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Octafish's Journal
Octafish's Journal
July 23, 2015

You should read more. CounterPunch gives you news and info you won't find anywhere else.

Did I tell you that you would agree with every article or author? No. You will learn a great deal at CounterPunch, such as this on the banksters:

The Paulson-Bernanke Bank Bailout Plan

CounterPunch, Sept. 22, 2008

Saturday’s $700 billion junk mortgage bailout is the largest and worst giveaway since a corrupt Congress gave land grants to the railroad barons a century and a half ago. If it goes through, it will shape the coming century by giving finance unprecedented power over debtors – homebuyers, industry, state and local government, and the federal government as well.


I should add that the solution does not lie simply in creating a new regulatory system, much less a single regulatory agency. After all, it was at Wall Street’s command that the Bush Administration installed deregulators in all the key regulatory positions. This meant that regulations didn’t matter at the Environmental Protection Agency (EPA), at the Fed under Alan Greenspan, at the Securities and Exchange Commission (SEC) under Mr. Cox (after William H. Donaldson resigned when the White House would not let him regulate as much as he thought necessary) or at the Department of Justice under Bush yes-men such as Alberto Gonzales. Politics and people have turned out to be more important than the law. We have seen the Supreme Court scrap the Constitution in the 2000 election – with acquiescence from the Democrats, starting with Mr. Gore’s refusal to contest Florida.

To appoint a single regulator would prevent all other regulators – and law enforcement officers, attorneys general, the SEC and so forth – from enforcing honest financial policies in the event that an incoming president should appoint another Greenspan, Gonzales or other ideological extremist averse to the idea of applying existing regulations and honest laws. Under these conditions “consolidated regulation” would mean a free ride for crooks much like J. Edgar Hoover gave the Mafia under his tenure.

My alternative solutions are as simple as Mr. Paulson’s, but of course are quite different. The public interest does indeed call for maintaining the economy’s basic credit, money-transfer, credit card and depository checking and savings functions. But not under the current venal and predatory management practices. It is this management that has lobbied so hard for deregulation, and whose industry representatives have insisted so strongly to place extremist ideological deregulators into the economy’s major positions. Therefore, the Treasury only should buy junk mortgages at current market price. The losses should be taken in order to re-even out the wealth pyramid that has become so much steeper under the Greenspan-Bernanke ploys. The banks knew full well that these mortgages lacked underlying value. The price of making use of this borrowing facility is to forfeit all equity stock to the government. The Treasury should prohibit any financial institution that sells or swaps securities to the Fed from paying any dividends to shareholders or stock options and bonuses to managers. It also should give the government priority over other creditors. Otherwise, firms that have negative equity will benefit purely at public expense, using the money to pay dividends, bonuses and exorbitant salaries.

Second, we need to restore the Glass-Steagall separation of commercial banks from risk-taking investment banks, mortgage brokers and other financial-sector flotsam and jetsam. Break up the mergers between banks and casino sell-side financial and real estate institutions. Just the opposite is occurring: On Monday, Sept. 22, the financial universe was transformed by the announcement that Mr. Paulson’s Wall Street firm, Goldman Sachs, was transforming itself into a bank holding company. The casinos are to take over the banking system as big fish eat little fish in the present financial emergency. It looks like new giants are emerging, already larger than the government in terms of the magnitude of the debts they have run up – and certainly in their earning power. Indeed, who is to say that extracting interest from the U.S. economy will not emerge as the new form of taxation?

Third, re-write the bankruptcy laws to favor debtors once again, not creditors. This means reversing the current bankruptcy code sponsored by lobbies from the credit-card companies. The interests of the five million mortgage debtors faced with foreclosure and expropriation this year should rightly be placed above the interest (literally) of predatory creditors.

Fourth, sharply increase property taxes, shifting them back off labor and sales. We need to return to the classical idea of taxing unearned and unproductive income instead of adding to the price of labor and industry. What has been freed from the tax collector by the shift of taxes off property has not lowered the cost of housing and other real estate, or corporate costs of doing business. The income “freed” has ended up being paid to the banks as interest. The government still has had to raise money – but in the form of taxes that fall on labor’s wages and industry’s profits. So labor and industry now pay twice for what they formerly paid only once. They still pay the same overall amount of taxes, but also pay an equivalent amount of interest. The financial system is crowding out the government.

