Thursday, June 29, 2006


Dirty Secrets of the Temple - by Stephen Lendman

Years ago I read William Greider's excellent book published in 1987 on how the US Federal Reserve System works. It was detailed and explicit and makes wonderful and informative reading, except for the solution he suggests to a huge problem. His was far too timid. This article proposes a much different one. Greider called his book Secrets of the Temple with a sub-title: How the Federal Reserve Runs the Country. A better sub-title might have been how the Fed (and other key central bankers) runs the world. This article attempts to summarize what it does, how it does it, for whose benefit and at whose expense. For those who don't know, prepare for some stunning information and commentary.

Let's be clear at the outset. The US Federal Reserve, Bank of England, Bank of Japan and the European Central Bank (for the 12 European countries that adopted the single euro currency in 1999) are institutions with enormous power far beyond what most people everywhere can imagine. These most dominant of all central banks, as well as most others, have a powerful influence on the financial conditions in virtually all countries including their own, of course, in an increasingly borderless financial world where a significant economic event in one nation can affect most others for better or worse.

One other powerful bank is also part of today's financial world. It needs mentioning because of its importance, even though it requires a separate article to explain how it works more fully. It's the secretive, inviolable and accountable to no one Bank of International Settlements (BIS) founded in 1930 and based in Basle, Switzerland. This bank most people never heard of is the central banker to its member central banks - a sort of banking "boss of bosses" equivalent to what apparently exists in the shadowy world of Mafia dons. Like most other central banks, including the Federal Reserve (explained below), it's privately owned by its members.

It's believed by some academicians and others who've studied the BIS that the ruling elite of financial capitalism established this bank of banks to be the apex of power to exercise authority over a world financial system owned and controlled by them. It's thought their plan was to use this bank to dominate the political system of every country and control the world economy in a feudalistic fashion. In a word, the thinking goes that these super-elite want to rule the world by controlling its money, and they set up this supranational all-powerful bank of banks to do it. As important as that is, that discussion remains for another time as the intent of this article is to focus solely on the US Federal Reserve.

The dominant central banks and BIS, together with most others, wield their influence in cartel-like alliance with each other to assure they all benefit more than they otherwise would without such a cozy arrangement. With their immense power it's no play on words to say these financial institutions do indeed rule the world. Because they're able to create money, they fund the needs of their governments, their militaries and all business activity that couldn't function without a ready supply of that most needed of all commodities. It's money, not love, that makes the world go round, and central bankers have the power to create or remove from circulation as much or little of it as they choose and for whatever purpose they have in mind. That kind of power can move mountains or destroy them.

No nation's central bank is more powerful today than the US Federal Reserve, but it wasn't always that way, and it now has competition for the top spot it hasn't known since WW II. The Fed, as it's called, has existed since it was first established by an act of Congress in 1913. But the Bank of England has been around since Britannia ruled the waves beginning in 1694 when King William III needed help funding the kind of escapade that takes lots of ready cash - war. Back then it was with France, and the king needed a friendly banker to print it up for him to help him fight it. He also needed financial help to facilitate trade and manage the country's debt that always mounts up when wars are fought. The Bank of England wasn't the first central bank, but it was the modern world's first privately owned one in a powerful country. It was called the Bank of England to keep the public from knowing that it, like our Federal Reserve, was and still is privately owned and not part of the government. It was also the model used in the formation of our own central bank and most others.

The Brits may have had a 219 year head start on the Fed, but central bankers are only as powerful as the countries they represent and their economies. Today the former dominant Brits must settle for a far lesser role as being just one of many junior partners to a US hegemon that emerged post WW II as the world's dominant economic power. It still is today, even though some credible experts believe this country may have seen and past its peak and is now in decline. Some go further and claim our decline has been accelerated by the disastrous policies of the Bush administration that irrationally believes waging war on the world without end is the way to rule it, promote endless economic growth and dominance, and thus preserve the nation's preeminent position as the reigning economic champion.

It's easy to challenge that view and think that champ has climbed into the ring a few times too many, has endless plans for more return engagements, and is likely to meet the same fate many a former human one did who didn't know when to quit and ended up with chronic brain damage known as dementia. The lesson from history is always the same. The price for reckless behavior is high, painful and inevitable. It's true for countries as well as individuals, but too often neither one sees it until it's too late. The biggest difference between the US today and other nations in the past that paid dearly for not yielding when their day had passed is that we have an all-powerful arsenal others never did. Should we decide to use it, there likely wouldn't be much left behind for a successor. Not a pleasant thought, but a very real one.

It All Began in 1910 On Jekll Island

It sounds like the title of a horror movie, but the real life events that happened at this privately owned island off the coast of Georgia in 1910 would have challenged even the Hollywood bad dream factory to come up with.
It was here that seven very rich and powerful men met in secret for nine days and created the Federal Reserve System that came into being three years later on December 23, 1913 by an act of Congress. Since that time, the nation and world would never be the same, but only the rich and powerful were the beneficiaries. That was the whole idea, and it worked as planned.

The Federal Reserve Act that began it all must surely rank as one of the most disastrous and outrageous pieces of legislation to the public welfare ever to come out of any legislative body. It may have also have been and still is illegal according to Article 1, Section 8 of the Constitution which happens to be the inviolable law of the land. The article states that Congress shall have the power to coin (create) money and regulate the value thereof. In 1935, the US Supreme Court ruled the Congress cannot constitutionally delegate its power to another group or body. The Congress thus acted in violation of the Constitution it's sworn to uphold and in so doing created the Federal Reserve System that, as will be explained below, is a private for-profit corporation operating at the expense of the public welfare. By its action, our lawmakers committed fraud against the people of the country and so far have gotten away with it without the public even knowing about the harm done.

The shameful result is that what should have arrived stillborn is now the most dominant institution on earth, and all because of what began on a privately owned island with a scary name. But had the Congress acted responsibly, the act of Fed creation might never have happened. The legislation establishing it was so harmful to the public interest, it likely never would have passed if it hadn't been shepherded through a carefully prepared Congressional Conference Committee meeting scheduled for between 1:30 - 4:30 AM (when most members of Congress were asleep) on December 22, 1913. The Act was then voted on the next day and passed although many members of the body had left for the Christmas holidays and most others who stayed behind hadn't had time to read it or know its contents. Sound familiar? Still it passed (like a thief in the night) and was signed into law by an unwitting or complicit Woodrow Wilson who later admitted he made a terrible mistake saying "I unwittingly ruined my country." But it was too late for postmortems, and the American people have paid dearly ever since. It's about time the public understood that and began to demand an end to over 90 years of damage done.

It almost happened 43 years ago when one president decided to act on behalf of the people who elected him. That man was John Kennedy, who before his death planned to end the Federal Reserve System to eliminate the national debt a central bank creates by printing money and loaning it to the government. That debt has now risen to over $8,400,000,000,000 ($8.4 trillion) which every taxpayer must pay for and has done so in the amount of nearly $174,000,000,000 ($174 billion) in just the first three months of 2006. This debt service is now an annualized amount exceeding two-thirds of a trillion dollars. It's made the bankers rich (which was the whole idea) and the public poorer because we're taxed to pay the tab. It's no exaggeration to call this the greatest financial scam in world history and one that gets greater every day.

The debt was less onerous 40 years ago, but Kennedy understood its danger to the country and the burden it placed on the public. Thus, on June 4, 1963, he issued presidential order EO 11110 giving the president authority to issue currency. He then ordered the US Treasury to print over $4 billion worth of "United States Notes" to replace Federal Reserve Notes. He intended to replace them all when enough of the new currency was in circulation so he could end the Federal Reserve System and the control it gave the international bankers over the US government and the public. Just months after the Kennedy plan went into effect, he was assassinated in Dallas in what was surely a coup d'etat disguised to look otherwise and may well have been carried out at least in part to save the Fed System and concentration of power it created that was so profitable for the powerful bankers in the country. Those benefitting from it had good reason to be involved in the plot to save the special privilege they weren't willing to give up without a fight. It's a plausible explanation that may explain who may have been behind the assassination and for what reason. Whatever the truth is, the banking cartel was only in distress a short time. Once Lyndon Johnson took office, he rescinded Kennedy's presidential order and restored the cartel's former power. It's kept it ever since and is now, of course, more powerful than ever. Even presidents are unable to stop it and those who would try have a lesson from history to give them pause.

The predecessors of the possible Kennedy coup plotters were the men who met on Jekyll Island in 1910. They represented some of the richest and most powerful men in the world - the Morgans, Rockefellers, Rothschilds of Europe (who dominated all European banking by the mid-1800s and became and still may be the wealthiest and most powerful family of all) and others of great influence and power. Included was a US senator, a high ranking Treasury official, the president of the largest bank in the country at the time, a leading Wall Street figure and the man who would later become the first chairman of the Federal Reserve System. It was quite an assemblage, and they came to accomplish one thing. They wanted to change the ideology and course of American business that up to then was based on marketplace competition and replace it with monopoly. They also knew what Baron M.A. Rothschild understood when he once said: "Give me control over a nation's currency and I care not who makes its laws." They knew the wisdom of what's stated in Proverbs 22:7 as well: "The rich rule over the poor, and the borrower is servant to the lender."

