuate the generational transfers of arcane knowledge that is used to keep the ordinary people in political, economic and spiritual bondage to the oldest bloodlines on earth. Ninety percent of the people in this group will live and die without having pierced the fifth veil.

The fifth veil: Ten percent of us will pierce the fifth veil to learn that the secret societies are so far advanced technologically that time travel and interstellar communications have no boundaries and controlling the actions of people is what their members do as offhandedly as we tell our children when they must go to bed. Ninety percent of the people in this group will live and die without having pierced the sixth veil.

The sixth veil: Ten percent of us will pierce the sixth veil where the dragons and lizards and aliens we thought were the fictional monsters of childhood literature are real and are the controlling forces behind the secret societies. Ninety percent of the people in this group will live and die without piercing the seventh veil.

The seventh veil: I do not know what is behind the seventh veil. I think it is where your soul is evolved to the point you can exist on Earth and be the man Gandhi was, or the woman Peace Pilgrim was - people so enlightened, they brighten the world around them no matter what.

The eighth veil? Piercing the eighth veil probably reveals God and the pure energy that is the life force in all living things - which are, I think, one and the same.

If my math is accurate there are only about 60,000 people on the planet who have pierced the sixth veil. The irony here is too incredible: Those who are stuck behind veils one through five have little choice but to view the people who have pierced the veils beyond them as insane. With each veil pierced, exponentially shrinking numbers of increasingly enlightened people are deemed insane by exponentially increasing masses of decreasingly enlightened people.

Adding to the irony, the harder a “sixth or better veiler” tries to explain what he is able to see to those who can't, the more insane he appears to them.

Our enemy, the State

Behind the first two veils we find the great majority of people on the planet. They are tools of the state: Second veilers are the gullible voters whose ignorance justify the actions of politicians who send first veilers off to die in foreign lands as cannon fodder -- their combined stations in life are to believe that the self-serving machinations of the power-elite are matters of national security worth dying for.

Third, fourth, fifth and sixth veilers are of increasing liability to the state because of their decreasing ability to be used as tools to consolidate power and wealth of the many into the hands of the power-elite. It is common for these people to sacrifice more of their relationships with friends and family, their professional careers and personal freedom with each veil they pierce.

Albert Jay Nock (1870-1945), author of “Our Enemy, the State” (1935), explained what happens to those who find the seventh and eighth veils: “What was the best that the state could find to do with an actual Socrates and an actual Jesus when it had them? Merely to poison one and crucify the other, for no reason but that they were too intolerably embarrassing to be allowed to live any longer.”

Conclusions

And so now we know that it's not that our countrymen are so committed to their lives that, “they don't want to see,” the mechanisms of their enslavement and exploitation. They simply “can't see” it as surely as I cannot see what's on the other side of a closed curtain.

The purpose of this essay is threefold: To help the handful of people in the latter veils to understand why the masses have little choice but to interpret their clarity as insanity; 2. To help people behind the first two veils understand that living, breathing and thinking are just the beginning and; 3. Show people that the greatest adventure of our life is behind the next veil because that is just one less veil between ourselves and God.

Watch the Conclusion Here:

a brief history of dollar debasement

seekingalpha | Technically the U.S. left the gold standard in 1971, but in reality we abandoned it in 1913 with the creation of the Fed. The two publicly visible gold-standard slippages of the past century (FDR's repricing and Nixon's cancellation) were merely necessary adjustments following decades of gradually increasing gold-price inconsistency caused by continuous inflation. Given this, it seems hard to imagine that the Fed was created for any purpose other to create this inflation, i.e. to effectively raise our taxes under the table.

This has enormous implications for today's long-term investor. Our most constant and predictable financial reality is the continued inflationary policy of the Fed. Given this, and assuming the U.S. is unlikely to pull another rabbit out of the global hat as Nixon and Ford did with the petrodollar in the early 70s, the dollar will almost certainly continue losing purchasing power indefinitely, in terms of both commodities and other currencies. And when the oil-producing nations finally agree to accept payment in currencies other than the dollar, expect a precipitous drop. Invest accordingly.

the importance of hesychasm in the history of orthodoxy

ohmksea | Hesychasm* constitutes the quintessence of Orthodox tradition, having related itself to everything that the term “Orthodoxy” embodies and expresses. Orthodoxy outside the Hesychastic tradition is unthinkable and nonexistent. Besides, Hesychasm itself is the “philosopher’s stone” by which one can recognize the genuine Christian image. In the Orthodox tradition, the “divine charismas” are acquired through fasting, vigils and prayer. And it should be clarified, that Hesychasm is understood first of all as the course towards theosis and the experience of theosis, and only secondly, as a (theological) recording of this method of experience. In Christianity (the authentic Christian conscience), we know that textual recordings are basically pursuant to practice and that they comprise descriptions of that practice; they do not however comprise a substitute. Saint Gregory Palamas’ “successors” are not located in academic theology; they can only be found in the continuance of his ascetic lifestyle.

«Hesychasm, as an ascetic therapeutic treatment, was at the core of Orthodoxy, even from the time of the Apostles, and it prevailed throughout the entire Roman kingdom, in the East and in the West» (Fr. John Romanides). This was the responsible verification of one of the most reliable researchers of Hesychasm and of Saint Gregory Palamas, i.e., father John Romanides. In the framework of a tradition that was spiritually uplifted by Hesychasm, it is easy to understand and to interpret the national, social and (even) political history of Romanity (Fr. John Romanides). It is precisely within this framework that one can also properly evaluate the contribution of Saint Gregory Palamas. “Being a continuation of the ancient Fathers”, of the united and indivisible patristic tradition, he “expressed –according to the venerable Geron, father Theocletos Dionysiatis- the eternal spirit of the Orthodox Church, by reviving its experiences, its practices, its teachings and its promises.» He contributed decisively in this way, towards the preservation of the Church’s overall identity.

the decline of christian spirituality in the roman catholic religious organization

digilander | Tracking the history of the decline of authentic spirituality in the Roman Catholic Religious Organization [RCRO] has many key events or points that cannot be all listed here in a single post. The best thing is to enter this topic gradually. There is method behind how topics are introduced.

