Category Archives: Economics

The “Health Care Industry” is Sick

THOUGHTS ON THE HEALTH SCARE-SNARE RACKET

Saturday, March 25, 2017—Trumpcare, the Republicans’ answer to Obamacare, failed this week.  Predictions abound about what the government will do next.  It appears Obamacare is imploding, and the media expects it to be saved or replaced.  My right-wing conservative friends declare government control of health care is unconstitutional.  My left-wing friends believe Obamacare needs to be fixed, not replaced.

I’ve been opposed to government and insurance-controlled medicine since graduating from medical school and psychiatry residency.  Back then, it was Hillarycare, which was trounced initially.  During Bill Clinton’s presidency, Hillarycare began being implemented piecemeal through bureaucracy.

For me, the issue then and now was freedom, including freedom of choice about everything from practitioners to types of treatment.  Government-controlled health care translates into a guaranteed captive market for insurance companies, in which the healthy subsidize everyone else, especially the “industry” itself.  Doctors and patients must kowtow to government and insurance rules.  Out the window go confidentiality, honesty, and compassion, since symptoms must fit a diagnosis code to insure payment for treatment.  In psychiatry, this means the psychiatrist must come up with a diagnosis which goes forever on the patient’s record and can interfere with everything from self-esteem to employment.

AND, SEVEN YEARS AGO THIS MONTH . . .

CURRENT EVENTS:  OBAMACARE

Wednesday, March 24, 2010—Everyone is talking about Obamacare, which passed over the weekend.  Everyone knew it would, but nobody knows what it means except more taxes.  The boat is sinking, but we’re afraid to rock it.

VIGNETTE:  OBAMACARE

Friday, March 26, 2010—I met a 35ish guy in line at Starbucks yesterday.  I was standing at the cash register when Sean mentioned something about Obamacare.  I said Dr.Obama needs to write his own prescriptions.  The guy behind me, a big, burly fella with motorcycle helmet and a completely tattooed right arm but untouched left arm, thick dark hair two-three inches long, eyes brown and intense, said something about economics, bankers, the Fed, or a related subject that tipped me off.

I realized he is an awakened soul, sees things as I do, and so we stood there agreeing with each other until both got coffee and moved out of the way.

Tee hee.  I had told the boyfriends the other day there is no gold in Fort Knox, and the levels of security exist to protect the void.  My new friend, whose name I didn’t ask, agrees there’s no gold in Fort Knox, but for fools’ gold, hahaha.  I told him his generation is much smarter than my generation and got a laugh out of someone behind me in line.

On the way out, my new friend mentioned the book, Creature from Jekyll Island, and said he learned on the net that the US has been selling gold-plated tungsten bars to China and I think France as if they were gold, and the deception has recently been discovered.  Apparently it began during the Clinton years, and the cost was something like $50,000 per bar to produce.

Later, Sean said we were two peas in a pod, an unlikely pair, the two of us, but what the hey.  These younger folks are expected to cater to all these old coots who were gullible enough to trust the Woodrow Wilsons, FDRs, Lyndon Johnsons, and other paternalistic exploiters, and I don’t blame the younger set if they believe Boomers are dispensable.  Why should they support us?  I told my friend he is under no obligation to make good on the government’s promises.

TEN YEARS AGO THIS MONTH:

MEDICAL SCHOOL ATTITUDES

Monday, March 26, 2007 – I’ve been thinking about my medical career.  Starting in medical school, I was appalled by the attitudes, and they got worse in the hospital in our third year.  M. was a good study companion the first two years, but his old girlfriend and the vicious, cut-throat, warfare in the hospital in our third year edged me out.  He played the politics and kissed up to the residents, but he also loved doing the procedures, and was like the rest of them, eager to compete for opportunities to do lumbar punctures, draw blood, drain fluid from lungs and peritoneal cavities, deliver babies, run codes.  While I wanted the experience, too, I wasn’t willing to elbow my way into the situations that offered them, and the rush-rush mentality rattled my confidence and made me afraid to touch the patients.

I was horrified at the frenzy of my classmates when it came to procedures, and the careless disregard for the patients they were so eager to practice on.  I wasn’t willing to follow residents around, hoping for chances to draw blood or run errands or otherwise do their bidding.  They perceived my attitude as insolence, and the OB-gyn boys took it more personally than the others. No one ever told me directly, so I was flabbergasted when Dr. S said they complained and almost failed me for the OB rotation.  I only remembered they wouldn’t let us do much, because they wanted to do it, and they kept medical students in a room together entire afternoons while they saw the patients alone.  I spent my time studying, so made the highest grade in the class on the written test.  I thought the OB-gyn material was the easiest.  Everyone else was bragging about how many babies they were “catching,” as if it were a disease.  I only “caught” one baby, that the chief OB resident helped me with, but he was the first baby with congenital syphilis the attending physicians had seen in ten years.

THE MD ROLE

Monday, March 26, 2007 – My no-frills trappings and simple, ascetic life – which it is – runs counter to the doctor stereotype, into which other doctors pour money and pride.  I’ve never felt comfortable in the doctor role.  It belongs to someone else, a non-being, a stereotype formed by others’ expectations, divorced from my self-perceived style.

But I’m good at it, among the best I know, which makes it all the stranger, because it comes so easily.  That I don’t put much faith in the pills I prescribe, the system I represent, the beliefs believed “normal” by today’s standards, ekes out in passing references.

No, I don’t believe in war, competition, health care insurance, the federal government, marriage, or that churches should be property tax-exempt, unless everyone is property tax-exempt.  If I pray directly to god, without need for a priest or rabbi to intercede, why should I pay property taxes when they don’t?  Who’s to say god listens more to them than me, and why should that give them a material advantage?

DRUG AND ALCOHOL LAWS

Saturday, March 3, 2007 – Drug and alcohol laws represent a major human rights violation–as the 1794 Whiskey Rebellion foretold–and should be abolished.  No one has the right to restrict another’s access to her own body.  The key to better health is better education and a free range of choices.  No one feels my pain like I do.

I believe drug laws set the frame for the sadomasochistic power struggles we call addiction. Drug laws are a means by which government seeks control over taxpayers.  Laws put government in a moralistic, paternalistic, top-dog position over the taxpayers who pay its way.

Laws and other social engineering tactics restrict the productivity of the very individuals who support them, and the entire society loses.

CHILD AND ADOLESCENT PRESCRIPTIONS

Monday, March 12, 2007 – Doing child and adolescent psychiatry means prescribing drugs I don’t approve of, because the teachers dictate medical care for unruly kids.

