Spitzer: "The Fed is a Ponzi scheme, an inside job.. it is time for congress to say enough of this"

[girl gone mad]

Sorry, I couldn't find this clip on youtube. Ratigan and Spitzer did a great job explaining why the Fed doesn't want us to audit their books:

http://www.msnbc.msn.com/id/21134540/vp/32124060#32124060 (video)

[MADem]

1. And no one will listen to him, because he couldn't keep his dick in his pants.

AND he did it with an age-inappropriate prostitute, as well.

While criticizing said behavior in his "Truth, Justice and the American Way" persona.

Pity that he couldn't have conducted himself in a better fashion. He had incredible potential.

He is most probably correct in his assertions, too.

[GoesTo11]

2. age-inappropriate?

She wasn't a minor. So what is an age appropriate prostitute?

[MADem]

3. He was old enough to be her father. NT

[notesdev]

10. But

... they just don't make 40-year-old hookers in that price range.

[deadmessengers]

5. I think MADem is talking about the half-plus-seven rule. n/t

[glitch]

11. I value his opinion on econ and corporate crime, and could care less about his dick's whereabouts.

So make that no one +1.

[MADem]

15. You are in the distinct minority.

Don't shoot the messenger.

[clixtox]

23. Wrong! You are in the minority. Who cares! Only you and old scolds! N/T

[AdHocSolver]

13. Spitzer isn't the only one pointing out that the Fed was involved in a Ponzi scheme.

The problem is that few people were listening to the warnings, not that no one was giving them out.

The Ponzi scheme was put into play by Greenspan when he kept the interest rates artificially low, under the pretext of fighting inflation. The inflation had nothing to do with high interest rates. The inflation was caused by the debt accrued to maintain high consumption rates by means of importing just about everything we buy. The dollar was devalued because of the borrowing to maintain the levels of consumption sustained by massive imports.

The interest rates were kept low to produce three outcomes. One was to encourage people to take their money out of insured savings accounts ("You aren't earning enough interest to keep up with inflation!") and invest in the stock market ("Look at the increase in the price of shares in Enron stock. You are missing out on all those capital gains.").

A second goal was to have banks pay out very little to savers who had bank accounts by keeping the spread between what the banks paid in interest to depositors and what the banks charged borrowers (such as credit card holders) very large, in order to boost bank profits.

A third goal was to enable banks to issue low initial rate balloon mortgages (ARM's) to people who would thereby be suckered into taking out mortgages beyond their ability to repay them. This boosted house prices, bank fee income, and real estate company profits enormously.

This scheme was readily understandable for the past several years to anyone with a minimal understanding of economics, and an intention not to be bamboozled by the lies and deception coming from "expert" economists, "expert" financial analysts, pundits, the self-seving media, and a Republican government's pronouncements about the economy.

The problem has not been Spitzer's peccadillos. The problem has been a public's unwillingness to understand what was happening right in front of them, preferring to be soothed and gulled by a bunch of not very clever crooks who were screwing the public in plain sight.

[MADem]

14. The thing about Spitzer, though, is that people actually used to LISTEN to him.

When he did his "Elliot Ness" routine, people stopped and paid attention. Now, those same people tend to tune him out BECAUSE of his peccadillos. It's not right, but it just is.

I'm so glad I never got suckered by that first goal you mentioned. As a consequence, I still have my money. I've always been a saver--despite their 2nd goal. And I agree completely with the third goal and know a few fools who did just that. A pity someone who was less tainted, but with the same cachet and ability to "E.F. Hutton" the assembled crowd, couldn't carry the water.

[AdHocSolver]

18. Being unable to think through an issue without direction from an "authority" figure....

is a serious American character flaw. This is the very reason why the crooks and Republicans can get away with their scams.

For example, in another recent thread, a poster asked people to answer the question: "What has the government ever done better than the private sector?" The list was staggering.

Then, one poster asked another question: Why weren't Democratic politicians responding to Republican talking points with a similar list of the things that government has done correctly? "Why not?", is a valid question.