Even the RCRO was at first highly critical of what was called "devotio moderna" during the late medieval and early modern period. But since its own authentically spiritual tradition was effectively dying (murdered by the RCRO itself), there was a void that could not withstand the flood of modern devotionalism. Modern devotionalism is the kind of emotionalism that the older Spiritual Directors warned against. It was called enthusiasmos, mania, and hysteria. It is a selfish, self-preoccupied, and auto-erotic narcissistic concern for being right and correct, often in the eyes of others and oneself.

The very basic difference between spirituality and the pseudo-spirituality of this emotionalism (that has deep ramifications to brought out later when we discuss the differences between nous, dianoia, ethical and intellectual virtues, and so on) is to be find in some of the older catechism "talks" some exceptional Fathers had with adult converts who were recently Baptized/Chrismated (originally, the instruction was the night after chrismation when the newly chrismated stayed in the church with the Bishop or Father). In the talks that have been recorded, there is a consistency from the 5th century to the 19th century that reveals the catholicity of these instructions. So, I summarize them.

The niptic Fathers teach that the type of emotionalism that characterizes the western forms of modern devotion are to be avoided. It is true, for example, that one is to try to pray with all one's thought, feeling, and attention focussed on the prayer even at the stage of verbal prayer. But such as we contra-naturally are, we do not have the power to attend fully and faithfully (its a lost natural capacity that needs to be regained as a skilled habit), nor the right attitude or feeling and any attempt on our part to emotionally try to feel the right feeling is imagination. We must work solely with focussing our thought (by stilling) and attention, and then, the prayer will teach us what to feel, how to worship, and elicit the appropriate response from us if and only if we are participating seriously in the ethical askesis and liturgical life of the Church as prior and contextual conditioning, so to speak. Without these other two, our soul's are not the previously furrowed or prepared "raw material" that can be appropriately worked on towards transformation.

This is why the Church gives us formal prayers to "recite" and the Psalms. We do not know what to feel or how to pray and need to be taught. In modern times, even the praiseworthy attempt to be deeply attentive is misguided. The attempt to attend takes the form as a concern with what to think, what to feel, and what to imagine during prayers and Divine Services. This is precisely to be as consumed, as distracted, and as dissipated in one's own self-preoccupied fantasies of being a good worshipper as the fellow thinking about his meal, and perhaps, football game and nap after the Liturgy.

Such a state of mind and its concerns is the exact opposite of the sober wakefulness needed. Lets call it "self-meddling preoccupation with one's attitude." One is just to attend to the prayers and Divine Services with a certain fullness of presence. In the beginning, one may feel cold. One has no feeling for these things. One is impatient. One's feet or back hurts. One's kids are an irritating embarrassment and you hope others didn't notice. That puts you in a bad mood of which you feel ashamed, and so, you do not try to make the effort attend because you feel unworthy, and thus, don't FEEL like it. Again, one falls into making it an issue of emotion. One is always catching oneself distracted, irritated, and inattentive. One notices how this insight may also lead one to forget again to try to just attend. To notice this is a first moment of discrimination (diakrisis).

Fantasy begins when I try to search for a way to give myself or make myself have the appropriate attitudes and feelings. Make no attempt to feel what one thinks one should feel. That is the role of the Holy Spirit through the Services, Psalms, Prayers, and Hymnography of the Church. Instead, noting one's distraction, irritability, pain, (pseudo-spiritual) passional concern over what to feel, and inattention, try again to just attend. Listen. This is the first baby step in dispassion (apatheia).

By contrast, the emotionalism of modern devotionalism is passional quicksand. Intensified, it can become refined into many fine shades of erotomania (eroticism and mania - manic).

orthodox spirituality compared and contrasted with other religious traditions

digilander | Development of the Soul

Although to describe in more detail how would take us too far afield, all three traditions are pretty much in agreement about the nature of the passions of the soul in its fallen, contra-natural, or samsaric (Yoga and Buddhist term roughly equivalent to both "external man" and "world" in St. John the Apostle's sense) state. All three would agree there are two kinds of virtue: practical or ethical and intellectual or contemplative. There is also some agreement about the nature of the ethical and intellectual virtues of the soul (mind). Each tradition would recognize as a form of ethical virtue what the others would regard as a form of virtue.

As indicated, there is agreement about the nature of the intellectual faculties of the soul (mind) and about the nature of the intellectual virtues of these two faculties in their higher forms of development, which we will not get into detail now.

Spiritual Practice

Corresponding to the consensus about the various powers of the soul and their developmental possibilities, it is no surprise that there is a superficial agreement about the nature of their training within a spiritual practice. According to both the Buddhist and Hindu tradition, the Eightfold Path and the Eightfold Yoga of Patanjali are also described as the threefold spiritual practice. In both these traditions, this threefold spiritual practice is also seen as a twofold training mainly of the will (and its affections) and of the mind, or, a training in the ethical virtues and in the intellectual virtues.

In Buddhism and Yoga, the threefold practice is sila, prajna, and samadhi. Sila is the training of the will and affections of the soul by the practice and cultivation of the moral virtues. Prajna is the dianoetic training of the reasoning, conceptualizing, logical part of the mind into its peak virtue. As indicated, samadhi is the noetic training of the power of consciousness or pure awareness to be increasingly intense degrees of self-concentrated states of non-distraction and self-awareness.

The Hesychast tradition can be schematized along very similar lines. There is a twofold training of the soul's capacities for ethical virtues or praxis, and of the soul's powers for intellectual virtues or theoria. But praxis and theoria can also be schematized as a threefold spiritual practice. The threefold schematization of the Hesychast way is comprised of praxis, diakrisis/sophia, and enstasis/hesychia. Again, praxis is the training of the will, affections of the soul, and their cultivation into the ethical virtues. Diakrisis/sophia is the training of the dianoia into virtuous form. Enstasis/hesychia is the training of the nous into a self-lucent and self-concentrated state of wakeful non-distraction.

