Bernanke leaves door open for Cyprus-style confiscation of savings

By LUIS MIRANDA | THE REAL AGENDA | MARCH 22, 2013

Federal Reserve Chairman, Ben Bernanke refused to say that the United States will not use Cypriot techniques of taxing the people by confiscating a percentage of their savings accounts to fund government operations.

During a press conference held to explain his view the economic conditions in the United States, Bernanke identified what he called the growth of private payrolls, increase in spending by households and companies, gains in the housing sector as signs that his expectations of a recovery in the economy were correct.

The Fed Chairman said his meetings with the Federal Open Market Committee concluded that the economic outlook is following its own pre-established expectations.

But when asked whether the U.S. would consider a Cyrpus-style approach to taking money from savers, Bernanke was ambiguous at best, as he usually is when the time comes to speak clearly.

The thought that a government -either by its own decision or due to outside pressure- seizes private monies to finance its operation or as part of a bailout plan is not new. People in Latin America and in the very same United States have already been victims of this practice. More recently, the government of Cyprus accepted to subtract funds from private citizens as a condition to get a so-called bailout from the European Union.

After much pressure, the Cypriot government sort of backed off, which caused banks across the country to close their doors after rumors of  imminent bank runs. “I was wondering if you can tell me how if a run on the banks happens in Cyprus, how that might affect U.S. markets. And also is it possible for the U.S. to levy a tax on regular deposits here? Or why not?”, asked a reporter.

Bernanke responded that the only trigger for actions such as the ones taken in Cyprus would be if depositors panicked. With his statement, and while not stating clearly whether it would happen in the U.S. or not, Bernanke left the door open for account seizing in the U.S.. Bernanke added that he believes it is unlikely that Cyprus’ scenario replicates in the United States. He then reminded the audience that in the U.S. the FDIC insures savings and that this fact is an assurance for depositors who may be concerned.

Unfortunately, the FDIC has only a very limited capacity to pay all depositors. In fact, the FDIC has shown weakness when it came to meeting its obligation in the recent past. In September 2009, the institution weighed the possibility of borrowing money from banks in a clear example of incapacity to do the job it created to do. The FDIC’s case is another one of those where the banks bailout the government and not the other way around.

In February 2012, the Obama administration showed concern about the FDIC’s ability to meet its obligations citing that the entity would become insolvent. On March 4, Congresswoman Chairman Sheila Bair said the FDIC was on its way to becoming insolvent and that its job to insure bank deposits would be in danger. It is important to note that the FDIC only insures deposits of up to $250,000. “Without these assessments, the deposit insurance fund could become insolvent this year,” Bair said.

So where is all of Ben Bernanke’s optimism coming from? An even more important questions is, do Ben Bernanke’s opinions about the economy matter? In the case of Cyprus, its own government’s word did not matter, because the European bankers had their hands tied around the government’s neck and it is them who decide what is done about the economy all around the continent. They did so in Spain, Greece, Portugal, Italy and now in Cyprus.

Just as Bernanke, the Fed and the banks are to blame for all economic hardship in the U.S., in Europe the usual suspects are the European Central Bank and the continental bureaucracy that work for the bankers themselves.

See Ben Bernanke’s complete press conference below:

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American Corporate Executives Cash In as Austerity arrives for the Rest

By ANDRE DAMON | WSW | MARCH 22, 2013

As the US government prepares to furlough 1 million federal workers and slash hundreds of billions in social spending, corporate executives in the United States are receiving among the highest payouts in history. USA Today reported Thursday that at least ten CEOs took in $50 million apiece in 2012, largely as a result of cashing in stocks that have soared in value with the rising market. According to the newspaper, “Early 2013 proxy filings detailing 2012 compensation show a growing number of CEOs reaping $50 million or more, gains that could prove unmatched in breadth and size since the Internet IPO craze enriched tech company executives more than a decade ago.”

In its own analysis, the Wall Street Journal observed that executive pay has become ever more directly tied to stock values, noting that last year, more than half of compensation at major companies was tied to “stock or financial performance,” compared to 35 percent in 2009.