The point I was making is that most Americans suffer from a serious character flaw. It is that they have authoritarian personalities. They only hear what supposed "experts" say. I have posted many times before how the Fed was involved in these Ponzi schemes. I have explained how former Fed chairman Greenspan enabled these schemes. Yet, when the economy started tanking, there were frequent references in the media to Greenspan's self-serving comments about what was happening, how he was trying to help the economy, but that he made a few "little mistakes". Hell, the guy was a key enabler in one of the biggest thefts in history.

When reality doesn't square with what the "experts" are telling you, it is time to question what you are being told. Most people are too intimidated by credentials or status to even occasionally think for themselves.

The problem we have is that most Americans live in a fantasy world. The big eye opener about the stock market and the economy occurred when Enron crashed back around 2001. The Ponzi scheme that is the stock market was laid bare for all to see. We didn't need a Spitzer to explain what was going on. Several of our most "prestigious" corporations "adjusted" their ledgers to conform better to reality. They were all cooking their books.

Yet the new knowledge that the "king was bare naked" did not make a dent in most people's investment strategies. It took an economic meltdown before people would even listen to a guy like Spitzer.

[MADem]

20. I don't think it's "direction" so much as "amplification." When the right

person, the one who catches the imagination, says, in a forceful, decisive, persuasive way, what everyone else has been thinking, it helps to shape and certainly FOCUS the debate. That person has to cut through the corporate-owned media, and that's not an easy trick, at times.

It doesn't have to be an authority figure, in fact, sometimes we prefer it not be--it can be a Clara Peller type, yelling "Where's the beef?"

It just needs to be someone who has a ring of sincerity about him or her. I think Americans aren't authoritarians. They do have the maybe-not-always-bad habit of giving people a break, and maybe expecting people to do good/be good, when they're in fact crooks. But Pollyannas aren't necessarily authoritarians.

Spitzer, unfortunately, is saying the right things, but he's got that albatross around his neck.

[AdHocSolver]

21. "Americans aren't authoritarians"? Unfortunately the evidence suggests otherwise.

In his book "Obedience to Authority: An Experimental View" published in 1974, Stanley Milgram describes experiments to ascertain just how influenced by authority figures a group of test subjects would be.

The test subjects are told they are to participate in an educational experiment to ascertain the effects of certain teaching techniques. There is the experiment "leader", the "learner", and the "teacher". The test subject is manipulated into being the "teacher". He is to give an increasingly stronger electric shock to the learner under the direction of the "leader" whenever the "learner" made a mistake, to get the "learner" to learn better in the experiment. The voltage could be increased to as high as 450 volts, which would be very painful, if not lethal, if actually administered.

The experiment sounds hokey on the face of it, and, in fact, the "leader" and the "learner" are actors. No real shocks are given. However, the "learner" is to fake pain by crying out whenever given a shock. The experimental subject, the "teacher", is the only one not in on the true nature of the experiment.

This experiment, and variations of it, were repeated over the years by Milgram and others. Analysis of these experiments showed that "the percentage of participants who are prepared to inflict fatal voltages remains remarkably constant, 61–66 percent, regardless of time or place."

A description of these experiments and various interpretations of the results together with links can be found at:

http://en.wikipedia.org/wiki/Milgram_experiment

Research by others from Altemeyer to Zimbardo supports the contention that a majority of the people are subservient to "authority" figures. This explains why Bush could get enough votes in 2004 to steal the presidential election. This explains why so many Congress critters will vote for no-strings-attached multibillion dollar bailouts for the banksters because the "economics experts" tell them that is the only way to save the economy. This explains the passage of the Patriot Act, and other antidemocratic, not to say downright stupid, legislation passed in the last fifteen years.

It takes guts to point out the fallacies and contradictions in what the "experts" keep telling us. The corporate bureaucratic world we live in puts people of dubious intellect in positions of authority, and they can inflict some serious negative consequences on a person's career and livelihood.