There is also agreement between all three traditions about how these three intially separate lines of training mutually interact with each other and reinforce each other's development. So, while beginning as apparently three separate lines of effortful developmental training, in more advanced phases their mutual augmentation becomes increasingly effortless and spontaneous unified way of being. But it is at this point that the really crucial differences are made clear, and thereby, reveal the fundamental differences that were there, under the surface, all along.

Differences

It is to these differences between Hesychasm, Buddhism, and Hindu Yoga that I now turn.

To best understand why there are these vitally important differences and what they mean, let us follow the Fathers of the Church, according to whom, there are the following possible three states of human existence, of the soul, and all its faculties. These three states are:

(1) the sub-natural or contra-natural state, also known as the "contrary to nature" state, and fallen subsistence,
(2) the natural state, also known as the "according to nature" state, and life as created in the Image, and -
(3) the supra-natural state, also known as the "beyond nature" or "according to grace" state of ascending participation in the Uncreated Energies, and deified eternal life after the Likeness.

There are two things to point out about these states. First, originally, we were created in the natural state in the divine Image but were meant to grow in synergy with the Uncreated Energies into the deified Likeness of God.

Second, we are in the contra-natural state. So, of course, it is the better known state. The natural and supra-natural states are less well known, even to the Fathers of the Church. Accordingly, there is more agreement between all three traditions, not surprisingly, about the nature and problems of the contra-natural state than there is about the natural state or about our ultimate supra-natural destiny. As a result, while there is much agreement about the nature and problems of the beginning stages of the spiritual life from the contra-natural state to the natural state, this consensus rapidly disappears. Despite the alleged superficial and deceptive similarities of the peak of the spiritual life that has been created by those who engage in highly selective quoting and juxtapositioning of bits and pieces of texts from various mystical traditions in an effort to support the view that all religions are one at the top, what we actually find is that both the nature and purpose of the more advanced phases of the spiritual life are topics where there is an increasing divergence of opinion. But as we can see with the Fathers, particularly in how the Cappadocians treat and weigh what is true and of value in Greek philosophy, and following their lead, especially with the Syrian Fathers dealing with what was true and what was error in Buddhist practice (as represented in Bactria), even the agreement about the nature of the contra-natural state is more limited than is apparent at first sight. This is because you can only fully agree about exactly how the contra-natural state is contra-natural only if there is shared knowledge of what the original design plan of purpose of human life intended us to be.

Differing conceptions of the ultimate nature and purpose of human life provide differing cures for the contra-natural disease we all suffer from. But as the meaning of the Greek word "pharmakon" reveals in ancient Greek medicine, depending on the exact nature of the disease as diagnosed in terms of some exact conception of health, the very same substance or treatment can either serve as a medicine (pharmakon) or poison (pharmakon). To be a medicine, a substance or treatment has to be given in the right amount, at the right time, and under the right conditions for a correctly diagnosed disease in order to have the right effect. The same holds true for spiritual treatments, techniques, and cures. We need to understand the vastly different purposes, serving different diagnoses of what is wrong, based upon different views of what human life is supposed to be, that similar, or even, exactly the same spiritual techniques are made to serve. It is not similar techniques that we need to look at but their purpose, their actual function within a larger operational context, and thus, their intended effect.

we must drive the money changers from the temples of life...,

Society is a hierarchical structure of vertical transactions enforced by the threat of coercive violence, which prescribes, proscribes and controls voluntary horizontal transactions as well. 

Community is structured on horizontal voluntary interactions - only some of which are transactions, none of which are backed by the threat of coercive violence. 

Building community dismantles society.

to keep the debt servitude paradigm going...,

zerohedge | Doing the “right thing” is usually political suicide for politicians. Cutting expenditure to pay its bills to pay down the debt will make the economy implode. Instead, the government in power continues its daily activities and promotes new social programs to promote reelection. Almost half of the spending done by the US government goes to entitlements (Medicare, Medicaid, social security). If any cuts are carried out in this sector, you can expect riots on the street (approximately 28% of the US population are baby boomers and 80% of investments and laws are carried out by this powerful demographic.) Cuts to entitlements are highly unlikely!

The continuous debate on raising the debt ceiling is all about a government mismanaging its money and not being able to control it–much like a child with no discipline. Since debt is being mismanaged, it has caused many distortions in the markets, and yet the debt is allowed to grow because of the US Congress. The debt ceiling has been increased 10 times since 2001. If the debt ceiling were actually a ceiling, the market and debt distortions would have imploded the economy–an implosion necessary for the economy to restore its equilibrium and liquidate all inefficiencies. 

“Too big too fail” is absolute nonsense.

Paying back investors, costly wars, entitlements and bailing out the “financial terrorists” (who caused the crisis) all add to the national debt and to the dysfunctional economy that continues to operate until its debt will cease to grow. The problem with this system is that it created significantly more credit (someone is the creditor to all the debt) than “cash” money (money in your wallet). Every time debt expands, the credit supply also expands. (Read Fractional Reserve Lending on how money is created.)

According to the FED, the Total Credit Market Debt Owed (TCMDO) is approximately 53$ trillion and 2.4$ trillion in the true money supply (M1). In other words, cash money is approximately 4.5% of credit (TCMDO/M1).

The result to our economy is that “boom” periods are hardly driven by cash money, as cash money is insignificant in relation to credit. Credit is what drives the markets, and it is this same credit that “busts” the markets as well, in times of credit contraction. In order for debt to expand, someone must be lending the US this money. At the moment, the lenders are China, Japan, and the OPEC countries.

But why do they continue to buy this debt?

Because they have too.