No, we won’t give them physical education, home economics, shop, or any incentive to behave, nothing that will interest them during the long hours they must sit, while some harried, bored, and boring teacher parrots an agenda designed to stifle curiosity and make children hate education.

No, we will diagnose them as Attention Deficit Hyperactivity Disorder (ADHD), and put them on amphetamines to control their behavior, because what we’re really doing is cultivating the next generation of slave labor for the imperialists who formerly were industrialists but no longer even produce meaningful industry.  They produce paperwork, insurance, stocks, cash, and debt, using their forebears’ reputations as collateral, generating paper profits on Wall Street, while product quality and workplace safety plummet.

 

Making Widgets

mcdtruckgov0905           I tried to explain the machine age paradigm to Ronnie.  It seems obvious to me, but I have never put the pieces together in a sequential way.

Say there’s a widget manufacturer who employs 100 people to make 100 widgets (one person/widget) per day.  He gets a machine that can do the same, so he needs only one person to run the machine.  99 people get fired.

Other than payments on the machine, its upkeep, etc., he saves in the short term.  However, as machines don’t make or spend money, he has also depleted the market for widgets, because 99 people must make do or do without.  All of a sudden, he is producing more widgets than he can sell, and it’s not so easy to adapt a machine to produce a more marketable product.  So the employer is forced to cut production or expand his market, thus generating more costs, like advertising, distribution, and the like, or to cut quality by using cheaper raw materials.

Meanwhile, the machine is pumping out widgets faster than the market can absorb them, and it requires servicing, maintenance, and other costs that were not necessary before.  Competent service becomes necessary to keep the machine operating.  If the machine must be shut down, it’s as though 100 laborers called in sick or went on strike the same day.  All work ceases, except that necessary to fix the machine.  Even if the machine remains functional, it runs the risk of over-supplying the market with monotonous product that piles up on the shelves, in storage, or on the wharves.

In the Industrial Revolution, as more laborers were replaced by machines that created debt and relentless overhead—without the flexibility inherent in a human labor force—the widget manufacturer’s problem is magnified on a world-wide scale.  The face of the labor force changes to machine operators, mechanics, salesmen, advertisers, designers and other people working to assist the machines rather than making widgets.  Those with the skills to make widgets, this’es, and that’s, have been sidelined by machines and a different labor force geared to working on the machines.  However, only the widgets bring revenue into the company, and only if the widgets sell does the company generate the revenue to stay in business (unless you count Wall Street, in which the company is in the stock churning rather than the widget making business, for all intents and purposes).

We also have overhead costs of advertising and distribution that were not necessary when the widget manufacturer had a human labor force in a market that could absorb the products as they were produced.

The automobile industry is a perfect example of the Industrial Revolution gone haywire.  Henry Ford’s assembly line concept essentially converted men to machines and eliminated labor wherever possible.  But Henry Ford believed in paying his labor enough so they could afford the cars.

State and federal governments were happy to help Henry out.  Oil magnate turned banker John D. Rockefeller also benefited mightily from the highway system government provided to support the auto industry. Thus massive government help through the highway system made autos appear cheaply available to large numbers of people.  This allowed more people to travel farther and faster, but it spawned urban sprawl and seduced people away from public transportation, passenger rail, buses, trolleys, horses, and bicycles.  It also created multiple levels of  taxation and bureaucracy to regulate and pay for the highways, bridges, gasoline, licenses, tags, and auto insurance.

As public transportation deteriorated, the automobile became more necessity than luxury.  Today, the economy is skewed in large measure to industries that work for cars—everything from insurance to tire shops, service, sales, advertising, stocks, oil, and the glut of government that the auto industry has generated.

Meanwhile, we have a superabundance of cars that fewer and fewer people can afford to buy, maintain, buy gas for, or park.  We also have the problem that there’s nowhere to go.

Every place looks like every other place in our homogenized America.  Traffic is so bad that you spend more time in the car getting from here to there than you spend at your destination.

Now Ford Motor Company is moving to Mexico.  Ever wonder if that wall The Donald wants to build is to keep Americans in rather than keeping Mexicans out?

The Cosmic Improv Group Puts the Robber Barons in Stitches*

knitsocks2010

HUMOR/SATIRE

by Dr. Kathorkian, an alter-ego of katharineotto.wordpress.com
Inspired by The Robber Barons, by Matthew Josephson, 1934, 1962

Monday, December 24, 2007 – I speak to others’ souls.  This is why I can nab JP Morgan in the Cosmic Commune and discuss his debt to society.

“Are you satisfied,” I ask, looking up from my knitting, but only briefly, so as not to lose any stitches.

 

“No,” says he.  “I’m miserable.”

“Good,” I say.  “You’re finally getting honest.”

“I always was honest,” he says.  “I named my three yachts Corsair I, II, and III, after all.  ‘Corsair’ means ‘pirate.’  Everyone knew what I was doing.”

“And no one stopped you.”

“No one even tried.”

“You made their chicanery look innocuous.  You were used by the thieves to cover for their less evident dishonesty.”

“I showed how easy it is to corrupt everyone.  They can all be bought.”

pennies20dollars0707

Twenty dollars in pennies.  A penny buys a penny’s worth every time it changes hands.  If it changes hands 100 times in a day, it stimulates the economy more than a dollar kept in a wallet.  Adam Smith, author of Wealth of Nations, recognized the value of a penny.

“You haven’t named a price that can buy this free market capitalist,” I say.  “What’s it worth to you, to help fix this mess?”

“Everything I have,” says he.

“Well, you are morally bankrupt, and in so much debt it will take several lifetimes to work it off, so it’s up to you whether you want to be a New York City bag lady next time around.”

I go back to knitting.

JP Morgan sits, sweating bullets, but too embarrassed to remove his jacket, because he has severe BO.

Meanwhile, Andrew Carnegie is hanging around, hopping from foot to foot, waiting to be noticed and invited to participate.  I see his ankle is in a golden shackle, attached by a golden chain to a bejeweled shackle around JP Morgan’s ankle.

 

I invite Andy to join us, but make it quick, because I need to leave soon, to pluck the fruits of my cosmic garden, tax-free products that have grown without government help and in spite of favoritism to people like them.

pecanmoss

Pecan tree and Spanish moss

I know John D. Rockefeller is listening from a table on the other side of the honeysuckle hedge.  He is sneaky, doesn’t want to admit he’s interested.  He is slowly getting drunk and justifying his actions to himself.  Besides, he hates JP Morgan and doesn’t like to deal with him at all, if possible.  He merely wants to sabotage him.