In the fifth place, we need to start discussing whether we really need a banking system that behaves in the way the present one does. In recent decades banks have made loans mainly to inflate asset prices by loading real estate and industry with interest-bearing debt. What if all banks were to be organized along the lines of savings banks, with 100% reserves. This is the Chicago Plan from the 1930s (currently revived by the American Monetary Institute, which holds its annual meeting this week in Chicago, by the way). This at least would go back to basics to provide a foundation from which to re-begin to discuss just what kind of credit the economy needs and what would be the best terms on which to structure financial markets.



That was 2008, when we could've made the banksters put the money back. Instead, we bailed them out, including making AIG whole, 100-cents on the dollar, at a cost of millions who lost their homes and trillions from the US Treasury.

BTW: CounterPunch provides a forum for authors. That's also a lot different from Fox or Stormfront. From what I understand, they're filled with people who don't like to learn anything new. You know, uhnope, like censors.

July 23, 2015

J Edgar Hoover is one who didn't tolerate dissent. Not me.

Here's what I think the FBI is capable of doing:

J. Edgar Hoover obstructed Justice in regards to the assassination of President Kennedy.

Special Agent Don Adams of the FBI deserved to be seen and heard by billions. The guy was the real deal, a brave agent who stepped forward. Among his assassination-connected work, FBI Special Agent Don Adams interviewed racist Joseph Adams Milteer, a guy an FBI informant had taped detailing a pre-Dallas plot in Miami.

He wrote a book on the experience:


Why Milteer matters:

Joseph Adams Milteer, the guy Adams was sent to interview, had outlined what would happen in Dallas before it happened. For some reason, Mr. Hoover "let him go."

Then, there's the Hosty note:

FBI Special Agent James HOSTY destroyed evidence: a ''threatening'' note from Oswald.

A couple of weeks before the assassination, Hosty paid a visit to Marina Oswald's residence at the home of Ruth Paine. Hosty was looking for Lee Harvey Oswald, who was not home. Oswald later found out about the visit and stopped by the Dallas FBI office and dropped off a note addressed to Hosty that threatened to "blow up the FBI building" in the words of the secretary who received the note in an unsealed envelope and read it.

Hosty and the FBI never admitted the note's existence until 1975 when the HSCA looked investigated the matter. Hosty said the note was not a threat and, therefore, not material to the case. Investigators believe Dallas SAC Gordon Shanklin ordered the note destroyed on direct orders from FBI Director J Edgar Hoover, a couple of hours after Oswald's own assassination while in police custody.

The note was never mentioned to the Warren Commission.

Destroying evidence is obstruction of justice.

Then, there's the evidence of various threats against President Kennedy that Hoover ignored. Author and former NYT reporter Edwin Black wrote about the Chicago Plot, the same M.O. as Dallas, ambush, high-power rifles, high-rise, and one patsy by the name of Thomas Arthur Vallee, a USMC veteran from a U-2 base in Japan. The plot was broken up by the Secret Service in Chicago. Not that they wanted to, they sort of had to when the local cops got a call from a landlady with the guns, passports, maps and "parade route" in Highlighter still on the bed.

Very important read in PDF:


You are right, jeff47. "GroupThink" is not the best way of phrasing it. I was asked one thing and now I have to answer for another. So, "Tag Team" is a better term.
July 22, 2015

The signatories are a ''Who's Who'' of Integrity.

For the Steering Group, Veteran Intelligence Professionals for Sanity

William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.)

Thomas Drake, former Senior Executive, National Security Agency

Philip Giraldi, CIA, Operations Officer (ret.)

Matthew Hoh, former Capt., USMC, Iraq & Foreign Service Officer, Afghanistan (associate VIPS)

Larry Johnson, CIA & State Department (ret.)

John Kiriakou, Former CIA Counterterrorism Officer

Karen Kwiatkowski, former Lt. Col., US Air Force (ret.), at Office of Secretary of Defense watching the manufacture of lies on Iraq, 2001-2003

Edward Loomis, NSA, Cryptologic Computer Scientist (ret.)

David MacMichael, National Intelligence Council (ret.)

Ray McGovern, former US Army infantry/intelligence officer & CIA analyst (ret.)

Elizabeth Murray, Deputy National Intelligence Officer for Middle East (ret.)

Todd E. Pierce, MAJ, US Army Judge Advocate (Ret.)

Coleen Rowley, Division Counsel & Special Agent, FBI (ret.)

Peter Van Buren, US Department of State, Foreign Service Officer (ret.) (associate VIPS)

Kirk Wiebe, former Senior Analyst, SIGINT Automation Research Center, NSA

Ann Wright, Col., US Army (ret.); Foreign Service Officer (resigned)

July 22, 2015

You should read about Lt. Cmdr. William Bruce PITZER.

