Friday, February 20, 2009

Harvard and Northwestern Economists: GOP tax cuts and resulting emergence of the elite class caused the financial crisis

by Len Hart, The Existentialist Cowboy

The financial crisis results directly from inequitable GOP tax cuts which have benefited only the GOPs elite base. The effect is that of a US economy 'contracting' with each tax cut. The scheme was conceived and promoted by American fascists --the big banks, the GOP, the MIC and the CIA. The result: the US economy is among the most inequitable economies in the world. Growing disparities between rich and poor were at one time associated only with a developing Third World or Latin American 'Banana Republics'. Now --it is clear that they are behind America's imminent fall. [See: Screw the Big Banks! Bailout the Small Depositors!]

The wealthy have always used many methods to accumulate wealth, but it was not until the mid-1970s that these methods coalesced into a superbly organized, cohesive and efficient machine. After 1975, it became greater than the sum of its parts, a smooth flowing organization of advocacy groups, lobbyists, think tanks, conservative foundations, and PR firms that hurtled the richest 1 percent into the stratosphere.
...
The origins of this machine, interestingly enough, can be traced back to the CIA. This is not to say the machine is a formal CIA operation, complete with code name and signed documents. (Although such evidence may yet surface — and previously unthinkable domestic operations such as MK-ULTRA, CHAOS and MOCKINGBIRD show this to be a distinct possibility.) But what we do know already indicts the CIA strongly enough. Its principle creators were Irving Kristol, Paul Weyrich, William Simon, Richard Mellon Scaife, Frank Shakespeare, William F. Buckley, Jr., the Rockefeller family, and more. Almost all the machine's creators had CIA backgrounds.

During the 1970s, these men would take the propaganda and operational techniques they had learned in the Cold War and apply them to the Class War. Therefore it is no surprise that the American version of the machine bears an uncanny resemblance to the foreign versions designed to fight communism. The CIA's expert and comprehensive organization of the business class would succeed beyond their wildest dreams. In 1975, the richest 1 percent owned 22 percent of America’s wealth. By 1992, they would nearly double that, to 42 percent — the highest level of inequality in the 20th century.
How did this alliance start? The CIA has always recruited the nation’s elite: millionaire businessmen, Wall Street brokers, members of the national news media, and Ivy League scholars. During World War II, General "Wild Bill" Donovan became chief of the Office of Strategic Services (OSS), the forerunner of the CIA. Donovan recruited so exclusively from the nation’s rich and powerful that members eventually came to joke that "OSS" stood for "Oh, so social!"
Another early elite was Allen Dulles, who served as Director of the CIA from 1953 to 1961. Dulles was a senior partner at the Wall Street firm of Sullivan and Cromwell, which represented the Rockefeller empire and other mammoth trusts, corporations and cartels. He was also a board member of the J. Henry Schroeder Bank, with offices in Wall Street, London, Zurich and Hamburg. His financial interests across the world would become a conflict of interest when he became head of the CIA. Like Donavan, he would recruit exclusively from society’s elite.
By the 1950s, the CIA had riddled the nation’s businesses, media and universities with tens of thousands of part-time, on-call operatives. Their employment with the agency took a variety of forms, which included:
  • Leaving one's profession to work for the CIA in a formal, official capacity.
  • Staying in one's profession, using the job as cover for CIA activity. This undercover activity could be full-time, part-time, or on-call.
  • Staying in one's profession, occasionally passing along information useful to the CIA.
  • Passing through the revolving door that has always existed between the agency and the business world.
Historically, the CIA and society’s elite have been one and the same people. This means that their interests and goals are one and the same as well. Perhaps the most frequent description of the intelligence community is the "old boy network," where members socialize, talk shop, conduct business and tap each other for favors well outside the formal halls of government.
--Steve Kangas, The Origins of the Overclass
Since Ronald Reagan's infamous tax cut of 1982, "conservatives" have been fond of talking about a 'great Reagan Recovery' which they cite as proof of "Reaganomics", 'trickle-down theory', otherwise called supply-side economics. It is not just bullshit! I believe that it is deliberate bullshit, a bald-faced lie cooked up inside a right wing 'think tank'! With 'Reaganomics', the government itself became nothing more than a shakedown scheme, a competitor with the mob.