This was the dawning of the age of powerful cartels when the seven financial titans meeting secretly in the island's clubhouse decided no longer to compete with each other and wanted the power to arrange it. They were already colluding informally but knew it would all work better under a legally sanctioned cartel. They wanted a banking cartel and got one that flourishes today below the public radar with the tool they wanted most - the ability to control the nation's money supply that gave them almost unlimited power. The cartel now works cooperatively with their governments and all other powerful transnational corporations in a dominant global alliance that allows them to control the world's markets, resources, cheap labor and our lives.

The Federal Reserve System Is Not A Government Agency - It's A Privately Owned Cartel of Powerful Banks Protected By Law

It's commonly but falsely believed the Federal Reserve System is a function of government and subject to its control. False. It's often referred to as a quasi-governmental, decentralized central bank, but that's just cover to disguise what, in fact, it really is: a privately held and operated cartel made to look like the government is in charge. The fact that it's headquartered in Washington in the formidable and impressive-looking Eccles building (named after a former Fed chairman) is just part of the clever subterfuge. Here's how it works:

The Fed is composed of a Board of Governors in Washington and 12 regional banks in major cities throughout the country (including in my own city of Chicago where anyone once but no longer could walk up to a teller's window and buy US Treasury securities). The system also includes many and various member banks including all national banks that are required to be part of the system. Other banks were also allowed to join and many did. The Federal Reserve began operating in November, 1914, almost one year after the Congressional act creating the system the previous year as explained above. It was mandated by law to have the greatest power of any institution in the country - the power to create and control the nation's money supply.

Most people know little or nothing about money and banking, likely never think about it, and have no idea how what the Fed and bankers do affect their lives. Before writing this article, I had little more than the modest knowledge I learned in a required course on the subject and basic accounting as part of my MBA curriculum 46 years ago. Those courses left out the most important parts of the story and never hinted at anything sinister about how the banking system works in fact. But no one should ever imagine banks were established or intended to be run for our benefit. They surely are not, and anyone suggesting they are should read on. They're about as beneficial to the public welfare as was the MX Peacekeeper ICBM (the clever language is impressive) intended to carry nuclear warheads back in the mid-80s that had the power to destroy all life on the planet and one day may do it in its old or updated form.

The Federal Reserve Act of 1913 (the law of the land) stipulates that the Federal Reserve Banks of each region are owned by the member banks in it. These Fed banks are privately owned corporations that make a great effort to hide the fact that they, in fact, own what the public largely thinks is part of the public treasury and government. It's easy to think that as Fed chairmen and seven of the twelve Governors are appointed by the President and approved by the Senate. As such, the FRB is a sort of quasi-government entity, but the fact is the System is a privately owned for profit enterprise just like any other business. It has stockholders like other public corporations that are paid 6% risk free interest every year on their equity holdings. The public doesn't know this, and it likely wouldn't be good PR if it found out. People might be even more upset if they learned some of the owners of our Federal Reserve are powerful foreign investors in the UK, France, Germany, The Netherlands and Italy. They're partners with giant US banks like JP Morgan Chase and Citibank as well as powerful Wall Street firms like Goldman Sachs in a new world order banking cartel that influences and affects business activity everywhere and our lives.

The issue of private ownership of the Federal Reserve Banks has been challenged several times in the federal courts to no avail. Each time the courts upheld the current system under which each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. One such case was Lewis v. United States that was decided by the 9th Circuit Court of Appeals that ruled the Reserve Banks are independent, privately owned and locally controlled corporations.

Our Founding Fathers Had Different Ideas Than the Powerful Men who Met on Jekll Island

Throughout our history, there was disagreement over who should control the power of the nation's money supply and the right to issue it. The Founding Fathers understood that the British Parliament was forced to levy unfair taxes on its American colonies and its own citizens because the Bank of England had run up so much debt the government needed revenue to reduce it. Benjamin Franklin, in fact, believed that was the real cause of the American Revolution. Most of the Founders also understood the danger that could result from bankers' accumulating too much wealth and power. James Madison, the main drafter of our Constitution, called them "Money Changers," referring to the Bible that said Jesus twice drove the Money Changers from the Temple in Jerusalem 2,000 years ago. Madison said:

"History records that the Money Changers have used every form of abuse, intrigue, deceit and violent means possible to maintain their control over governments by controlling money and its issuance."

Thomas Jefferson was just as strong in his condemnation when he said:

"I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs."

Jefferson and Madison understood the dangers of commercial monopolies of all types and tried to assure they never would exist in the new nation. They, in fact, wanted two additional amendments added to the "Bill of Rights" in the Constitution but never got them. They believed to protect the liberty of the people the nation should have "freedom from monopolies in commerce" (what are now giant corporations including the big international banks and Wall Street investment firms) and "freedom from a permanent military," or standing armies. Try to imagine what the country would be like today if Jefferson and Madison had gotten their way - a country without giant predatory corporations exploiting everyone for profit and without a rampaging military waging war on the world, threatening to destroy it, and doing it so those corporate giants could earn even greater profits.

They never did, of course, and the people have paid dearly ever since including the great harm caused because the government relinquished its right to control the nation's money supply. It gave it away secretly with the public none the wiser, never knowing how greatly it's been harmed. It's been even worse since the 1980s because the power of the Fed grew under a friendly Republican president, and the corporate media led cheerleading for it hid the effect. For them, no public demeaning of it, its giant member banks or Wall Street allies is allowed.

Things were especially out of hand during the tenure of Alan Greenspan - a Fed chairman no one should have found much reason to cheer either before he headed the Fed when he was a presidential advisor or during the time he did. It was only after his economic consulting firm failed that he went into government service likely because he needed a new line of work. There he managed to become a larger than life seer of central banking who was elevated to near sainthood by the business pundits who thought under his tenure the skies were only blue and the few clouds in sight always had silver linings. Now Alan is retired to the greener pastures of lucrative book contracts and speaking engagements, which shows when you do your job well for the rich and powerful (at the expense of the rest of us) who gave it to you, you'll be well rewarded in the end. It's likely the new Fed chairman has taken note and will dutifully try to follow in the tradition that preceded him.

But try imagining a different sort of Fed chairman, one who knew, believed in and practiced the words and wisdom of another American president of some note - Abraham Lincoln. In 1886 Lincoln said the following: "The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarch, more insolent than autocracy and more selfish than a bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at the rear is my greatest foe."

Lincoln also appears to have said (although some dispute it): "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country.....corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed." Imagine what Lincoln might say today.

Given Lincoln's sentiment about the bankers and money power of the country, it would seem to beg the obvious question: did it play a role in, or was it the reason for, his untimely death at the hands of John Wilkes Booth? The international bankers clearly disliked Lincoln after he managed to get the Congress to pass the Legal Tender Act in 1862 that empowered the US Treasury to issue paper money called "greenbacks." Lincoln needed this legislation after he declined to pay the bankers the usurious 24 - 36% interest rates they demanded on the loans he needed to fund his war with the South. With the new banking law, Lincoln was then able to print up the millions of dollars he needed which was debt and interest free. Clearly this was not what the greedy bankers wanted as they can only profit when they get their pound of flesh from financial transactions they control. Right after the war ended Lincoln was assassinated, and shortly thereafter the so-called Greenback law was rescinded, a new national banking act was passed, and all money became interesting-bearing again.

How the Federal Reserve System Works

The Federal Reserve System is the result of the Congress and President having agreed to privatize the nation's money system and relinquish the power that should have remained the government's exclusive right. That act was so outrageous the Fed had to be deliberately designed to look like a branch of the federal government to hide the fact that it's really an all-powerful privately owned banking cartel whose member banks (including all the national ones) share in the vast profits earned from having the most important of all franchises governments alone should have - the right to print money in any amount, control its supply and price, and benefit hugely by loaning it out for a profit including to the government itself that must pay interest on the money it should never have to if it simply printed its own. Think of what happened as the government having legalized the right to counterfeit the national currency for private gain. It's no exaggeration to claim this is the greatest ever of all financial scams causing incomprehensible harm with the public none the wiser. Here's how it works in simple terms:

The Fed was given the authority to conduct the nation's monetary policy with the power to control the supply and price of money. It has three ways to do it - through open market operations, the discount rate it charges member banks, and the reserve requirement percentage of member banks assets it requires them to hold and not loan out. The Board of Governors is responsible for handling the discount rate and reserve requirements while the Federal Open Market Committee (FOMC) is in charge of the open market operations of buying or selling bonds explained further below. Using these tools, the Fed is able to influence the supply and demand for money and thus directly control the federal funds short-term rate that's always fixed unless the Fed wishes to raise or lower it. Longer rates are controlled by the powerful institutional traders in the bond market.

The FOMC and How It Works

The Federal Open Market Committee is really key to the whole process of money creation or contraction. It consists of 12 members - seven members of the Board of Fed Governors, the president of the New York Fed Bank (the most important one of all) and four of the remaining 11 Reserve Bank presidents who serve one year terms on a rotating basis. The FOMC holds eight regularly scheduled meetings a year to assess economic conditions and decide how loose or tight it wants monetary policy to be to further its stated goal of sustainable economic growth and price stability.