The myth is the "independent spirit of Americans working for the best outcomes for all". The reality is 62 years after President Truman promoted affordable health care for all, and the Clintons pushed for health care reform in the early 1990's, and studies have shown that every other industrialized country has affordable, near-universal health care with measurably better outcomes, at half of the cost of what we spend, many Americans still hesitate to demand a "public" option based on a fear promoted by a self-serving insurance industry that the government will take away your choices, or that it will cost you more than what you pay now, or that it will bring about (oooooh!) "socialized" medicine.

[MADem]

22. Oh good grief. You are using a book that is almost FORTY years old, first off.

Describing an experiment that was crafted in the long shadow of World War Two's "I Vas Only Followink Ohhhh-ders" justification at Nuremberg. And the book consists of DATA that is almost fifty years old (Milgram did his experiments commencing in the early sixties). Secondly, Milgram used KIDS--college kids, precisely, who went to YALE, specifically, white rich boys, mostly--think GW Bush--in his experiments. I hardly think the average caucasian, privileged, eighteen to twenty two year old Yale University student who was focused on toeing the line so they stayed in their rich daddy's will and who graduated nearly fifty years ago is "representative" of the entire population of the USA, but there you go.

A lot of babies have been born, have grown up, and had kids of their own since Stanley Milgram did his little experiments. A lot of immigrants have landed on our shores, too. We're not the same nation we were circa 1961.

It doesn't make your conclusions valid, using a tome that was written when America was a very different place, both culturally and demographically.

It doesn't take "guts" to cut-n-paste old, outdated paradigms from Wikipedia, but knock yourself out and hold that highly negative worldview if that makes you happy. It also doesn't take "guts" to use the minority of the population of the USA (people who voted in 04--many gave it a miss) and add that to a massive amount of theft, outright fraud and shenanigans on the part of the GOP as an unsubstantiated "example" to support your claim.


Your glass is about a quarter full. Trust me (or don't, if you prefer, entirely up to you)--that's a shitty way to go through life.

Finally, I am not particularly concerned about what it will cost "me" for my medical care--mine's very low cost already. If my taxes need to go up to help others (as is happening with the sales tax in MA), so be it. I have great "public" paid-for-by-the-US-government medical care (for life) already as a consequence of my service to this nation, so I am hardly opposed to a public option, and I am also not opposed at all to pitching in to help out others get something along the lines of what I have.

Not everyone is a selfish prick. Not everyone is a corporatist asshole. Many people are good at heart. I know a lot of them.

Things aren't always what they seem.

I am not at all convinced that people are as jerky, wussy or selfish as you apparently want to make them out to be, either.

[AdHocSolver]

25. Einstein published his theory of relativity over 80 years ago. We have to discard that, also.

Then there is Newton's "Principia Mathematica" published over 320 years ago. Nothing useful there. Throw out gravity as a useful concept.

Moreover, Darwin's theories demonstrated beyond doubt that Americans evolve faster than any other living organism so that Americans today are essentially a different species from what they were 40 years ago. Any experimental psychology done 40 years ago couldn't possibly apply today. Except, for the fact that Milgram's experiments have been repeated and elaborated upon during the past 40 years by others in many countries throughout the world with essentially the same results.

I learned from many years experience working in the corporate, academic, and medical environments, that the corporate mentality dominates the world, and that in these environments, the "jerky, wussy, and selfish people", not to leave out the incompetent or downright stupid, generally rise to the top. These are the "leaders" who set the tone of the organization.

The people lower in the pecking order, in order to survive, that is, to keep their jobs, to make a living to support themselves and their families, to keep the health insurance they get on the job by keeping their jobs, learn to reflexively subordinate their feelings, opinions, competencies, and even their politics to that of the "corporation" and their bosses. The oppressiveness can become so great, that many people carry this attitude with them when they are not even in a work environment.