The US Dollar is the reserve currency of the world. You need it to buy oil, a vital component of any economy. Since other countries like China cannot print US dollars at their leisure, they have to get it from somewhere. They get it from trade with the US. The US buys products in Asia and the rest of the world with US dollars, and in turn these same dollar surpluses are used to buy oil and US bonds, creating a much needed artificial demand for US dollars.

too big to fail and too big to jail

finalcall | According to a Dec. 11, USA Today story, the British banking giant Hong Kong and Shanghai Banking Corporation (HSBC) agreed to pay a record $1.92 billion settlement after a broad investigation by U.S. federal and state authorities found the bank violated federal laws by laundering money from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma.

Between 2006 and 2010, Mexican drug traffickers laundered at least $881 million in illegal proceeds through accounts in HSBC’s U.S. arm, according to the story. The bank reportedly supplied a billion dollars to a firm whose founder had ties to Al-Qaeda and shipped billions in cash from Mexico to the United States, despite warnings the money was coming from drug cartels. Earlier this year, a Senate investigation concluded that HSBC provided a "gateway for terrorists to gain access to U.S. dollars and the U.S. financial system."

However, unlike the fairytales shown to us on TV and in the movies, no one involved with the bank has been indicted. When asked by Amy Goodman on NPR’s Democracy Now! "What does the Justice Department, what does the Obama administration, gain by not actually holding HSBC accountable?" Matt Taibbi, author of the book Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History, answered: "I really believe—and I think a lot of people believe this—that the Obama administration sincerely accepts the rationale that to aggressively prosecute crimes committed by this small group of too-big-to-fail banks would undermine confidence in the global financial system and that they therefore have to give them a pass on all sorts of things …"

So because HSBC is "too big to fail," all of its managers are "too big to jail." On the other hand, according to Mr. Taibbi, "There are 50,000 marijuana possession cases in New York City alone every year. And here we have a bank that laundered $800 million of drug money, and they can’t find a way to put anybody in jail for that."

When a Black man is caught with 28 grams of cocaine, he goes straight to jail for five years and most of his citizenship rights are taken from him, forever. Too bad "Honest Abe" overlooked the "fine print" in the Thirteenth Amendment, which gave America the right to impose involuntary servitude on any Black "convicted of a crime."

Without the dirty international bankers to launder the drug money, drug trafficking on a large scale would cease. It is the HSBCs of the world that finance the drug trade and the drugs that infest the Black communities and ensnare our young Black males for the new prison plantation system. So now the Honorable Minister Louis Farrakhan has to bring the F.O.I. into drug-torn neighborhoods to clean up the mess hatched by these international hoodlum bankers.

However, I must at least give Presidents Abraham Lincoln and John F. Kennedy credit for going up against the International Bankers—but for doing so, they were assassinated. And maybe that is why President Obama is reluctant to take on Wall Street, the International Bankers and the Federal Reserve System.

there is no such thing as IQ or a general measure of intelligence...,

thestar | The idea that intelligence can be measured by a single number — your IQ — is wrong, according to a recent study led by researchers at the University of Western Ontario.

The study, published in the journal Neuron on Wednesday, involved 100,000 participants around the world taking 12 cognitive tests, with a smaller sample of the group undergoing simultaneous brain-scan testing.

“When we looked at the data, the bottom line is the whole concept of IQ — or of you having a higher IQ than me — is a myth,” said Dr. Adrian Owen, the study’s senior investigator and the Canada Excellence Research Chair in Cognitive Neuroscience and Imaging at the university’s Brain and Mind Institute. “There is no such thing as a single measure of IQ or a measure of general intelligence.”

Rather, the study determined three factors — reasoning, short-term memory and verbal ability — that combined to create human intelligence or “cognitive profile.”

IQ testing is used by many educators to measure intelligence, including in public schools in Ontario.

The researchers advertised their tests through New Scientist magazine and on discovery.com. Word quickly spread around the world, far surpassing the expectations of researchers, who expected only a few thousand participants. It became the largest online study on intelligence, allowing them to gather data across demographic, age and gender lines.

The scientists also used brain-scanning (fMRIs) on some of the subjects. “If there is something in the brain that is IQ, we should be able to find it by scanning. But it turns out there is no one area in the brain that accounts for people’s so-called IQ. In fact, there are three completely different networks that respond — verbal abilities, reasoning abilities and short-term memory abilities — that are in quite different parts of the brain,” Owen said.

Among the study’s other findings:

•  While aging has a detrimental effect on reasoning and short-term memory, it leaves verbal abilities “completely unimpaired.”
•  Smoking has a negative impact on verbal abilities and short-term memory but does not affect reasoning skills.
• People who play video games performed “significantly better” in terms of both reasoning and short-term memory.
• Products that are advertised to improve brain function aren’t effective. “People who ‘brain-train’ are no better at any of these three aspects of intelligence than people who don’t,” Owen said.

 People can still take the tests at cambridgebrainsciences.com/theIQchallenge. Owen said he hopes that 1 million people across the globe will eventually participate. Fist tap Dale.

a shining example of oft-noted (never cited) PRR and where it leads...,

lesacreduprintemps19 | Rushton’s (1985, 2000) r-K life history theory that Mongoloids are the most K evolved, Caucasoids somewhat less K evolved, and Negroids the least K evolved is examined and extended in an analysis of data for erect penis length and circumference in three new data sets. These new data extend Rushton’s theory by presenting disaggregated data for penis size for European and North African/South Asian Caucasoids; for East Asian and Southeast Asian Mongoloids; for Inuit and Amerindians and Mestizos, and for thirteen mixed race samples. The results generally confirm and extend Rushton’s r-K life history theory.

speaking of eugenic conspiranoid beliefs: the "peers" in that formerly oft-noted "peer reviewed" research...,

Bigthink |  On 02 October, J. Philippe Rushton passed away at an infuriatingly young age of 68.

