The crisis that is currently affecting our lives is behind this global shift. The slow fire has moved from real estate, to banking and finances, and is now reaching industry, agriculture and the whole economy. From the heartland in the United States it is reverberating outward touching the entire world.
The fear of a domino effect and its potential for economic, political and social upheavals and the fear of widespread anarchy will provide the necessary tools to install this new order, which for most people will appear as the only possible outcome. The act of governing will change as a world body will be in charge the financial, economic and tax systems. Police, prisons and private relations inside and outside the family will come under its purview, so will national sovereignty of the peoples and the right to express opinions that are different from those of the single thought of relativism, which will be seen as the only solution that is available and desirable.
The G20 and the New World Order
Until a few decades ago such a new world order would have been anathema, a nightmare, a first step towards a worldwide dictatorship. Now world leaders will be praised when they show concern for the well-being of the earth’s peoples and social groups at a time of difficulties. Of course, this is what we will hear, and very soon too, in terms more unambiguous that we might think now. This said, new rules, a new Bretton Woods, are not anything new; discussions have been going on for some time. Perhaps the next G20 summit on 15 November will be a time when the “miracle” cure is found, one that will entail a world central bank that regulates a single currency of account and its relationship to local currencies.
After a short lesson and a quick diagnosis of the current problems, during which G20 participants will hear that “it was all the fault of Bush’s brainless laissez-faire advocates,” the same people responsible for the current crisis will supply the treatment for putting things right.
All we have to do is see who funded the most expensive presidential campaign in the former US superpower (more than a billion dollars at a time of great recession). As always some have bet on both horses just to be on the safe side. As we know Barack Obama pulled it off, money-wise too, almost twice as much as the Republican candidate. In addition to traditional sectors like show business, media, academe, education, information technology and the Internet, hedge funds, law firms (closely linked to the world of creative financial mediation) and private equity funds have bankrolled the new president’s campaign.”1
In order to change nothing, the appearance of everything has to change. In fact, only the surface had to change a bit; the new president’s darker skin. For everything else, it was business as usual. Indeed the cabinet of the new president is made up of the same, reckless people. Let’s see! We have Larry Summers, Tim Geithner and Robert Rubin who have been short-listed for the Treasury Department; all of whom are extreme laissez-faire advocates who believe in an unfettered financial system, enemies of the Glass-Steagall Act.2 They are same people who swapped jobs at the International Monetary Fund, World Bank, Clinton Administration; played sidekicks for Alan Greenspan and Ben Shalom Bernanke, or at the headquarters of Federal Reserve Bank of New York (Geithner); that is the same people who masterminded events before and after the current crisis.
Old faces in Obama’s new government
Obama picked Rahm Emanuel to be his chief of staff, a man whose career straddled politics and Wall Street’s great financial groups. But there is more to his case. Not only his father was a member of the Irgun3 but he holds Israeli citizenship, has fought for Israel and represents that country’s armed forces. He also endorsed Obama before the leadership of the AIPAC,4 a US Zionist organisation that is also funded by the State of Israel and which has recently been involved in espionage cases. In Israel many view Rahm as “our man in the White House.”
Based on this perhaps the choice between the two candidates was not really equal. See-sawing in the polls for quite a while after an apparent jump, buoyed by the war in Georgia, the Republican camp saw its fortunes nosedive after President Bush refused in late August to provide Israel’s air force refuelling aircrafts for a long range mission5, in effect vetoing an attack against Iran. Starting with oil, the prices of primary commodities began dropping a few days later, negatively affecting investment banks, which had bet on high prices to compensate for losses in the home mortgage market, thus throwing the world’s stock markets into a tailspin in early September.6
Democracy and money
From all of the above it is clear that an Obama presidency will not change how the financial crisis will be handled. On the contrary, it will strengthen the trend to protect large institutions and industries at the expense of small enterprises and the man and woman of the street who voted for him. It is quite obvious that the G20 summit in Washington will not affect the central issue of the present financial and economic crisis (and the many preceding crises of modernity and post-modernity), i.e. sovereignty and system legitimacy.
In today’s world the only political regime that is considered fully legitimate in political and economic terms is democracy. Many wars have been fought to spread democracy and in democracy, by definition, the people are sovereign. However, if a highly developed and complex democracy like that of the United States can be guided (in the sense that voters are left with the illusion that they can choose when in fact their choices like in a supermarket are shaped by marketing, political marketing that is) by those with deep pockets, the legitimacy of the system no longer lies in the consent of the people since the latter goes to the highest bidder. Hence money becomes the basis of consent and power in a democracy.