The FOMC literally has the power to create money out of nothing. It does it in a four step process:

Step 1 - The FOMC first approves the purchase of US government bonds on the open market.

Step 2 - The New York Fed bank buys them from sellers (financial markets always have an equal number of buyers and sellers).

Step 3 - The Fed pays for its purchases with electronic credits to the sellers' banks, which, in turn, credit the sellers' bank accounts. These credits are literally created out of nothing.

Step 4 - The banks receiving the credits can then use them as reserves to enable them to loan out as much as 10 times their amount (if their reserve requirement is 10%) through the magic (only banks have) of fractional reserve banking and, of course, collect interest on all of it. What a business, and it's all legal. Imagine how rich we might all be if we as private individuals could do the same thing. Borrow a million from the Fed and like magic it becomes 10 times as much, and we get to collect interest on all but the 10% of it we must hold in reserve. This is the magic of fractional reserve banking money creation and explains how powerful an economic stimulus it is when the Fed wants to enhance economic growth.

When the Fed wishes to contract the economy by reducing the money supply, it simply reverses the above process. Instead of buying bonds, it sells them so that money moves out of the buyers' bank accounts instead of into them. Bank loans must then be reduced by 10 times if the reserve requirement is 10%.

How the Fed Harms the Public Interest

The Federal Reserve System exists only to serve its owners and member banks and in doing so is hostile to the public interest. That's because it's a banking cartel with the power to restrict competition for greater profits gained at our expense. It goes from our pockets to theirs, and the public loses in at least four ways:

One - Through the invisible tax of inflation that results from the dilution of purchasing power caused by newly created money entering the system reducing the value of dollars already there. The Greenspan Fed was especially expansive, never was held to account for its excess and was able to pass a serious problem it created on to a future Fed chairman and society to deal with. The man we now lionize as a monetary magician began sensibly. From 1982, before he arrived in 1987, until 1992, the money supply increased on average by 8% a year. But from 1992 - 2002, the printing press worked overtime in sync with the deregulation and growth of global markets expanding the currency by more than 12% a year. It became even more extreme post 9/11 and since 2002 grew at a 15% rate. It now has more than doubled in less than a decade. It appears that the new Fed chairman has taken note and has begun reducing the rate of money expansion as he continues raising the federal funds rate to whatever level he has in mind.

Currency traders as well apparently have taken note of the rate of money supply expansion overall. Except for a respite in 2005, it's quite likely the dollar weakness since 2002 is the result of the excess amount of them created for the Bush administration's profligate spending to fund its endless wars and reckless tax cuts for the rich. The problem is further compounded as from 1964 to the present debt service has grown from 9% to 16.5% of the federal budget and rising; the current account deficit has gone from a 1% surplus to an almost 7% deficit; and federal indebtedness has grown by 40% just since 2001 and financed in large part by "the kindness of (foreign) strangers" that may be growing restive. Furthermore, since March, 2006, the Fed stopped publishing the M-3 aggregate of the total amount of dollars in circulation. With that transparency gone, big buyers of US Treasuries now have to calculate the value of the dollar based on speculation and uncertainty rather than hard data - not a way to inspire trust in the financial markets that function best in an atmosphere of openness and clarity.

Two - The public also loses because the banking cartel is able to practice usury - from it's power over a flexible currency to artificially move rates up or down to any level it chooses which many small lenders in a truly free and open market can't do. In addition, the cartel's market dominance forces most borrowers (especially smaller ones less able to issue their own debt instruments) to come to them for loans which it's then able to make using what should be the peoples' money available to them at the lowest possible cost from many highly government regulated small lenders competing for customers.

Three - Through the taxes, we, the public, must pay to cover the interest on the huge national debt (now over $8.4 trillion) accumulated from the money the Fed printed and loaned to the government. As mentioned earlier, that now totals an annualized amount exceeding two-thirds of a trillion dollars and increasing daily. It's made the bankers rich, ordinary people poorer, and the public none the wiser it's been fleeced big time.

Four - Compounding the above abuse, the cartel is able to get the public to bail out the system with more of its tax dollars. It happens whenever any of the too-big-to-fail banks need financial help to survive. The same is true for big corporations like Chrysler or Lockheed, large investment firms or hedge funds like Long-Term Capital Management or even countries like Mexico. It's also true when a single bank goes out of business and depositors must be compensated or more seriously in the wake of a systemic financial meltdown like the one that wiped out many savings and loan banks in the 1980s. Whether it's a single bank or many dozens at a time, public tax dollars are used to save the system or just pick up the tab to repay depositors insured against losses through government insurance protection up to a stipulated amount per account.

How Would Adam Smith Have Reacted to the Federal Reserve System

This concentration of banking cartel wealth and power is the opposite of what Adam Smith, the ideological godfather of free market capitalism, advocated in his writings including his seminal work The Wealth of Nations. Smith wrote about an "invisible hand" that he said worked best in a free market with many small businesses competing locally against each other. He strongly opposed the concentrated mercantilism of his day (what there was of it) which now would be the equivalent of today's giant transnational corporations and the banking cartel with the power to restrict competition, maintain higher prices than otherwise possible and earn greater profits as a result at the public's expense.

The kind of banking cartel that exists today is precisely what Smith would have condemned. But having a central bank is not in itself a bad thing provided the bank is government owned, controlled and operated for the public welfare. There's only a problem when through subterfuge the bank is set up to appear government owned and run but is, in fact, for private profit the way ours is and most others as well. And in the US, to make the arrangement work, a mostly publicly appointed governing authority runs the System acting as a shill for its private for-profit banking cartel members that wanted it in the first place and got a corrupted Congress to give it to them. To work, the cartel needs the cover it gets from its partnership with government, but it's through that arrangement that it harms the public interest for its own private gain.

And that goes to the heart of the problem: that the Congress elected to serve the people instead betrayed them by creating an all-powerful banking cartel and gave it the authority to practice fractional reserve banking with the power to get free money by creating it out of nothing. It then allowed its members a near-monopoly right to set the rates of interest they wish to charge borrowers. The whole process amounts to a legally sanctioned heist by the powerful banks working in league with government for its own gain. It's also part of a more extensive government arranged process to transfer wealth from the people to the pockets of large corporations and the rich and doing it while those being harmed are unaware it's even happening.

Another Way the Federal Reserve System Harms the Public

The Fed harms the public welfare in one other important way, and again most people are none the wiser about it. Supposedly the Federal Reserve System was established to stabilize the economy, smooth out the business cycle, maintain a healthy rate of sustainable growth while holding prices steady and benefitting everyone. So how well has it done its job? Since its creation in 1913, and with them in charge, we had the crashes of 1921 and the most important and remembered one in 1929. That was followed by The Great Depression that lasted until the onset of WW II that noted conservative economist Milton Friedman explained was caused and exacerbated because the Federal Reserve oddly decided to reduce the money supply at a time of economic contraction instead of increasing it. We then had recessions in 1953, 1957, 1969, 1975, 1981, 1990 and 2001. We also had inflation beginning in the 1960s which became quite severe through much of the 1970s and early 1980s. And we had a major banking crisis in the 1980s at which time more banks and savings and loan associations failed than ever before in our history. It happened in the wake of financial market deregulation when banks were allowed to pursue their own interests without government oversight to check their willingness to assume excess risk or stop them from trying to get away with deliberate fraud.

Along with the economic stability the Fed never achieved, we've also had soaring consumer debt; record high federal budget and trade deficits; a high level of personal bankruptcies and rising mortgage loan delinquencies; interest on a mounting national debt that's a large and rising percentage of the federal budget; the loss of our manufacturing base and it's high-paying jobs with good benefits because they're being exported to low wage countries; an economy in which services now account for nearly 80% of all business that provide mostly lower paying, less skilled jobs with few or no benefits; and a widening income and wealth gap that continues to harm lower and middle income earners to benefit the rich and well-off privileged few and a government that encourages it.

Sum it all up and the conclusion is clear. The one thing the Fed failed to accomplish above all else was what it was established to do in the first place. But it's much worse than that if we understand a cartel's real motives. It's not to serve the public interest. It's to abuse it because that's how it benefits most. It's able to do it with its legally sanctioned concentrated power and a friendly government in league with it as partners or facilitators. It's from that cozy hidden from view arrangement that it's able to get away with the grandest of grand thefts.

A Needed Solution to A Huge Problem

From the information presented above, it's clear that the Federal Reserve System was established through stealth and deceit by a handful of corrupted politicians in service to their powerful banking and Wall Street allies. They did it to defraud the public and without them being any the wiser about what, in fact, had been done or how harmful it was to be to their welfare and interests. Those in the Congress and President Wilson (a man trained in the law, one-time practicing attorney, former esteemed academic and president of Princeton University) either knew or should have known that the act he and they approved establishing the Fed was in direct violation of the Constitution they were sworn to uphold. They didn't, they broke the law, and the public paid dearly for their crime ever since to this day.