So I count rows and stitches while JP and Andy unburden their weary souls. Rockefeller’s presence is known–he is bound to the others by his own shackle and chain–but he is not acknowledged.

Other Cosmic Communists are coming and going, but the three souls within range don’t see or hear them.  They feel alone and abandoned but for each other and me.  This makes our discussion semi-private, for their purposes, which is fine with me, because it eliminates distractions.

Andy is the most heterosexual of the bunch.    JP and JD prefer to sublimate sexuality to imperialism, so lust after domination for its own sake.  Because they are cowards, they make a show of being otherwise, in true reaction formation style.

“You become what you hate,” Buddhism states.

“Or what you love,” I add.

Suddenly JP and JD realize they spent their lives symbolically sodomizing each other and everyone else who crossed their paths.  Now they wonder why no one in the Cosmic Commune invites them to parties.

“You’re boring, that’s why,” I tell them.  “What can you do that’s useful?”

I hear JD comment on Rockefeller Plaza. I remind him he didn’t build it, it’s an insult to the people who paid for it, and it’s ostentatious.  Ditto for donations to the Met, Carnegie Hall, and Carnegie Mellon.  “You people wanted to buy love and respect with other people’s money,” I say.

So now we know Rockefeller is participating, too, even though he remains at his table.

“What about abolishing income and payroll taxes and the Federal Reserve System,” I ask JP Morgan.  “Even though you have no credit with me, if you help undo that tangle in this time knot, it might improve your seedy image and win you a friend or two.”

bksdavisirs1997

bkspaulfed2009

JP gets restless and starts looking at his watch.  He hems and haws.  Andy looks on.  He has suddenly become very quiet.  Rockefeller pours himself another drink, and I hear the tinkle of ice against glass as his hands shake.

“Well, you boys think about it. These are my terms, for the moment, but no promises.  Things are likely to change any time.”

I poof out of their milieu and return to my cosmic home, where everything is free, and money doesn’t exist.

 

knoxtva0206

Knoxville, Tennessee City Market, with Tennessee Valley Authority twin towers at far end. Kco0206

Tuesday, December 25, 2007 – Later, I revisit the area in the Cosmic Commune where JP Morgan, Andrew Carnegie, and John D. Rockefeller are chained together by golden chains.  This place reminds me of the “revitalized” Knoxville, TN City Market.  It is a wide, concrete wasteland with no human beings in sight.  The twin towers of the Tennessee Valley Authority loom over one end.

I have poofed myself a garden in this heat sink.  The garden has grown since my last visit.  Now, there are trellises and vines of roses without thorns.  Confederate jasmine, wisteria, and the like.  There is a water fountain, where birds drink and splash around.  The mass of vegetation creates the effect of a giant atrium, open to the breeze but protected from the sun.

 

I see Clarence Thomas’ higher self happening by, so I invite him to join us.  The older boys are impressed and a little afraid of ole Clar, because he is a Real Man, a black male, Supreme Court Justice, and Southern gentleman, despite what Anita Hill claims.  They want to impress him.  I show the chain gang I mean business.  CT is on my side, whether he knows it or not.

JP starts kissing up to Justice Thomas, explaining how taxpayers weren’t ready to manage their own money back in 1913, but he thinks they may have matured enough by now.  Ole Clar says don’t talk to me.  Talk to your boys on Wall Street, like Rupert Murdoch.  If you people can shape up real quick-like, we won’t have to embarrass you in front of your international friends.

So all these men start telling me how to pull this off.  They tell me to mail some of my improved-upon news clippings to Paul Gigot, editorial page editor of the Wall Street Journal, specifically my GE cartoon of CEO Jeffrey Immelt.  I should include a copy of my letter and GE’s 43-cent check SunTrust bank wouldn’t take.

So I say okay.  I’ll do it when the spirit moves me.  I’ve already started making copies.

Meanwhile, women are beginning to show up, because they like rich, influential men.  I’m fine with this, because I’ve solved enough of their problems for one day, and I have homework to do.  I poof myself back home, while they hang out and chitchat.

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The Creature from Jekyll Island: Notes and Thoughts

bksgriffincreature1994

The Creature from Jekyll Island:  A Second Look at the Federal Reserve
by G. Edward Griffin, first published 1994.
Notes and Thoughts on the first three chapters.

           The Creature from Jekyll Island is astounding in its implications.  It reveals that the money lending game is essentially between banks, with debt fueling the pump.  Powered by individual as well as government debt taken on in  taxpayers’ names, it makes me wonder whether unborn taxpayers can be obligated by federal debt.  Also, if the Fed were abolished, might all this artificial debt cancel itself out?

The book starts with a cameo of a secret meeting on Jekyll Island, Georgia, in 1910 that led to the Federal Reserve Act in 1913.  Nelson Aldrich, Senator from Rhode Island and father-in-law to John D. Rockefeller, Jr., hosted the private rail trip for six other movers and shakers in the banking and finance industries.  These men were to arrive at the train station separately, go by first names only, and say they were going duck hunting.  The regular staff at JP Morgan’s Jekyll Island Club was given a vacation.  Carefully selected others served the men while they were there.

The men were: 1.  Aldrich, who was also Republican “whip” in the Senate, chair of the National Monetary Commission, and a business associate of J. P. Morgan; 2.  Abraham Piatt Andrew, Assistant Secretary of the US Treasury;  3.  Frank A. Vanderlip, president of the National City Bank of New York, the most powerful bank at the time, and representing William Rockefeller and the international investment banking house of Kuhn, Loeb, and Company;  4.  Henry P. Davison, senior partner at JP Morgan Company;  5.  Charles D. Norton, president of JP Morgan’s First National Bank of New York;  6.  Benjamin Strong, head of JP Morgan’s Trust Company;  7.  Paul M. Warburg, partner in Kuhn Loeb and Company, a member of the Rothschild banking dynasty in England and France, and brother of Max Warburg, head of the Warburg banking consortium in Germany and the Netherlands.

When Griffin says the Fed creates money out of nothing, he is not entirely accurate.  Rather, the Fed creates debt out of nothing to lend to Congress and calls it money, because it is backed by congressional promises of future taxpayer earnings (through the income tax, established earlier the same year, 1913).  The incredible credit is then passed off as currency, and no one is the wiser.

Until now.  The lie continues that US taxpayers are obligated by congressional guarantees, but we are not morally obligated to pay that debt.  Unfortunately, since their strategy has included putting everyone on the payroll—in one form or another—everyone is implicated in the scam and terrified of its inevitable unraveling.

