Category Archives: Banking

Italian article this am

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Misrepresents what I say a bit, but they do have my picture next to JFK!
;)

The IMF: sovereign currency, no longer the monopoly of the banks

Eliminate the public debt of the United States at once, and do the same with Great Britain, Italy, Germany, Japan, Greece. At the same time revive the ‘ economy, stabilize prices and oust the bankers. In a clean and painless, and faster than what you can imagine. With a magic wand? No. With a simple law, but able to replace the current system, in which to create money out of nothing are private banks. We only need a measure requiring the banks to hold a financial reserve real, 100%. To propose two economists at the International Monetary Fund, Jaromir Bene and Michael Kumhof. You, the bank, you want to make money on the loan of money? First you have to prove it really that much money. Too easy to have it by the central bank (which the factory from scratch) and then “extort” families, businesses and entire states, imposing exorbitant interest.

The study of two economists, “The Chicago Plan Revisited,” with “a revolutionary and” scandalous “‘Maria Grazia Bruzzone,” La Stampa “, emphasizes the global resonance of the dossier, that bursts like a bomb on the world capitalist system now jammed. The global debt came the exorbitant sum of 200 trillion, that is 200 trillion dollars, while the world GDP is less than 70 trillion. Translated: the world debt is 300% of gross domestic product of the entire planet. “And to hold this huge mountain of debt – which continues to grow – there are more advanced economies and developing countries,” says the Bruzzone, stressing that “the heart of the problem and the cross” is the highest “power” Japan, Europe and the United States. Hence the sortie “heretical” by Bene and Kumhof: simply write off the debt, it disappears.Sparked the debate was the last IMF report, which points the finger on austerity policies aimed at reducing thepublic debt . Policies that “could lead to recession in the economies ‘, since’ cuts and tax increases depress the ‘economy ‘.

Not only. The IMF would be really worried the crisis that is ravaging the ‘ Europe threatens to be worse than the 2008 financial. The surprise is that even the IMF now thinks that “austerity can be used to justify the privatization of public services,” with consequences “potentially disastrous”. But if the problem is the debt – public, but now “privatized” by finance – you can not delete? Solution already ventilated by the Bank of England, which holds 25% of the British sovereign debt: the Bank of England may reset it by clicking on the computer. Advantages: “You will pay much less interest, it would free up cash and you could make less harsh austerity.” The debate rages on many media, starting from the same “Financial Times”. thread which breaks now the revolutionary proposal of the two IMF economists targati: cancel the debt.

“The Chicago Plan Revisited,” writes Maria Grazia Bruzzone, raises and explores the “Chicago Plan” original, drawn up in the middle of the Great Depression of the ’30s by two other economists, Irving Fisher, Henry Simons of the University of Chicago, the cradle of liberalism . Cancel 100% of the debt? “The trick is to replace our system, where money is created by private banks – for 95-97% of the supply of money – money created by the state. It would mean return to the historical norm, before the English King Charles II put in private hands control of the money available, “back in 1666. It would mean a frontal assault on the “fractional reserve” banking, accused of seigniorage on the issue of currency speculation: if lenders are instead forced to hold 100% of its reserves to guarantee deposits and loans, “pardon the exorbitant privilege of create money out of nothing. ” As a result: “The nation regained control over the availability of money,” and also “reduces the pernicious cycles of expansion and contraction of credit.”

The authors of the first “Plan of Chicago” had thought that the cycles of expansion and contraction of credit lead to an unhealthy concentration of wealth: “They had seen in the early thirties creditors seize farmers effectively bankrupt, grab their lands or comprarsele for a piece of bread. ” Today, the authors of the new edition of this plan argue that the “trauma” of the credit cycle that expands and contracts – caused by private money creation – is a historical fact that is already outlined with Jubilees Debt ancient Mesopotamia, as well as in ancient Greece and even Rome. Sovereign control (the state or the Pope) on currency, recalls Bruzzone, Britain remained so throughout the Middle Ages, until 1666, when it began the era of the cycles of expansion and contraction. With the “bank privatization” of money, add the “Telegraph”, “opened the way for the agricultural revolution, and after the industrial revolution and the biggest leap Economic ever seen “- but it is not the case of” quibbling, “quips the newspaper.