This self-suppression is learned in the schools where students are trained not to seek knowledge and develop skills, but to learn the "curriculum" and submit to authority. The No Child Left Behind (NCLB) law is a prime example of the corporatization of education, which is designed not to increase learning, but to suppress real teaching and increase subservience to authority.

Where do my opinions on education come from. I earned the required college credits in education and taught school for two years. I saw teachers, who could inspire kids, being "crushed" by the system because of their success in motivating their students, and I saw dedicated teachers who played by the rules, and observed their frustration when an off-the-cuff snide remark by a student seemed to negate the values the teacher was trying to instill.

Besides teaching, I worked in several corporations, hospitals, a bank, and universities. The problem is that, in most cases, the "good at heart" were the workers at the bottom of the pecking order, and the "selfish pricks" and the "corporatist assholes", as you refer to them, were running the place.

[ejpoeta]

4. funny, too... because we seem to have plenty of politicians with issues keeping their dick in their

pants, and yet the other ones are supposedly fine to put their 2 cents in and keep their jobs too.

[earth mom]

6. Wow a glimmer of truth from the corporate media?!

:wow:

[TTUBatfan2008]

7. Shocking...

The banksters have been screwing us over for a long time. The Federal Reserve needs to be abolished. For fuck's sake, the Founding Fathers were against having a private central bank precisely because they knew how dangerous it would be. And yet it happened in 1913. We handed over our country's sovereignty with the Federal Reserve Act. They print money and tack on interest. Every dollar they print causes our national debt to keep going up due to the interest they are charging us. Debt is slavery.

[DonCoquixote]

8. Him, Bill Clinton and John Edwards

All of them were people that were handed a shot at actually helping this country, but they all blew it for the sake of some cheap sex. I do not care who or what a Politician sleeps with; if it would get us single payer and out of Baghdad, I would personally ship a Pol the same donkeys used in Tijuana Brothels, even though I know that would be animal cruelty! However, all these idiots let their ego get in charge, which made them nice targets for the GOP snipers. As much as Obama's Vulcan passivity is annoying, I realize there is a bad side to the flamboyant ego types.

[Joanne98]

9. I had to change my mind about auditing the Fed after the last Bernake hearing.

The Republicans kept asking a question about full employment.



http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employment_Act

In response to rising unemployment levels in the 1970s, Representative Augustus Hawkins and Senator Hubert Humphrey created the Full Employment and Balanced Growth Act. It was signed into law by President Jimmy Carter on October 27, 1978, and codified as 15 USC § 3101.

The Act explicitly instructs the nation to strive toward four ultimate goals: full employment, growth in production, price stability, and balance of trade and budget. By explicitly setting requirements and goals for the federal government to attain, the Act is markedly stronger than its predecessor. {An alternate view is that the 1946 Act concentrated on employment, and Humphrey-Hawkins, by specifying four competing and possibly inconsistent goals, de-emphasized full employment as the sole primary national economic goal]. In brief, the Act:

Explicitly states that the federal government will rely primarily on private enterprise to achieve the four goals.
Instructs the government to take reasonable means to balance the budget.
Instructs the government to establish a balance of trade, i.e. to avoid trade surpluses or deficits.
Mandates the Board of Governors of the Federal Reserve to establish a monetary policy that maintains long-run growth, minimizes inflation, and promotes price stability.
Instructs the Board of Governors of the Federal Reserve to transmit an Monetary Policy Report to the Congress twice a year outlining its monetary policy.
Requires the President to set numerical goals for the economy of the next fiscal year in the Economic Report of the President and to suggest policies that will achieve these goals.
Requires the Chairman of the Federal Reserve to connect the monetary policy with the Presidential economic policy.
The Act set specific numerical goals for the President to attain. By 1983, unemployment rates should be not more than 3% for persons aged 20 or over and not more than 4% for persons aged 16 or over, and inflation rates should not be over 4%. By 1988, inflation rates should be 0%. The Act allows Congress to revise these goals as time progresses.