Demand all you want, SidDithers of DU. That's typical. I said I don't know.

As to what I think, I'd tell you if I wanted to. It could have been CIA or DIA or FBI or some other secret agency. There's more than enough to go on to ask about them. For instance, did you ever hear about Lt. Cmdr. William Bruce Pitzer?

Seeing the Unspeakable:

Lt. Cmdr. William Bruce Pitzer

The following excerpts of Jim Douglass’ JFK and the Unspeakable - Why He Died and Why It Matters examine the visual record of President Kennedy’s head wounds on the evening of November 22 as captured by William Bruce Pitzer, head of the Audio-Visual Department of the Naval Medical School in Bethesda, Maryland, and his subsequent murder in 1966. In the book’s Introduction Douglass identifies the power each of us manifests through the denial we have exercised regarding the political assassinations during the 1960s in the United States.


In the first week of August 1965, Colonel Clarence W. Patten, commanding officer of the 6th Special Forces Group, summoned then-captain Dan Marvin to an office in Fort Bragg headquarters. Marvin says Colonel Patten told him to “meet a ‘Company’ man in an area adjacent to headquarters.”[604]

Marvin has described this meeting, “in the shade of some nearby pine trees,” with “a slender man of about 5’10”:

“Dressed casually in short sleeves, light slacks and sunglasses appropriate for the August heat, he flashed his ID and took me aside. Would I terminate a man who was preparing to give state’s secrets to the enemy—a traitor in the making?”[605]

Marvin, already trained as an assassin, said he would. He assumed his target would be in Southeast Asia, where he was on orders to go in December 1965.[606]

Marvin asked the CIA man who the traitor was.

“I was told,” Marvin said, “he was a Navy officer—a Lieutenant Commander William Bruce Pitzer. The agent told me that Pitzer worked at Bethesda Naval Hospital. He said nothing of a link with the JFK autopsy and I just assumed that Pitzer was one of those sorry types that went wrong and was going to sell secrets to our enemy. The job had to be done at Bethesda before the man retired from the Navy.”[607]



In a democracy, this is the kind of information that citizens would know.

Why does it bother you when I bring these things up?
July 22, 2015

CIA wants to blockade Truth from US!

WikiLeaks has exposed many members of the US government for what they are -- in the pockets of fraudsters, warmongers and banksters.

Wikileaks: CIA's Brennan on 'witch hunt' when Hastings was killed

By Ralph Lopez
Digital Journal, Dec 26, 2014 in World

A 2010 email released by Wikileaks from a top-level CIA contractor asserts that CIA Director John Brennan, the subject of a story by now deceased journalist Michael Hastings, was on a "witch hunt" against "investigative journalists" perceived as hostile.

Hastings, a reporter for the Rolling Stone who ruffled many feathers in his career, was killed in an unusual high-speed car accident in which the vehicle exploded on impact with a tree, and perhaps before. Hastings' wife confirmed to San Diego 6 News Television, soon after the uncharacteristic high-speed automobile crash, that Hastings' next "big story," as he called it, was to be on Brennan.

The email, written by Stratfor President Fred Burton and reported by San Diego 6, reads:

Brennan is behind the witch hunts of investigative journalists learning information from inside the beltway sources.

Note -- There is specific tasker from the WH to go after anyone printing materials negative to the Obama agenda (oh my.) Even the FBI is shocked. The Wonder Boys must be in meltdown mode...

The story on Brennan was never published.

Stratfor was once called "The Shadow CIA" by Barron's. In 2012 WikiLeaks began publishing “The Global Intelligence Files,” over five million e-mails from the Texas-based company.



Most people in CIA and all across the secret US government agencies are good people. It's just when they use their positions of power to enrich themselves and their chums and make wars without end for profits without cease that they cross a line called integrity.

And asshats with emoticons wonder why DU matters. It's where we can share ideas, you know, like we used to when this was a Democracy.
July 21, 2015

They were rich when the entered office. They both died in office, serving their country.

Can you show me a decision either man made that benefited the rich at the expense of the People -- or a decision that advanced the interests of the warmongers at the expense of the peace makers? Show me even one, please.

Now we have DEMOCRATS who openly talk about reversing much of the progress made over the last 83 years, from the New Deal to the New Frontier. GOOGLE Pete Peterson and contrast with William K. Black.

The real irony, YoungDemCA, can be found in presidents of both parties who come into the Oval Office poor and find ways of becoming rich during and after their "service."

