Blame and misnomers

This week's BBC news has contained a few gems. First up Mrs Ngozi Okonjo-Iweala, Managing Director of the World Bank. Mrs Ngozi is from an elite family in Nigeria, was educated at Harvard and MIT, recruited by the World Bank she worked there as an economist for two decades eventually becoming Vice President of the World Bank Group. In 2000 she returned to Nigeria, serving first as Finance Minister from 2003-2006 and then briefly as Foreign Affairs minister until she was fired from the position in August 2006. The Independent credits her with combating corruption in Nigeria, saying in May 2006:

Ngozi Okonjo-Iweala is a heroine not just of Nigeria, where she is Finance Minister, but of the entire continent. Her crusade against corruption has put her life at risk. - Independent

The article goes on to describe how she was recruited as part of a UN scheme to repatriate talented Africans and was receiving a salary of $240,000 - in a country where the average minister receives $6000 and many people live on less than a dollar a day. The Independent, utterly fawning and stupid in their praise of Ngozi, described those pointing out the hypocrisy as being part of a 'smear campaign'.

So passionate is she about staying the course that last year she gave up the dollar salary and now earns $6,000, like other Nigerian ministers. - Independent

This sort of utterly uncritical reporting occurs in almost every article on Ngozi that I've read this morning, and it must have been rather embarrassing for Paul Vallely, the author of the Independent piece, that so keen was Ngozi to stay the course that she gave up a massive salary that she didn't need due to years of working for bankers, and being of aristocratic heritage, only to leave the job not long after, seduced once more by the rulers of the world. After the scandalous end to Paul Wolfowitz's reign as President of the World Bank her name was being bandied about as a possible replacement. A few months later, in October 2007, Bilderberg member and Wolfowitz follow-on Robert Zoellick appointed her as Managing Director. She is now back safe and sound in a place where no one will care how much she's being paid. One of the causes of this sort of crude and obvious journalism is, of course, that she is black and also a woman, and she's risen to the top, or at least somewhere near the top. Demographically speaking, it is extremely rare to see a black woman with such a career, though when you throw in her family and educational opportunities, as well as her obvious willingness to do the work required of her, her gender and race are actually useful brand aspects.

It helps that she parrots the sort of pseudo-progressive mumbo-jumbo (no racial slur intended) that impresses left-leaning liberal press organs such as the Independent and the BBC. In the interview posted by the BBC this morning she claims that African countries were just 'innocent bystanders' in the 'economic crisis', that the crisis started in the developed world, and then making a plea for 0.7% of the 'stimulus packages' of developed countries to go to aid for Africa. There are numerous deceits involved here.

Firstly, it is treating African countries as a homogenous singularity, as is so popular in the colonial mindset she's clearly adopted as she betrayed her country and fled to an easier life with a corrupt corporation. Secondly, a few people in African countries are far from being innocent bystanders in all this, being willing partners in the economic system that enabled this 'crisis'. Ngozi, having worked for the World Bank for so long, helped preside over this system though she did so from America, so technically wasn't in an African country. Thirdly, continual aid and debt relief isn't ever going to see Africa fulfill its potential as a continent, as such policies only continue to keep the people there indebted, in need, and therefore controlled. But it all makes Ngozi, a black woman in case you hadn't noticed, seem less like an aristocrat sell-out working for the very organisation which continues to enslave her people, and more like a caring African woman done good. Usefully for the World Bank, it makes them look like a benevolent organisation which even employs a black woman as its MD.

An additional story from the BBC today offers another angle. Titled Global Crisis 'to strike by 2030', it details predictions of population growth leading to food, water and energy shortages. Global crises being the order of the day, it's probably worth pointing out that we already have massive food, water and energy shortages for billions of people all over the world, without having to engage in speculation. Rather than worry about people dying in 2030, we should probably worry about creating a more equitable system to stop all the people dying right now in 2009. Just a suggestion. Also, the population can only continue to increase while there are resources to support and enable that increase, so we cannot ever truly reach a point of there being too many people. We can only ever reach a point where the inequitable distribution of the resources needed to sustain life kill so many people so quickly that we are morally distraught. From a biological/evolution/resource point of view, all such claims and predictions are nonsense. From a moral/political/economic point of view, we've already reached a point where we should be morally distraught about the rate and scale of human death, and the quality of life for so many of the living. However, predictions of potential crisis makes for better reading than truthful and earnest exposition of real and present crisis. You don't want people crying into their breakfasts and demanding the overthrow of the institutions of power. Furthermore, if we as a species chose to exploit the world's resources efficiently and fairly then Africa and Latin America could feed the world.

We can see this logic in another recent BBC article, titled Climate scenarios 'being realised'. You might be led by the title to believe it would be about actual evidence of the severe climate change predicted by the IPCC and others, but no. All that is being discussed is yet more predictions, these ones more dramatic that those offered in the IPCC's 2007 report.