Among the top pay packages according to preliminary calculation is that of Starbucks CEO Howard Schultz, which included stock options valued at $103.3 million this year, on top of $30 million in other compensation and stock, as well as $10.2 million in vested shares, according to USA Today.

Ford CEO Alan Mulally likewise took home $61 million by cashing in shares that vested last year, added to his compensation of $21 million. This payout was based on a sharp rise in the company’s profitability that has been made possible by downsizing and the slashing of wages for newly hired workers to $15 per hour. Mulally’s pay is more than 2,500 times that of a new auto worker.

Apple’s Tim Cook got $139.7 million from restricted shares that vested last year, while Oracle CEO Larry Ellison was granted $90 million in stock.

These payouts are only a sampling of the huge sums that the ruling class is handing itself. The stock market, inflated through $85 billion a month handed to the banks by the US Federal Reserve, is the central transmission belt for this enrichment.

The engorgement of the ruling class has been facilitated by the actions of the state, and in particular the Obama administration. After the financial collapse of 2008, facing widespread public outrage at executive compensation, the administration explicitly opposed any constraints on pay. “We don’t disparage wealth,” Obama said repeatedly. Proposals for CEO pay centered on encouraging companies to tie this pay more directly to “performance”—i.e., share values.

Even while the corporate CEOs and other members of the financial oligarchy rake in astronomical payouts, the constant refrain from the media and big business parties is that there is no money to pay for social spending, and that health care and retirement programs must be cut and workers’ incomes slashed.

Next month, as a result of $85 billion in “sequester” spending cuts, over 1 million federal government employees will begin scheduled furloughs, resulting in effective pay cuts of 20 to 35 percent. These furloughs come together with tens of billions in cuts to public education, anti-poverty programs, and unemployment insurance.

With both Democrats and Republicans acknowledging that the cuts will be permanent, the turn now is toward working out an agreement to slash hundreds of billions of dollars from Medicare, Medicaid, and Social Security. The ultimate aim of the ruling elite is to dismantle everything that remains of the social safety net, plunging the working class into Dickensian poverty and social misery.

The argument that there is no money to pay for these programs is rendered absurd by the vast amounts of cash being handed out to executives or simply sitting around on corporate balance sheets. In 2012, the amount of cash held by US non-financial corporations rose by 10 percent, to $1.45 trillion, according to Moody’s. This figure is enough to pay for the sequester cuts 17 times over.

In fact, Apple, whose cash hoard rose to $137 billion, could itself pay for this year’s sequester cuts, with $50 billion to spare.

Loaded with cash and unwilling to invest, corporations have dramatically increased dividend payments to investors. The New York Times reported earlier this month that S&P 500 companies are expected to hand investors $300 billion in dividends this year, an increase over last year’s payout of $282 billion. American corporations bought back $117.8 billion in their own stock last month, the highest total on records going back to 1985.

The relationship of the American ruling class to the rest of society is a fundamentally parasitic one. Over the course of three decades, under conditions of economic decline, stock market speculation, rather than production, has become the central mechanism of wealth accumulation.

The 2008 crisis, far from reversing this process, has strengthened it. The ruling elite seized on the crisis to escalate the transfer of wealth. The soaring CEO pay and investor payouts on one hand, and vast social misery on the other, are in reality two sides of the same process.

The American ruling class proceeds with an almost shameless disregard for the consequences of its own actions. Amidst mass poverty and unemployment, as it dictates the most brutal austerity measures all around the world, the financial aristocracy engages in an uncontrollable orgy, propelled by its own social being.

Such actions, however, do not go unnoticed. They are producing within the United States an immense wellspring of social opposition that will take the form of working class struggle.

North Korea threatens to attack U.S. bases in Japan and Guam

BY JACK KIM | REUTERS | MARCH 21, 2013

North Korea said it would attack U.S. military bases on Japan and the Pacific island of Guam if provoked, a day after leader Kim Jong-un oversaw a mock drone strike on South Korea.

The North also held an air raid drill on Thursday after accusing the United States of preparing a military strike using bombers that have overflown the Korean peninsula as part of drills between South Korean and U.S. forces.