If private enterprise is lacking in power to achieve these goals, the Act expressly allows the government to create a "reservoir of public employment." These jobs are required to be in the lower ranges of skill and pay so as to not draw the workforce away from the private sector.

Perhaps most interestingly, the Act directly prohibits discrimination on account of gender, religion, race, age, and national origin in any program created under the Act.

http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employment_Act



I have come to the conclusion that the conservatives are trying to capture the Fed just like they did the Supreme Court and I'm not going to help them do that.

[nashville_brook]

17. do you think it's good or not-good to audit the Fed -- dumb question, probably

but, i got lost in the Hubert Humphrey thing. is the GOP trying to take over the Fed by forcing transparency?

[Crewleader]

12. Thank you girl gone mad

:thumbsup:

[nashville_brook]

16. "The Most Outrageous Thing..." no reform. they got the money, and there's no change.

Reinstate Glass-Steagall now. Repeal Commodities Futures Modernization Act.

[notesdev]

19. You might be amused

... or angered...

by this:

Pay up - $100 mil - or the bailout cash-fueled commodity speculation gets it

[TheWatcher]

24. Mr. Spitzer, I hope you don't plan to ride in any small planes any time soon.

Other than that, I agree with him.

[GodlyDemocrat]

26. Yes, it's a big conspiracy by the Rothschild and Rockefeller families

:eyes:

It's one thing to say the Fed's operations are a clusterfuck and another to say it is a Ponzi scheme. Spitzer is just trying to make news.

[truedelphi]

27. How is it not a Ponzi scheme? With some added features that

Bernie Madoff could only have dreamt of.

In the late nineties - The Fed uses its influence to see to it that repeal of Glass Steagall occurs. And also helps along the Banking Reform act of 1999, and the Credit Modernization Act.

Then, The Fed, with Monsieur Greenspan at the helm, goes and lowers the interest rate to foster a housing bubble.

Once the housing bubble is underway, the banksters are out there realizing that they can make a whole lot more money selling Credit Default Swaps on the mortgages that are being made, than they can ever make on the mortgages themselves.

Some critics now say as much as 500 trillion bucks may have been at stake in the Credit Default Swaps end of things. The biggest player of all, inside this casino of international banking and "non-insurance" insurance, was AIG. Who apparently bought short in terms of Credit Default Swaps, effectively covering its own ass.

Then when the housing market tanks, and the massive losses being racked up are finally transparently seen for what they are, (Circa Fall 2008) the money involved in the Credit Default Swaps losses is so extensive that many financial firms, including AIG, start telling Congress through Paulson that Congress must bail them out as they are too big to fail.

Congress generously does so. It offers them 700 billion dollars in the first Bailout alone. But Congress doesn't think to add any restrictive strings to this money handout - after all, just because the banks and AIG were too fucked up to ever consider that the housing market might someday implode doesn't mean that they cannot be entrusted with more monies! And as an added bonus there is not much in the way of oversight either, except for red pencil lady Elizabeth Warren.
(You can be sure her reports will not have so much as a stray comma, but whether they actually analyze material facts and debits and credits according to the strict accounting methods taught by my father some thirty years ago is yet to be seen.)

AIG ends up receiving Bailout monies and offers a huge payout from the Bailout to Goldman Sachs. GS is perhaps better represented by the Federal and Treasury employees, than any other influential corporation to date. GS receives monies several times over, currently edging toward the 60 billion dollar mark or more.

Now a new bubble is being created, which I call the Suckers End All of End All stock markets bubble. Buy in now, as whether this bubble will go up for more than sixty days or not cannot be predicted. So if you have a hot tip, and have the dough, go for it, but then watch carefully and maybe even pull out early September.

While some experts expect the wild ride to be over in Fall of 2009, others think that enough money was pumped into the system (Some three trillion bucks) that it could be around for another 36 months. Americans love hype; they love bubbles.

We complain about madness but never want to not participate inside of any mad crazed scheme that comes along. In fact, usually the crazier the better.