I first learned of Phil’s work in 1999 when, as a then member of the Social Psychology Section of the American Sociological Association, I received a complimentary copy of the abridged edition of Race, Evolution and Behavior, which Phil had sent to all 600+ members of the Section at his personal expense.  I read it right away, then I purchased and read the unabridged version.

When I met Phil in person for the first time the following year, I could not believe that a man so intensely hated in public (nearly always by idiots who did not know him personally and who did not know anything about science) could be so gentle, genial, and generous in person.  His very kind and mild manners always impressed me, especially in stark contrast to how people thought and assumed he was.

Here’s one of my most favorite pictures in the world, which I call “The four most hated men in science, and Jim Flynn.”  The four most hated men are, from left to right, J. Philippe Rushton, Helmuth Nyborg, Richard Lynn, and yours truly, with James R. Flynn at the center.  The picture was taken at the 2007 conference of the International Society for Intelligence Research, by a young intelligence researcher Jonathan Wai.  I proudly display this picture in my office at LSE.  My latest book The Intelligence Paradox:  Why the Intelligent Choice Isn’t Always the Smart One is partly dedicated to Phil, as well as to the other two most hated men in the photo and other courageous pioneers in the field of intelligence research.  I can’t believe there can’t be any more pictures like this with Phil.

facts that make eugenic conspiranoid beliefs seem tame by comparison...,

Wired | Author’s note: Most people don’t realize that we knew in the 1920s that leaded gasoline was extremely dangerous. And in light of a Mother Jones story this week that looks at the connection between leaded gasoline and crime rates in the United States, I thought it might be worth reviewing that history. The following is an updated version of an earlier post based on information from my book about early 10th century toxicology, The Poisoner’s Handbook.

In the fall of 1924, five bodies from New Jersey were delivered to the New York City Medical Examiner’s Office. You might not expect those out-of-state corpses to cause the chief medical examiner to worry about the dirt blowing in Manhattan streets. But they did.

To understand why you need to know the story of those five dead men, or at least the story of their exposure to a then mysterious industrial poison.

The five men worked at the Standard Oil Refinery in Bayway, New Jersey. All of them spent their days in what plant employees nicknamed “the loony gas building”, a tidy brick structure where workers seemed to sicken as they handled a new gasoline additive. The additive’s technical name was tetraethyl lead or, in industrial shorthand, TEL. It was developed by researchers at General Motors as an anti-knock formula, with the assurance that it was entirely safe to handle.

But, as I wrote in a previous post, men working at the plant quickly gave it the “loony gas” tag because anyone who spent much time handling the additive showed stunning signs of mental deterioration, from memory loss to a stumbling loss of coordination to  sudden twitchy bursts of rage. And then in October of 1924, workers in the TEL building began collapsing, going into convulsions, babbling deliriously. By the end of September, 32 of the 49 TEL workers were in the hospital; five of them were dead.

The problem, at that point, was that no one knew exactly why. Oh, they knew – or should have known – that tetraethyl lead was dangerous. As Charles Norris, chief medical examiner for New York City pointed out, the compound had been banned in Europe for years due to its toxic nature. But while U.S. corporations hurried TEL into production in the 1920s, they did not hurry to understand its medical or environmental effects.

In 1922,  the U.S. Public Health Service had asked Thomas Midgley, Jr. – the developer of the leaded gasoline process – for copies of all his research into the health consequences of tetraethyl lead (TEL).

Midgley, a scientist at General Motors, replied that no such research existed. And two years later, even with bodies starting to pile up,  he had still not looked into the question.  Although GM and Standard Oil had formed a joint company to manufacture leaded gasoline – the Ethyl Gasoline Corporation - its research had focused solely on improving the TEL formulas. The companies disliked and frankly avoided the lead issue. They’d deliberately left the word out of their new company name to avoid its negative image.

In response to the worker health crisis at the Bayway plant, Standard Oil suggested that the problem might simply be overwork. Unimpressed, the state of New Jersey ordered a halt to TEL production. And because the compound was so poorly understood, state health officials asked the New York City Medical Examiner’s Office to find out what had happened. Fist tap Dale.

bankster monopoly takeover hijinks

counterpunch | The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

The emerging financial oligarchy seeks to shift taxes off banks and their major customers (real estate, natural resources and monopolies) onto labor. Given the need to win voter acquiescence, this aim is best achieved by rolling back everyone’s taxes. The easiest way to do this is to shrink government spending, headed by Social Security, Medicare and Medicaid. Yet these are the programs that enjoy the strongest voter support. This fact has inspired what may be called the Big Lie of our epoch: the pretense that governments can only create money to pay the financial sector, and that the beneficiaries of social programs should be entirely responsible for paying for Social Security, Medicare and Medicaid, not the wealthy. This Big Lie is used to reverse the concept of progressive taxation, turning the tax system into a ploy of the financial sector to levy tribute on the economy at large.

Financial lobbyists quickly discovered that the easiest ploy to shift the cost of social programs onto labor is to conceal new taxes as user fees, using the proceeds to cut taxes for the elite 1%. This fiscal sleight-of-hand was the aim of the 1983 Greenspan Commission. It confused people into thinking that government budgets are like family budgets, concealing the fact that governments can finance their spending by creating their own money. They do not have to borrow, or even to tax (at least, not tax mainly the 99%).

The Greenspan tax shift played on the fact that most people see the need to save for their own retirement. The carefully crafted and well-subsidized deception at work is that Social Security requires a similar pre-funding – by raising wage withholding. The trick is to convince wage earners it is fair to tax them more to pay for government social spending, yet not also to ask the banking sector to pay similar a user fee to pre-save for the next time it itself will need bailouts to cover its losses. Also asymmetrical is the fact that nobody suggests that the government set up a fund to pay for future wars, so that future adventures such as Iraq or Afghanistan will not “run a deficit” to burden the budget. So the first deception is to treat only Social Security and medical care as user fees. The second is to aggravate matters by insisting that such fees be paid long in advance, by pre-saving.