Obviously the easiest solution is for individuals to get out of debt.  When debts are paid off, the money vanishes into the red hole it came from, the money supply shrinks, and deflation gives everyone except banks, debtors, and governments—the biggest debtors of all–more buying power.

Griffin gives a good summary at the end of each chapter, thereby simplifying this 600 page tome.

Chapter 1:  “The Journey to Jekyll Island” tells how the skeleton of the Federal Reserve System was worked out at Jekyll Island in 1910 by RI Senator Nelson Aldrich and six other men representing the most powerful banking interests in the Western world.  These included US banks under JP Morgan and John D. Rockefeller; English and French banks under Kuhn, Loeb and Company, representing Rothschild interests in Europe; and Germany and Netherlands banks by the powerful Warburg family.

Author Griffin refers to it as a banking cartel, in which powerful competitors align to prevent other competition and use the government’s police power to enforce their monopoly.  Griffin hints without actually saying that descendants of these five banking dynasties still control the Fed.  These are Morgan, Rockefeller, Rothschild, Warburg, and Kuhn-Loeb.

He says the Jekyll Island meeting had five objectives:  1. Stop the growing competition from the nation’s other banks;  2.  Obtain a franchise to create money through debt;  3.  Get control of all the banks’ reserves so the more reckless ones would not be exposed to currency drains and bank runs;  4.  Get taxpayers to cover the cartel’s losses;  5.  Convince Congress the purpose was to protect the public.

Chapter 2:  “The Name of the Game is Bailout.”  The crucial point is that all the money created through the banking system since the Federal Reserve Act is backed only by debt, primarily by Congress’ obligating taxpayers’ future earnings.  A defaulted loan, thereby, costs the bank little in tangible value.  Therefore, the goal is to continue receiving interest on the loan by lending more (future) money to cover it.  This is especially true with large loans.  With extremely large loans the cartel gets the federal government to guarantee the loan, should the borrower default.  If this tactic fails and the bank is forced into insolvency, the FDIC is used to pay off depositors.  Small banks pay disproportionately for this “insurance” and are least likely to be bailed out, should disaster hit.

Because money is created out of nothing for the purpose of lending, huge sums are dispersed through the economy, devaluing the existing currency and causing inflation.

Griffin does not say that the income tax, passed earlier in the same year, 1913, was the funding source by which the federal government would pay perpetual interest to the Fed on the national debt.  This method mirrored the 1790-1791 creation of the whiskey tax and the nation’s first central bank, a double whammy on taxpayers, devised by Alexander Hamilton and George Washington.  (This from Alexander Hamilton, by Ron Chernow, 2004)

Chapter 3:  “Protectors of the Public.”  This chapter gives multiple examples of previous federal bailouts, beginning with Penn Central in 1970, Lockheed in 1970, the Commonwealth Bank of Detroit in 1974, New York City in 1975, Chrysler in 1978, the First Pennsylvania Bank of Philadelphia in 1979, and Chicago’s Continental Illinois in 1982.  Continental was the first electronic bank run.  It was the nation’s seventh largest bank at the time, with $42 billion in assets, with multiple loans out to high-risk business ventures and foreign governments.  Here the Federal Reserve becomes the “lender of last resort,” meaning it creates money out of nothing to cover, in this case, $4.5 billion in bad loans, and passing costs on to taxpayers in the form of inflation.

And this book has 26 chapters.  Stay tuned . . .

 

 

 

Here’s How 061916: Government Creep by Eminent Domain

Five days ago, I posted a blog that referenced the Supreme Court’s 2005 “Kelo” decision about eminent domain.

Four days ago, I read in the Savannah Morning News about the latest example of government creep by eminent domain.  At issue is the request by oil-and-gas pipeline corporation Kinder Morgan for eminent domain privileges through 210 miles of coastal Georgia.  The so-called “Palmetto Pipeline” is intended to transport oil, gas, possibly natural gas and ethanol (although this is not clear) to ports at Savannah, Brunswick, and Jacksonville for export.

Now Richard Kinder, head of Kinder Morgan, was one of the principals at Enron, when it collapsed in bankruptcy, following an internal scandal revealed in October, 2001.  Enron’s was the largest corporate bankruptcy in US history, at $63.4 billion in assets, until WorldCom surpassed it a year later.  (Wikipedia, 100415)

More recently, in 2014, one of Kinder Morgan’s existing pipelines spilled 370,000 gallons of gasoline in Belton, SC.

In 2015, Georgia Governor Nathan Deal did something right, for a change, and denied Kinder Morgan’s bid for eminent domain.  Kinder Morgan appealed the decision, but a Fulton County judge (Atlanta) upheld it, and Kinder Morgan officially withdrew its application.

Now comes the Georgia Legislature to help Kinder Morgan out.  The SMN’s article “Pipeline study group forming,” by Mary Landers, says House Bill 1036, signed into law May 3, 2016, has created a “study commission” tasked with recommending changes to the way Georgia evaluates gasoline and diesel pipelines.  This “State Commission on Petroleum Pipelines” has until December 31 to “conduct a detailed study to ensure the exercise of eminent domain powers by petroleum pipelines is carried out in a prudent and responsible manner consistent with the estate’s essential public interests.” (Quoted from the Savannah Morning News’ quote of the press release).  (KO Translation:  “We are trying to find a way to grant eminent domain privileges to Kinder Morgan.”)

Yours truly, here, has been keeping her finger on the pulse of the planet for forty years, and she has been right too often to doubt her assessment now.  This is how government works to benefit asset plunderers and money churners, at the expense of the taxpayers who pay the costs of the industry as well as the environmental costs on land they thought they owned.

Before Governor Deal denied the original application, I wrote letters to him and to Richard Kinder, threatening to look into stock investments of everyone involved in the decision, including judges.  I sent copies to everyone I could think of, because this is cheaper than filing lawsuits and dealing with the perpetrators in their own lair and on their terms.

As a tactical move, it also shows how legislators and bureaucrats at every level of government have an inherent conflict of interest as long as they have or control pension plans invested on Wall Street.  As long as they are making decisions that affect us all, we have a right to know where their taxpayer-funded investments are going.  After all, the biggest eco-rapists, like the energy companies, pay the highest dividends, and corporate and pension fund managers want to show high rates of return.

I posted the following satirical article about the Kelo decision on my now-defunct website in October, 2007.  It would be funny if it weren’t so sad.