July 20, 2015

Money should not determine how ''Good'' a Democrat we are.

That's how the Republicans think: One person is better than another.

And the more money you have, the more your worth.
One person is worth more than another. It's why their money is safe offshore and their Banksters never go to jail.
One human is more important than another. It's why they never go to Vietnam or wherever is the current Forever War.
One life holds greater value than another. It's why their mass media never talk about the economy or the environment or history or Forever War.

That is the polar opposite of what I, a Democrat following the examples of FDR and JFK, believe: All are Equal under the Law. Peace and Prosperity for ALL.

July 20, 2015

Tyler Cowen on Naomi Klein's 'Shock Doctrine'

Naomi Klein wrote extensively about Chile and the Chicago Boys in her book, "The Shock Doctrine."

Theory: The Shock Doctrine

Contributed by Mark Engler

“Only a crisis — actual or perceived — produces real change.” -- Neoliberal economist Milton Friedman

In Sum: Pro-corporate neoliberals treat crises such as wars, coups, natural disasters and economic downturns as prime opportunities to impose an agenda of privatization, deregulation, and cuts to social services.

Origins: Naomi Klein’s 2007 book The Shock Doctrine: The Rise of Disaster Capitalism.

The shock doctrine is a theory for explaining the way that force, stealth and crisis are used in implementing neoliberal economic policies such as privatization, deregulation and cuts to social services. Author Naomi Klein advanced this theory in her 2007 book, The Shock Doctrine: The Rise of Disaster Capitalism.

By way of metaphor, Klein recounts the history of electroshock therapy experiments conducted by Scottish psychiatrist Ewen Cameron for the CIA in the 1950s. Cameron’s “shock therapy” sought to return troubled patients to a blank slate on which he could write a new personality. Klein argues that a parallel “shock therapy” process has been used at the macro level to impose neoliberal economic policies in countries around the world.

The shock doctrine posits that in periods of disorientation following wars, coups, natural disasters and economic panics, pro-corporate reformers aggressively push through unpopular “free market” measures. For more than thirty years, Klein writes, followers of Milton Friedman and other market fundamentalists have been “perfecting this very strategy: waiting for a major crisis, then selling off pieces of the state to private players while citizens were still reeling from the shock, then quickly making the ‘reforms’ permanent.”

One of the earliest examples of the shock doctrine is the case of Chile. In 1973, Chile’s democratically elected socialist President Salvador Allende was overthrown in a coup d’état led by army general Augusto Pinochet, with support from the United States. Amid lingering turmoil created by the coup and tensions caused by the ensuing economic downturn, Milton Friedman suggested that Pinochet implement a “shock program” of sweeping reforms including privatization of state-owned industries, elimination of trade barriers, and cuts to government spending. To implement these policies, the Pinochet regime appointed to important positions several Chilean disciples of Friedman. Additionally, to squash popular movements that opposed these changes, the regime unleashed a notorious program of torture and “disappearances,” which ultimately led to the deaths of thousands of dissidents.



For some reason, economist and neo-something Tyler Cowen has a big problem with that idea. The economist frp, George Mason University has seen the future and it looks bleak for most of us. Thankfully, the United States of America may be in for good times, especially for those perched atop the socio-economic pyramid scheme, should war break out.

Shock Jock

By TYLER COWEN | October 3, 2007
Book Review
The Shock Doctrine: The Rise of Disaster Capitalism
by Naomi Klein


Ms. Klein's rhetoric is ridiculous. For instance, she attaches import to the fact that the word "tank" appears in the label "think tank." In her book, free market advocates are tarred with the brush of torture, because free market advocates often support unpopular policies, and torture also often supports unpopular policies. Clearly, by her tactic of freewheeling association, free market advocates must support torture. Often Ms. Klein's proffered connections are so impressionistic and so reliant on a smarmy wink to the knowing that it is impossible to present them, much less critique them, in the short space of a book review.

Rarely are the simplest facts, many of which complicate Ms. Klein's presentation, given their proper due. First, the reach of government has been growing in virtually every developed nation in the world, including in America, and it hardly seems that a far-reaching free market conspiracy controls much of anything in the wealthy nations. Second, Friedman and most other free market economists have consistently called for limits on state power, including the power to torture. Third, the reach of government has been shrinking in India and China, to the indisputable benefit of billions. Fourth, it is the New Deal — the greatest restriction on capitalism in 20th century America and presumably beloved by Ms. Klein — that was imposed in a time of crisis. Fifth, many of the crises of the 20th century resulted from anti-capitalistic policies, rather than from capitalism: China was falling apart because of the murderous and tyrannical policies of Chairman Mao, which then led to bottom-up demands for capitalistic reforms; New Zealand and Chile abandoned socialistic policies for freer markets because the former weren't working well and induced economic crises.