In a statement in Copenhagen on their six key messages to political leaders, they say there is a increasing risk of abrupt or irreversible climate shifts...

...Scientists heard that waters could rise by over a metre across the world with huge impacts for hundreds of millions of people...

...The meeting was also addressed by Lord Stern... He urged scientists to speak out and tell the politicians what the world would be like if effective measures against global warming were not taken. - BBC

The article, and indeed the speakers at the meeting being described, are conflating 'could' with 'would' in a dastardly and intentional deceit. Predictions are not facts, however much they may be based on facts. Models of what might happen are not guarantees of what will happen, but if there's no impending global crisis then there's no need to create or enhance global institutions of control.

Back to the economic 'crisis', we've also seen this week the Federal Reserve and the Bank of England adopting a strategy popularly termed 'quantitative easing' but which basically involves the purchase of debt via the creation of money out of thin air. In short, the Bank of England will spend up to £150 billion on corporate and public (government) debt and the Federal Reserve in the land of Barack 'concrete action of change' Obama will spend up to $1.2 trillion on the same, both in an effort to recapitalise the markets and encourage lending, spending and therefore the ultimate economic aim, growth. Given that both the US and UK governments are currently running up huge budget deficits for their existing 'stimulus packages' (a pretty saucy term if you think about it), as is the Eurozone for that matter, this purchase of debt (bonds) is circular, or rather, will take debt off the market in large quantities only to dump new debt back on the market to enable the budget deficits of the client governments of these central banks. As Robert Peston commented:

The Treasury has to pump out over £100bn a year of new government bonds over the next two or three years, to finance the ballooning gap between what the public-sector spends and what it receives in tax revenues.

And the device of authorising the Bank of England to buy up a huge proportion of these IOUs has apparently reduced the cost of all that borrowing to an astonishing degree.

Which seems a bit bananas, since surely all we're talking about here is one arm of the state buying debt issued by another arm of the state.

Surely if markets were rational and efficient, there would be no impact on gilt prices, or yields or interest rates at all.

Isn't there a kind of Ricardian equivalence going on here, where nothing of economic substance has actually changed?

It seems to me that this policy only works on the basis that markets are irrational and short-termist. - Peston, BBC

As a stern critic of Peston I can firmly say this is the most sensible thing he's written in months. Even a broken watch is right twice a day. Though he's not quite right, because we're not talking about two arms of the state, but an arm of the state (the treasury in any given client country) beholden to the corporate-state hybrids that are central banks. Still, he's right that it is bananas. We're just creating debt to buy debt so we can then sell debt, thus perpetuating the very economics that allowed for this to happen. The net result in real terms will be inflation, possibly even hyperinflation, as there's more money around thus each individual money is worth less. So the economics won't radically change, we'll just be more indebted than ever and everything will cost more.

Beyond this, the 'emergency summit' in Brussels ended at the beginning of March with the consensus British PM Gordon Brown (Bilderberg member and unabashed globalist) was trying to achieve.

"There was consensus on the need to avoid any unilateral protectionist measures," European Commission president Jose Manuel Barroso said. - BBC

A few days later Brown would be in Washington, again warning against 'protectionism'.

So should we succumb to a race to the bottom and a protectionism that history tells us that, in the end, protects no-one? No. We should have the confidence that we can seize the opportunities ahead and make the future work for us.

Why?

Because while today people are anxious and feel insecure, over the next two decades literally billions of people in other continents will move from being simply producers of their goods to being consumers of our goods and in this way our world economy will double in size.

Twice as many opportunities for business, twice as much prosperity, and the biggest expansion of middle class incomes and jobs the world has ever seen. - Brown speech in full, Telegraph

So, rather than invest money in building up emerging industries, creating jobs, encouraging economic growth based on real exchange, Brown's policy is to indebt the country even further in the name of putting more money in the hands of huge corporations on the prediction that billions in the next two decades will become consumers just like us in the West. What history has taught us is that the domination of capital by an elite is precisely what prevents the majority from achieving economic independence, and therefore from gaining the ability to be consumers. Not that a world where everyone spends money on crap they don't need is particularly desirable, but the consumer is in a more free position than the impoverished. The 'biggest expansion of jobs the world has ever seen' will not be created by quantitative easing and pretending RBS hasn't gone bankrupt, though when the trouble clears we probably will have more bankers, economists, treasury civil servants and so on than we've ever had before.