–news from the event horizon–

A RETROSPECTIVE: October 28, 2007

by Katharine C. Otto

VIAGRA BLINDS US SUPREME COURT
United States Government Implodes Following Eminent Domain Decision

Homeowners quit buying homes and paying property taxes after the United States Supreme Court sold them out to a higher bidder. On June 23, 2005, the High Court sided 5-4 with the New London, Connecticut City Council, allowing the city to take Susette Kelo’s and her neighbors’ homes by eminent domain.  When Kelo, et al. lost their property rights, homeowners everywhere realized US law no longer guarantees ownership, so property taxes are invalid.

Multibillion-dollar international drug manufacturer, distributor, university and medical education grantor, researcher, lobbyist, political donor, NYSE high roller, and advertizing giant Pfizer, Inc. denied a role in the Supreme Court decision. A spokesman for Pfizer, who refused to be identified, claimed the mega-corporation has not leased or purchased any part of the conference and convention center planned atop Kelo’s neighborhood and next door to Pfizer’s new, $270 million, global research facility.

Pfizer also says its popular erectile dysfunction drug Viagra does not cause blindness–despite litigation to the contrary–but a source close to the labs hints this is how Viagra works. (“FDA Was Told of Viagra-Blindness Link Months Ago:  Senator Criticizes Delay in Alerting Consumers After Safety Officer Warned Agency About Drug,” washingtonpost.com, by Marc Kaufman, Washington Post Staff Writer, Friday, July 1, 2005.)

Viagra blinded local governments, though. Running with the Supreme Court’s balls, city and county governments drove thousands of people from their homes, offering zoning changes and tax incentives to commercial developers.  Sadly, no one could pay the price.

This caused a general collapse of US currency. “The dollar no longer makes sense,” said a famous economist who asked for anonymity.  “This means there’s no difference between rich and poor.  And, since we have no property rights, tu casa es mi casa, as any illegal alien can tell you.”

Hoards of homeless men, women, and children hailed the news. They swarmed the White House, governors’ mansions, and other public housing, where they spread blankets and took up residence.

Government officials and bureaucrats, fearing angry mobs, barricaded themselves in government buildings, but no one tried to get in. When they attempted to leave with their hands up, they found doors locked from outside.

Ex-taxpayers gathered outside and questioned whether public servants serve the public. One woman insisted they could be taught.  She recommended re-writing their job descriptions, but others doubted they could learn anything new.  A janitor claimed it’s theoretically possible to rehabilitate federal employees with short job titles, but it would be taxing.  They could start by cleaning out their own offices.

A former property owner, who still lives at home, said quarantining public servants taxes no one but the government. It protects neighborhoods and keeps cities safe from democracy.

“We discovered the blockhead period of architecture—so popular with the feds since the 1950s—is perfectly suited for housing our surplus supervisors until we figure out what to do with them.” When asked how they would feed the thousands of incarcerated deciders, she replied, “Let them eat paper, since that’s all they produce.”

Junk food corporations broadcast outrage at this cold-hearted attitude. They have responded by donating millions in food and drink for the trapped victims.  Now, inside sources say the prisoners are far from starving, and many can finally stay on their diets.

But angry environmentalists are threatening to torch the burgers with the packaging, if McDonald’s and others don’t pack out their own trash. In a furious back-lash, the fast food and packaging industries are lobbying Congress to require more trash cans outside government buildings.

But Congress has more urgent problems. Legislators are locked in the Capitol and strapped for bathrooms and toilet paper. They are working on bi-partisan emergency legislation for men’s room rationing and other limitations on dumping. Already, government waste has backed up the sewage system and flooded the nation’s capitol, creating the most blighted neighborhood the world has ever smelled.  The President has declared a national emergency and is pumping trillions of electronic dollars into the sewer system.

Sadly, nationwide polls show little sympathy for Washington’s plight. “Let ‘em eat shit,” said a Kansas farmer who was paid not to farm.  “Nobody owns this land now.  Money has no value, but my family still has to eat.  People around town are helping out.”

He laughed when offered federal assistance. “Pay them to stay away,” he said. “I’ll distill corn ethanol, stay home, and party. Can we tighten that Beltway some more?”

He suggested selling or leasing government employees to third world countries. When reminded money was worthless, he suggested giving the public servants away, but admitted this may not be feasible, either.

An Alaskan book dealer said the Arctic National Wildlife Refuge seems safe, for now. People who worked only for the money have quit their jobs and no longer drive so much.

A Montana rancher didn’t know the government had collapsed, because he had no TV. He asked if that explained why road projects through nearby National Forest lands were abandoned.

A Georgia shrimper wondered about the sudden disappearance of the DNR, EPA, DEA, FBI, CIA, Department of Immigration and Naturalization Services, Department of Homeland Security, Army Corps of Engineers, US Coast Guard, city and county police, and military aircraft from the coastline.

Large retailers, who expected mass looting when the dollar collapsed, discovered nobody wanted anything they had. The stores have been abandoned.  When asked why she no longer visits Wal-Mart, one former shopper said she just enjoyed spending money.  Now, she uses what she has.

The packaging industry is in crisis, because like the government, fast food, and Wal-Mart, it provides nothing of lasting value. Similarly, bankers, accountants, and lawyers have found their skills obsolete in a cashless, lawless society.

The rest of the world has questioned why the US stopped bombing Iraq.

“Economics,” everyone says. “When no one gets paid, the relative value of life goes up.”

The collapse of the US economy has surprised no one except the economists, who claim the dollar really does have value, despite appearances.

Overall, the implosion of the United States government has not been the disaster everyone feared. Of course, creditors with liens against the country want to collect what they can, but they are finding little worth taking.  Some have even resorted to accepting government employees.  It is hoped that outsourcing the largest worker force in the nation will spread democracy around the globe and provide the balance of trade so crucial to world peace.

 

 

 

 

 

 

 

 

Fat, sickly and broke

May, 2016 Update on Ethanol:

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Not only is ethanol–otherwise known as corn liquor–corrosive for engines, corn liquor is less fuel efficient than gasoline, raises the price of food, and unfairly squeezes small and independent farmers.  Archer Daniels Midland, which is involved in every step of the growth to international insurance aspect of the corn chain, was the major benefactor from the ethanol mandate.  It distributes many highly advertised, processed, packaged, and nutritionally depleted food products.  Factory food stocks do well in today’s market, too.

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Which isles do you shop?  The most nutritious and healthiest foods are also the least expensive.