So what recourse is left, and can people be mobilized to pursue it. There's only one sensible and just solution to undo the damage done to so many for so long - abolish the Federal Reserve System and restore the power it now has to the federal government working for the public welfare. Take it back from the powerful banking cartel working against it and never allow it to be in its hands again. That alone is the only way. The great German poet and playwright Bertolt Brecht would have agreed and once said it was "easier to rob by setting up a bank than by holding up (one)."

Freeing us from the these powerful "Money Changers" would have enormous benefits for everyone. It would establish a prudent policy of money creation that would minimize our most unfair tax - inflation which is caused by private for-profit bankers manipulating the nation's money supply to enhance their profits. It would stabilize the economy and smooth out the extremes in the business cycle exacerbated by the cartel working for its benefit and against ours. It would lower the cost of money for borrowers because it would end the monopoly power the cartel now has to set the rates it chooses by opening the market to more competition. It would reduce the growing and oppressive national debt freed eventually from the extra money supply growth needed to pay it off. It would lower the public's tax burden as less revenue would be needed for debt service. It would be a momentous step toward reducing and hopefully one day eliminating the overwhelming power of all predatory corporate giants preying on us so they can grow and prosper. It might even discourage wars which are only fought for wealth and power - never for glory or to make the world safe for democracy or other false motives. Without a powerful corporate banking cartel and other industry giants that feed on the human misery they create, there would be less of a reason to pursue any. Try to imagine that kind of world and a government working for the public welfare instead of harming it as it now must do in service to capital. That world is possible, and responsible people need to work for it as the one we now have has failed and must be changed before it's too late.

A View of the World Created by the Interests of Capital and Our Government That Supports It

It's the ugly, corrupted world of neoliberal "free market" capitalism controlled by giant corporations; that benefits the privileged few alone causing great human misery and despair; a despotic world that can't endure nor must we allow it to much longer; one with endless wars for power and profit; where people are commodities to be used as needed and discarded like trash when they're not; with no concern for preserving an ecology able to sustain us and won't much longer because we're destroying it and ourselves for profit; where essential human needs don't matter under an economic model only valuing private gain; where democracy is incompatible with predatory capitalism; one no one should want to live in or ever have to; one we must change or perish. In the language of capital, that's the bottom line. Only a mass movement of committed people can change that world. It must or we all will.

Unless we can move from our failed economic model to a better alternative, it will end on its own one day by one means or other. But it may be a denouement no one would wish for - it's own self-destruction taking all else with it either by nuclear holocaust or an environment so inhospitable it won't support our ability to live in it. Our only chance is to work for change while there's still time.

A Vision of A Different Kind of World

History proves a better world is possible when committed people work hard enough for it. It's how slavery was ended; workers won the right to organize and bargain collectively; women gained equal suffrage to men, control of their own bodies, and more rights and status in the work force; blacks and other minorities won important civil rights; and politicians once enacted important social legislation if only out of fear of what might happen if they didn't.

Thomas Jefferson explained the "The price of liberty is eternal vigilance." It's also the price to keep our hard won social gains. For the past generation those gains have eroded while we weren't paying attention and only mass people action can regain them. The goal should be for a world of caring and sharing; where peoples' lives improve because we all work together for it; one at peace and not with endless wars to benefit the rich and powerful at our expense; where all essential human needs are met because governments work for the common good to assure it; with real participatory democracy where the public and elected officials work together to keep it strong and vibrant; with no oppressive corporate giants or banking cartels because the law won't allow any; where ecological nurturing and preservation are central; with clean air, water and soil and food that's fit and safe to eat; a much simpler world, more locally based than today's where notions like globalization aren't even in the vocabulary; one based on social equity and justice for all with government, law enforcement and the courts working to assure it stays that way; one we all want to live in and hope some day we can; one we want to pass on to future generations; one we can't afford not to have because the alternative may be no world at all.

We may now be at a key watershed moment where our fate hangs in the balance. We can either work together for a better, sustainable world or likely become the first species in it ever to destroy itself. If it happens, we'll likely take most others with us and not leave much behind for the few hearty ones that remain. We no longer have the luxury of debate for the kind of world we need to survive. The giant banks and corporations won't give it to us nor will a hostile government allied with them. It's up to us to go for it or likely perish if we fail. A good beginning would be by driving the Federal Reserve "money changers" out of our temple and the corporate giants with them. A better world is possible if we remember and live by political theorist Antonio Gramsci's inspirational words about "the optimism of the will." With it, organized people can find a way to beat organized money.

Stephen Lendman lives in Chicago and can be reached at Also visit his blog site at

Saturday, June 24, 2006


The Wall Street Journal Calls Hugo Chavez A Threat to World Peace - by Stephen Lendman

You won't find commentary and language any more hostile to Hugo Chavez than on the editorial page of the Wall Street Journal. Their June 23 piece by Mary Anastasia O'Grady in the Americas column is a clear, jaw-dropping example. It's practically blood-curdling in its vitriol which calls Hugo Chavez a threat to world peace. The sad part of it is Journal readers believe this stuff and are likely to support any US government efforts to remove the "threat."

The O'Grady article is about the elections scheduled to take place in the fall for five non-permanent UN Security Council seats to be held in 2007. One of them will be for the Latin American seat now held by Argentina. The two countries vying to fill the opening are Guatemala and Venezuela, and the other countries in the region will vote on which one will get it. You won't have to think long to guess the one the US supports - its Guatemalan ally, of course. And why not. For over 50 years its succession of military and civilian governments have all followed the dictates of their dominant northern neighbor. In so doing, they all managed to achieve one of the world's worst human rights records that hasn't abated even after the 1996 Peace Accords were signed ending a brutal 36 year conflict. Although the country today is nominally a democratic republic, it continues to abuse its people according to documented reports by Amnesty International.

Amnesty is aware of sexual violence and extreme brutality against women including 665 murders in 2005 gotten from police records; 224 reported attacks on human rights activists and organizations in the same year with little or no progress made investigating them; forced evictions and destruction of homes of indigenous people in rural areas (echoes of Palestine); and no progress by the government and Constitutional Court in seeking justice for decades of genocidal crimes and crimes against humanity committed by paramilitary death squads and the Guatamalan military. The sum of these and other unending abuses led Amnesty to call Guatamala a "land of injustice."

That record of abuse hardly matters to the Bush administration nor did it bother any past ones either since the CIA fomented a coup in 1954 ousting the country's democratically elected leader Jacobo Arbenz Guzman. That coup began a half century reign of terror against the country's indigenous Mayan majority. It was fully supported by a succession of US presidents who were quite willing to overlook it as long as Guatamalan governments maintained a policy of compliance with the US agenda. They all did, and in return received the support and blessing of the US and its corporate giants that continue to suck the life out of that oppressed country.

Guatamala fills the bill nicely for the Bush administration and would be expected to be a close ally in support of US positions that come up for votes in the UN Security Council. Venezuela, on the other hand, is a different story. Since he was first democratically elected in 1998, Hugo Chavez has done what few other leaders ever do. He's kept his promises to his people to serve their interests ahead of those of other nations, especially the US that's dominated and exploited Venezuela for decades. He's served them well, and in so doing engendered the wrath of his dominant northern neighbor that already has tried and failed three times to oust him and is now planning a fourth attempt to do it.

The idea of a Chavez-led government holding a seat on the Security Council does not go down well in Washington, and the Bush administration is leading a campaign to prevent it with aid and support of the kind of attack-dog journalism found in the Wall Street Journal. Honest observers know this newspaper of record for corporate America has a hard time dealing with facts it dislikes so it invents the ones it does to use in their place.

The June 23 editorial is a good example. It extolls the record of the Guatamalan government with its long-standing record of extreme abuse against its own people falsely claiming it's been "accumulating an impressive record of international cooperation on a variety of UN efforts." It claims one of its main qualifications is its "active role in international peacekeeping" and that the country is now home to a Central American regional peacekeeping school and training center. Oddly, it mentions that Guatamalan peacekeepers are now serving in the Democratic Republic of Congo, Sudan and Haiti. What it fails to mention is that those so-called "peacekeepers," along with those from other countries serving with them, have in large part functioned as paramilitary enforcers, and in that capacity have committed gross human rights abuses against the local people rather than trying to protect them. The WSJ writer surely knows this but didn't choose to share that information with her readers. Instead she extolls the country's "democratic credentials." But readers with any knowledge of recent Guatamalan history surely know that country's true record is one of extreme violence and abuse against its own people and one no one would think of as a nation representing them democratically.

The WSJ's June 23 editorial is titled "A Vote for Venezuela Is a Vote for Iran." The commentary in it is one of the paper's most extreme diatribes against the Venezuelan leader which would seem to indicate the Bush administration and corporate America are stepping up their attack on Hugo Chavez in advance of when they plan to make their move to oust him. The Journal writer calls him a "strongman" in an "oil dictatorship" leading a government that values "tyranny and aggression" who'll use his seat and Council presidency when his nation assumes it to support "hostile states" like Iran, Cuba, Sudan and North Korea. Observers knowledgeable about Venezuela under Chavez would have a hard time containing themselves as the true Chavez record is totally opposite the one the Journal portrays. The Journal writer, of course, knows this, but would never report it in her column. Her employer and the interests it serves wouldn't be pleased if she did.

