Sabbah Report » Ralph Nader

The Source of the Economic Crisis: A Chicago State of Mind

Maidhc Ó Cathail — Fri, 05 Feb 2010 17:46:42 +0000

By Maidhc Ó Cathail* | Sabbah Report | www.sabbah.biz

Worried about the global economic crisis? It's all in your head, says a leading financial expert.

And that's the problem, according to Jeff Gates, author of the highly-regarded Democracy At Risk: Rescuing Main Street From Wall Street, a sequel to The Ownership Solution: Toward A Shared Capitalism For The 21st Century. The latter book was described by one reviewer as "the best book on economics for a generation," and praised by Ralph Nader as "a Capitalist Manifesto, a blueprint for spreading the benefits of capitalism more equitably."

Gates, a former counsel to the U.S. Senate Committee on Finance (1980-87), identifies the source of the current economic crisis as a "shared mindset" into which we have been induced to put our faith, to the grave detriment of the majority – but to the immense benefit of a very few.

While the events of September 2008 on Wall Street may have come as a shock to many – not least those who suddenly found themselves out of work or on the streets – they were "perfectly predictable" to a close-knit group of "financial sophisticates," Jeff Gates maintains.

But is there any evidence that this was a deliberate fraud?

"Systems analysts offer an acronym ("POSIWID") to identify systemic flaws: the purpose of a system is what it does," Gates says.

"In financial systems, results are downstream of the 'Chicago model' – a shared mindset from which today's results flow. Over the past half-century, this market-fundamentalist perspective evolved into the 'Washington' consensus to emerge as the guiding principle of the World Trade Organization (WTO) now taking this model to global scale."

What exactly does he mean by the "Chicago model"?

"At the core of this worldview lies a premise whose purpose is easily stated: 'maximize financial returns and – trust us – all else will be fine.' Faith in that perspective ensured today's results," Gates explains.

"As this 'Chicago' frame of mind gained the force of law through the 'law and economics' movement, the result became a globalized operating system best described as 'money-on-autopilot.' There lies the blame for this collapse – in that narrow 'consensus' perspective."

The "law and economics" movement referred to by Gates also traces its origins to the University of Chicago. As key opponents of financial regulation, this movement was heavily funded by the same Olin Foundation that also supported neoconservatism through its funding of neocon think tanks such as the American Enterprise Institute.

This "Chicago" state of mind, Gates argues, had far-reaching consequences that could have been easily foreseen by its advocates. "The results of this purpose-driven 'operating system' were guaranteed to concentrate wealth and income and thereby undermine both democracies and markets. By equating personal freedom with financial freedom, we were induced to freely embrace the very forces that now jeopardize freedom," Gates says.

"Nowhere in this operating system is there any provision for the values essential to the long-term health of communities: fiscal foresight, civil cohesion and environmental sustainability. Money is the only value granted a voice."

Jeff Gates' latest book, Guilt by Association: How Deception and Self-Deceit Took America to War, traces the corruption that plagues American politics to a network who "share an ideological bias sympathetic to Israel." It should be read by concerned citizens everywhere, but especially in the United States, where the "Chicago" mindset has been most deeply embedded in its economic and foreign policy-making.

Endorsed by former U.S. Ambassador Edward Peck and Illinois Congressman Paul Findley (1961–1983), Guilt by Association identifies those who have promoted aggressive economic and foreign policies that have been "ruinous" not only to America's reputation but also to "moderate and secular Jews." The latter, Gates points out, are often unfairly portrayed as "guilty by association" with the behaviour of these "elites and extremists."

Who are these "elites and extremists," and how do they make America appear "guilty by association"?

"When waging unconventional warfare, Defense Secretary Robert Gates points to the perilous role of 'the people in between.' Thus, for instance, while pro-Israelis induced the U.S. to wage war in Iraq with false and flawed intelligence, 'the people in between' created, promoted and reported intelligence 'fixed' around that pre-determined goal," Gates explains.

"In the financial domain, 'the people in between' are securities bundlers, rating agencies and, most fundamentally, those who induce "the mark" (the public) to put their faith in the financial premise that enables this ongoing fraud.

"All flows downstream from a 'consensus' perspective – regardless whether the deception is a shared belief in Iraqi weapons of mass destruction or a consensus faith in the infallibility of unfettered financial markets. The modus operandi is identical – the displacement of facts with beliefs."

Perhaps not coincidentally, the intellectual roots of neoconservatism can also be traced to Chicago, where University of Chicago Professor Albert Wohlstetter's cadre of students included Richard Perle and Paul Wolfowitz. Wohlstetter himself had been a protégé of another University of Chicago Professor, Leo Strauss. Considered to be the "intellectual godfather" of the neocons, Strauss significantly advocated a "philosophy of deception."

Through their failure to identify the source of the problem, government responses to the ongoing economic crisis will only make matters worse, maintains Gates.

"Lawmakers seek to solve a systemic problem well downstream of its source. By piling on more interest-bearing debt without addressing the underlying problem, they are unleashing long-term financial forces destined to make a bad situation worse – at a staggering cost," he says. "We can anticipate stagnation and inflation while 'the people in between' continue to amass more assets (at distressed prices) and collect more interest on more taxpayer-secured debt. The pace is poised to quicken in this policy-enabled redistribution of wealth – from the bottom to the top."