But the reader will search in vain for an intelligent discussion of any of these points. What the reader will find is a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions and foist unfettered capitalism upon an unwilling British public.

The simplest response to Ms. Klein's polemic is to invoke old school conservatism. This approach, most prominently represented by classical liberal Friedrich Hayek, rejected the idea of throwing out or revising all social institutions at once. Indeed the long history of conservative thought stands behind moderation in most matters of social and economic policy. That tradition does advise a scaling down of free market ambitions, no matter how good they may sound in theory, and is probably our best hedge against disasters of our own making. Such a simple — indeed sensible — point would not have produced a best-selling screed, however. And so we return to charging Friedman as an enabler of torture. The clash between democratic preferences and policy prescriptions is, if anything, a problem for Ms. Klein herself. Ms. Klein's previous book, "No Logo" (2000), called for rebellion against advertising and multinational corporations, two institutions which have proved remarkably popular with ordinary democratic citizens. Starbucks is ubiquitous because of pressure from the bottom, not because of a top-down decision to force capitalism upon the suffering workers in a time of crisis.

If nothing else, Ms. Klein's book provides an interesting litmus test as to who is willing to condemn its shoddy reasoning. In the New York Times, Nobel Laureate Joseph Stiglitz defended the book: "Klein is not an academic and cannot be judged as one." So nonacademics get a pass on sloppy thinking, false "facts," and emotional appeals? In making economic claims, Ms. Klein demands to be judged by economists' standards — or at the very least, standards of simple truth or falsehood. Mr. Stiglitz continued: "There are many places in her book where she oversimplifies. But Friedman and the other shock therapists were also guilty of oversimplification." Have we come to citing the failures of one point of view to excuse the mistakes of another?

With "The Shock Doctrine," Ms. Klein has become the kind of brand she lamented in "No Logo." Brands offer a simplification of image and presentation, rather than stressing the complexity, the details, and the inevitable trade-offs of a particular product. Recently, Ms. Klein told the Financial Times, "I stopped talking about (the campaign against brands) about two weeks after ‘No Logo' was published." She admitted that brands were never her real target, rather they were a convenient means of attacking the capitalist system more generally. In the same interview, Ms. Klein also tellingly remarked, "I believe people believe their own bulls---. Ideology can be a great enabler for greed."



Which is all fine and good, until we remember that's what Naomi Klein was saying, that what destroyed democracy in Chile and threatens to destroy it in the USA. And not only that, WAR is what Tyler Cowen sees as being the economy of the future.

The Pitfalls of Peace

The Lack of Major Wars May Be Hurting Economic Growth

Tyler Cowen
The New York Times, JUNE 13, 2014

The continuing slowness of economic growth in high-income economies has prompted soul-searching among economists. They have looked to weak demand, rising inequality, Chinese competition, over-regulation, inadequate infrastructure and an exhaustion of new technological ideas as possible culprits.

An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace.

The world just hasn’t had that much warfare lately, at least not by historical standards. Some of the recent headlines about Iraq or South Sudan make our world sound like a very bloody place, but today’s casualties pale in light of the tens of millions of people killed in the two world wars in the first half of the 20th century. Even the Vietnam War had many more deaths than any recent war involving an affluent country.

Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely. This view does not claim that fighting wars improves economies, as of course the actual conflict brings death and destruction. The claim is also distinct from the Keynesian argument that preparing for war lifts government spending and puts people to work. Rather, the very possibility of war focuses the attention of governments on getting some basic decisions right — whether investing in science or simply liberalizing the economy. Such focus ends up improving a nation’s longer-run prospects.

It may seem repugnant to find a positive side to war in this regard, but a look at American history suggests we cannot dismiss the idea so easily. Fundamental innovations such as nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War. The Internet was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth.

War brings an urgency that governments otherwise fail to summon. For instance, the Manhattan Project took six years to produce a working atomic bomb, starting from virtually nothing, and at its peak consumed 0.4 percent of American economic output. It is hard to imagine a comparably speedy and decisive achievement these days.