While claiming that a Guatamala seat on the Council is a "voice for the region, not its own national interests," it says Venezuela's "rests largely on oil 'diplomacy' and the capacity to push anti-American buttons around the UN." It goes on to state "It may seem strange Venezuela has any support in the region. Over the past seven years, its meddling in its neighbors' politics 'have' (even the grammar is wrong) earned it a reputation as a bully. Mr. Chavez is persona non grata in more than a few Latin nations. Many countries are worried about Venezuela's 'big spending' to acquire fighter jets and 100,000 kalisnikovs from Russia." Readers may need to pause to catch their breath.

What the Journal writer doesn't explain is far more important than what she does - but she's doing her job as a servant of the US empire. Chavez's so-called "oil diplomacy," in fact, is based on his Bolivarian Alternative of the Americas or ALBA. It's based on the principles of complementarity (not competition), solidarity (not domination), cooperation (not exploitation) and respect for other nations' sovereignty free from the control of dominant powers like the US and its large transnational corporations. It's the mirror opposite of US-style predatory capitalism and the one-sided trade agreements it uses to exploit other countries for its own gain.

The nations participating in ALBA-style agreements are able to operate outside the usual international banking and corporate trading system in their exchange of goods and services so that each country benefits and none loses - just the opposite of the one-sided way the US operates. Because Venezuela is rich in oil, it's been able to trade that vital commodity with its neighbors who need it, even sell it to them at below-market prices, and get back in return the products and services its trading partners can supply on an equally favorable basis. It's a true "win-win" arrangement for participating countries but one that angers the US because it cuts its corporations and big banks out of the process. The Chavez plan is to help his people, not serve the interests of the corporate giants or dominant US neighbor. The WSJ calls this "meddling" and Chavez a "bully." What glorious meddling it is, in the true spirit of the country's Bolivarian Revolution, and "bully" to Hugo Chavez for doing it.

As for Chavez's so-called "big spending" for weapons that has "many countries worried," one must wonder which countries the Journal writer means. She mentions none, which she surely would have and quoted their officials if, in fact, there were any. The truth, of course, is Hugo Chavez is acting no differently than most all other countries in the region or elsewhere, has expressed no hostility toward any of them, has never invaded a neighbor or threatened to, and is a model of a peace-promoting leader who's only taking sensible steps to upgrade his small military and protect his nation against a hostile US he has every reason to believe will attack him. But you'll never find that commentary on the pages of the Wall Street Journal.

The Journal editorial ends in grand style. It demeans the poor countries of the region benefitting from below-market priced Venezuelan oil as likely supporting that country for the Latin American Council seat. It also attacks Argentina for being a "Venezuelan pawn," calling it "once a haven for Nazis" (the US was and still is), and stating "the country has been so incompetent about managing its 'resources' that it too needs charity from Mr. Chavez." Indeed, Argentina had big financial trouble at the end of the 1990s, but the Journal writer doesn't explain why. It was because the country became the "poster child" model for US-style neoliberal free market capitalism in the 1990s. It wrecked the economy causing it to collapse into bankruptcy it's still struggling to recover from.

The Journal writer also attacks Bolivia and Cuba for supporting Chavez but is particularly hostile to the Lula government in Brazil for its siding with the Venezuelan leader. She calls that support "surprising" and accused the Brazilian government of being "Bolivia's unofficial energy advisor (that) orchestrated the confiscation of Brazilian assets (in Bolivia) recently." Bolivian president Evo Morales nationalized his nation's energy resources which Bolivian law clearly states the nation owns. He confiscated nothing, which the Journal writer surely knows but failed to tell her readers. She also mentioned a so-called "eternal Brazilian struggle to prove that it can challenge US 'hegemony' in the region (that) trumps the need to regain dignity and protect its investments abroad." Left out of the commentary is any mention that Argentina, Bolivia, Cuba and Brazil are sovereign states with the right to support whatever policies and other countries they wish without needing US approval to do it.

About the only final comment the Journal writer can make is to claim Guatamala has the "solid backing of the 'more serious democracies' in the region - such as Colombia and Mexico." It's likely what the writer means by "serious" is those countries' elections are about as free and fair as ours - meaning, they only are for the power-elites controlling them who arrange the outcomes they want.

The June 23 Wall Street Journal editorial was a typical example of what this newspaper calls journalism and editorial commentary. This writer follows it to learn what the US empire likely is up to. In the case of Hugo Chavez in Venezuela, it's no doubt up to no good. The continued hostile rhetoric is clearly to signal another attempt to oust the Venezuelan leader at whatever time and by whatever means the Bush administration has in mind. Stay tuned.

Stephen Lendman lives in Chicago and can be reached at Also visit his blog site at

Saturday, June 17, 2006


Wall Street Journal Gives Hugo Chavez A Mixed Review - by Stephen Lendman

In contrast to its one-sided stance on Hugo Chavez, the June 16 Wall Street Journal had an interesting article on US based activists in Boston, New York, San Diego, Miami, Cincinnati and other cities around the country forming Bolivarian Circles and other groups supporting the Chavez government. But it couldn't do it without taking its usual swipe at the Venezuelan leader beginning with the front page article's title: Move Over Che: Chavez Is New Icon of Radical Chic. That's WSJ language intending to demean in its headline rather than use a proper one to reflect what their story was about.

It then used its opening paragraph (which many readers never go beyond) to convey a flavor of invective before getting into the heart of a story worth telling but not without some slaps at Chavez interspersed along the way. It referred to the president's "fiery" rhetoric (never mentioning its honesty) saying it wins him few friends in Washington while never explaining the one place on earth Hugo Chavez will never have friends in high places is in the nation's capitol. It also accuses Chavez of becoming a "revolutionary hero nearly on a par with Che Guevara and Fidel Castro," that he uses his nation's oil riches to "prop up Mr. Castro's regime," and that "His dream is to spread the Venezuelan brand of socialism across Latin America."

Journal writers are masters of half-truths and distortion that goes along the the paper's policy of being hostile to any government not in line with the neoliberal Washington Consensus (wreaking havoc wherever it spreads) and not fully subservient to US wishes. Nothing in their article explains that the Bolivarian Revolution is a true participatory democracy where the people have a say in how the country is governed; that the lives of the majority poor have benefitted enormously by an impressive array of essential social programs and services unimaginable in the US; that Hugo Chavez aids his neighbors (Castro included who aids Venezuela in return) and doesn't threaten war or sanctions against them; has no secret prisons; no illegal political prisoners or illegal detentions; doesn't practice torture; doesn't ethnically cleanse neighborhoods to aid corporate developers; and never suspended the constitution even after a coup d'etat, mass street riots and a crippling US-instigated oil lockout and shutdown. It's even working to clean up and change a many decade-long legacy and systemic climate of corruption and inefficient state bureaucracy and is making slow progress against great odds that would challenge any leader.

When it comes to reporting even a good story about Hugo Chavez, the Journal has to ruin it by taking their usual jabs and getting their facts wrong in the process. It went on to claim a "darker side" in the Bolivarian circles within Venezuela stating they help the "government identify opponents, who are then denied remedial education and other government services." It reported this was what two US academics found in a study they conducted that may have been funded by the Bush administration to report results in line with its own policy and rhetoric. Bush officials also may have bought off some so-called "Human rights groups" which the Journal writer says claim Chavez is "dangerously centralizing (his) power, emasculating Venezuela's judiciary and threatening press freedom." It sounds more like those groups were misquoted and are talking instead about what's happening inside the US as the Bush administration consolidates its power, is systematically stripping away sacred constitutional freedoms and is moving the country dangerously closer to a full-blown police state. Hugo Chavez is doing just the opposite in Venezuela, but you won't learn that on the pages of the Wall Street Journal or from their so-called sources.

Nonetheless, the Journal reported an inspiring story of ordinary US citizens wanting to spread the message of what, if fact, is happening in Venezuela. It's heartening to learn about groups forming around the country that hopefully may grow in size and whose activities may be able to counter the hostile commentary from high level US officials and the complicit and stenographic corporate media. It's quite surprising to read on the front page of the WSJ a quote many in the US would agree with, but we'd never expect to see it in print in any major US newspaper. It's by a Chavez supporter in Olympia, WA who says "My political belief is that the US is a horrendous empire that needs to end." Another supporter said he formed an Oregon Bolivarian Circle because of his outrage over the 2002 US led failed coup against the Venezuelan leader. He went on to explain he and his Venezuelan-born wife make annual trips to the country and are impressed by Chavez's efforts to provide (free) health care and education for the poor (who never had it before he was elected). He then added that he "couldn't understand why the US press didn't see it his way," so he and others in his Circle began to sponsor pro-Chavez movies, college lectures and rallies. This gentleman actually appeared on one of President Chavez's five hour Sunday call-in television programs "Alo Presidente" and was called "brother" by the president.

The Journal went on to report on other groups including one in Philadelphia that has produced three pro-Chavez videos including one about supportive oil workers who helped the state-owned oil company keep operating despite a crippling anti-Chavez strike that began in December, 2002. It also explained that the US based groups get no funding from the Venezuelan government and instead operate strictly on their own and do it to "help us counteract the campaign that there isn't freedom of expression in Venezuela," according to the country's US ambassador Bernado Alverez.