It must be pointed out that following the tax cut, the nation plunged into recession, the worst since Herbert Hoover's Great Depression of 1929. Nevertheless, conservatives will persist in citing a three percent growth rate following two years of severe recession as proof that "wealth trickles down". This assertion fails to address key questions.

Who benefited from the recovery?

How long did it take for the nation to regain lost ground?

Did Reagan's tax cuts bring about more growth than would have normally occurred?
The record shows that the growth rate was 3% between 1979 and 1989 --the same as the growth rate between 1973 and 1979! There was, then, no improvement with "voodoo economics" than without it. There was no "Reagan recovery"! Wealth did not trickle down! Wealth moved, flowing upward at alarming but predictable, exponential rates.

Reagan did not perform nearly so well as Jimmy Carter, who is, in fact, among the nation's best 'performing' Presidents in terms of the growth of GDP and jobs. Everything said by the right wing about Carter is a bald face lie! Carter ranks number two on the list of best Presidents since World War II. From that same list, the top five are Democrats. The bottom three are goppers.
However hard you may look, you will not find in the official stats any confirmation of GOP/Reaganomics whatsoever. Go to the Bureau of Labor Statistics, the Census Bureau, the BEA! You will find, rather, confirmation of a more pernicious trend: the rich began to get even richer.

With the ascension of Ronald Reagan, the poor began to lose ground at alarming rates. It seems almost to have been deliberate. The late Steve Kangas believed it was deliberate just as I believe that the war against Iraq continues to be a payoff to robber barons that make up the Military/Industrial complex.

In my last article [Screw the Big Banks! Bailout the Small Depositors!], I charged that obscene income and wealth disparities, having the effect of effectively removing trillions of dollars from the US economy are to blame for the current 'financial crisis'. Lately, I have discovered additional support for my position in the work Robert J. Gordon, Northwestern University and NBER Ian Dew-Becker, Harvard University.
... we identify a second of market-driven incomes which do not share super-star elements of audience magnification, namely lawyers and investment bankers including hedge fund managers. Third are the CEOs which differ because their incomes are not driven by the market but by decisions of their peers, with the presumption of self-serving reciprocity. We devote particular attention to conflicting papers endorsing alternatively a market-driven and management-power-driven explanation of the explosion of CEO relative pay. Why are American incomes at the very top increased so much relative to incomes below the 90th percentile and also relative to top incomes in Europe and Japan? In this paper we distinguish three types of top-level incomes. The first group consists of super-stars, driven by the market demand for sports and entertainment stars where media have magnified the reach of the very top individuals, and where the effort of the worker is the same whether the audience is a single person or ten million people. Second, we identify a second of market-driven incomes which do not share super-star elements of audience magnification, namely lawyers and investment bankers including hedge fund managers. Third are the CEOs which differ because their incomes are not driven by the market but by decisions of their peers, with the presumption of self-serving reciprocity. We devote particular attention to conflicting papers endorsing alternatively a market-driven and management-power-driven explanation of the explosion of CEO relative pay.

--Unresolved Issues in the Rise of American Inequality [PDF], Robert J. Gordon, Northwestern University and NBER Ian Dew-Becker, Harvard University
How is it possible that an entire nation is so easily brainwashed? The question answers itself and the operative word is 'brainwashed'.

Journalism is a perfect cover for CIA agents. People talk freely to journalists, and few think suspiciously of a journalist aggressively searching for information. Journalists also have power, influence and clout. Not surprisingly, the CIA began a mission in the late 1940s to recruit American journalists on a wide scale, a mission it dubbed Operation MOCKINGBIRD. The agency wanted these journalists not only to relay any sensitive information they discovered, but also to write anti-communist, pro-capitalist propaganda when needed.
The instigators of MOCKINGBIRD were Frank Wisner, Allan Dulles, Richard Helms and Philip Graham. Graham was the husband of Katherine Graham, today’s publisher of the Washington Post. In fact, it was the Post’s ties to the CIA that allowed it to grow so quickly after the war, both in readership and influence. (8)
MOCKINGBIRD was extraordinarily successful. In no time, the agency had recruited at least 25 media organizations to disseminate CIA propaganda. At least 400 journalists would eventually join the CIA payroll, according to the CIA’s testimony before a stunned Church Committee in 1975. (The committee felt the true number was considerably higher.) The names of those recruited reads like a Who's Who of journalism:

