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War, Martial Law, and the Economic Crisis

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The following is an excerpt of a chapter by Peter Dale Scott from the new book by Global Research Publishers, The Global Economic Crisis: The Great Depression of the XXI Century.

The U.S. Treasury's Financial Bailout

The bailout measures of late 2008 may have consequences at least as grave for an open society as the response to 9/11 in 2001. Many members of Congress felt coerced at the time into voting against their inclinations, and the normal procedures for orderly consideration of a bill were dispensed with.

The excuse for bypassing normal legislative procedures was the existence of an emergency. But one of the most reprehensible features of the legislation, that allowed Treasury Secretary Henry Paulson to permit bailed-out institutions to use public money for exorbitant salaries and bonuses, was inserted by Paulson after the immediate crisis had passed.

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According to Congressman Peter Welch (D-Vermont) the bailout bill originally called for a cap on executive salaries, but Paulson changed the requirement at the last minute. Welch and other members of Congress were enraged by "news that banks getting taxpayer-funded bailouts are still paying exorbitant salaries, bonuses, and other benefits." In addition, as the Associated Press reported in October 2008, "Sen. Charles Schumer, D-N.Y. questioned allowing banks that accept bailout bucks to continue paying dividends on their common stock. "There are far better uses of taxpayer dollars than continuing dividend payments to shareholders,' he said."

Even more reprehensible is the fact that after the bailouts, Paulson and the Treasury Department refused to provide details of the Troubled Assets Relief Program (TARP) spending of hundreds of billions of dollars, while the New York Federal Reserve refused to provide information about its own bailout (using government-backed loans) that amounted to trillions. This lack of transparency was challenged by Fox TV in a FOIA suit against the Treasury Department, and a suit by Bloomberg News against the Fed.

The financial bailout legislation of September 2008 was only passed after members of both Congressional houses were warned that failure to act would threaten civil unrest and the imposition of martial law.

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U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.

Here are the original remarks by Senator Inhofe:

Speaking on Tulsa Oklahoma's 1170 KFAQ, when asked who was behind threats of martial law and civil unrest if the bailout bill failed, Senator James Inhofe named Treasury Secretary Henry Paulson as the source. "Somebody in D.C. was feeding you guys quite a story prior to the bailout, a story that if we didn't do this we were going to see something on the scale of the depression, there were people talking about martial law being instituted, civil unrest... who was feeding you guys this stuff?," asked host Pat Campbell. "That's Henry Paulson," responded Inhofe. "We had a conference call early on, it was on a Friday I think -- a week and half before the vote on Oct. 1. So it would have been the middle... what was it -- the 19th of September, we had a conference call. In this conference call -- and I guess there's no reason for me not to repeat what he said, but he said -- he painted this picture you just described. He said, "This is serious. This is the most serious thing that we faced.'"

Rep. Brad Sherman (D-CA 27th District) reported the same threat on the Congressional floor:

The only way they can pass this bill is by creating a panic atmosphere... Many of us were told that the sky would fall... A few of us were even told that there would be martial law in America if we voted no. That's what I call fear-mongering, unjustified, proven wrong.

So it is clear that threats of martial law were used to get this reprehensible bailout legislation passed. It also seems clear that Congress was told of a threat of martial law, not itself threatened. It is still entirely appropriate to link such talk to the Army's rapid moves at the time to redefine its role as one of controlling the American people, not just protecting them. In a constitutional polity based on balance of powers, we have seen the emergence of a radical new military power that is as yet completely unbalanced.

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Continuity of Operations (COOP)

The Army's New Role in 2001: Not Protecting American Society, but Controlling It. This new role for the Army is not wholly unprecedented. The U.S. military had been training troops and police in "civil disturbance planning" for the last three decades. The master plan, Department of Defense Civil Disturbance Plan 55-2, or "Operation Garden Plot," was developed in 1968 in response to the major protests and disturbances of the 1960s.

But on January 19, 2001, on the last day of the Clinton administration, the U.S. Army promulgated a new and permanent Continuity of Operations (COOP) Program. It encapsulated its difference from the preceding, externally oriented Army Survival, Recovery, and Reconstitution System (ASRRS) as follows:

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Peter Dale Scott, a former Canadian diplomat and English Professor at the University of California, Berkeley, is the author of Drugs Oil and War, The Road to 9/11, and The War Conspiracy: JFK, 9/11, and the Deep Politics of War. His book, Fueling (more...)
 

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