Quote of the day

This one was written by one-time insider Paul Craig Roberts:

Today the entire “mainstream media” is closed to truth-tellers. The US media is Washington’s propaganda ministry. The US media has only one function–to lie for Washington.

Quote of the day

Paul Craig Roberts and Nomi Prins see the Libor interest rate manipulation scandal a bit differently:

According to news reports, UK banks fixed the London interbank borrowing rate (Libor) with the complicity of the Bank of England (UK central bank) at a low rate in order to obtain a cheap borrowing cost. The way this scandal is playing out is that the banks benefitted from borrowing at these low rates. Whereas this is true, it also strikes us as simplistic and as a diversion from the deeper, darker scandal. Banks are not the only beneficiaries of lower Libor rates. Debtors (and investors) whose floating or variable rate loans are pegged in some way to Libor also benefit. One could argue that by fixing the rate low, the banks were cheating themselves out of interest income, because the effect of the low Libor rate is to lower the interest rate on customer loans, such as variable rate mortgages that banks possess in their portfolios. But the banks did not fix the Libor rate with their customers in mind. Instead, the fixed Libor rate enabled them to improve their balance sheets, as well as help to perpetuate the regime of low interest rates. The last thing the banks want is a rise in interest rates that would drive down the values of their holdings and reveal large losses masked by rigged interest rates.

Briefly put, the Libor scandal is the result of a smoke and mirrors operation meant to secure the smoke and mirrors world of high level banking.

Quote of the day

Paul Craig Roberts addresses the looming American attack on Iran:

In my judgment, the US government’s war preparations are driven by three factors.

One is the neoconservative ideology, adopted by the US government, that calls for the US to use its superior military and economic position to achieve world hegemony. This goal appeals to American hubris and to the power and profit that it serves.

A second factor is Israel’s desire to eliminate all support for the Palestinians and for Hezbollah in southern Lebanon. Israel’s goal is to seize all of Palestine and the water resources of southern Lebanon. Eliminating Iran removes all obstacles to Israel’s expansion.

A third factor is to deter or slow China’s rise as a military and economic power by controlling China’s access to energy. It was China’s oil investments in eastern Libya that led to the sudden move against Libya by the US and its NATO puppets, and it is China’s oil investments elsewhere in Africa that resulted in the Bush regime’s creation of the United States Africa Command, designed to counter China’s economic influence with US military influence. China has significant energy investments in Iran, and a substantial percentage of China’s oil imports are from Iran. Depriving China of independent access to oil is Washington’s way of restraining and boxing in China.

What we are witnessing is a replay of Washington’s policy toward Japan in the 1930s that provoked the Japanese attack on Pearl Harbor. Japan’s bank balances in the West were seized, and Japan’s access to oil and raw materials was restricted. The purpose was to prevent or to slow Japan’s rise. The result was war.

A war with China — that’s truly change we can believe in….

Roberts continues by asking:

We, as Americans, need to ask ourselves what all this is about? Why is our government so provocative toward Islam, Russia, China, Iran? What purpose, whose purpose is being served? Certainly not ours.

Quote of the day

Paul Craig Roberts, long a conservative, wrote:

Economic policy in the United States and Europe has failed, and people are suffering.

Economic policy failed for three reasons: (1) policymakers focused on enabling offshoring corporations to move middle class jobs, and the consumer demand, tax base, GDP, and careers associated with the jobs, to foreign countries, such as China and India, where labor is inexpensive; (2) policymakers permitted financial deregulation that unleashed fraud and debt leverage on a scale previously unimaginable; (3) policymakers responded to the resulting financial crisis by imposing austerity on the population and running the printing press in order to bail out banks and prevent any losses to the banks regardless of the cost to national economies and innocent parties.

Later on, Roberts observed: “This is what economic policy in the West has become — a tool of the wealthy used to enrich themselves by spreading poverty among the rest of the population.” Roberts refers here to what James Galbraith called the Predator State. Roberts eventually concluded his article with:

For four years interest rates, when properly measured, have been negative. Americans are getting by, maintaining living standards, by consuming their capital. Even those with a cushion are eating their seed corn. The path that the US economy is on means that the number of Americans without resources to sustain them will be rising. Considering the extraordinary political incompetence of the Democratic Party, the right wing of the Republican Party, which is committed to eliminating income support programs, could find itself in power. If the right-wing Republicans implement their program, the US will be beset with political and social instability. As Gerald Celente says, “when people have have nothing left to lose, they lose it.”

One point I wish to make: I do not believe the Democratic Party is as incompetent as Roberts suggests; I do believe instead that the Democratic Party is as morally, culturally and politically bankrupt as the Republican Party, including that party’s most reactionary component. Competence is not the problem for the Democrats. The problem broadly considered can be found in the political commitments of the two parties and the structural constraints which make creating an opposition party and opposition movements so difficult. To my mind, this broadly construed problem reflects the essence of the duopoly party system: There exists no viable alternative to the status quo — it’s the duopoly parties and non plus ultra.