  • Philip and Katharine Graham (Publishers, Washington Post)
  • William Paley (President, CBS)
  • Henry Luce (Publisher, Time and Life magazine)
  • Arthur Hays Sulzberger (Publisher, N.Y. Times)
  • Jerry O'Leary (Washington Star)
  • Hal Hendrix (Pulitzer Prize winner, Miami News)
  • Barry Bingham Sr., (Louisville Courier-Journal)
  • James Copley (Copley News Services)
  • Joseph Harrison (Editor, Christian Science Monitor)
  • C.D. Jackson (Fortune)
  • Walter Pincus (Reporter, Washington Post)
  • ABC
  • NBC
  • Associated Press
  • United Press International
  • Reuters
  • Hearst Newspapers
  • Scripps-Howard
  • Newsweek magazine
  • Mutual Broadcasting System
  • Miami Herald
  • Old Saturday Evening Post
  • New York Herald-Tribune
Perhaps no newspaper is more important to the CIA than the Washington Post, one of the nation’s most right-wing dailies. Its location in the nation’s capitol enables the paper to maintain valuable personal contacts with leading intelligence, political and business figures. Unlike other newspapers, the Post operates its own bureaus around the world, rather than relying on AP wire services. Owner Philip Graham was a military intelligence officer in World War II, and later became close friends with CIA figures like Frank Wisner, Allen Dulles, Desmond FitzGerald and Richard Helms. He inherited the Post by marrying Katherine Graham, whose father owned it.
--Steve Kangas, The Origins of the Overclass
This so-called 'bailout' is a daylight theft which has already netted the GOP elite some 1.5 trillion dollars in bailout monies. So --where's the money now? Where's the recovery? Where are the culprits hiding out? Why has there been no investigation of this monumental fraud, a fraud that makes Enron look like a Sunday School picnic --or at the very least a dress rehearsal?

Only the big banks have benefited. None of the money has trickled-down; the economy continues to 'contract' at an annualized rate of 3.8 percent. This time, the plan may backfire. Fat cats are scrambling to escape a black hole of their own creation. True to their evil natures, however, the GOP elite are not above putting the screws to you as they themselves get sucked past the event horizon.

Already the goppers have renewed their assault on the Social Security trust fund, the government's only success story. The smart money 'bailed out' long ago. What's left is a mad melee in search of a federal bail out. The profits have been taken. The best that can be hoped for now is 1) the end of the GOP; 2) that only the crooked architects of this disaster are victimized by it. Alas--that's too much to ask. Cynically, the world just doesn't seem to work like that.

10 comments:

Liberality said...

You write down everything I've been thinking. Some of what I've been thinking is incoherent but there, unformed and hard to articulate. Thanks for making what should be explicit explicit. We know why the MSM won't report on this and aren't likely to anytime too soon either. But we must! The blogosphere must get the word out and make articulate this massive fraud being perpetrated against us!

Len Hart said...

Liberality said...

You write down everything I've been thinking. Some of what I've been thinking is incoherent but there, unformed and hard to articulate. Thanks for making what should be explicit explicit.

Your comments are very kind. I hope I have managed to get all this down. I have my detractors at KOS and, frankly, they just missed the whole frickin' point. It is truly gratifying to read your response.

The blogosphere must get the word out and make articulate this massive fraud being perpetrated against us!

Indeed! Someone (I can't recall who) said something to the effect that if you are going to commit a crime, commit a really, really big one. That's the only way to get away with it.

This 'crime' is one that we should have had some experience with but, sadly, most of those affected most seriously are dead by now. I am speaking of the Great Depression. These people are like the WWII veterans who are slowly leaving us. I wish someone had made an effort to collect at least a representative sample of their oral histories. My cynical side says it would not have made any difference. Then again --who knows?

werkshop said...

This is such a fine piece, but what I just can't agree with is associating everything bad with the GOP.

werkshop said...