North Korea has stepped up its rhetoric in response to what it calls “hostile” drills between South Korea and the United States. It has also been angered by the imposition of fresh U.N. sanctions that followed its February 12 nuclear test.

Separately, South Korea said a hacking attack on the servers of local broadcasters and banks on Wednesday originated from an IP address in China, raising suspicions the intrusion came from North Korea.

“The United States is advised not to forget that our precision target tools have within their range the Anderson Air Force base on Guam where the B-52 takes off, as well as the Japanese mainland where nuclear powered submarines are deployed and the navy bases on Okinawa,” the North’s supreme military command spokesman was quoted as saying by the KCNA news agency.

Japan and U.S. Pacific bases are in range of Pyongyang’s medium-range missiles.

It is not known if North Korea possesses drones, although a report on South Korea’s Yonhap news agency last year said it had obtained 1970s-era U.S. target drones from Syria to develop into attack drones.

“The (drone) planes were assigned the flight route and time with the targets in South Korea in mind, Kim Jong-un said, adding with great satisfaction that they were proved to be able to mount (a) super-precision attack on any enemy targets,” KCNA reported.

It is extremely rare for KCNA to specify the day on which Kim attended a drill. It also said a rocket defense unit had successfully shot down a target that mimicked an “enemy” Tomahawk cruise missile.

North Korea has said it has abrogated an armistice that ended the 1950-53 Korean War and threatened a nuclear attack on the United States.

Although North Korea lacks the technology to carry out such an attack, Washington said it would deploy more anti-missile batteries in Alaska to counter any threat.

PYONGYANG HAS HACKED SOUTH KOREA BEFORE

The hacking attack brought down the servers of South Korean broadcasters YTN, MBC and KBS as well as two major commercial banks, Shinhan Bank and NongHyup Bank.

South Korean communications regulators said the attack originated from an IP address based in China.

An unnamed official from South Korea’s presidential office was quoted by the Yonhap news agency as saying the discovery of the Chinese IP address indicated Pyongyang was responsible.

Investigations of past hacking incidents on South Korean organizations have been traced to Pyongyang’s large army of computer engineers trained to infiltrate the South’s computer networks.

At least one previous attack was traced to a Chinese IP address.

South Korea’s defense ministry said it was too early to blame the North but said such a cyber capability was a key part of its arsenal. Experts say thousands of North Korean engineers may have been recruited for the purpose.

“Throughout the world, states that create cyber warfare and engage in those types of activities are precisely the same countries that develop nuclear weapons,” Defense Ministry spokesman Kim Min-seok said.

“North Korea has strongly stepped up development of asymmetrical strategy with nuclear development and many types of ballistic missiles as well as a special forces of 200,000 strong.”

War Council Pawns meet in Israel

By BILL van AUKEN | GLOBAL RESEARCH | MARCH 21, 2013

Starting a two-day visit to Israel on Wednesday, US President Barack Obama issued bellicose threats against both Syria and Iran. The visit, which plainly has the character of a US-Israeli war council, makes clear that ten years after the US invasion of Iraq, US imperialism is preparing even greater crimes in the Middle East.

The Democratic president threatened the Syrian regime of Bashar al-Assad that it would “be held accountable for the use of chemical weapons or their transfer to terrorists,” adding that if evidence showed that such a weapon had been used it would be a “game-changer.”

On Iran, Obama repeated his vow “to prevent Iran from having a nuclear weapon” and that “all options are on the table,” while recognizing Israel’s “right” to take unilateral action against Iran. There “is not a lot of daylight” between the US and Israel on Iran, he said.

Obama’s remarks came one day after the tenth anniversary of the US invasion of Iraq. No speeches or ceremonies were organized by the Obama administration or the US Congress Tuesday to mark the onset of a war to which 1.5 million Americans were sent, and where nearly 4,500 died and hundreds of thousands suffered either physical or psychological wounds.