Overall, the Journal today was unusual in that it was both in and out of character in the way it reports on the Chavez government. On the one hand, it showed Hugo Chavez has loyal supporters inside the US working to spread the truth about his government and Bolivarian Revolution. But at the same time, the flavor of invective was strong, in line with the Journal's usual one-sided stance, and it ended up spoiling what otherwise would have been a fine effort. Wouldn't it be nice if one day the WSJ doffed its empire-friendly garb and told it like it is, fully and honestly. Apparently that's too much to expect from the newspaper of record for corporate America that never lets the truth get in the way of their one-sided support for the US empire and interests of capital. In spite of it, the spirit of the glorious Bolivarian Revolution is uplifting and inspiring. It's powerful, spreading and in the end won't be derailed by Journal writers or other enemies of those on the side of social equity and justice.

Stephen Lendman lives in Chicago and can be reached at Also visit his blog site at

Thursday, June 15, 2006


Comments on John Pilger's New Book Freedom Next Time - by Stephen Lendman

John Pilger is an award-winning journalist and documentary filmmaker and one of the truly great ones of our time. For nearly 50 years, he's courageously and brilliantly done what too few others in his profession, in fact, do - his job. John has also been a war correspondent, is the author of 10 books and is best known in his adopted country Great Britain for his investigative documentaries exposing the crimes of US and Western imperialism.

Freedom Next Time is John's newest book just published and the fifth one of his I've read. The others were magnificent, and when I learned a new one was due out, I couldn't wait to read it knowing it would be vintage Pilger and not to be missed. I wasn't disappointed and am delighted to share with readers what it's about. What else, as John himself says in his opening paragraph: "This book is about empire, its facades and the enduring struggle of people for their freedom. It offers an antidote to authorized versions of contemporary history that censor by omission and impose double standards." Indeed it does, and John devotes his book to exposing the crimes of empire in five countries. I'll cover each one in a separate section.

The Introduction - An Explanation of the Imperial Mindset

In his introduction, John explains how the imperial notion of "colonial assumptions have not changed," and to sustain them the great majority of people everywhere "remain invisible and expendable." He poignantly recounts how while on September 11, 2001 a few thousand people tragically died in New York and Washington, the UN Food and Agricultural Organization reported the daily mortality rate of 36,615 children alone from the effects of extreme poverty. Not a word of it was in the news that day or any other. Nor was there any explanation of why these people were denied the bare essentials to survive in a world able to provide them. These and the ones killed daily in Iraq and elsewhere are what John calls the "unworthy victims" as distinguished from the "worthy ones" in the US on 9/11 and those in London on July 7, 2005 who died in a "terrorist" bombing. The only crimes we recognize are the ones committed by others - those we call "terrorists" or label as enemies, never any by us. Nobel laureate Harold Pinter refers to this as "a vast tapestry of lies, upon which we feed." We only know what our leaders and complicit corporate media (BBC, NPR and PBS included) choose to tell us, and it's never the truth or full disclosure we're entitled to have. What they suppress is far more important than what they report.

Until the fall of the Soviet Union, the notion of imperialism in the US was that it was a European, not an American tradition. It was untrue, of course, but a proper education in the US, like the one I got, never let on. It hid the true history of my country that from inception practiced a policy of imperial expansion west and south and engaged in plunder and genocide against the original inhabitants living there to make it possible. George Washington was its first practitioner, referring to the new nation as a "rising empire." He helped build it by removing and exterminating its native Indians so expansion could proceed as the Founding Fathers and those who followed them wished. Washington believed the Indian peoples were subhumans (no different from how we view Iraqis today) and compared them to wolves and "beasts of prey" who must be destroyed. And our sacred Declaration of Independence contained the language "merciless Indian savages" which left no room for their independence or any justice either.

The tradition begun at the republic's birth never changed but until the end of the "cold war" was well hidden behind a respectable democratic facade and still mostly is. Any notion of imperialism was never something taught in school at any level, discussed in polite society or acknowledged publicly. But all that changed in the 1990s after the fall of the Soviet Union. What never before could be admitted now began to be seen as something respectable and even a matter of national pride. And with the advent of the Bush administration, imperial dominance and expansion began to be portrayed as something positive and contributing to the advance of civilization. How low we've sunk in coming so far.

John explains how fraudulent and dangerous Bush's priorities are based on its policy papers and one conceived a few years before it came to power. It began with a 1997 "messianic conspiracy theory" called The Project for the New American Century (PNAC) written by many of the far right neoconservative ideologues now in power. This document is an imperial plan for US global dominance to extend well into the future and be enforced with unchallengeable military power. It was a blueprint for the current "war on terror" (which John calls a "war of terror') and "preventive war" that began after 9/11 and is now ongoing in Iraq and Afghanistan with further conflicts likely ahead. The Pentagon goes even further in its Vision 2020 that lays out a goal that calls for "full spectrum dominance." By this is meant the total, unchallengeable control of all land, sea, air and space and the self-given right to enforce it with the use of nuclear or any other kinds of weapons.

The British government under Tony Blair is part of the same scheme as a complicit junior partner. It sees it in its own interest to be allied with the US and Bush administration and supports its imperial policies. As a result, John explains, it's no surprise Mr. Blair has taken his nation to war more often than any British Prime Minister in modern times. For him and George Bush, international law, norms and any sense of morality are irrelevant and aren't allowed to stand in the way of their unrestricted political violence portrayed as having a democratic face and purpose. Freedom Next Time exposes this hypocrisy to show that "imperialism, in whatever guise, is the antithesis of the 'benevolent and moralistic.' " It examines the history and events in five countries John knows well as a journalist and filmmaker.

Before beginning, John first addresses the present in his introduction. He quotes those who see the seeds of fascism and disturbing similarities in the US (and UK) today to Nazi Germany and Hitler's demonic appeal to his divine mission as that country's savior that he sold to his people in Christian religious terms. He did it in a country that was the pride of Western civilization and a very model of democracy. If it can happen there, it can anywhere and will unless enough committed people work to prevent it. But John stresses he hasn't written a pessimistic book. He cites the alternate seeds of hope, rebirth of democracy, and social equity in Latin America - especially in Hugo Chavez's Venezuela and the poorest of all the continent's nations Evo Morales' Bolivia. He sees these forces as part of a "worldwide movement against poverty, war and misinformation that has arisen in less than a decade, and is more diverse, enterprising, internationalist and tolerant of difference than anything in my lifetime." John concludes his message of hope saying that the "wisest... know that just as the conquest of Iraq is unraveling, so a whole system of domination and impoverishment can unravel, too."

John's book is divided into five chapters for each nation he covers. Four are well-known, but few readers may know about the first one discussed below in the Chagos archipelago or even know where it is.

Chapter One: Stealing A Nation Called Diego Garcia

Diego Garcia is a small 84 square mile British controlled island in the Chagos archipelago in the Indian Ocean(officially known as British Indian Ocean Territory) that lies strategically half way between Asia and Africa. It was once the home of 2,000 "gentle Creole" people who are British citizens, but between 1967 - 1973 they were tricked and expelled by the UK government so their island home could be given to the US for a military base. They were sent into exile to a very inhospitable new home in Mauritius where seven British governments watched their displaced citizens suffer and perish in the shanties they were forced to live in and the desperate poverty they were forced to endure.

This "act of mass kidnapping" was so devious and deceitful, it was carried out in secrecy, and for almost a decade was concealed from the Parliament and US Congress. The Chagossians were treated with contempt as they not only lost their homeland, they were "deemed not to exist." It was the US that made the demands and cut the deal. Washington wanted the entire population expelled and the whole dirty business covered up. Then as today, the British went along with the ugly scheme. The people had no say, and those who refused were lied to and told they had no choice because "their removal was 'legal' under the rules of the colony."

In their new home, life became a living hell. The Chagossians found themselves in a society foreign to their simple way of life, and they were unable to adjust. On Diego Garcia they had their own home, grew their own food, fished and worked on a plantation. In Mauritius they had to find jobs to survive and most couldn't. The result was by the mid-70s most of the exiles were unemployed, impoverished and began to die. The British Foreign Office and High Commission contemptuously ignored their plight saying the Chagossians should take up their problem with the Mauritian government. It hardly mattered that these people were British citizens and entitled to the same rights as all other Brits. All they got in compensation was 1,000 pounds (about $1,800) in exchange for agreeing to renounce their right ever to return to their homeland and do it on a document they couldn't read.

The history of this disgraceful episode was well hidden until the 1990s when a "treasure trove of declassified documents" was found in the National Archives at Kew in London. It proved there was a conspiracy between two governments that Article 7 of the statute of the International Criminal Court referred to as a "deportation or forcible transfer of a population (and) a crime against humanity." It also violated Article 73 of the UN Charter that obliges a colonial government like Britain to obey its "sacred trust" to protect the human rights of its people. Britain shamelessly did none of this and instead dutifully bowed to the wishes of Washington and obeyed its commands as it still does today. The two countries also engaged is a huge cover-up for a decade that went to the highest level of both governments hoping to hide the truth from ever coming out. Those involved included Prime Minister Harold Wilson, Queen Elizabeth and Presidents Johnson and Nixon among others. Everything was hidden including a secret financial kickback Washington made that was also concealed from the US Congress and British Parliament.