“The only good thing about ethanol is you can drink it.” –A wise person
STOP ETHANOL, 2016

 

 

 

Making Waste

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April, 2016

It occurred to me yesterday that money hoarding and information hoarding go together.  Information hoarding is most obvious in the patent industry.  This translates into mass confusion at the grassroots level, where multiple companies compete on the same turf for “market share.”

faucetplastic0316My new bathroom faucet provides the most recent example of this dysfunctionality.  Home Depot supplies only one brand of faucet, and the bottom of the line (read “simplest”) faucet only comes in one color, an off-color, “polished nickel,” so doesn’t match my formerly standard chrome.  In the 20 years since I bought the old faucet, the metal to plastic ratio has declined maybe 50%.  The drain pipe, pivot nut, and strap are now plastic.  I only needed the new faucet because the plastic gears inside both handles on the old one broke.

Plastic gears, plastic joints, and plastic moving parts have replaced metal in an across-the-board move that creates enormous waste and is dangerous, to boot.  I’m thinking of the aluminum lawn chair that snapped without warning because of the plastic joints.  Plastic, unlike metal or wood, is unfixable, so the entire product must be discarded.

Back to the faucet:  I considered substituting the old metal drain pipe for the new plastic one, but found that male and female ends had been reversed.

Why?  I have to wonder if patents have replaced standardized parts in our universalized conveniences.

Who benefits from this subtle downgrading of standard household equipment?  Certainly not the homeowner, who has not only the expense but the inconvenience of replacing equipment that should have lasted much longer.  Faucets installed all over town in the early 1900s are still functional.   While somewhat corroded and rusty on the outside, they still work as well as ever.

This isolated example would be a minor problem, except that every new replacement product I buy is worse than the old one.  Why did I even have to buy a new one?

“We can’t get parts,” is the standard answer.  When I suggest that digital controls on everything from my propane gas stove, dryer, and tankless water heater, to microwave–and even coffee percolator–add unnecessary levels of complexity and increase electrical and repair costs, people look at me as though I’m the crazy one.

stovefrigidairedig0416Why, in an age when we claim to want to reduce energy waste, are we being maneuvered into untenable situations like this?  My desire to free myself from the grid and Southern Company’s monopoly is blocked at every turn by corporate desperation to keep me hooked into a system that bleeds individuals like me dry.

And they wonder why the economy is imploding?

*The Waste Makers, by Vance Packard, (1963) which I read in the 1970s, made a profound and enduring impression.  I skimmed through it while writing this blog and see that Packard’s observations are even more apparent today.  It should be required reading in every high school.

**Total cost of replacing the Frigidaire stove’s digital control panel was $115. (The replacement part was $82).

 

US Constitution, Article 2, Section 1

capitol

The capitol city had not been built when the US Constitution was signed in Philadelphia September 17, 1787, but this is the most relevant photo I have.

For those who have not read the US Constitution recently, I’d like to quote the 5th paragraph of Article 2, Section 1, which delineates the necessary qualifications for the President of the United States.

“No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.”

I interpret this to mean that the “natural born citizen” qualification was specifically intended to keep Alexander Hamilton out (as the writerswithoutmoney bloggers have noted), but after that, it was an open field for those 35 or older, who had lived here at least 14 years.  But I’m not a lawyer.

Article 3, Section 1, defining the Supreme Court, is even more vague:  “The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.  The Judges, both of the supreme and inferior Courts, shall hold their Offices during good behavior, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.”

In other words, there are absolutely no Constitutional requirements for Supreme Court justices, no specified number, and the appointment for life is not written in the Constitution.  This means that the last word on every law in the United States rests on the power of nine unelected but appointed individuals who are notorious for 5-4 splits.

This is not a “democracy.”  It is not a “republic.”  It is an economic engine driven by the “Framers”  and funded by a continent of previously untapped natural resources that they needed taxpayers to exploit.

While ObamaCare is blamed on or credited to Democrats, let’s not forget that the Bush-appointed Chief Justice John Roberts cast the deciding vote.  He weaseled around to the personal insurance mandate by calling it a “tax,” thereby effectively passing the world’s first tax on breathing.

Citizens who are willing to put up with this deserve to be slaves.

 

Freedom, Democracy, and Capitalism

 

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Supercapitalism:  The Transformation of Business, Democracy, and Everyday Life, Robert Reich, 2007

December, 2015–I read Robert Reich’s Supercapitalism:  The Transformation of Business, Democracy, and Everyday Life, just after it was published in 2007, and posted the following commentary on my now defunct website in October of that year.  That was the month the “Great Recession” began, so the review, from a 2015 perspective, seems prophetic, given subsequent events.

I followed my own advice to abandon Wall Street for Main Street in January, 2008, after the value of my stock portfolio plunged below mortgage debt.  I used the money to pay down that debt and then devoted every available penny to become completely debt-free.

The following commentary links freedom, democracy, and capitalism by seeking to re-define “capitalism” as we know it.  Milton Friedman, in Capitalism and Freedom (1962) and Ayn Rand in Capitalism:  The Unknown Ideal (1967) both referred to “human capital,” but neither seemed to give “human capital” sufficient status.  I’m presenting my commentary here in its original form, posted when George Bush was still president, to remind readers of where we stood then and how events have grown from seeds sowed long ago.

Supercapitalism’s Crystal Ball Shatters:  The Future Has Arrived
October, 2007

Supercapitalism, by Robert Reich, shows the landscape of the enemy’s mind, and it is lifeless monotony.  Former President Bill Clinton’s secretary of labor trounces capitalism without bothering to define it, yet it’s clear he doesn’t understand the term.  This fatal omission turns the book’s intent upside down to make it a strong example in favor of the “democratic capitalism” he claims is dead.

Freedom, democracy, and capitalism are interrelated qualities only individuals can own or control.  The term “capitalism” has been assigned to those who would harness and control human capital, imperialists who know human capital is the only viable capital.  All other capital is derived from human effort or desire.

I make a career of using the wealth between my ears, my caput – the Latin word for “head” – to work for me.  Supercapitalism shows how amalgamated heads under corporate or government superstructures reduce thinking to the lowest common denominator.  No individual is responsible for the outcome.  That’s supercapitalism.

The word “capitalism” means using your head to generate income, to “capitalize” on available resources. In a truly capitalistic society, tax law would favor individual entrepreneurs and those who can be self-sufficient and perhaps hire and train others.

Human capital respects human dignity and works to create an expanding network of like-minded individuals.  Life is free.  You own your body and your mind. They are your most valuable assets.  No one can live your life but you, and you don’t have to sleep with anyone but yourself.  If you strive to make your life a work of art, and can earn a living doing it, you’ll have only yourself to thank.

