|TEN TRUTHS MOST POLITICIANS AVOID
These days Americans are protesting in the streets because parts of the American economy are in
freefall. But that's not the picture for all Americans. The income of the top 1% almost tripled from 1979 to
2007. The income of the bottom 80% increased about 1% per year in the same years. The top 20%
(excluding the super rich 1%) have made modest gains of over 2% per year. (2007 Dollars, Source:
Congressional Budget Office, "Trends is the Distribution of Household Income Between 1979 and 2007,"
Judging by the Occupy Wall Street movement, protesters don't comprehend what is actually happening
in the country. Big money politicians of both parties, funded by the rich and the super rich, are not
about to enlighten them. Maintaining the wealth of the wealthy is why they get the big dollars.
Most politicians are happy to leave voters ignorant, distract them from real problems, and get elected
so that they can continue feathering their nests. Note: I didn't say all politicians. I'm about to quote two
exceptions. And now here is the list of things big money politicians don't tell you.
1. The real cause of the collapse of the housing market was the loss of American manufacturing jobs.
"For American manufacturers, the bad years didn't begin with the banking crisis of 2008. Indeed, the U.
S. manufacturing sector never emerged from the 2001 recession, which coincided with China’s entry
into the World Trade Organization. Since 2001, the country has lost 42,400 factories, including 36
percent of factories that employ more than 1,000 workers (which declined from 1,479 to 947), and 38
percent of factories that employ between 500 and 999 employees (from 3,198 to 1,972). An additional
90,000 manufacturing companies are now at risk of going out of business." (Richard McCormack, "The
Plight of American Manufacturing," The American Prospect, December 21, 2009).
"Manufacturing employment dropped to 11.7 million in October 2009, a loss of 5.5 million or 32 percent
of all manufacturing jobs since October 2000." (Ibid). Richard McCormack is editor and publisher of
Manufacturing & Technology News.
Many of the 5.5 million who lost high paying manufacturing jobs had to settle for low pay work or no
work. Either way, they could not afford their mortgages. Eventually a glut of unsold homes collapsed the
2. Our membership in the World Trade Organization forces us to treat cutthroat trade partners like China
as well as we treat fair trade partners like Canada. But the World Trade Organization can not control
"We must puncture the myth that China's main manufacturing edge is solely its cheap labor. Indeed,
while low labor costs are a factor, when you carefully research the biggest source of China's
manufacturing advantage, it is actually a complex array of unfair trade practices, all of which are illegal
under free-trade rules.
"The most potent of China's "weapons of job destruction" are an elaborate web of export subsidies; the
blatant piracy of America's technologies and trade secrets; the counterfeiting of valuable brand names
like Nike and Chevy; a cleverly manipulated and grossly undervalued currency; and the forced transfer
of the technology of any American company wishing to operate on Chinese soil or sell into the Chinese
"Each of these unfair trade practices is expressly prohibited both by World Trade Organization rules as
well as rules established by the U.S. government..." (Peter Navarro, "How China unfairly bests the U.S."
The Los Angeles Times, Op-Ed, June 21, 2011). Peter Navarro is a business professor at University of
California at Irvine, a CNBC contributor and the coauthor with Greg Autry of "Death by China:
Confronting the Dragon — A Global Call to Action."
America's membership in the World Trade Organization is extremely profitable to shipping companies
and those global companies who have moved their manufacturing to the third world.
3. Irresponsible mortgage lending was at the heart of the 2007 housing bubble.
Banks wrote mortgages and took their profits from front end fees, paid out in fat salaries and bonuses.
Then they sent the mortgage loans to firms like Goldman Sachs that sold groups of mortgage loans as
securities. At Goldman Sachs, there were more fees, paid out in million dollar salaries and bonuses.
As the demand for these securities increased, lending standards declined. When borrowers could not
pay, the bubble collapsed. Estimates of the ultimate cost of the bailout start at $1 Trillion, but many
economists expect it to be substantially higher. (For more see No. 113, "The Banksters Myths And Your
4. Special interests have sabotaged the reform of banking.
To quote former US Representative, former Louisiana governor, Harvard MBA, banker and current
Presidential candidate Buddy Roemer ""I am a banker, and I watched bank reform last year that didn't kill
"too big to fail"... I watched bank reform that didn't reinstate Glass Steagell... I watched bank reform that
didn't require the megabanks to increase their capital as their size went up... And I know that two weeks
after the bill passed where the President of the United States was... He was on Wall Street, at a fund
raiser hosted by Goldman Sachs, who I consider a firm that lied and stole and cheated and not one
person went to jail. He went to Wall Street and accepted tickets to his fund raiser at $35,000 a ticket.
This system is corrupt, and I don't just hold President Obama to a standard of moral high ground, I hold
them all."" (Buddy Roemer, "Buddy Roemer on "The Money"," YouTube, Sept. 2, 2011).
5. The media either ignores or puts down reform candidates, depending on how much support they
Buddy Roemer is running to oppose special interests and the loss of jobs to China. (For more, see No.
124, "Quotable Notables.") He has just started his campaign and is being mostly ignored by the press.
Sarah Palin, who acted as a reformer in Alaska, has been character assassinated. Ron Paul, whose
positions are all on the Internet, has been deemed to be "unelectable" despite a solid following. (Both
Sarah Palin and Ron Paul are also included in "Quotable Notables.")