There is no inherent need to single out any particular area of public spending as causing a budget deficit if it is not pre-funded. It is a travesty of progressive tax policy to only oblige workers whose wages are less than (at present) $105,000 to pay this FICA wage withholding, exempting higher earnings, capital gains, rental income and profits. The raison d’être for taxing the 99% for Social Security and Medicare is simply to avoid taxing wealth, by falling on low wage income at a much higher rate than that of the wealthy. This is not how the original U.S. income tax was created at its inception in 1913. During its early years only the wealthiest 1% of the population had to file a return. There were few loopholes, and capital gains were taxed at the same rate as earned income.

welcome to 2013: centennial anniversary of the irs and the fed...,

seekingalpha | The IRS was Conceived 100 Years Ago Next Month

On February 3, 1913, Delaware became the 36th state to ratify the proposed 16th Amendment authorizing income taxes. With three-fourths of the 48 states backing the resolution, the 16th Amendment became an official part of the U.S. Constitution on February 25, while Republican William Taft was a lame duck President awaiting the inauguration of Democrat Woodrow Wilson a week later on March 4, 1913.

Six months later, the Revenue Act of 1913 was signed into law on October 13, 1913 authorizing tax rates ranging up to 7% for those earning $500,000 or more. The lowest (1%) income tax rate kicked in for single taxpayers making $3,000 per year or couples making $4,000 or more. Therefore, fewer than 5% of U.S. workers were obligated to pay any income tax at first. Businessmen, proud of their success, showed off their tax bill in bars as if to say "I'm one of the top 5%," a badge of honor in a capitalist economy.

World War I changed all that. By 1917, President Woodrow Wilson raised the top tax rates tenfold.

In 1916, President Wilson campaigned against joining the "war to end all wars," but just one month after his second inauguration, he pushed us into World War I and used the income tax to fund that war effort. In 1917, the top income tax rate grew nearly tenfold, from 7% to 67% on top income earners. The new income tax tool was powerful enough to fund America's first entry into a major European conflict.

Unlike most politicians, who tend to mask their views in patriotic pieties, Wilson clearly stated the pragmatism of his politics much earlier in his 1889 book The State:

We are not bound to adhere to the doctrines held by the signers of the Declaration of Independence … Government does now whatever experience permits or the times demand.

Wow! Those last 10 words form a chilling expression of raw unprincipled power. They are also applicable to today's fiscal cliff debate: "Whatever experience permits or the times demand" is a fair description of raising tax rates to fund runaway spending needs.

The Federal Reserve was also Born a Century Ago, in 1913

In a parallel track, the Federal Reserve was conceived and born a century ago this year. On March 31, 1913, J.P. Morgan, America's unofficial one-man central bank, died in his sleep in Rome. Like any good banking man, he died at the closing day of a financial quarter handing new President Woodrow Wilson the opening to create a central bank. After a close call in the Panic of 1907, J.P. Morgan, then entering his 70s, told the nation he was retiring from the central banking business, saying that the next panic would sink him - and the country - even if other syndicate members joined him (as they usually did).

The death of J.P. Morgan almost nine months later led to the centralized solution everyone seemed to favor then. At 6:02 pm on December 23, 1913, The Federal Reserve Act, authorizing the creation of the Federal Reserve, was signed into law by President Woodrow Wilson using four golden pens in a lightly-attended ceremony during the Christmas break. Like income taxes, the Fed quickly grew quite powerful.

The Federal Reserve took shape in stages, throughout 1914, with an official launch date of November 16, 1914. Ironically, the Fed was formed for the express purpose of avoiding the financial panics so painful in recent memory - 1893 and 1907 - but the Fed merely continued the same kind of boom-bust cycle of panics, ranging from a short, sharp shock in 1920-21, to the long-term Great Depression of 1929 to 1941.

In particular, the Fed fueled a huge wave of inflation after providing liquidity for World War I spending. That was followed by a sharp cutoff in liquidity and a "flash" depression in 1920. The Fed then fueled too much liquidity throughout the 1920s, leading to a real estate and stock market crash, followed by a sharp (33%) cut in liquidity between 1929 and 1932. The Fed just couldn't seem to find a balance.

The early Fed was quite clear in its mission. In its 1923 Annual Report, the Federal Reserve described its role clearly:

The Federal Reserve banks are…the source to which the member banks turn when the demands of the business community have outrun their own unaided resources.

This is why the Fed increased credit 61% in the 1920s, from $45.3 billion on June 30, 1921 to over $73 billion in July 1929.

The Fed's inflationary monetary policies led to a nearly 99% decline in the purchasing power of the U.S. dollar in gold terms. In 1913, gold traded for $20.67 per ounce vs. around $1,690 today. Our official cost of living increase since 1913 is +2,261%, meaning that an item costing $1 in 1913 costs $23.61 now. The Fed's policies have also led to a series of stock market booms and busts over the century, begging the question of whether the Fed has been any more effective than J.P. Morgan and his big-banker syndicate.

tragedy and hope: top lives off the yield of the bottom...,

Excepts From "Tragedy and Hope: A History of the World in Our Time". Chapters 6,20,21,38

The Money Power Controlled by International Investment Bankers Dominates Business and Government

In the various actions which increase or decrease the supply of money, governments, bankers, and industrialists have not always seen eye to eye. On the whole, in the period up to 1931, bankers, especially the Money Power controlled by the international investment bankers, were able to dominate both business and government. They could dominate business, especially in activities and in areas where industry could not finance its own needs for capital, because investment bankers had the ability to supply or refuse to supply such capital. Thus, Rothschild interests came to dominate many of the railroads of Europe, while Morgan dominated at least 26,000 miles of American railroads. Such bankers went further than this. In return for flotations of securities of industry, they took seats on the boards of directors of industrial firms, as they had already done on commercial banks, savings banks, insurance firms, and finance companies. From these lesser institutions they funneled capital to enterprises which yielded control and away from those who resisted. These firms were controlled through interlocking directorships, holding companies, and lesser banks. They engineered amalgamations and generally reduced competition, until by the early twentieth century many activities were so monopolized that they could raise their noncompetitive prices above costs to obtain sufficient profits to become self-financing and were thus able to eliminate the control of bankers. But before that stage was reached a relatively small number of bankers were in positions of immense influence in European and American economic life. As early as 1909, Walter Rathenau, who was in a position to know (since he had inherited from his father control of the German General Electric Company and held scores of directorships himself), said, "Three hundred men, all of whom know one another, direct the economic destiny of Europe and choose their successors from among themselves."