Don't get me wrong - the GOP is pretty much evil incarnate in my view. but I don't think the Dems are much better. Both are on the side of the Global Elite, and against humanity (in my view). How can any human be against humanity? God only knows - it's hard to figure - but the evidence seems to be all around us.

Len Hart said...

werkshop said...

Don't get me wrong - the GOP is pretty much evil incarnate in my view. but I don't think the Dems are much better.

Your point is well taken...ahem...that said, here's why I respectfully disagree.

I've been 'undercover' amongst the GOP, and, on several occasions in the company of Satan himself --George Bush Sr. My skin crawls just thinking about it. I feel like Kevin McCarthy in "The Invasion of the Body Snatchers".

I guess you'll just have to trust me on this one. As far as 'evil' is concerned, the Demos are just not in the same league.

Secondly, my biggest problem with the Dems is they are not nearly 'liberal' enough. I am more aligned with early 20th century 'Progressives' and 'Socialists' like LaFollette, journalists like Upton Sinclair, Lincoln Steffans et al.

A final point, I am not being rhetorical or metaphorical when I call the GOP a 'crime syndicate'. The leadership should all be rounded up under federal racketeering statutes and prosecuted. But who has the nuts and guts to do it?

The Dems are challenged to hold a convention, let alone a conspiracy to take over the world. As Will Rogers put it: "I am not a member of any organized political party! I am a Democrat!"

A final observation: the phrase '...but the Dems are just as bad' is entirely too convenient for my taste. I should not be surprised if someone should, at last, reveal that this phrase has been created, tested, focus-grouped and given a stamp of approval by the Heritage Foundation.

Liberality said...

I should not be surprised if someone should, at last, reveal that this phrase has been created, tested, focus-grouped and given a stamp of approval by the Heritage Foundation.

Bwhahahahah!!! Nor would I be surprised.

opit said...

Tested marketing phrase.Snort.
Your comment about Bush reminds me of a shot I saw of Pelosi with Jr. leaning over her : whether it had been photoshopped I couldn't say - but she looked like a bird pinned in a viper's gaze, somewhat green too.
Even so, to say the Dems are better than the GOP is only a matter of degree going in the wrong direction.Up my way things are more creative : we have a minimum of two parties doing that.
Thing is, Len - the people couldn't stop Nam, were blatantly stampeded into Iraq even without considering 9/11 related data - and are now headed into Afghanistan to destroy it more utterly than was managed on previous occasions.The time when the battle was 'won' there and thrown away is never mentioned - nor is there proper emphasis on the aid debacle and imminent starvation of 30% of the people. Tom Engelhardt has a piece on that
http://aep.typepad.com/american_empire_project/2009/01/the-afghan-scam.html
I've watched with interest the style of Progressive YouTube clips surface here that came up during the Ron Paul campaign. I don't think many can beat this NWO related release
http://thecrowhouse.com/ftnwo.html
I'm old enough to vouch for the historical accuracy of this one! :)

Len Hart said...

opit sez...

Even so, to say the Dems are better than the GOP is only a matter of degree going in the wrong direction.Up my way things are more creative : we have a minimum of two parties doing that.

I am not sure the Dems are better but they are most certainly different and different in ways that professional sociologists and psychologists have credibly identified.

To me, the Dems are simply incapable of pulling off the subversions of the Constitution as we have seen in the Bush administration. That requires a moneyed elite and that 'ain't' the dems. Demos not only tend toward 'dis-organization' but, with the exception of Obama's campaign, seem always to have less money than the GOP. Secondly, I daresy, no 'elite' (save Soros, perhaps) votes Democratic. The 'ruling' one percent of elites are called 'ruling' for a reason.

In my articles, I have repeatedly referred to an 'elite'. This elite, frankly, couldn't care which party they corrupt so long as they rule. Of course, there are Dems who swallowed the Kool-aid. But, as one of my old broadcasting mentors told me: "One is either a part of the solution or a part of the problem."

Secondly, there is the problem of 'organization'. The GOP differs QUALITATIVELY from the Democratic party. This structure follows from the mindset.