Meanwhile, British banks have only a few more days to sign up for the government's 'Asset Protection Scheme' which effectively enabled them to pay an insurance premium against possible future losses on 'toxic' financial assets, as Peston is so enamoured of calling them. Does creating national insurance for privately-held abstract financial assets whose values is determined by derivatives merely add to the chain of artificial and illusory financial mechanisms? No, it doesn't merely do this, though it most definitely does do this. It also nationalises the risk of loss due to over-exposure, greed, incompetence, manufactured crashes and the rest. This BBC story about Barclays considering entering into the scheme states that RBS (part-owned by the state) has paid £6.5 billion to the state which part owns it so that the state will insure £325 billion in assets. Barclays' position was stated in the BBC article:

The bank said any decision on whether it would participate, "and to what extent", would be based on "the economic merits to shareholders". - BBC

In effect, the government is becoming a significant player in the derivatives market, only without the expertise, experience and understanding of banks and traders. Because of this lack of knowledge in what they're getting themselves into, it is happening entirely on the terms of the banks and other financial institutions participating in it, who will only do so if they think there's a profit to be made, i.e. only if they believe they will eventually get back more money than the premium they have to pay. Comments on both Peston's blog and Sky News' use the cliche 'locking the stable door after the horse has bolted' but this is inaccurate. The scheme is more akin to hanging up a sign saying 'free stable, food, water' in a language horses can read and leaving all the doors to the stables open so the horses can exploit them as and when they choose.

Barclays are one of few banks to still be reporting profits in spite of the 'economic crisis'. In February they announced a £6.1 billion pre-tax profit, compared to a loss of over $18.7 billion for Citigroup, nearly $62 billion for AIG, and over £24 billion lost by RBS. At a time when money is tight, those will some ready cash can clean up, as JP Morgan Chase did by buying Bear Stearns at a bargain-basement price, and as Barclays did by purchasing a major part of Lehman. It is so far proving to be good business, as noted by the BBC:

Barclays' profits included £2.41bn of gains from acquisitions, mainly from its takeover of the North American operations of Lehman Brothers, the failed US bank. - BBC

Given that Barclays paid around $1.75 billion for the portion of Lehman it acquired this could turn out to be the deal of the century. Likewise, JP Morgan Chase is still profitable. Control of these banks is incestuous and conspiratorial. Consider the fact that JP Morgan Chase is the world's leading derivatives player. The acquisition of Bear Stearns took them to a notional position of $77 trillion a year ago, to around $90 trillion in October 2008. The chart here shows just how massive a proportion of the American derivatives market this $90 trillion constitutes. Globally the situation is unclear, but in 2008 the Bank for International Settlements, the world's oldest international central bank, put the value at $600 trillion for over-the-counter derivatives though the total market was recently estimated at over $1.1 quadrillion. Even with such ludicrous numbers on the table, JP Morgan alone accounts for nearly 1/11th.

Now the kickers - JP Morgan has been a Rothschild-controlled bank for decades, as has Barclays. Barclays, through their Global Investors arm dominate all the Wall Street banks worth mentioning. But much of this is by proxy, owning a few percent via one bank and a few percent by another, with all the major banks in the cartel owning parts of each other. A decade ago, JP Morgan was a poor relation, struggling to tread water with the big boys in New York. The JP Morgan-Chase Mahattan merger was not just a somewhat unlikely combination of the interests of major banking families, it produced the means for an assault by the usually Eurocentric Rothschilds on the largely Goldman Sachs-Rockefeller dominated territory of America. Hence why JP Morgan and Barclays are the only banks to have made major acquisitions of rivals since the beginning of the credit crunch.

Indeed, JP Morgan facilitated the collapse of Lehman (and therefore its subsequent takeover by Barclays at a rock bottom price) by withholding $17 billion of Lehman funds and securities held at JP Morgan Chase, freezing their accounts. This was on Friday night. By Monday, Lehman were filing for bankruptcy. One Rothschild bank helping out another. The epilogue is that after Barclays had bought up those bits of Lehman that it wanted essentially just its North American holdings, the investment bank chosen to advise on the eventual sale of Lehman's Asian holdings was, unsurprisingly, NM Rothschild of London. This firm was also the training ground for Lord Myners, the new City Minister in the British government, a firm from which he still receives 'benefits'.

So, while Ngozi is somewhat correct is saying the economic crisis started in the developed world, it is less of a misnomer and a more accurate apportioning of blame to say it started in the minds of elite banking families fighting each other for turf. When the same people own the bank where the credit crunch is widely held to have begun, and the banks buying up competitors, and the banks helping each other buy competitors, and the banks advising on the sale of competitors (or bits of them) that they don't want, and control the policy mechanisms of the major treasuries and central banks then denial of the existence of a cartel becomes nothing more than rhetoric. Yet I cannot find a single mainstream media reference in literally thousands of articles on the 'credit crunch' to this interpenetration of influence, this conspiracy. Of course, the same people also own Reuters and the Associated Press.