According to the young economists of the IMF, is just a myth – disclosed “innocently” by Adam Smith – that the money has been developed as a medium of exchange based on gold, or related to it. Just as it is a myth, the study points out the IMF, what you learn from books: that is the Fed, the U.S. central bank, to control the creation of the dollar. “In fact, money is created by private banks to 95-97% through loans.” Private banks, in fact, do not lend as owners of cash deposits, the process is exactly the opposite. “Every time a bank makes a loan, the computer writes the loan (plus interest) and the corresponding liability in its balance sheet. But the money that pays the bank has a small part. If it does borrow from another bank, or by the central bank. And the central bank, in turn, creates out of nothing that lends the money to the bank. ”

In the current system, in fact, the bank is not required to have its own reserves – except for a tiny fraction of what it provides. Under a system of “fractional reserve”, each money created out of nothing is a debt equivalent: “Which produces an exponential increase in the debt, to the point that the system collapses on itself.” The economists of the IMF hours overturn the situation. The key is the clear distinction between the amount of money and the amount of credit between money creation and lending. If you impose banks to lend only numbers covered by actual reserves, loans would be fully funded from reserves or profits accrued. At that point, the banks can no longer create new money out of thin air. Generate profits through loans – without actually having a cash reserve – is “an extraordinary and exclusive privilege, denied to other business.”

“The banks – says Maria Grazia Bruzzone – would become what he mistakenly believed to be, pure intermediaries who have to get out their funds to be able to make loans.” In this way, the U.S. Federal Reserve “is approprierebbe for the first time the control over the availability of money, making it easier to manage inflation.” In fact, it is observed that the central bank would be nationalized, becoming a branch of the Treasury, and now the Fed is still owned by private banks. “Nationalizing” the Fed, the huge national debt would turn into a surplus, and the private banks’ should borrow reserves to offset possible liabilities. ” Already wanted to do John Fitzgerald Kennedy, who began to print – at no cost – “dollars of the Treasury,” against those “private” by the Fed, but the challenge of JFK died tragically, as we know, under the blows of the killer of Dallas , quickly stored from “amnesia” of powerful debunking.

Sovereign coin, issued directly by the government, the state would no longer be “liable”, but it would become a “creditor”, able to buy private debt, which would also be easily deleted. After decades, back on the field the ghost of Kennedy. In short: even the economists of the IMF hours espouse the theory of Warren Mosler, who are fighting for their monetary sovereignty as a trump card to go out – once and for all – from financial slavery subjecting entire populations, crushed by the crisis , the hegemonic power of a very small elite of “rentiers”, while the ‘ economic reality – with services cut and the credit granted in dribs and drabs – simply go to hell. And ‘the cardinal assumption of Modern Money Theory supported in Italy by Paul Barnard: if to emit “money created out of nothing” is the state, instead of banks, collapsing the blackmail of austerity that impoverishes all, immeasurably enriching only parasites of finance . With currency sovereign government can create jobs at low cost. That is, welfare, income and hope for millions of people, with a guaranteed recovery of consumption. Pure oxygen ‘s economy . Not surprisingly, adds Bruzzone, if already the original “Chicago Plan”, as approved by committees of the U.S. Congress, never became law, despite the fact that they were caldeggiarlo well 235 academic economists, including Milton Friedman and English liberal James Tobin, the father of the “Tobin tax”. In practice, “the plan died because of the strong resistance of the banking sector.” These are the same banks, the journalist adds the “Print”, which today recalcitrano ahead to reserve requirements a bit ‘higher (but still of the order of 4-6%) required by the Basel III rules, however, insufficient to do deterrent in the event of a newcrisis . Banks: “The same who spend billions on lobbying and campaign contributions to presidential candidates. And in front of the new “Chicago Plan” threaten havoc and that “it would mean changing the nature of western capitalism. ‘” That may be true, admits Bruzzone: “Maybe but it would be a better capitalism. And less risky. ”

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U.K. Economy Surges 1% as Britain Exits Double-Dip Recession

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Deficit finally large enough for a bit of stability and growth?