But once the truth began to come out, things changed. On November 3, 2000 the British High Court stunned the government by citing the Magna Carta and annulled the original deportation order. It meant the people were entitled to British passports and had the right to go home. But it was a short-lived pyrrhic victory as one year later the Chagossians were back in the High Court seeking compensation for their ordeal. This time they faced a hostile judge who described their case as "unmeritorious" and denied their claim. Then three months later, the Foreign Office minister responsible for the Chagos sent an "order-in-council" to the Queen for her "rubber-stamped" approval which overturned the High Court 2000 victory and banned the islanders from ever returning home. As John was writing, he reported the Chagossians were back in London for a last chance judicial review before the High Court to annul the government's denial of their right of return to their homeland. Even after all these years, these courageous people were and still are fiercely determined to achieve the justice they so rightfully deserve.

It finally came in late March 2006 (after John's book was finished), in a damning High Court verdict that condemned as "repugnant" the decision to remove the Chagossians at the US insistence. It overturned the Blair government "order-in-council" discussed above. The Foreign Office must now decide if it will appeal the verdict and may be pressured to do so by the US. But even if all litigation ends favorably for the Chagossians, it's by no means certain they'll ever be allowed to return as long as Diego Garcia remains an important US military base. The Bush administration is contemptuous of the law, may likely ignore it and a new US administration elected in 2008 may do the same. It thus remains to be seen if justice will ever be served in this long-running tragedy. However, it's likely the Chagossians will never stop seeking it.

Chapter Two: The Last Taboo - The Five and A Half Decade Cover-Up of Israel's Oppression of the Palestinians

John chose the title of this chapter from an essay with that title written by the eminent and courageous Palestinian-born writer, scholar and activist Edward Said shortly before his death in September, 2003. Said was a brilliant man and passionate fighter for justice for his people. In his essay he wrote: "The extermination of the Native Americans can be admitted, the morality of Hiroshima attacked, the national flag (of the United States) publicly committed to flames. But the systematic continuity of Israel's 52-year oppression and maltreatment of the Palestinians is virtually unmentionable, a narrative that has no permission to appear."

It appears boldly and courageously in John's chapter as he recounts the unexplained and irrational hatred most Israelis have for Palestinians, a people whose country they stole and have relentlessly oppressed for many decades. He explains what life is like for these defenseless people under a cruel occupying power in the refugee camps or the world's two largest open-air prisons of Gaza and the West Bank. He recounts how ordinary people who only want to live in peace and have normal lives are denied their most basic personal, economic and political freedoms, dignity and any sort of justice. He shows how Israelis with full financial and political backing from the US and the West have terrorized the Palestinian people with impunity, and when the victims dare defend themselves or resist they're called "terrorists."

I, too, have written about Israeli crimes against the Palestinian people in a recent article I called Life in Occupied Palestine. What John documented on the ground from the people who endure this brutal daily onslaught, I summarized in a few paragraphs I'd like to share here. I wrote as follows:

Try to imagine daily life under these conditions:

You live in limbo in a country occupied by an oppressive foreign army and a system of institutionalized and codified racism. You have no recognized nation, no right of citizenship and no power over your daily life. You live in a constant state of fear. The occupier imposes economic strangulation and collective punishment by restricting free movement; enclosing population centers; closing borders; barring most of your people from working inside their border; imposing regular curfews, roadblocks, checkpoints, electric fences and separation walls and continues to build new settlements in your Occupied Territories (on your land in your country) violating the Geneva Conventions prohibiting an occupier from settling its population on conquered land.

The occupier denies your people their basic human rights including those under the Fourth Geneva Convention which governs the treatment of civilians in war and under occupation. There are 149 articles of this Convention. The occupier's government violates almost all of them and in so doing is committing war crimes according to international law. The UN Human Rights Commission determined it's also committing "crimes against humanity" against your people. This concept comes from the 1945 Nuremberg Charter drafted by the U.S. to try Nazi war criminals. The international notion of a "crime against humanity" was established to define what Hitler did to the Jews. The UNHRC ruled this is what the occupier is doing to your people, and that this act is the historical and legal precursor to the international crime of genocide as defined by the 1948 Convention on the Prevention and Punishment of the Crime of Genocide.

The occupier also sends its troops, tanks and heavy armor into neighborhoods at will to maraud and destroy. It strikes at will from the air with sophisticated missle-firing attack helicopters and F-16s and deliberately inflicts eardrum shattering and terrifying sonic booms. And it gives its military the right to freely harass, arrest or kill extra-judicially any of your people - man, woman or child on any pretext with impunity. It bulldozes homes and the people in them if they don't escape in time (usually in middle of the night and without warning or notice) as punishment or for lacking a permit to build on their own land, in their own country or for any other reason. It steals land relentlessly hoping it will have it all one day or at least all the parts it wants. It detains, imprisons and tortures thousands of your people for the real or perceived crime of fighting for their freedom against an oppressive occupier.

To enact vengeance and to provide security for its illegal settlers in the Occupied Territories, it restricts or prevents access to essential and emergency health care, education, employment, the right to move goods and services from producer/suppliers to end users, and even enough food and water. It created a state of economic siege forcing up to nearly two-thirds of your people (according to the UN) below the poverty line of $2.20 a day (and half of those two-thirds on $1.60 or less) and over half the work force to be unemployed (the number varying with the intensity of the Israeli lockdown). It destroys your peoples' crops and orchards including more than 1 million olive trees. It imposes punitive taxes and provides few services or withholds them at will as collective punishment. You have no power to stop any of these abuses or receive any redress in the occupier's courts. How can you as a Muslim in a racist Jewish state.

John explains that Britain was the architect of this historic disaster and injustice. In 1917, it wanted a client state in the Middle East to watch over its economic interests and got one with the Balfour Declaration that promised a "national home for the Jewish people" in Palestine. The Declaration also made a hollow promise to the Palestinians who'd been living there for centuries that "nothing shall be done which may prejudice the civil and religious rights of the existing non-Jewish communities." It was not to be. The Jewish state came into being in 1948 and was born in the original sin of mass slaughter and forcible expulsion of the people living there, and nothing was ever the same thereafter. Israel systematically defies all international laws and norms, has the full backing and financial support of the US and the West, and the Palestinians are forced to endure the most outrageous abuses without end and with no help from the outside to stop them.

Most people in the West have little knowledge of any of this because the major media refuse to report it and only portray Israel as a beacon of democracy in a region that has precious little of it. It's a myth, but one that's widely believed. Those who dare expose it or Israeli crimes are called anti-semites or self-hating Jews. They also face extreme denunciation and even ostracism. There's an unwritten binding rule no one dare violate in the US especially: Israel can do no wrong and must be fully supported whatever it does. As a result, the myth of a so-called "peace process" that never was and never will be persists as well as the false hope that the Palestinians will ever have a state of their own beyond the bantustans the Israeli's have in mind for them after they've been fully ethnically cleansed or murdered in the areas the Israelis want for themselves.

John also exposes the fraud of the Oslo Accords and later Camp David meetings hosted by Bill Clinton at which Israeli Prime Minister Ehud Barak offered nothing to Yasar Arafat. The public was fraudulently told otherwise and Arafat was unfairly blamed for turning down a proposal no sane and responsible leader could ever accept. We learned about the many massacres from the hundreds of Palestinians killed at Deir Yassin in 1948, the 18,000 slaughtered when Israel illegally invaded Lebanon in 1982 including the Ariel Sharon ordered massacre of up to 3,000 defenseless men, women and children at the Sabra and Shatila camps, to the rape of Jenin in April, 2002 when the Israeli Defense Forces (IDF) invaded this city of 35,000 (including its refugee camp), cut it off from any outside help, destroyed hundreds of buildings (many with people buried alive under the rubble), cut off power and availability of food and water from the outside, prevented outside help from entering the city and murdered an unknown number of Palestinians.

John covers much more including the daily killings of defenseless people, the mass Israeli inflicted unemployment, poverty and deprivation, and the life of unending desperation these people are forced to endure. Yet they do and continue to cling to the hope that one day their stolen land will be returned and their rights fully restored. One of the many untold stories is that many outraged Israeli Jews have the same hope and are courageously defying their government and supporting the Palestinians to achieve it.

Chapter Three: Shining India - The False Facade of A Nation Where Over One Third of the People Live in Desperate Poverty

John explains how India is a nation of stark contrasts, and the country's richest city, Bombay, may show it best. At one extreme is a thriving business community of maritime trade, merchant banks and two stock exchanges. At the other is a city of one million humans per square mile and typified by the "rail roads" district foreigners and outsiders know nothing about. It teems with desperate people living under conditions "barely describable - a packing case for a home with sewage "ebbing and flowing in the monsoon." John asks how can a nation with memories of "great popular struggle" and democracy allow this. The answer is its leaders chose to sell its sovereignty to the neoliberal model of a global economy dominated by giant transnational corporations, especially those in the US.