The Power of Investment Bankers Over Governments

The power of investment bankers over governments rests on a number of factors, of which the most significant, perhaps, is the need of governments to issue short-term treasury bills as well as long-term government bonds. Just as businessmen go to commercial banks for current capital advances to smooth over the discrepancies between their irregular and intermittent incomes and their periodic and persistent outgoes (such as monthly rents, annual mortgage payments, and weekly wages), so a government has to go to merchant bankers (or institutions controlled by them) to tide over the shallow places caused by irregular tax receipts. As experts in government bonds, the international bankers not only handled the necessary advances but provided advice to government officials and, on many occasions, placed their own members in official posts for varied periods to deal with special problems. This is so widely accepted even today that in 1961 a Republican investment banker became Secretary of the Treasury in a Democratic Administration in Washington without significant comment from any direction.

The Money Power Reigns Supreme and Unquestioned

Naturally, the influence of bankers over governments during the age of financial capitalism (roughly 1850-1931) was not something about which anyone talked freely, but it has been admitted frequently enough by those on the inside, especially in England. In 1852 Gladstone, chancellor of the Exchequer, declared, "The hinge of the whole situation was this: the government itself was not to be a substantive power in matters of Finance, but was to leave the Money Power supreme and unquestioned." On September 26, 1921, The Financial Times wrote, "Half a dozen men at the top of the Big Five Banks could upset the whole fabric of government finance by refraining from renewing Treasury Bills." In 1924 Sir Drummond Fraser, vice-president of the Institute of Bankers, stated, "The Governor of the Bank of England must be the autocrat who dictates the terms upon which alone the Government can obtain borrowed money."

Secrecy Is One of the Elements of the English Business and Financial Life

This element of secrecy is one of the outstanding features of English business and financial life. The weakest "right" an Englishman has is the "right to know," which is about as narrow as it is in American nuclear operations. Most duties, powers, and actions in business are controlled by customary procedures and conventions, not by explicit rules and regulations, and are often carried out by casual remarks between old friends. No record perpetuates such remarks, and they are generally regarded as private affairs which are no concern of others, even when they involve millions of pounds of the public's money. Although this situation is changing slowly, the inner circle of English financial life remains a matter of "whom one knows," rather than "what one knows." Jobs are still obtained by family, marriage, or school connections; character is considered far more important than knowledge or skill; and important positions, on this basis, are given to men who have no training, experience, or knowledge to qualify them.

The Core of English Financial Society Consists of 17 Private International Banking Firms

As part of this system and at the core of English financial life have been seventeen private firms of "merchant bankers" who find money for established and wealthy enterprises on either a long-term (investment) or a short-term ("acceptances") basis. These merchant bankers, with a total of less than a hundred active partners, include the firms of Baring Brothers, N. M. Rothschild, J. Henry Schroder, Morgan Grenfell, Hambros, and Lazard Brothers. These merchant bankers in the period of financial capitalism had a dominant position with the Bank of England and, strangely enough, still have retained some of this, despite the nationalization of the Bank by the Labour government in 1946. As late as 1961 a Baring (Lord Cromer) was named governor of the bank, and his board of directors, called the "Court" of the bank, included representatives of Lazard, of Hambros, and of Morgan Grenfell, as well as of an industrial firm (English Electric) controlled by these.

Money Power Exercises Its Influence through Interlocking Directorates and Direct Financial Controls

From this date onward, financial capitalism grew rapidly in Britain, without ever achieving the heights it did in the United States or Germany. Domestic concerns remained small, owner-managed, and relatively unprogressive (especially in the older lines like textiles, iron, coal, shipbuilding). One chief field of exploitation for British financial capitalism continued to be in foreign countries until the crash of 1931. Only after 1920 did it spread tentatively into newer fields like machinery, electrical goods, and chemicals, and in these it was superseded almost at once by monopoly capitalism.... In addition, its rule was relatively honest (in contrast to the United States but similar to Germany). It made little use of holding companies, exercising its influence by interlocking directorates and direct financial controls. It died relatively easily, yielding control of the economic system to the new organizations of monopoly capitalism constructed by men like William H. Lever, Viscount Leverhulme (1851-1925) or Alfred M. Mond, Lord Melchett (1868-1930). The former created a great international monopoly in vegetable oils centering upon Unilever, while the latter created the British chemical monopoly known as Imperial Chemical Industries.

Banking Control of Government throughout the World

Financial capitalism in Britain, as elsewhere, was marked not only by a growing financial control of industry but also by an increasing concentration of this control and by an increasing banking control of government. As we have seen, this influence of the Bank of England over the government was an almost unmitigated disaster for Britain. The power of the bank in business circles was never as complete as it was in government, because British businesses remained self-financing to a greater extent than those of other countries. This self-financing power of business in Britain depended on the advantage which it held because of the early arrival of industrialism in England. As other countries became industrialized, reducing Britain's advantage and her extraordinary profits, British business was forced to seek outside financial aid or reduce its creation of capital plant. Both methods were used, with the result that financial capitalism grew at the same time as considerable sections of Britain's capital plant became obsolete.

