BUSH AND HIS BAIL-OUT PLAN
By Erick San Juan
Finance people who view with much apprehensions, the economic bail-out package that US President George W. Bush has laid out for America ’s ailing banking sector, can always justify their ambivalent behavior as a natural reaction to the series of Houdini tricks that the bankers have played on us for ages, leading to a cycle of financial meltdowns.
Besides, it is but natural for President Bush to favor rescuing the lenders over the borrowers, because he comes from a family with strong ties to the banking syndicate of the west. His grandfather – and of course, father of former President George Bush, Sr. – was a director and vice president of the US Union Bankers Corp., which kept the Nazi’s enormous war chest in its vaults and in fact provided Germany with all the money laundering facilities that it needed during the war.
The recent record-breaking performances of over 900 percentage points posted by the stock markets was largely triggered by the admission of US Treasury Secretary Henry Paulson that, in some ways, the US government had to arm-twist some big banks into participation in the scheme whereby US$ 250 billions of government funds will be infused as rescue facility for the banks in trouble.
In effect, this record-breaking performance is seen to attract so much investments that could pump-prime the financial communities towards a speedy recovery. But let us not forget that what is being pump-primed is the same financial community that led an earlier profit-taking spree out of the enormous gains generated by the boom that preceded the bubble burst on the housing industry.
President Bush’s preference for the bankers (over the home-buyers who suffered the most due to high interest rates that characterized the onslaught of the financial crisis, which is not the only one the world experienced in recent memory) is, no doubt, the principal reason why academics in banking and finance have become so wary about the scheme.
Since the start of the American civil war in 1775, the real truth has always been that “a financial element in the large centers has owned the ( US ) government since the days of Andrew Jackson,” said Franklin Delano Roosevelt in 1933. In fact, he suspected that “the refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the cause of the revolution.” It is widely perceived that the Americans’ dissatisfaction was fueled by King George’s policies that forced the US to borrow money from the Bank of England at exorbitant interest rates.
In 1783, America won its independence from England . However, its battle against the central bank concept has just begun. Indeed, he who controls the central bank controls the government because the Central Bank does not simply supply hard currency, but it also loans money to the government. By increasing or decreasing the volume of hard money in circulation, the CB is able to regulate the value of its currency. With a central banking system, he who is in control can produce debt. And he who incurs debt – as the Philippines and other developing countries – is necessarily enslaved, because a CB in debt must have to increase the hard currency it circulates to be able to pay for the interest on its loans.
Former US President Thomas Jefferson once said: “I believe that banking institutions are more dangerous than standing armies…if the American people ever allow private banks to control the issue of currency… the banks and corporations that will grow up around the world will deprive the people of their properties until their children wake up homeless on the continent their fathers conquered.”
On the other hand, Sir Josiah Stamp (1880 to 1941) once warned that “if you want to remain slaves of the bankers and pay for the cost of your slavery, let them continue to craft money and control the nation’s credit.”
In the US , bankers like JP Morgan, Baron de Rothschild, John D. Rockefeller and Paul Warburg seized early control over the US ’ central banking system. At one point, the group of JP Morgan, who at that time was considered the banking luminary, spread rumors that some prominent private banks were manipulating the currency because it was actually insolvent or bankrupt. This sent chills down the spines of the business community. At the end of the day, a bank run has already begun.
Having made enormous sums of money from that scheme, the bankers once again sought to reestablish a central bank. This was facilitated by Senator Nelson Aldrich, who had strong ties with the bankers and in fact, eventually married into the Rockefellers.
Wit the sole purpose of establishing the US Federal Reserve Service, the bankers held a top secret summit at Jekyll Island , off the coast of Georgia . All the attendees had to come clandestinely and used pseudonyms to avoid detection. There they – the bankers, not lawmakers – actually wrote the Federal Reserves Act, which Senator Aldrich, their point-man, pushed in the US Senate.
In exchange for favors, President Woodrow Wilson signed the Act into law – an act he would later regret and over which he said: “our great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. We have come to be one of the worst ruled, one of the most completely controlled and domesticated governments in the civilized world. No civilized world by free opinion and the duress of small groups of dominant men.”
On the other hand, Senator Louis McFadden’s reaction was “a world banking system was being set up here… A super-state controlled by international bankers… acting together to enslave the world for their own pleasure. The Fed has usurped the government.”
Significant developments in the US banking system – which eventually affected the free world – came one after the other, until smaller banks got attracted to contract loans as money supply doubled from 1914 to 1919. But with the panic triggered by the rumors spread about town by the group of JP Morgan, the banks started calling in loans, resulting in the collapse of at least 5400 smaller banks.
In allocating some $250 billions as government investment in the ailing banks, President Bush ironically made himself clear that the US government has no plans on taking over the banks – just bail them out of trouble. But what about the home buyers who sunk all their lifetime savings into the properties they tried to acquire, but got frustrated due to the collapse of the economy?Bail out for the rich and nothing for the poor episode continuous.We never learn!