The rise of the Hindu nationalist (proto fascist) BJP-led government in the 1990s accelerated the process. It removed the barriers in place to protect Indian industry and opened the country to invasion by foreign predatory corporations that took full advantage. The result is a nation that could be a poster child for how an adopted economic model got it all wrong and caused mass human misery. It's seen in an increase in "absolute poverty" to over one third of the population or about 364 million people. John explains that although India's growth rate is high, "this is about capital, not labour, about liberated profits, not people." He also exposes the myth of India being a high-tech juggernaut. While the nation has risen to "pre-eminence" in computer and other technology, the new "technocratic class" is tiny. Also, the so-called consumer boom has benefitted at most about 15% of the population.

Over two thirds of the people live in rural villages and depend on small scale agriculture for their livelihood and survival. These people have been devastated by the nation's embrace of the Western economic model. It's caused a hidden epidemic of suicides among them because they can't compete with agribusiness. Those opting for a less severe solution are forced off their land in a futile attempt to seek refuge among the teeming masses in the cities. The result is growing poverty, deprivation and extreme human misery on a massive scale. Because of its huge population of over one billion, India stands out as a warning of the kind of future people everywhere will face unless a way is found to reverse a failed economic model that enriches the few, devastates the many and is strangling the ability of the planet to continue sustaining the abuse afflicted on it.

Chapter Four: Apartheid Did Not Die - Predatory Capitalism Made It Worse

The hated apartheid may have ended in South Africa about 16 years ago, but the new neoliberal Washington Consensus was even worse. The obsession with race in a white supremacist society was replaced by the dominance and pursuit of wealth allowed only a privileged minority at the expense of the great mostly black majority. The result is that while average household income has risen for about 15% of the population (including some blacks), the overall black majority household income has fallen by about 20% making conditions today far worse than under apartheid.

The new South Africa under its heroic new president Nelson Mandela chose to embrace the Western economic model. He agreed to an "unspoken deal" that allowed the white elite to retain economic control in exchange for black majority rule that would be subservient to the former white government. The current president Thabo Mbeki cut the deal when he led a group of ANC officials in secret meetings in London between 1987 - 1990. They agreed to essentially betray their people and their 40 year struggle for freedom now lost. In came the World Bank and IMF dictating mass privatizations and structural adjustments to cut essential social services in return for financial aid. It's caused an oppressive level of debt, unemployment of about 38%, an HIV infection rate of about 20%, 40% of the schools with no electricity, 25% of the people with no access to clean water and most of those with access unable afford the cost, 60% with inadequate sanitation and 40% with no telephones. The result has been an economic apartheid replacing a legal one with the majority black population worse off today than under the political oppression of the past. It's a disturbing story of what's occurred in all countries that agreed to the Washington Consensus under which they sold their sovereignty to the interests of capital. The difference in South Africa is that the man oppressed blacks thought would win their freedom, in fact, sold them out instead.

John returned to South Africa after a 30 year absence following his expulsion by the apartheid government he abhorred. He interviewed Mandela in retirement and is nearly alone explaining the first ANC president's "ambiguity." He posed tough questions asking how could the ANC that struggled so long for freedom now have embraced "Thatcherism." Why would he allow his long-suffering people to suffer even greater harm under a system where virtually everything, including essential services, is privatized and deregulation allows big business free reign to pursue profit at the expense of the public interest. Mandela responded that "You can put any label on it you like; you can call it Thatcherite but, for this country, privatization is the fundamental policy." A sorrowful answer from a man who knows better. John also confronted Mandela about why he supported and showed deference to oppressive governments in Indonesia, Burma, Algeria, Colombia and Peru and even ordered a bloody invasion of neighboring tiny Lesotho. Again the answer he got was none too impressive and from a man who once was and still is in important ways a giant in the fight for social equity and justice.

Once again John shows how he discovered on his return that the spirit of resistance had survived. He found it among numerous "social movement" and allied organizations that he called the most "sophisticated and dynamic in the world." They've forged links to international human rights and anti-capitalist movements along with independent trade unionists. He said what South Africa has in abundance is a force called "ubuntu" - "a humanism that is never still.....a subtle concept....that says a person's humanity is expressed through empathy and solidarity with others; through community and standing together." It's what Steve Biko called "authentic black communalism." It's in that spirit that John hopes the future of South Africa lies.

Chapter Five: Liberating Afghanistan - the US Inflicted Nightmare on Another Long-Suffering People

John begins describing Afghanistan like it's more a moonscape than a functioning country - Kabul streets with "contours of rubble rather than streets, where people live in collapsed buildings, like earthquake victims waiting for rescue......(with) no light or heat." It's an age-old story for these beleaguered people who've had a long history of conflict and suffering with little relief ever. For almost a century the country was victimized by the "Great Game" of competition between the British empire vying with Tsarist Russia for control of this part of the world. In recent history, it paid dearly again in the 1980s when a US recruited mujahedin guerrilla army battled against a Soviet occupation. It forced the occupiers out but only at the expense of a ravaged country that never recovered throughout the 1990s as a brutal civil conflict followed the Soviet withdrawal. Then came 9/11 and the US inflicted nightmare that continues to this day with no end in sight.

John explains that Afghanistan today is what the CIA called during the Vietnam war "the grand illusion of the American cause." While Kabul has some freedoms denied by the Taliban, the rest of the country has virtually none. In place of the Taliban, who've begun a resurgence, are the brutal regional "warlords" that human rights groups say have "essentially hijacked the country." The nation is a war zone and failed narco-state with regional "warlords" and drug kingpins controlling everything outside the capitol. The country's US selected and nominal president Hamid Karzai (a former CIA asset) is a caricature of a man and willing stooge who's little more than the mayor of Kabul. He has no mandate or support and wouldn't last a day on his own without the heavy protection afforded him round the clock by the US military.

Life was no bed of roses under the Taliban. But despite their ultra-puritanical ways and harsh treatment for the disobedient, at least they kept order and wouldn't tolerate banditry, rape or murder. They also virtually ended opium production. Now all that's changed. The US-British invasion in 2001 ended the ban on opium production, allowed the "warlords" to replant and the result is that 87% of the world trade in this drug is from these fields. In addition, unemployment is soaring at about 45%; there's been little reconstruction; the poverty is overwhelming; there's little electricity, clean water or most other essential services; lawlessness is back; Sharia law has been reinstated; the internal conflict has resumed; and no one is safe either from the country's warring factions or from the hostile occupying force. In addition, the Taliban have reclaimed parts of southern Afghanistan and are gaining supporters among the people fed up with the misery inflicted on them by the US and multinational force invaders. It may just be a matter of time before the violence again explodes into another catastrophic guerrilla war just like in Iraq. Already it seems to be beginning.

So what was the invasion and occupation all about? We now know it was planned before 9/11 and had nothing to do with a Muslim fundamentalist government that treated its people harshly. It had everything to do with an Afghan leadership that wouldn't surrender its authority to US demands and its imperial quest to dominate this strategically important region. It was explained earlier by former National Security Advisor Zbigniew Brzezinski under President Carter in his 1997 book The Grand Chessboard. He referred to Eurasia as the "center of world power extending from Germany and Poland in the East through Russia and China to the Pacific and including the Middle East and Indian subcontinent. By dominating this region, the US would assure itself control of a vast supply of energy and other essential resources. Afghanistan was a key part of the plan as it was across this country that the US wanted to build the oil pipelines needed to transship the Caspian basin oil to deep water ports where it could easily be shipped to the parts of the world the US would allow it to go.

At first the US was very content to work with the Taliban when they were in power. As long as it was felt a deal with them was possible, their religious extremism and human rights abuses were of no concern. It was only when agreement couldn't be reached that the decision was taken to remove them. And that brings us to the present. The country is in ruins, the conflict continues without end, and the people are suffering more than ever with no visible hope on the horizon for relief.

John wrote his book to document the history of imperial abuse he witnessed first-hand in five countries. But he also wants it to be a message of the hope he found that may one day lead to the same rebirth of democracy and social equity now growing in parts of Latin America like Venezuela. He finds courageous and dedicated people everywhere, even in Afghanistan where conditions are so bad it's hard finding any. He said that "Through all the humanitarian crises in living memory, no country has been abused and suffered more, and none has been helped less, than Afghanistan." It's still that way and seemingly getting worse. Unless it changes, a time of peace and an end to the violence and suffering of the Afghan people is a long way off at best. And yet hope persists. John finds it everywhere in the hearts of people who'll never give up the struggle for the fair and just world they want and are fighting to get.

A Summation

John has once again written a brilliant and magnificent book. Everyone should read it to learn from this great man what was and is ongoing in the five countries he chose to cover from among the many he knows well from having witnessed events around the world first-hand over his long career. He explains what few others do or would dare to help us understand how peoples' lives everywhere have been affected by the US economic model that's based on militarism and imperial expansion to control the world's markets, essential resources and cheap labor with no challengers to its dominance allowed. That's one message the book imparts. But it also breathes a special hope that the human spirit is indomitable and will find a way to overcome adversity and oppression and be able to endure. John believes a time of deliverance is ahead because committed people everywhere will never give up working for it.

Stephen Lendman lives in Chicago and can be reached at Also visit his blog site at