U.K. Economy Surges 1% as Britain Exits Double-Dip Recession

By Scott Hamilton and Jennifer Ryan

October 25 (Bloomberg) — Britain exited a double-dip recession in the third quarter with the strongest growth in five years as Olympic ticket sales and a surge in services helped boost the rebound.

Gross domestic product rose 1 percent from the three months through June, the fastest growth since 2007, the Office for National Statistics said in London today. That exceeded the highest estimate in a Bloomberg News survey for growth of 0.8 percent. The median forecast of 33 economists was 0.6 percent. The pound rose after the data were published.

The growth surge reflects a boost from the Olympics and a rebound from the second quarter, when GDP was affected by an extra public holiday. While the data may give some short-term relief to Prime Minister David Cameron’s struggling government, Bank of England Governor Mervyn King said this week that the recovery is “slow and uncertain.” That suggests the figures mask underlying weakness that could warrant further stimulus from the central bank.

“We’re still concerned the U.K. economy is going to be pretty much flat throughout next year,” James Shugg, an economist at Westpac Banking Corp. (WBC) in London, said on Bloomberg Television’s “The Pulse” with Maryam Nemazee. “It all depends how rigidly determined the government is to stick to its deficit reduction plan.”

Ticket Sales

Services, which make up about three quarters of GDP, surged 1.3 percent in the third quarter from the previous three months, the most in five years, the ONS said. Olympic ticket sales are estimated to have added 0.2 percentage points to GDP. Production rose 1.1 percent, the most in more than two years, while manufacturing increased 1 percent. Construction output fell 2.5 percent, a third straight quarterly decline.

The pound extended its gain against the dollar after the report and was trading at $1.6134 as of 10:52 a.m. in London, up 0.6 percent on the day. Bonds declined, pushing the yield on the 10-year government bond up 8 basis points to 1.93 percent.

From a year earlier, GDP was unchanged in the third quarter, the ONS said. That compared with a decline of 0.5 percent forecast by economists in a separate Bloomberg survey.

While today’s data confirm Britain exited its first double- dip recession since 1975, GDP is still 3.1 percent below its peak in the first quarter of 2008. The report also showed that the economy has grown 0.6 percent since the third quarter of 2010, just after Cameron’s coalition government came to power.

Economy ‘Healing’

Cameron urged caution on the GDP data, saying there is “still much to do.” The opposition Labour Party has accused his government of exacerbating the economic slump by sticking to its fiscal squeeze. Ed Balls, Labour’s finance spokesman, said today the economy “remains weak” and “is only just back to the size it was a year ago.”

“There are always one-off figures in all of these announcements but they do show an underlying picture of good and positive growth,” Cameron said. “We’ve got to stick with the program.”

The data today are an initial estimate and the figures are subject to revision when the ONS gets more information. In the second quarter, the decline in GDP was revised up to 0.4 percent from an initially reported 0.7 percent.

Britain is the first of the Group of Seven nations to report GDP data for the third quarter. U.S. growth probably accelerated to a 1.9 percent annual rate after expanding at a 1.3 percent pace the prior quarter, according to a Bloomberg survey before a Commerce Department report tomorrow. It would be the first back-to-back readings lower than 2 percent since the U.S. was emerging from the recession in 2009.

Deficit Reduction

The U.K. data come two weeks before the Bank of England’s Monetary Policy Committee must decide whether to end its stimulus program or extend it beyond 375 billion pounds ($605 billion). Governor Mervyn King said this week that a “zig-zag” pattern of recovery is likely to persist.

Debenhams Plc (DEB), Britain’s second-largest department-store chain, said today that the U.K. experienced “challenging trading conditions during 2012.” Whitbread Plc (WTB) Chief Executive Officer Andy Harrison said the consumer market is “pretty flat” and generating any growth is “jolly difficult.”

Stripping out one-time distortions, the National Institute of Economic and Social Research said on Oct. 9 that third- quarter growth was closer to between 0.2 percent and 0.3 percent.