At last --numerous studies have identified several 'traits' --psychopathy, authoritarianism, etc. A number of these traits are STATISTICALLY much higher among GOPs than Dems. My guess is that that is because the Dems, as Will Rogers had said, was NOT an 'organized party'. Independent, creative, constructive thinkers, by definition and inclination, are anathema to the GOP and the GOP to them!

Must reading:

John Dean: Conservatives Without Consciences. Dean's book was inspired by some very serious research. According to Dean, the conservative mind-set is characterized by recurring qualities such as 'the unbridled viciousness toward those daring to disagree with them', as well as the big business favoritism that costs taxpayers billions.

Even before, Dean published, a Stanford Univ group had published findings indicating that GOPPERS have more nightmares and night terrors than do Democrats. Nightmares are manifestations of deep-seated fears, insecurities and anxieties. It was goppers of this type who said of Ronald Reagan: "He made us feel good about ourselves!"

Deans's book is based upon other studies identifying 'authoritarian' characteristics of the 'conservative mindset', specifically Robert D. Hare's now-standard text on psychopaths, Without Conscience of 1993. As I have charged, this 'type' is challenged to make valid inference from premises. Often, they worked backward from a conclusion to the premise. These are NOT just my allegations. These are observations by professional psychologists and psychiatrists. The results are published, and, in previous articles, I have quoted the research and cited it.

The American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders' description of antisocial and narcissistic personality disorders, for example, provides a diagnostic context for the very behaviors that Dean describes among so many of the "social dominants" and "double highs." Antisocials, for instance, "show little remorse for the consequences of their acts.... They may be indifferent to, or provide a superficial rationalization for, having hurt, mistreated, or stolen from someone (e.g., 'life's unfair,' 'losers deserve to lose,' or 'he had it coming anyway')... They may believe that everyone is out to 'help number one' and that one should stop at nothing to avoid being pushed around."

Certainly --these people exist AS A CLASS and --statistically --they are attracted to the GOP! The GOP --as a class --evince these identifiable and identifying traits. This no longer guess work. The correlation of these traits with the GOP is a science.

People attracted to the Democratic party are NOT attracted to the GOP for these very reasons. As Will Rogers said --the Dems are disorganized and so they are. As rule, 'authoritarian' types are just not interested.

There are many other examples --but the lack of 'authoritarianism' is measurable.

Many specialists in this area have been inspired by Carl Jung who estimated that authoritarians amount to THIRTY PERCENT of ANY given population. That is about the size of the GOP 'base'. Is it so surprising that these 'folk' would create a party?

It must be point out that Jung was most certainly talking about that thirty percent that would --in fact --become NAZIS in Germany. In the US, a similarly psychopathic THIRTY PERCENT have become 'Republicans', a party that has become more Nazi-like since it rise to prominence as the party of the so-called 'robber barons'. How many 'robber barons' were Democratic? Was J.P. Morgan or Rockefeller Democratic? I don't think so.

I am quite sure that the 'mentality' which became Nazi in Germany became REPUBLICANS in America. If it walks like a duck, quacks like a duck and swims like a duck, it's a duck.

kelley b. said...

Another great post, Len.

The problem is the old money infiltrated the CIA as it was being born, and used the tools made available to the CIA to strangle Democracy and create a post New Deal aristocracy.

People point to the current economic crisis as a failure of that aristocracy to manage the $ystem, and it truely is. But the failure we're seeing is also an inevitable and conscious result of the policies the Company has supported. The crisis is intended to destroy the middle class and produce a large underclass in peonage.

The only middle class they want left are the manager/ overseer types that keep the workers in line.

The economics schools are there to preach the gospel of Supply Side Jesus. People like Roubini or Krugman are exceptions that don't fit the Company plan. Thus even when they're acknowledged correct, they're ignored in the main$tream press and the Washington policy formulations.

Len Hart said...

kelley b. said...

The crisis is intended to destroy the middle class and produce a large underclass in peonage.

Certainly --the economy has begun such 'contractions' in every GOP regime since 1900.

There are only two 'logical' outcomes of these repeatedly failed policies:

1) eugenics and/or

2) death camps

Such 'contractions' can be avoided; the GOP record in this respect cannot be merely accidental.