Living in a largely peaceful world with 2 percent G.D.P. growth has some big advantages that you don’t get with 4 percent growth and many more war deaths. Economic stasis may not feel very impressive, but it’s something our ancestors never quite managed to pull off. The real questions are whether we can do any better, and whether the recent prevalence of peace is a mere temporary bubble just waiting to be burst.

Tyler Cowen is a professor of economics at George Mason University.

SOURCE: http://www.nytimes.com/2014/06/14/upshot/the-lack-of-major-wars-may-be-hurting-economic-growth.html?_r=0

[font color="purple"]Dr. Cowen, from what I've read, is a fine person and not one to promulgate war. He's just sayin'.

He has commented on other Big Ticket economic themes impacting us today: "Inequality," for another instance.
[/font color]

Tired Of Inequality? One Economist Says It'll Only Get Worse

September 12, 2013 3:05 AM

Economist Tyler Cowen has some advice for what to do about America's income inequality: Get used to it. In his latest book, Average Is Over, Cowen lays out his prediction for where the U.S. economy is heading, like it or not:

"I think we'll see a thinning out of the middle class," he tells NPR's Steve Inskeep. "We'll see a lot of individuals rising up to much greater wealth. And we'll also see more individuals clustering in a kind of lower-middle class existence."

It's a radical change from the America of 40 or 50 years ago. Cowen believes the wealthy will become more numerous, and even more powerful. The elderly will hold on to their benefits ... the young, not so much. Millions of people who might have expected a middle class existence may have to aspire to something else.


Some people, he predicts, may just have to find a new definition of happiness that costs less money. Cowen says this widening is the result of a shifting economy. Computers will play a larger role and people who can work with computers can make a lot. He also predicts that everyone will be ruthlessly graded — every slice of their lives, monitored, tracked and recorded.

CONTINUED with link to the audio...


For some reason, the interview with Steve Inskeep didn't bring up the subject of the GOVERNMENT DOING SOMETHING ABOUT IT LIKE IN THE NEW DEAL so I thought I'd bring it up. I know you know, Zorra, but other DUers may not recall that the Democratic Party once actually did Big Things for the average American, from school and work to housing and justice. But, we can't afford that now, obviously, thanks to austerity or the sequester or the divided government or whatever it is we can't afford it, but forget we do have the ability to print up whatever amount the Banksters need to make whole their losses at the casino every time.
July 19, 2015

The Chicago Boys in Chile: Economic Freedom's Awful Toll

Operating on behalf of Nixon and Wall Street, the CIA and Milton Friedman & Friends perfected the art of turning the screws through austerity in Chile.

Too bad, so sad about all the little people who didn't go along with the big plan. Oh well. "Progress."

"The Chicago Boys in Chile: Economic Freedom's Awful Toll"

Orlando Letelier
August 28, 1976


The Economic Prescription and Chile's Reality


These are the basic principles of the economic model offered by Friedman and his followers and adopted by the Chilean junta: that the only possible framework for economic development is one within which the private sector can freely operate; that private enterprise is the most efficient form of economic organization and that, therefore, the private sector should be the predominant factor in the economy. Prices should fluctuate freely in accordance with the laws of competition. Inflation, the worst enemy of economic progress, is the direct result of monetary expansion and can be eliminated only by a drastic reduction of government spending.

Except in present-day Chile, no government in the world gives private enterprise an absolutely free hand. That is so because every economist (except Friedman and his followers) has known for decades that, in the real life of capitalism, there is no such thing as the perfect competition described by classical liberal economists. In March 1975, in Santiago, a newsman dared suggest to Friedman that even in more advanced capitalist countries, as for example the United States, the government applies various types of controls on the economy. Mr. Friedman answered: I have always been against it, I don't approve of them. I believe we should not apply them. I am against economic intervention by the government, in my own country, as well as in Chile or anywhere else (Que Pasa, Chilean weekly, April 3, 1975).


A Rationale tor Power


Until September 11, 1973, the date of the coup, Chilean society had been characterized by the increasing participation of the working class and its political parties in economic and social decision making. Since about 1900, employing the mechanisms of representative democracy, workers had steadily gained new economic, social and political power. The election of Salvador Allende as President of Chile was the culmination of this process. For the first time in history a society attempted to build socialism by peaceful means. During Allende's time in office, there was a marked improvement in the conditions of employment, health, housing, land tenure and education of the masses. And as this occurred, the privileged domestic groups and the dominant foreign interests perceived themselves to be seriously threatened.