Inflation Cools

Still, recent data have shown pressure on consumers easing. Inflation cooled to the slowest in almost three years in September, while retail sales increased more than forecast. Payrolls rose to a record in the quarter through August, pushing the unemployment rate down to 7.9 percent from 8.1 percent.

“At this stage, it is difficult to know whether some of the recent more positive signs will persist,” King said on Oct. 23. “The MPC will think long and hard before it decides whether or not to make further asset purchases. But should those signs fade, the MPC does stand ready.”

Elsewhere in Europe, Sweden’s Riksbank kept benchmark interest rates unchanged at their lowest level since early 2011 and said further easing has become more probable as growth slows in the largest Nordic economy.

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Mosler for Congress update

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I sent the following to my international audience looking to a return to prosperity
for all of us, which I now send along to you here in the USVI to keep you well informed!

(note that ‘closing the output gap’ means ‘eliminating unemployment’)

They have known me for a very long time and have been most supportive:

First let me thank all of you who have contributed, and have become part of what could quickly become much more than just another seat in Congress!!!

Donations have exceeded $25,000 and at only $25/minute for radio and TV adds the incremental spending has indeed made a difference- thanks again!

There are three weeks to go an any additional contributions will immediately be used to add to the advertising and promotional efforts.

When I ask our volunteers ‘out of ever 10 people they speak to in their neighborhoods, how many say they are voting for me’ they all say more than half!

Friday in St. Thomas while walking to a UVI event I heard a loud ‘Mosler!’ and looked over to see a patrol car with the window down and the officer looking at me. As soon as I turned his way he said ‘Everyone’s voting for you this time, you’re going to win you know!’

I’ve been in 5 ‘debates’ so far, with the candidates on a panel taking questions from a moderator. I’ve just focused on what I’m going to do about each issue, both for the national economy and the USVI economy, while the other candidates have had no specific agenda apart from promising to work hard (and taking cheap shots at each other, of course!)

More and more the audiences seem to be responding with ‘your the only one who knows what to do’. And the ‘anti incumbent’ feeling in general is actually alarmingly high as conditions here continue to deteriorate. Our cost of electricity, for example, just went up to over 50 cents/kw, while government salaries that were already half the national average were cut 8%, with thousands of lost jobs due to the closing of the Hovensa refinery here on St. Croix and widespread government layoffs of nurses and teachers in an already grossly under served community.

I assure you that if I get in Washington will soon be aware of the hurricane that’s come up from the USVI. The Fed chairman will suddenly face ‘innocent’ questions of profound magnitude, such as, ‘Isn’t true that a $trillion deficit adds exactly that much to global dollar net savings, and not a penny less or a penny more, or these two gentlemen next to me from the CBO would have stay late at work looking for their arithmetic mistake?’ ‘Isn’t it true, that by your own regulatory standards, loans to the ECB collateralized with euro deposits would be classified as unsecured loans?’ ‘Given that you do the actual spending on behalf of Congress simply by crediting accounts, and therefore ability to pay, insolvency, and prior funding for Congress, unlike for Greece, is never an issue, and, again unlike Greece, for all practical purposes the Fed sets US interest rates by voting and not the market, what then, is the short term or long term risk posed by deficit spending? And many more. And with all of these questions serving the agendas of various members of Congress there is every incentive for them to be asked. And not to mention testimony and discussions on banking, budgets, and trade. Looking forward to gettng the job done/close the output gap!!!

If any of you want to contribute to ‘THE CAUSE’ remember the limit is $2,500 per person and checks can be made out to ‘Mosler For Congress 2012’.

You can also click here or paypay and further information.

All the best!!!

Warren

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Thaler’s Corner 28th September 2012: Poor Macro Money Data, Eurozone

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I like this report.
The overnight data does still look to me like there are signs of it all stabilizing
but it also seems like that will only bring more fiscal tightening to ensure the output gap remains wide.

Poor Macro Money Data, Eurozone
 
First a quick point on our asset allocation biases. We are still Risk OFF, despite the over 3% decline on the Eurostoxx and the 1.70% hike on the Bund since we issued our recommendation. The reasons for this Risk Of remain valid and the presentation of the new Spanish government budget yesterday does not change our opinion. I consider the macroeconomic forecasts on which it is based to be unrealistic. Both the hoped for 3.8% hike in tax receipts and the projection that unemployment has peaked this year appear very optimistic in such a depressive context!
 
