by Guest Author Dan Flemming
There are three main economic results and several additional concerns arising from Federal Debt “Gone Wild”, corruption from TBTF banks and failures of ratings agencies. Remember: the U.S. government had enjoyed AAA ratings since the time of the Vietnam War thru the Cold War, Bush Wars; and while all the time stealing from the Social Security Trust Fund. Click on cartoon for larger image of rogue banks.
The three main results are:
1) Social movements toward socialism, unionism, nationalism, individual blogging activism, and resulting backlashes from the political right or left.
2) The perception of a loss of legitimacy or representation in Washington DC (political loss).
3) Growing awareness of classism and perception that rich, powerful, and corporate executives don´t have to answer to the public or make honest reports to shareholders, replete with corporate excesses and general corruption of tax and financial systems by the privileged. The additional direct factors include:
4) Public perception that the US Constitution and it´s amendments are not being used to guide the executive and legislative branches
5) Public perception that money buys government and elections and is now open to foreign influence
6) Globalism brings cheap goods to the market, but at a cost to the tax base (off-shoring), loss of jobs (outsourcing), and complicated financial reporting
7) Possible corporate structures that led by crony board members enable expensive and complicated benefits packages that drain profits from revenue.
Status quo comes to mind when it comes to both financial scandals and politics. And it appears that bankers and with pie on their face will go after US Social Security and Medicare benefits due to budget cuts in the coming years. However there was no US referendum vote for war spending or stealing in the past from Social Security. War is unpopular almost by definition. Past spins on reasons for war and war spending have omitted the choices to build stronger borders and fight only to defend our borders.
There is nothing fiscally conservative about going to war without raising funds to pay for the war. The same can be said for spending Social Security funds as if they were general tax revenues. So the US public has gotten propaganda and political spin that is casually accepted. The real U.S. Budget deficit is a total of $20T when you look at the out years. And Washington spin would have you believe that the budget problem is just about cutting $1.5T in spending.
It is more of the same status quo and it is miserable. In fact what we have in politics is gridlock on the budget (hasn’t been passed in years) and the debt. We are just kicking the can down the road on the wars, foreign policy, social issues, and other important problems like unemployment. We can call Washington politics bi-polar since the results of elections are first the right, then the left, then the right again. Politics are suffering from a lack of choices, debate, and ideas. It seems the choice is between the war party and the social programs party. But neither the right nor the left wants to pay for government programs. A new party platform should be built on reforms.
One of the big stories this year was the backlash against unions by governments of Wisconsin and Ohio. Funny no one wants to go back and blame executives that negotiated with the unions for poor performance. How about creating new Economic Zones where expensive rules could be omitted to allow entrepreneurs to start small businesses of less than 400 employees or less than $15M. Economic zones may not be popular with unions or when times are good, but they maybe a God send now.
Remember the profiles of the terrorists from the Middle East? The social cost of national corruption is rich kids without jobs or meaningful lives. But the social cost may also be kids moving to the extreme left or extreme right of social movements. We can all see the financial scandals in the U.S. Perhaps this is a “Banking Cycle” where bankers become corrupt every 50-80 years. This corruption leads to the Tea Party and OWS and others. Clearly protesters in the streets are a possible sign of loss of legitimate government. Certainly left leaning social movements are sometimes linked to a perception that government rulers are rich, elite, or don´t live the way everyone else lives. It is true there is a separate set of rules for members of Congress. Examples abound regarding Congress, whose members don’t have co-pays or premiums for their health care. Congressmen can accept travel gifts other members of the government can´t. And members of Congress can accept all kinds of campaign contributions, including lobbying dollars from foreign governments, companies and individuals, while other government employees can´t. And now we learn they are exempt from insider trading laws and appear to take full advantage.
What does the Congress do? They used to have the power to declare war. It seems that is not the case anymore. Congress has never declared war on Iraq, Afghanistan, Libya, Somalia, Yemen, or Pakistan. They used to have the power to make budget decisions but that was given up to a super committee (which also failed to create a budget). Congress hasn’t passed a budget in a couple of years which is another constitutional duty not fulfilled.
The Amendments to the US Constitution spell out the rights of the American Citizen. However these are being systematically eroded and the U.S. now resembles the former USSR or old East Germany. Any veteran of the Cold War will tell you what made the U.S. free was not being like our enemies who watched their people constantly with great police powers. The war on terror has eroded the rights of citizens in privacy, free speech, and freedom from being jailed without legal representation. The U.S. public knows we have given up too many individual rights.
Successful reconstruction after wars seems to depend on people believing that they are equals and are protected from being taken advantage of financially or otherwise. World War I certainly taught us that. The rules of equality of opportunity have to be in place to keep people from choosing totalitarian options like fascism or communism. But as communism disappeared as a threat, there seems to be a diminishing of proper regulation or enforcement to prevent corporate and banking scandals. At the end of the Cold War the proper social structure was not put in place, especially in the U.S.
Following the Cold War globalism and global capitalism have become accepted norms. Maybe for globalism to work there has to be enforcement and successful regulation to keep equal opportunity. But that has not happened as we see the rise in the gap between rich and poor. The middle class that made the U.S. great and unique is shrinking. The idea of retirement is disappearing for many.
Main Street is looking for information on who is to blame for current stresses. As long as the Internet is free people will get educated on who political insiders are in bed with. We will follow the money. And with coming budget cuts we will demand government regulators and administrators do a good job for all of us. Things will change, and hopefully in a peaceful and democratic manner.
Does it seem like the IRS does as well as the SEC while Bernie Madoff and Enron reported record earnings? And where were the banking regulators in this financial crisis? Surely the bank regulators have been clamoring for new regulations on derivatives for years prior to the crisis to keep the financial system from being compromised? I know where I stand on Alan Greenspan: he blew it.
It is easy to develop an effective auditing office. You send out 6 teams of good people then you compare the results and set standards. Then you build on your success by adding people and looking for the best practices. This is what we need in today’s government regulators. In fact maybe the GAO could establish an office to review federal justice department decisions in regard to defending the U.S. Constitution.
We find ourselves in the age of the Rogue Bankers. Hopefully the recovery from their reign of economic terror will produce citizens who:
1) Observe democratic processes
2) Observe and monitor individual politicians
3) Learn about corporate structures and corporate rules
4) Learn about national and international bankers and banking rules
5) Reduce exposure to banking fees and expenses
6) Consider relocation to U.S. States with favorable taxes and debt levels
7) Discuss the possibility of new economic zones where rules or taxes are reduced to encourage new enterprise
8) Question corporate ratings, reputations, risk assessments, and learn where large systemic risks are with regard to our banks and governments
9) Diversify our financial assets
10) Ask our congressmen for investigations of justice department decisions upholding the U.S. Constitution and our Amendments
11) Investigate nationalism, socialism, unionism, corporatism, globalism and, above all, corruption.
About the Author
Dan Flemming is a Systems Analyst and Logistician. He has utilized dozens of defense systems to identify bottlenecks, problems, systemic issues, and solutions across agencies within the Department of Defense.