Despite strong financial and political pressure from abroad and efforts to manipulate the attitudes of the middle class by propaganda, popular support for the Allende government increased significantly between 1970 and 1973. In March 1973, only five months before the military coup, there were Congressional elections in Chile. The political parties of the Popular Unity increased their share of the votes by more than 7 percentage points over their totals in the Presidential election of 1970. This was the first time in Chilean history that the political parties supporting the administration in power gained votes during a midterm election. The trend convinced the national bourgeoisie and its foreign supporters that they would be unable to recoup their privileges through the democratic process. That is why they resolved to destroy the democratic system and the institutions of the state, and, through an alliance with the military, to seize power by force.

In such a context, concentration of wealth is no accident, but a rule; it is not the marginal outcome of a difficult situation -- as they would like the world to believe -- but the base for a social project; it is not an economic liability but a temporary political success. Their real failure is not their apparent inability to redistribute wealth or to generate a more even path of development (these are not their priorities) but their inability to convince the majority of Chileans that their policies are reasonable and necessary. In short, they have failed to destroy the consciousness of the Chilean people. The economic plan has had to be enforced, and in the Chilean context that could be done only by the killing of thousands, the establishment of concentration camps all over the country, the jailing of more than 100,000 persons in three years, the closing of trade unions and neighbourhood organizations, and the prohibition of all political activities and all forms of free expression.

While the Chicago boys have provided an appearance of technical respectability to the laissez-faire dreams and political greed of the old landowning oligarchy and upper bourgeoisie of monopolists and financial speculators, the military has applied the brutal force required to achieve those goals. Repression for the majorities and economic freedom for small privileged groups are in Chile two sides of the same coin.



Three weeks after this was published in The Nation (Aug. 28, 1976), Orlando Letelier was assassinated by a car bomb in Washington, D.C.

FWIW: Then-CIA Director George Herbert Walker Bush knew all about Operation Condor and didn't stop them from killing Orlando Letelier and his American companion, Ronni Moffit.

DCI Bush even told then-Congressman Ed Koch (D-NY), threatened anonymously for his work uncovering Operation Condor and its associated evil at the time, "Nothing I can do."

Why does this matter today? What the CIA and Big Money Boys did in Chile in 1973, they're doing to Greece and the USA now.

Something else: They know if We the People are sufficiently worried about keeping a roof over the family and food on the table, We won't have much time to worry about little stuff like Democracy.

More on the subject: from the National Security Archive at George Washington University.
July 18, 2015

Brendan Sullivan bought Sen. Dan Inouye enough time to shut down Rep. Jack Brooks' question.

Thank you, think! Watched on the tee vee way back then, yet I remember it like it was yesterday:

The Shredding of Democracy

excerpted from the book

The Secret Government

by Bill Moyers
Seven Locks Press, 1988


Ronald Reagan ran in 1980 with a strong and clear message the world was a hostile place and closing in on America. Russian troops were in Afghanistan, Sandinistas were in Nicaragua, and Americans were being held hostage in Iran. President Reagan wanted to reinvigorate the CIA. To run it, he chose a tough director, his campaign manager, William Casey.

They were ideological soulmates, true Cold Warriors on the offensive. In seven years Reagan approved over 50 major covert operations, more than any president since John F. Kennedy. Reagan and Casey set the agenda, but it was Oliver North's job to carry it out. In North, they had their 007.

North's primary mission was to keep the contra war going despite the congressional ban on aid. For two years he master minded a privately funded airlift to Honduras. According to some reports, criminal elements seized opportunities presented by the secret airlift to smuggle drugs back into the United States with profits being used to buy more weapons for the contras


Were there contras who relied on the profits of narcotics in order to buy arms and to survive? Yes. I'm convinced of that. Once you open up a clandestine network which has the ability to deliver weapons or other goods from this country, leaving airfields secretly under the sanction of a "covert operation," with public officials, DEA, Customs, law enforcement, whatever, pulled back because of the covert sanctioning, you've opened the pipeline for nefarious types who are often involved in these kinds of activities to become the people who bring things back in.

North had been told the airlift was using questionable characters. Robert Owen, his contact man with the contras, wrote from the field that some of the leaders were running drugs. In February 1986, Owen advised North that a resupply plane had been used for shipping drugs. In Owen's words, "Part of the crew had criminal records."

SEN. DANIEL K. INOUYE, D.-Hawaii (Iran-contra hearings, 1987):

The second sentence says, "Nice group the boys choose." Who are the boys?


So what happens? I asked Senator Kerry: "In effect, does the president of the United States say, 'This is the national security, you must step back and let these people do their job,' and therefore a lot of smugglers, drug traffickers, others, go through the back door?"