The earlier examples of “adjustments” imposed by the Troika in eurozone countries who agreed to these bailout plans only demonstrate that the application of harsh austerity treatment in the midst of a severe recession is counterproductive. The decline in the Debt/GDP denominator accelerates the flight of private capital, thereby making the country’s economy all the more vulnerable to “negative disequilibria”.
 
The repetition last Friday morning by Herr (Darth) Schäuble of the main points made in the letter he signed with the Dutch and Finnish finance ministers (legacy assets, etc) highlights how the reticence of eurozone “creditors” is threatening the hopes raided by the European summit of June 29th.
 
However, let’s take a look at the eurozone macro monetary figures published Thursday and Friday because they show that the ECB must remain on high alert since they show a continuous worsening of monetary conditions, despite the measures already taken.
 
And yet, when I see the alarmist statements by Mr Weidmann on the dangers of inflation created by the OMT or those made by Mr Asmussen warning that the ECB would intervene immediately in case of a spike in inflationary risk, I wonder on what planet they are living!
 
I understand these statements are motivated by domestic political consideration: i.e. the need to reassure savers frightened by a reduction in purchasing power stemming from real negative interest rates, especially since these savers mainly vote for Chancellor Merkel’s party, given that they are made up of retirees and others from comfortable segments of society.
 
But a comparison of this approach with that of the Fed, which instead is doing all it can to revive inflationist expectations by using precisely these expectations to contend with “0% Lower Bound”, is more than a bit worrisome.
 
Here are my favorite two graphs updated to included data from August.
 
M3 and Core CPI


 
As readers know, I am anything but a hardcore monetarist, because I consider that the ratio emphasized by the fans of the “Quantity of Money” theory does not account for changes in money velocity (the V in MV=PQ). These monetarists have a “vertical”conception of money in which the central bank is the sole agent of money creation. But M3 is in reality the consequence of the “horizontal” nature of money, i.e. its creation by private-sector banking (Loans make Deposits). The money verticality that does exist is of a totally different nature since it relates to budget deficits whereby the state injects financial assets into the private sector (treasuries) to finance spending. However, the graph above shows just how much the M3 curve has changed since the outbreak of the Great Financial Crisis, with a decline in annual growth from over 8% between 2001 and 2008 to a miserable 1.05% since then.
 
Some people claim that a certain amount of inflation paranoia is validated by the CPI published Friday morning, +2.7% annually, given that the consensus was looking for +2.4%, i.e. higher than the target set by the ECB. Maybe we would be treated to a new hike in key interest rates if Mr Trichet were still head of the ECB. But I think that those currently in charge of monetary policy are conscious of the temporary nature of the effect of indirect tax and commodity price rises and that the inflation index could fall below the ECB target in H2 2013.
 
M3, and loans to businesses and households


 
Much more relevant than M3, and perfectly consistent with our report on money velocity, these two statistics (loans to consumers and non-financial businesses) paint a much grimmer picture of the monetary situation in Europe.
 
Down -2.4% yoy at 31 August, consumer loans are declining at their steepest rate since this figure began publication! The decline has been continuous since the beginning of 2009, which compares to nearly 9% annual growth in mid-2006.
 
No matter how big the interest rate cuts, none of them will persuade people to spend more when they are worried about losing their job and about the possible implosion of the eurozone. In that context, I am utterly baffled when I hear Mr Asmussen declare, as he did just a few minutes ago, that banks are at fault because they are not lending out their surplus reserves!
Remember, banks do not lend their reserves (Loans make Deposits). At best, they can lend to banks short of reserves! In fact, that would reduce the central bank’s balance sheet which continues to play its role as intermediary on the still nonexistent interbank market. This highlights the need to give priority to the recapitalization of struggling banks in the system, even if we have to override the opposition of certain northern country finance ministers.
 
From a qualitative viewpoint, the ECB also released its monthly Euro Money Market Survey Friday morning, i.e. liquidity circulation within the banking system (V).
 