* Maidhc Ó Cathail is a widely published writer based in Japan.

Ralph Nader – Letter to Bush on Gaza Crisis

Haitham Sabbah — Wed, 07 Jan 2009 20:18:16 +0000

Dear George W. Bush---

Cong. Barney Frank said recently that Barack Obama's declaration that "there is only one president at a time" over-estimated the number. He was referring to the economic crisis. But where are you on the Gaza crisis where the civilian population of Gaza, its civil servants and public facilities are being massacred and destroyed respectively by U.S built F-16s and U.S. built helicopter gunships.

The deliberate suspension of your power to stop this terrorizing of 1.5 million people, mostly refugees, blockaded for months by air, sea and land in their tiny slice of land, is in cowardly contrast to the position taken by President Dwight Eisenhower in 1956. That year he single handedly stopped the British, French and Israeli aircraft attack against Egypt during the Suez Canal dispute.

Fatalities in Gaza are already over 400 and injuries close to 2000 so far as is known. Total Palestinian civilian casualties are 400 times greater then the casualties incurred by Israelis. But why should anyone be surprised at your blanket support for Israel's attack given what you have done to a far greater number of civilians in Iraq and now in Afghanistan?

Confirmed visual reports show that Israeli warplanes and warships have destroyed or severely damaged police stations, homes, hospitals, pharmacies, mosques, fishing boats, and a range of public facilities providing electricity and other necessities.

Why should this trouble you at all? It violates international law, including the Geneva Conventions and the UN Charter. You too have repeatedly violated international law and committed serious constitutional transgressions.

Then there is the matter of the Israeli government blocking imports of critical medicines, equipment such as dialysis machines, fuel, food, water, spare parts and electricity at varying intensities for almost two years. The depleted UN aid mission there has called this illegal blockade a humanitarian crisis especially devastating to children, the aged and the infirm. Chronic malnutrition among children is rising rapidly. UN rations support eighty percent of this impoverished population.

How do these incontrovertible facts affect you? Do you have any empathy or what you have called Christian charity?

What would a vastly shrunken Texas turned in an encircled Gulag do up against the 4th most powerful military in the world? Would these embattled Texans be spending their time chopping wood?

Gideon Levy, the veteran Israeli columnist for Ha'aretz, called the Israeli attack a "brutal and violent operation" far beyond what was needed for protecting the people in its south. He added: "The diplomatic efforts were just in the beginning, and I believe we could have got to a new truce without this bloodshed.....to send dozens of jets to bomb a total helpless civilian society with hundreds of bombs-just today, they were burying five sisters. I mean, this is unheard of. This cannot go on like this. And this has nothing to do with self-defense or with retaliation even. It went out of proportion, exactly like two-and-a-half years ago in Lebanon."

Apparently, thousands of Israelis, including some army reservists, who have demonstrated against this destruction of Gaza agree with Mr. Levy. However, their courageous stands have not reached the mass media in the U.S. whose own reporters cannot even get into Gaza due to Israeli prohibitions on the international press.

Your spokespeople are making much ado about the breaking of the six month truce. Who is the occupier? Who is the most powerful military force? Who controls and blocks the necessities of life? Who has sent raiding missions across the border most often? Who has sent artillery shells and missiles at close range into populated areas? Who has refused the repeated comprehensive peace offerings of the Arab countries issued in 2002 if Israel would agree to return to the 1967 borders and agree to the creation of a small independent Palestinian state possessing just twenty two percent of the original Palestine?

The "wildly inaccurate rockets", as reporters describe them, coming from Hamas and other groups cannot compare with the modern precision armaments and human damage generated from the Israeli side.

There are no rockets coming from the West Bank into Israel. Yet the Israeli government is still sending raiders into that essentially occupied territory, still further entrenching its colonial outposts, still taking water and land and increasing the checkpoints This is going on despite a most amenable West Bank leader, Mahmoud Abbas, whom you have met with at the White House and praised repeatedly. Is it all vague words and no real initiatives with you and your emissary Condoleezza Rice?

Peace was possible, but you provided no leadership, preferring instead to comply with all wishes and demands by the Israeli government-even resupplying it with the still active cluster bombs in south Lebanon during the invasion of that country in 2006.

The arguments about who started the latest hostilities go on and on with Israel always blaming the Palestinians to justify all kinds of violence and harsh treatment against innocent civilians.

From the Palestinian standpoint, you would do well to remember the origins of this conflict which was the dispossession of their lands. To afford you some empathy, recall the oft-quoted comment by the founder of Israel, David Ben-Gurion, who told the Zionist leader, Nahum Goldmann:

"There has been anti-Semitism the Nazis Hitler Auschwitz but was that their [the Palestinians] fault? They only see one thing: We have come here and stolen their country. Why should they accept that?"
Alfred North Whitehead once said: "Duty arises out of the power to alter the course of events." By that standard, you have shirked mightily your duty over the past eight years to bring peace to both Palestinians and Israelis and more security to a good part of the world.

The least you can do in your remaining days at the White House is adopt a modest profile in courage, and vigorously demand and secure a ceasefire and a solidly based truce. Then your successor, President-elect Obama can inherit something more than the usual self-censoring Washington puppet show that eschews a proper focus on the national interests of the United States.

END.

Source: http://tinyurl.com/898t5l