Silence, in this case, denotes guilt. Both political parties, every branch of government, the media and the US corporations were directly complicit in what unquestionably stands as the greatest war crime of the 21st century: an unprovoked war, launched on the basis of lies, against a virtually defenseless nation, claiming some one million lives and leaving an entire society in ruins.

America’s ruling elite is now pressing for even greater and more destructive conflicts, in the face of mass public opposition to war. In Orwellian fashion, familiar and discredited pretexts of “weapons of mass destruction,” terrorism and the promotion of “democracy” are being recycled, this time to justify war against Syria.

On Capitol Hill there was a drumbeat of calls for new Middle East wars. Adm. James Stavridis, the chief of the Pentagon’s European Command, testified before the Senate Armed Services Committee Tuesday on extensive planning by NATO for intervention in Syria. “We are looking at a wide range of operations, and we are prepared if called upon to be engaged as we were in Libya,” he said.

Under serious consideration, according to Stavridis, is the establishment of a “no-fly zone.” Calls for such a no-fly zone in Libya, approved by the United Nations Security Council in March 2011, led to a US-NATO bombing campaign and war for regime change.

The committee’s chairman, Senator Carl Levin, (Democrat, Michigan) led the questioning. The day before, he had spoken at the Council on Foreign Relations, calling for the establishment of “a protected zone along the Turkish-Syrian border” and the use of military force to “go after some Syrian air defenses and after some of the Syrian air power.”

Resolutions were introduced in both the House and the Senate calling for stepped-up arming and training of Western-backed “rebels” fighting to overthrow Assad.

Meanwhile, the apparent use of a chemical weapon that claimed the lives of over 30 Syrians Tuesday prompted renewed demands for direct US intervention on Capitol Hill.

The Syrian government charged that the Western-backed fighters fired the rocket carrying the chemical warhead. By all accounts, the device hit a government-controlled village outside of Aleppo. Opposition sources said that most of the victims were Syrian government soldiers, while sources in Syria described them as Alawite civilians, a population that largely supports Assad.

Lawmakers invoked Obama’s earlier threats that the use of chemical weapons in Syria represented a “red line” that would prompt US intervention. “If today’s reports are substantiated, the President’s red line has been crossed, and we would urge him to take immediate action to impose the consequences he has promised,” Republican Senators Lindsey Graham and John McCain said in a joint statement.

Graham went further in an interview, calling for sending US ground troops into Syria to secure its chemical weapons, an operation that the Pentagon estimated would require 75,000 soldiers and Marines.

The twisted logic of this campaign is that the two-year-old sectarian civil war that the US and its allies in Europe, Turkey and the Persian Gulf monarchies have fomented, funded and armed has weakened the Assad regime to such an extent that its chemical weapons could fall into the hands of terrorists.

However, these terrorists, such as the Al Qaeda-linked Jabhat al-Nusra and other jihadist militias, are the principal shock troops of the Western-backed war for regime change.

As for the claim that Washington is promoting “democracy” in Syria, there could be no more telling refutation than the “election” Monday of the prime minister for a new “interim government” to be installed on Syrian territory seized by the so-called rebels. The winner, chosen by barely 35 members of a Syrian National Council formed under the tutelage of the US State Department, was Ghassan Hitto. A US citizen and Texas-based IT executive, he left Syria as a 17-year-old over 30 years ago.

The ideological pretexts for a US war in Syria are even less coherent than the ones used to carry out the war in Iraq a decade ago. The real driving forces are the same. What is involved is a predatory war aimed at redrawing the map of the Middle East to suit the interests of US imperialism and assure its hegemony over the region’s energy resources. War for regime change in Syria is part of a broader campaign for war with Iran and carries with it the threat of drawing in Russia and China, as well.

While the American ruling establishment may want to bury the memory of the Iraq war, working people have drawn their own conclusions, with poll after poll showing the overwhelming view that it should never have been fought.

The attempt to foist a new war on the American people, using the same warmed-over lies, comes together with a deepening assault on jobs and living standards and continuous revelations of the criminality of the financial aristocracy, in whose interests these wars are fought. Such a volatile mixture is a recipe for social explosions within the United States and the development of a mass political movement against imperialist wars in Iraq, Syria and beyond.

