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The twin swelling heads of Empire and Oligarchy are driving our country into an ever-deepening corporate state, wholly incompatible with democracy and the rule of law.
Once again the New York Times offers its readers the evidence. In its February 25, 2010 issue, two page-one stories confirm this relentless deterioration at the expense of so many innocent people.
The lead story illustrates that the type of massive speculation--casino capitalism, Business Week once called it--in complex derivatives is still going strong and exploiting the weak and powerless who pay the ultimate bill.
Titled "Banks Bet Greece Defaults on Debt They Helped Hide," the article shocks even readers hardened to tales of greed and abuse of power. Here are the opening paragraphs: "Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin."
"Echoing the kind of trades that nearly toppled the American Insurance International Group /AIG/, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers."
"These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company, or in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit."
"It's like buying fire insurance on your neighbor's house--you create an incentive to burn down the house," said Philip Gisdakis, head of credit strategy at UniCredit in Munich.
These credit-default swaps increase the dreaded "systemic risk" that proliferates until it lands on the backs of taxpayers, workers and savers who pay the price. And if Greece goes, Spain or Portugal or Italy may be next and globalization will eventually bring the rapacious effects of mindless speculation to our shores.
Greece got into financial trouble for a variety of reasons, but it was widely reported that Goldman Sachs and other big banks showed them, for generous fees, how to hide the country's true financial condition. Avarice at work.
Note two points. These derivatives are contracts involving hundreds of billions of dollars and are essentially unregulated. These transactions are also essentially untaxed, unlike Europe's value added tax on manufacturing, wholesale and retail purchases. The absence of government restraints produces unlimited predation.
As astute investors in the real economy have said, when money for speculation replaces money for investment, the real economy suffers and so do real people. Remember the Wall Street collapse of 2008 and who is paying for the huge Washington bailout.
The other story shows that the Presidency has become a self-driven Empire outside the law and unaccountable to its citizens. The Times reports "how far the C.I.A. has extended its extraordinary secret war beyond the mountainous tribal belt and deep into Pakistan's sprawling cities." Working with Pakistan's counterpart agency, the C.I.A. has had some cover to do what it wants in carrying out "dozens of raids throughout Pakistan over the past year," according to the Times.
"Secret War" has been a phrase applied numerous times throughout the C.I.A's history, even though the agency was initially created by Congress right after World War II to gather intelligence, not engage in lethal operations worldwide.
Unrestrained by either Congress or the federal courts, Presidents say they can and do order their subordinates to go anywhere in the world, penetrate into any country, if they alone say it is necessary to seize and destroy for what they believe is the national security. American citizens abroad are not excluded. Above the law and beyond the law spells the kind of lawlessness that the framers of our constitution abhorred in King George and limited in our country's separation of powers.
Because our founders would not tolerate the President being prosecutor, judge, jury and executioner, they placed the war-declaration and appropriations authorities in the Congress.
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