6. The state of the American economy is not a problem for the rich.
The rich can make money whether the economy is good or bad. When the economy is good their stocks
and manufacturing and shipping and financial interests do well. When the economy is bad, they buy
distressed property cheap and make money by betting that the markets will go down.
7. Inflation is inevitable and turmoil makes it worse.
Inflation increases as the number of buyers outstrips what is available to buy, so it is obvious that it
would be related to world population. In 1950 world population was about 2.5 billion. By 1985, the human
population was 5 billion. By 2000 global population was 6 billion and now it is about 6.8 billion.
That means that world population increased by an average of 70 million people a year from 1950 to 1985
and is currently increasing by an average of 80 million people a year.
If the economy of the world was an efficient machine, it could rev up its engine and produce the goods
and services these extra 80 million people require. Then the supply of goods could almost keep up with
the demand for goods and inflation would be between 1% and 2% a year. But the world's economy is
running at half power, it has been choked by banksters trying to increase their profits by manipulating
the money supply and by the switch from local to international markets and by the destruction of goods
8. The Federal Reserve is not your friend.
The Federal Reserve system is both public and private. Federal Reserve regional member banks are
for-profit privately owned businesses. Each private member bank elects their own board of directors at
their regional Federal Reserve Bank, but the Board of Governors of the whole system is selected by the
President of the United States and confirmed by the Senate.
Despite apparent separation between the public government body of the Federal Reserve and the
private regional branches, usually many of the six members of the Board of Governors have ties to
regional member banks.
In 1976, a Congressional Committee studied the control of the Federal Reserve by the Rothschild family:
"The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn, Loeb & Co. were
the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who
directed the subsequent successful campaign to have the plan enacted into law by Congress, and who
purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914.
"These firms had their principal officers appointed to the Federal Reserve Board of Governors and the
Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling
stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in
the Federal Reserve regional banks.
"Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and
the current stockholders list of the 12 regional Federal Reserve Banks show this same family control."
(Federal Reserve Directors: A Study of Corporate and Banking Influence. Staff Report, Committee on
Banking, Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.)
The Federal Reserve and the American taxpayers have a distinct conflict of interest. The Federal
Reserve is a friend to big international money, not you or me.
9. Payoffs by politicians to special interests is one of the reasons government programs cost so much.
Take Medicare for example. The legislation that founded the Medicare Drug Plan forbid its
administrators from negotiating with drug companies over the price of drugs. That was the price
demanded by the pharmaceutical companies for the votes of their Congressmen that passed the bill.
One of the reasons that medical costs keep rising is that Medicare has no schedules for the amount
paid for common procedures. That was a concession made to appease those Congressmen indebted to
the American Medical Association.
Here's a comment from Republican Congressman Ron Paul, who objected when Republicans added the
drug benefit to Medicare. "The new Medicare drug plan enriches pharmaceutical companies, fleeces
taxpayers, and forces millions of older Americans to accept inferior drug coverage — while doing
nothing to address the real reasons prescription drugs cost so much." (Ron Paul, MD, "Republican
Socialism," November 25, 2003).
10. Owning the political process is extremely profitable for special interests.
Take the bankers who made millions from the deregulation of the Savings and Loan industry, for
example. Note that the Federal Reserve deliberately bankrupted the S&Ls while claiming to fight
In 1979, the Federal Reserve decided to put an end to inflation. The prime rate spiked to over 20% in the
early 1980s. Because they could offer only low interest rates, S&Ls suddenly lost depositors and could
not attract new ones. The failure of hundreds of S&Ls was imminent.
To save the S&Ls, Congress deregulated them, allowing them to loan outside their communities and to
make commercial loans, etc. These changes presented an open bank vault to banksters, who
proceeded to loot the failing industry.
A study of the criminality behind the S&L disaster concludes "deliberate insider fraud was at the very
center of the disaster... Systematic political collusion - not just policy error - was a critical ingredient in
this unprecedented series of frauds... The vast majority of savings and loan wrongdoers will never be
prosecuted, much less sent to prison... The savings and loan crimes decimated the industry itself and
brought the American financial system to the brink of disaster. This victimization of thrift institutions by
their own management for personal gain, the existence of networks of co-conspirators with influential
political connections, and other aspects of thrift fraud suggest a greater similarity to organized crime
than to traditional white collar crime." (Kitty Calavita, Henry N. Pontell, Robert Tillman, "Big Money Crime:
Fraud and Politics in the Savings and Loan Crisis," University of California Press, 1999, p 1,2)
Systematic political collusion kept most of the S&L thieves out of jail then. In the banking crisis of 2007,
NONE of the bankers who got rich destroying about half of the net worth of the American middle class
was even indicted. Instead they were bailed out by the same taxpayers whose wealth they destroyed.
Only by educating voters can Americans take back the political process from special interests and the
well financed politicians who maintain control of the government for them.
PLEASE E-MAIL (OR PRINT AND SNAIL MAIL) THIS ARTICLE TO EVERYONE YOU KNOW. THE SPECIAL
INTERESTS AND THEIR POLITICIANS HAVE OWNED AMERICA LONG ENOUGH. DON'T GET MAD, GET EVEN
AT THE BALLOT BOX.
Amo Paul Bishop Roden