 

Deceiving the People: Social Engineering and the 21st Century

By JAMES F TRACY | GLOBAL RESEARCH | MARCH 20, 2013

On March 9, 1995 Edward Bernays died at the age of 103. His professional endeavors involved seeking to change popular attitudes and behavior by fundamentally altering social reality.[1] Since he laid the modern groundwork for deceiving the public we are for better or worse living out his legacy today.

Several years ago Project Censored directors Peter Phillips and Mickey Huff identified and explained the “truth emergency” that is among the greatest threats to civil society and human existence. This crisis is manifest in flawed (or non-existent) investigations into 9/11 and other potential false flag events, fraudulent elections, and illegal wars vis-à-vis a corporate-controlled news media that fail to adequately inform the public on such matters. While neglecting or obscuring inquiry into such events and phenomena major media disparage independent and often uncredentialed researchers as “conspiracy theorists” or, more revealingly, “truthers.”[2]

The truth emergency continues today, and social engineers like Bernays long understood the significance of undermining the use of reason, for it is only through reason that truth may be determined and evaluated. To be sure, individuals and institutions that have successfully achieved legitimacy in the public mind are recognized as having a monopoly on the capacity to reason and are thus perceived as the foremost bearers of truth and knowledge. Through the endorsement of “experts”—figures perceived as authoritative in their field—the public could easily be persuaded on anything from tobacco use and water fluoridation to military intervention abroad.

Today reason is defined one dimensionally; its relationship to truth largely taken-for-granted. Yet as Leibniz observed, reason marks our humanity, suggesting a portion of the soul capable of a priori recognition of truth. With this in mind the modern individual in the mass has been rendered at least partially soulless through her everyday deferral to the powerfully persuasive notion and representation of expertise. However narrowly focused, under the guise of objectivity the institutionally-affiliated journalist, academic, bureaucrat, and corporate spokesperson have become the portals of reason through which the public is summoned to observe “truth.”

These agents of reason are largely bereft of emotion, moderate in temperament, and speak or write in an unsurprisingly formulaic tone. The narratives they relate and play out present tragedy with the expectation of certain closure. And with a century of commercial media programming the mass mind has come to not only accept but anticipate such regulation and control under the regime of institutionally-sanctioned expertise.

The selection and arrangement of experts by corporate media guarantees a continued monopoly on “truth,” particularly when presented to an uninquisitive and politically dormant public. Yet this phenomenon extends to ostensibly more trustworthy media outlets such as public broadcasting, where a heightened utilization of credentialed expertise is required to ensure the consensus of those who perceive themselves as more refined than the Average Joe.

This preservation of what passes for reason and truth cannot be sustained without a frequent dialectical struggle with unreason and falsity. Since many individuals have unconsciously placed their genuine reasoning faculties in abeyance and often lack a valid knowledge of politics and history, their unspoken faith in government and the broader political economy to protect and further their interests is groundless. Against this milieu those genuinely capable of utilizing their reasoning capacities in the pursuit of truth are often held up as heretical for their failure to accept what is presented as reality, with the requisite “conspiracy theory” label wielded in Orwellian fashion to denote such abnormal intellectual activity.

Lacking the autonomous use of reason to recognize truth, form often trumps substance. For example, a seemingly obscure news website with unconventional graphics or an emotional news presenter purporting to discuss the day’s affairs is typically perceived as untrustworthy and illegitimate by a public conditioned to accept forms of news and information where objectivity and professionalism often camouflage disinformation.

In 2013 the truth emergency is greater than ever, and in the era of seemingly never-ending pseudo-events and Potemkin villages presented by major media as the reality with which we must contend, the application of independent reason in pursuit of truth has all too frequently been replaced with an unthinking obeisance toward the smokescreen of expertise disguising corporate power and control.

Notes

[1] Peter Phillips and Mickey Huff, “Truth Emergency and Media Reform,” Daily Censored, March 31, 2009.

[2] “Edward Bernays, ‘Father of Public Relations’ and Leader in Opinion Making, Dies at 103,” New York Times, March 10, 1995.