In a genuine democracy—which has never really existed–the individual has all the rights, and the corporate structure has none.  Human capital, the only viable capital, assumes priority status, and gives credit where credit is due.  Capitalism within a democracy perpetually renews the individual’s vital self-directed role as a functioning member of a larger culture.

But if you are Mr. Reich, “democratic capitalism” has given way to the “supercapitalism” of “global supply chains.”  Get over it, he tells American customer-voter-citizen-taxpayers.  The supercapitalists are corporations, profit-making contractual arrangements, which have no obligation or responsibility to anyone except their shareholders.  Corporations are inhuman, and they have triumphed over you. They will not be curbed without more government, but politicians are crooked, too.  Nor can you trust the do-gooders, who also benefit from supercapitalism.  That’s progress.

Admittedly, we have social problems, Reich says.  We’re poisoning ourselves out of existence.  Natural resources, manufacturing, and jobs are leaving the country as fast as the supercapitalists can sell us out, but that’s not supercapitalism’s fault.  Supercapitalists are only responsible to the bottom line, and shame on you if you expect otherwise.

Reich doesn’t trace the source of “supercapitalism,” but consider these historical facts:  In 1910 an elite group of bankers, industrialists, and politicians, including investment banker J. Pierpont Morgan and Rhode Island Senator Nelson Aldrich, met secretly on Jekyll Island, Georgia, to engineer the creation of a central bank.  There they crafted the initial version of the Federal Reserve Act, which became law in 1913, and created a debt-backed currency, controlled by private bankers.

According to None Dare Call it Conspiracy, by Gary Allen (1971), “German born international financier Paul Warburg masterminded establishment of the Federal Reserve to put control of the international economy in hands of international bankers.  The Federal Reserve controls the money supply, which allows manipulators to create alternate cycles of boom and bust, i.e., a roller coaster economy.  This allows those in the know to make fabulous amounts of money, but even more important allows the Insiders to control the economy and further centralize the federal government.” p 65.

The income tax, also passed in 1913, guaranteed that American taxpayer income would pay perpetual interest on government borrowing. These two actions created the monster we now see as “supercapitalism,” economic slavery of debt-ridden America to the banks, industrialists, politicians, and their designated favorites.

This system requires ever-increasing debt to prop up the money’s presumed value, but Americans are maxed out on credit.  The banks have stretched the rules to make borrowing easier.  The Fed is fiddling with interest rates to insure its economic health, but the loans are backfiring, and the banks are stuck with tangible, costly assets that they can’t easily unload.   Even the “global supply chain” can’t make it cost-effective to export a piece of real estate to Japan, but electronic money is easily disbursed around the world at the flick of a keystroke.  If money is the bank’s only product, that money better be backed by something of real value, or the bank loses its relevance, and the global supply chain crumbles into a pile of broken links. This is the supercapitalist dilemma.

If Americans aren’t working, spending, and paying taxes, government income can’t keep up with obligations. It can’t repay the loans, or even interest on the loans.  The “consumers” aren’t consuming enough.  Bottom lines have suffered.

Former President Bill Clinton’s Secretary of  Labor touts Clinton solutions.  Under his scenario, government has the answer to everything.  More laws, more regulation, more oversight, more paperwork, more money. . . this is the Clinton team answer, but it does nothing to repair the sidewalks in Savannah.

But of course Clinton is no longer the worst president in American history.  Bush is the next logical progression in the supercapitalists’ slave trader tradition.  Unfortunately, “consumers” are overstuffed and have lost their appetites.  They are fed up.  The supercapitalists might have to start earning their income.  Their seemingly unlimited stable of revenue-producing taxpayers isn’t performing up to economists’ predictions. The money churners on Wall Street and the asset plunderers in Washington are lost in the never-never-land of money backed only by money, and nobody knows where the value went.

Reich talks about “consumer buying power.”  What you have, Joe and Josie Taxpayer, is “withholding power.”  Note the crammed retail shelves and store aisles.  Bad choices abound, as the products worth buying slyly disappear, only to re-appear later with new price and packaging. Hardly worth the walk from the parking lot, or the time spent in the check-out line. Bottom line is they can’t move all that cheap plastic junk made by slave labor in China, and overhead is tightening the designer nooses around their supercapitalist necks.

The term “consumer” insults “customers” and reveals the anachronistic, aristocratic mentality at the core of supercapitalist thinking. This seduces the individual customer-voter-citizen-taxpayer into believing she is receiver rather than giver of charity to government and industry, yet both depend on “customer” income for survival.

But, all taxes fall disproportionately on those who can least afford them.  These individuals—who pay the largest share of disposable income in taxes–suffer first and most severely if the delegated power is abused.

That’s why we should abolish corporate income taxes, Reich says on page 216 of his 225 page book.  Let those profits flow through to shareholders, who are individuals. He claims the corporate income tax rate is higher than what low-income shareholders would pay if it were reported as personal income instead.  He claims lower income shareholders and company employees are unfairly taxed by the current arrangement.

Reich neglects to mention that the megacorporate supercapitalists, inhuman as they are, leave giant footprints on the communities they trample.  The corporate income tax is a token acknowledgment of their superhuman presence within the environment and on the local infrastructure.  The bipartisan, concerted move to abolish corporate income taxes reveals the supercapitalists’ latest ploy to shift costs to neighbor-customer-citizen-voter-taxpayers, better to pad bottom lines and pretend they deliver more than they cost.

Large corporations thus export money and resources out of town while local communities bear the costs.  The small business person, the entrepreneur, is the capitalist who does not depend on government help, yet suffers more than anyone from the political favoritism granted through corporate contractual agreements.  The supercapitalist’s greatest competitor is the genuine capitalist, the individual, who is free to use her head to negotiate her way through local markets, the stock market, and life, whether as seller or buyer, giver or receiver.

In supercapitalist jargon, customer-voter-citizen-taxpayers are not free thinking individuals.  We are “consumers,” “covered lives,” “special-interest groups,” “minorities,” “the elderly,” “the poor,” identities encoded in numbers that can be stolen without a gun, and, by the way, the source of all the supercapitalists’ revenue, whether through product purchases or taxes.  Shareholders are also customer-voter-citizen-taxpayers, and as individuals and capitalists, they are free to buy or sell their stock at any time.