The Money Trust Became Increasingly Concentrated and Powerful in the Twentieth Century

The control of the Bank of England over business was exercised indirectly through the joint-stock banks. These banks became increasingly concentrated and increasingly powerful in the twentieth century. The number of such banks decreased through amalgamation from 109 in 1866 to 35 in 1919 and to 33 in 1933. This growth of a "money trust" in Britain led to an investigation by a Treasury Committee on Bank Amalgamations. In its report (Colwyn Report, 1919) this committee admitted the danger and called for government action. A bill was drawn up to prevent further concentration but was withdrawn when the bankers made a "gentlemen's agreement" to ask Treasury permission for future amalgamations. The net result was to protect the influence of the Bank of England, since this might have been reduced by complete monopolization of joint-stock banking, and the bank was always in a position to influence the Treasury's attitude on all questions. Of the 33 joint-stock banks existing in 1933, 9 were in Ireland and 8 in Scotland, leaving only 16 for England and Wales. The 33 together had over £2,500 million in deposits in April 1933, of which £1,773 million were in the so-called "Big Five" (Midland, Lloyds, Barclays, Westminster, and National Provincial). The Big Five controlled at least 7 of the other 28 (in one case by ownership of 98 percent of the stock).

Although competition among the Big Five was usually keen, all were subject to the powerful influence of the Bank of England, as exercised through the discount rate, interlocking directorships, and above all through the intangible influences of tradition, ambition, and prestige.

The Techniques of Finance Capitalism Reach Levels of Corruption into America Higher Than Any Country in the World

By the 1880's the techniques of financial capitalism were well developed in New York and northern New Jersey, and reached levels of corruption which were never approached in any European country. This corruption sought to cheat the ordinary investor by flotations and manipulations of securities for the benefit of "insiders." Success in this was its own justification, and the practitioners of these dishonesties were as socially acceptable as their wealth entitled them to be, without any animadversions on how that wealth had been obtained. Corrupt techniques, associated with the names of Daniel Drew or Jay Gould in the wildest days of railroad financial juggling, were also practiced by Morgan and others who became respectable from longer sustained success which allowed them to build up established firms.

Close Alliance of Wall Street with Two Major Parties

Any reform of Wall Street practices came from pressure from the hinterlands, especially from the farming West, and was long delayed by the close alliance of Wall Street with the two major political parties, which grew up in 1880-1900. In this alliance, by 1900, the influence of Morgan in the Republican Party was dominant, his chief rivalry coming from the influence of a monopoly capitalist, Rockefeller of Ohio. By 1900 Wall Street had largely abandoned the Democratic Party, a shift indicated by the passage of the Whitney family from the Democrats to the Republican inner circles, shortly after they established a family alliance with Morgan. In the same period, the Rockefeller family reversed the ordinary direction of development by shifting from the monopoly fields of petroleum to New York banking circles by way of the Chase National Bank. Soon family as well as financial alliances grew up among the Morgans, Whitneys, and Rockefellers, chiefly through Payne and Aldrich family connections.

Finance Capitalism in New York Resembles a Feudal Structure

For almost fifty years, from 1880 to 1930, financial capitalism approximated a feudal structure in which two great powers, centered in New York, dominated a number of lesser powers, both in New York and in provincial cities. No description of this structure as it existed in the 1920's can be given in a brief compass, since it infiltrated all aspects of American life and especially all branches of economic life. At the center were a group of less than a dozen investment banks, which were, at the height of their powers, still unincorporated private partnerships. These included J. P. Morgan; the Rockefeller family; Kuhn, Loeb and Company; Dillon, Read and Company; Brown Brothers and Harriman; and others. Each of these was linked in organizational or personal relationships with various banks, insurance companies, railroads, utilities, and industrial firms. The result was to form a number of webs of economic power of which the more important centered in New York, while other provincial groups allied with these were to be found in Pittsburgh, Cleveland, Chicago, and Boston.

J. P. Morgan Dominates Corporate America (Now known as JP Morgan Chase - Morgan-Rockefeller alliance)

J. P. Morgan worked in close relationship to a group of banks and insurance companies, including the First National Bank of New York, the Guaranty Trust Company, the Bankers Trust, the New York Trust Company, and the Metropolitan Life Insurance Company. The whole nexus dominated a network of business firms which included at least one-sixth of the two hundred largest nonfinancial corporations in American business. Among these were twelve utility companies, five or more railroad systems, thirteen industrial firms, and at least five of the fifty largest banks in the country. The combined assets of these firms were more than $30 billion. They included American Telephone and Telegraph Company, International Telephone and Telegraph, Consolidated Gas of New York, the groups of electrical utilities known as Electric Bond and Share and as the United Corporation Group (which included Commonwealth and Southern, Public Service of New Jersey, and Columbia Gas and Electric), the New York Central railway system, the Van Sweringen railway system (Allegheny) of nine lines (including Chesapeake and Ohio; Erie; Missouri Pacific; the Nickel Plate; and Pere Marquette); the Santa Fe; the Northern system of five great lines (Great Northern; Northern Pacific; Burlington; and others); the Southern Railway; General Electric Company; United States Steel; Phelps Dodge; Montgomery Ward; National Biscuit; Kennecott Copper; American Radiator and Standard Sanitary; Continental Oil; Reading Coal and Iron; Baldwin Locomotive; and others.

The Economic Power of the Money Trust in America Is Almost Beyond Imagination

The economic power represented by these figures is almost beyond imagination to grasp, and was increased by the active role which these financial titans took in politics. Morgan and Rockefeller together frequently dominated the national Republican Party, while Morgan occasionally had extensive influence in the national Democratic Party (three of the Morgan partners were usually Democrats). These two were also powerful on the state level, especially Morgan in New York and Rockefeller in Ohio. Mellon was a power in Pennsylvania and du Pont was obviously a political power in Delaware.

The Morgan Hierarchy

In the 1920's this system of economic and political power formed a hierarchy headed by the Morgan interests and played a principal role both in political and business life. Morgan, operating on the international level in cooperation with his allies abroad, especially in England, influenced the events of history to a degree which cannot be specified in detail but which certainly was tremendous....