I don't think the president of the United States said specifically, "Look the other way to these things." I don't think the president of the United States knew these things were going on. But the president of the United States did encourage to such a degree the continuation of aid to the contras, and it was so clear, through Casey and Poindexter, etc., that this was going to please the president if it happened. It's clear that there were those who turned their heads and looked the other way because they knew that this major goal was out there and it was part of it, and if there happened to be these minor aberrations, as people referred to them, that was the price you were paying in the effort to accomplish the larger goal. Which larger goal, obviously, was against the law and against the wishes of the Congress and against the American people.

How does it happen that to be anticommunist we become undemocratic, as if we have to subvert our society in order to save it? Because the powers claimed by presidents in national security have become the controlling wheel of government, driving everything else. Secrecy then makes it possible for the president to pose as the sole competent judge of what will best protect our security. Secrecy permits the White House to control what others know. How many times have we heard a president say, "If you only knew what I know, you would understand why I'm doing what I'm doing." But it's a self-defeating situation. As Lord Acton said, "Everything secret degenerates, even the administration of justice." So in the bunker of the White House, the men who serve the president put loyalty above analysis. Judgment yields to obedience. Just salute and follow orders.

COLONEL NORTH (Iran-contra hearings, I987):

This lieutenant colonel is not going to challenge a decision of the commander in chief, for whom I still work, and I am proud to work for that commander in chief. And if the commander in chief tells this lieutenant colonel to go stand in the corner and sit on his head, I will do so.

That notion troubled Inouye, a combat hero of World War II. He reminded North of the military code, of a soldier's duty.

SENATOR INOUYE (Iran-contra hearings, 1987):

The uniform code makes it abundantly clear that it must be the lawful orders of a superior officer. In fact it says, "Members of the military have an obligation to disobey unlawful orders." This principle was considered so important that we - we, the government of the United States, proposed that it be internationally applied in the Nuremberg trials. And so in the Nuremberg trials we said that the fact that the defendant -

BRENDAN SULLIVAN, counsel to Colonel North:

Mr. Chairman, may I please register an objection?


May I continue my statement?


I find this offensive. I find you're engaging in a personal attack on Colonel North, and you're far removed from the issues of this case.

North's lawyer deflected Inouye, but some of North's fellow officers watching on television took issue with the colonel.

GEORGE GORMAN, former captain, U.S. Marine Corps:

I'm two years senior to Oliver North out of the Naval Academy, and the only thing he's got on me is a Silver Star and six more years in the Corps. And when Oliver North started to say the things he started to say, I literally wanted to throw things at my TV set. I seriously considered mailing my Naval Academy ring back to the Naval Academy and denying ever having gone there. I was so embarrassed and humiliated that a professional military officer would stoop to the dishonor and disgrace and warmongering that Oliver North and Poindexter and McFarlane and the rest of the crew did. Selling arms to the Iranians after they blew up the Beirut barracks, after they blew up the Beirut embassy, is the most immoral thing- that's like selling Zyklon-B to the Germans after you've found out the Holocaust is under way.

ROBERT COLCLASURE former captain, U.S. Marine Corps:

One of my drill instructors in the Marine Corps - there were a of protests in Washington, D.C., and somebody said, well, those commie lovers, or whatever - and the drill instructor told us something as we were about to graduate. He said, "What you're fighting for might be wrong or right, nobody really knows. But,&quot he said) "there's a Constitution that allows those people to be out on the streets protesting." (He said) "That's what's worth fighting for. That's what the Constitution is." He said, "That's what you took an oath to, and when you put those bars on as a second lieutenant, you better remember that." I don't think Oliver North had that drill instructor.

It was career military men who managed the Iran-contra debacle under Reagan and Casey; North, Poindexter, McFarlane, Secord, and Singlaub were trained to fight wars, not run foreign policy. In war, the aim is absolute and simple: destroy the enemy, no matter what. They had little understanding of politics in Iran, in Nicaragua, and, most important, in Washington. Yet our foreign policy has increasingly become a military policy. Reagan has doubled the number of military men on the staff of the National Security Council. What was created in 1947 as a civilian advisory group to the president has become a command post for covert operations run by the military. Far removed from public view and congressional oversight, they are accountable only to the one man they serve. The framers of the Constitution feared this permanent state of war, with the commander in chief served by an elite private corps that put the claims of the sovereign above the Constitution.



Interesting how few people know this history, and when we try to bring it up, so many want to shoot down its discussion. I wonder why that would be?

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