Our society exploits human capital and degrades itself by not appreciating the rich variety of its human talent.  Human capital can’t be owned, but it can be manipulated and controlled through force and deceit.  These tactics eventually fail, because they engender passive aggression and passive resistance that ultimately undermine the predator, to no one’s benefit.  This sadomasochistic dance is the enemy of capitalism, because no one profits in a power struggle.

“Consumer spending” accounts for two thirds of US revenues, and as “consumer spending” decreases, so do tax revenues, an unfortunate, unintended consequence of putting everybody out of work or on the public dole.

My take-home message from Supercapitalism, the bottom line, is this:  The so-called supercapitalists have painted themselves into a corner, and they are desperate. They couldn’t have grown to their current size without significant government help, at the expense of the customer-taxpayers who finance both sides.  But legislation and tax law favor large over small, and the group over the individual. This heavily weighted advantage is the opposite of capitalism, freedom, fair trade, and democracy.

The easiest way to shrink the supercapitalists’ overinflated self worth is to work less, earn less, consume less, spend less, drive less, waste less, want less, and pay less in taxes.  I could repair the sidewalks myself for what I pay in taxes, and if I quit working, I might have the time.

The “customer” is always right. Joe and Josie Taxpayer have the right not to spend, the right not to pay for products shoved down their throats.  Get out of debt.  Interest payments do not give value for money.  Do you think the international investment bankers—the most superior of supercapitalists—want you discovering you have better uses for your money than debt-plus-interest payments?  You think the government wants you to shrink it to a manageable level?  You, Joe and Josie Taxpayer, are the genuine capitalists in America. Your minds are more vital than any supercapitalist contractual agreement. Life is free.  It’s your choice how you spend it.

 

Book Commentary: Confessions of an Economic Hit Man

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If I am opinionated, these are my teachers.

Happy Thanksgiving, Everyone.  Today, Thursday, November 26, 2015, I am feeding poultry, rather than the other way around.  I’m contemplating the market value of feathers from live chickens, and other tangible assets on the here-and-now front.  The Golden Goose, and all that.

I seem to be scoring hits with these Process Commentaries on books about current events.  Here’s another one.  Confessions of an Economic Hit Man was published in 2004.  I read it in March, 2006.  It was an eye-opener.  Perkins doesn’t go into the domestic implications of EHMs.  Think about the domestic implications of the EHM mentality, and you’ll never think the same again.

With out further ado, I’m uploading my 2006 take on Confessions:

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Confessions of an Economic Hit Man, John Perkins, 2004, http://www.penguin.com

Book Synopsis: Confessions of an Economic Hit Man

by John Perkins
Copyright 2004
A Plume Book
http://www.penguin.com

Synopsis by Katharine C. Otto, March, 2006

“Economic Hit Men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign ‘aid’ organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources.”

Thus begins John Perkins’ personal account as an economist hired by a background corporation to promote US government and corporate interests in foreign–primarily third world–countries. The method was simple: if there were resources to be exploited, he worked to seduce foreign governments into enormous debt obligations for infrastructure built by American contractors, financed through the World Bank and others. He achieved this by exaggerating predictions of economic growth. The arrangement resulted in huge contracts to large American corporations. Another goal was to obligate the borrower far more than it could ever repay, in order to tie that government to American political interests.

“I was to justify huge international loans that would funnel money back to MAIN [the company Perkins worked for] and other US companies (such as Bechtel, Halliburton, Stone & Webster, and Brown & Root) through massive engineering and construction projects. Second, I would work to bankrupt the countries that received these loans (after they had paid MAIN and the other U.S. contractors, of course) so that they would be forever beholden to their creditors, and so they would present easy targets when we need favors, including military bases, UN votes, or access to oil and other natural resources.”

Perkins writes that if EHMs fail at their jobs, “CIA jackals” step in. “If the jackal fails, then the job falls to the military.”

The purpose is to promote US commercial interests by ensnaring world leaders “in a web of debt that ensures their loyalty . . . . In turn, they bolster their political positions by bringing industrial parks, power plants, and airports to their people. The owners of U.S. engineering/construction companies become fabulously wealthy.

“Today, we see the results of this system run amok. Executives at our most respected companies hire people at near-slave wages to toil under inhuman conditions in Asian sweatshops. Oil companies wantonly pump toxins into rain forest rivers, consciously killing people, animals, and plants, and committing genocide among ancient cultures. The pharmaceutical industry denies lifesaving medicines to millions of HIV-infected Africans. Twelve million families in our own United States worry about their next meal. The energy industry creates an Enron. The accounting industry creates an Andersen.

“The US spends over $87 billion conducting a war in Iraq,” and now Bechtel, among others, holds US government contracts to rebuild Iraq from the devastation the war has created.

EHMs provide favors as “loans to develop infrastructure–electric generating plants, highways, ports, airports, or industrial parks. A condition of such loans is that engineering and construction companies from our own country must build all these projects. In essence, most of the money never leaves the United States; it is simply transferred from banking offices in Washington to engineering offices in New York, Houston, or San Francisco.

Ecuador provides one striking example of this system’s results: About the size of Nevada, Ecuador has 30 active volcanoes, over 15 percent of the world’s bird species, and a land of diverse cultures. In 1968, Texaco had just discovered petroleum in Ecuador’s Amazon region. Since then, a trans-Andean pipeline has leaked more than a half million barrels of oil into the fragile rain forest. Now there’s a new $1.3 billion, 300-mile pipeline by an EHM consortium, and oil accounts for nearly half the country’s exports.

“Vast areas of rain forest have fallen, macaws and jaguars have all but vanished, three Ecuadorian indigenous cultures have been driven to the verge of collapse, and pristine rivers have been transformed into flaming cesspools.”

Perkins says that since 1970, public debt in Ecuador increased from $240 million to $16 billion. Overall, third world debt has grown to more than $2.5 trillion, and the cost of servicing it is over $375 billion/year, as of 2004.

The only way Ecuador can buy down its foreign obligations is by selling its rain forests to the oil companies. One of the reasons the EHMs targeted Ecuador is the sea of oil beneath its Amazon region is believed to rival the oil fields of the Middle East.

“All of those people–millions in Ecuador, billions around the planet–are potential terrorists,” Perkins says, “not because they believe in communism or anarchism or are intrinsically evil but simply because they are desperate.”

Perkins describes similar tactics in Java, Kuwait, Iran, Panama, Guatemala, Chile, Saudi Arabia, Columbia and Venezuela. In rich countries like Saudi Arabia, he says, the goal was to induce them to spend money already in their coffers, buy US Treasury bonds, and use the interest to pay American contractors.