There is nothing new in all this but the crucial point is that printing money is a sovereign act and is governed by laws. A creditor cannot refuse payment in money that has legal tender and demand instead payment according to his or her wish (gold, silver or what not) if he or she has not negotiated it beforehand. Those who control the money supply through ad hoc rules can favour some over others.7
Thus the paradox of modern democracy is that a sovereign people (through its supposed representatives, parliaments, heads of state and government) have de facto no power or right over the US Federal reserve (or the European Central Bank) with regards to such an important sovereign act.
In order to protect the public and avoid political interference printing money has been privatised and placed beyond public control. Through its representatives the sovereign cannot be trusted and thus is not sovereign. Few know that the US Federal Reserve was established under private law; the same is true for the Bank of Italy and many other central banks. It has been so since the dawn of parliamentary government, right after the Glorious revolution if 1688.8
1. See for example “Hedge Funds: Long-Term Contribution Trends,” in OpenSecrets [vedi: http://www.opensecrets.org/industries/indus.php?ind=F2700], retrieved on 13 November 2008; “Lawyers / Law Firms: Long-Term Contribution Trends,” in OpenSecrets [http://www.opensecrets.org/industries/indus.php?ind=K01], retrieved on 13 November 2008; and RENICK Mayer, Lindsay, “Obama's Pick for Chief of Staff Tops Recipients of Wall Street Money,” 5 November 2008, in OpenSecrets, [http://www.opensecrets.org/news/2008/11/obamas-pick-for-chief-of-staff.html], retrieved on 13 November 2008.
2. The Glass-Steagall Act split deposit banking from investment banking. The law was adopted in 1933 to prevent a repeat of the stock market crash of 1929 which caused the Great depression of the Thirties. The law was repealed in 1999 by the Clinton Administration. Creative financing, which is the root cause of the current crisis, was thus the brainchild of a Democratic, not a Republican administration.
3. Zionist organisation that carried out a violent campaign against the British in order to end Britain’s mandate over Palestine and set up the State of Israel. The mandate iself was established by the League of Nations, the predecessor of the United Nations.
4. Jose, Katharine, “Obama's AIPAC Speech, Rahm's Endorsement,” in The New York Observer, 4 June 2008 [http://www.observer.com/2008/emanuel-endorses-obama-after-aipac-speech], retrieved on 13 November 2008.
5. “ZOA Critical Of Bush Administration Decision To Deny Refueling Aircraft To Israel,” 22 August 2008, in Zionist Organization of America, [http://www.zoa.org/sitedocuments/pressrelease_view.asp?pressreleaseID=1419], retrieved on 13 November 2008; KEINON, Herb and Hilary Leila KRIEGER, “Barak: US clearly opposes military action against Iran now,” 14 August 2008, in The Jerusalem Post, [http://www.jpost.com/servlet/Satellite?cid=1218446196991&pagename=JPost%2FJPArticle%2FShowFull], retrieved on 13 November 2008.
6. “Futures chart - Oil price chart,” Live Charts, [http://www.livecharts.co.uk/LongTerm/oil_price_chart.php], retrieved on 13 November, 2008.
7. For example, only firms listed in the Primary Dealers list (historically no more than 20, those that have recently topped the financial pages) can take part in the transactions and auctions by the Federal Reserve for billion dollar securities. See “Primary Dealer List,” in Federal Reserve Bank of New York, [http://www.newyorkfed.org/markets/pridealers_current.html], retrieved on 13 November 2008.
8. Ties between finances and politics exist in modern parliamentary systems. Recent “orange revolutions” in Eastern Europe, backed by financier George Soros, were inspired by the historical precedent of the Glorious Revolution. Parliamentary rule prevailed in England at the time of the Glorious Revolution when James II (a Catholic) was ousted from power. But we should not confuse parliamentary government with constitutionalism. James II was the legitimate and constitutional sovereign because he had acknowledged the legislative powers of parliament. William of Orange, backed by an army of Dutch and German mercenaries and financed by Amsterdam bankers, invaded England and removed James II. In order to pay off his debts William, also known as the bankers’ king, granted private interests a monopoly over printing money with legal tender. He chartered the Bank of England and the Bank of Scotland. With capital worth two million pound sterling the Bank of England began loaning an equal amount for interest as well as issuing Gold certificates (paper money) for the same amount, thus doubling its capital. The Orangist army did not have to fight because William of Orange was backed by influential people who, instead of fighting the invader on the field, came to terms with him betraying their legitimate sovereign. The main character in the story founded the Churchill line.