And here too, the picture is frightening.
 
The spot (next day) market has contracted 50% in the past year.
On the unsecured market, transactions in Q2 2012 plunged by about an annual 35%, while the secured market declined 15% !
Moreover, the ratio for these latter transactions, compensated by a counterparty clearinghouse (Cedel, Clearnet, etc.), now stands at 55%.
This highlights the degree of distrust in the interbank system. So I will end this letter today with the ECB staff’s own conclusion!
 
The qualitative part of the survey shows that efficiency in the unsecured market was deemed to have worsened markedly in comparison with 2011. Liquidity conditions were also perceived to have deteriorated. As regards the secured segment, the number of respondents giving a positive assessment of the market’s efficiency increased, although liquidity conditions were perceived as being worse than in 2011. For most other market segments, the perception of efficiency was more positive in 2012, whereas it was generally felt that liquidity conditions had deteriorated.
 
Between monetary verticality in free fall (generalized austerity) and evaporated horzontality (nonexistent interbank market), is there still hope?
Central banks cannot solve these problems all by themselves.

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QE follow up

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It’s been about a week, and the initial reactions are already wearing off and markets settling in.

The lasting effects are those of the income lost to the economy as the Fed earns the interest on the securities it buys instead of the economy. This reduces the federal deficit and is a ‘contractionary’ force. At the same time the Fed removes securities/duration/convexity/vol from the economy which tends to lower the term structure of risk free rates some and further reduce volatility as well.

Initially the long end sold off on the presumption that QE works to lower the output gap/restore growth and employment, which means the Fed would, down the road, be hiking rates in response to the improving economy.

However, as the reality that QE doesn’t work to support aggregate demand sinks in, long end yields can come down on the anticipation that future growth prospects are not good, increasing the odds that the Fed will be keeping rates low that much longer.

Likewise, it’s a mixed bag for stocks, though overall modestly supportive. QE doesn’t improve earnings prospects, and serves to keep growth down, but the lower interest rates help valuations, and high unemployment along with productivity increases work to keep unit labor costs down.

Europe has solved the solvency issue, but it’s all conditional on bringing deficits down, and so far it looks like they are all working to keep doing exactly that, and with no prospects for material private sector credit expansion or export growth,
GDP can continue to be negative.

Then there’s the US fiscal cliff. Everyone agrees deficit reduction slows things down, which is why they say we shouldn’t do it now. But they also therefore know it will slow down things whenever they do it in the future. So how hard should it be to come to recognize that slowing things down is actually the point of deficit reduction, and is appropriate only for that reason? Apparently it’s impossible. And the fiscal cliff is already taking its toll as anticipated contracts for next year along with purchases are being delayed.

So without some kind of fiscal paradigm shift I don’t see much good happening, and even the muddle through scenario is now at risk.

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Mafin 2012 Genova, Italy presentation

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Very good!
One suggestion, in caps:

In reality, BECAUSE AN OVERDRAFT AT A CENTRAL BANK *IS* A LOAN FROM THAT CENTRAL BANK, central banks have no option other than supplying the amount of reserves banks require to settle payments through standard operations, bilateral lending, or intra-day overdrafts.

Yet, it can unilaterally set the interest rate on reserves borrowing and reserves holding.

Revising the quantity theory of money in a financial balance approach

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What Obama Has Wrought

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Looks like potentially a good MMT proponent if anyone knows him?

What Obama Has Wrought

By Glen Ford

September 5 (BAR) — The meticulously scripted spectacles of the two corporate party conventions are very poor backdrops for clear thinking – but luckily, the ordeals are almost over. What remains after the tents are folded, are the crimes of this administration and its predecessor: both horrifically evil in their own ways. History will mark Obama as the more effective evil, mainly because of the lack of opposition.

Most people don’t want to be a perceived as party-poopers – which is why the principled folks that have protested the evil antics of the corporate, imperial parties, in Tampa and Charlotte, are so much to be admired. Frankly, who wants to be the one to point out, in the middle of the festivities, that Michelle Obama was just a Chicago Daley machine hack lawyer who was rewarded with a quarter million dollar a year job of neutralizing community complaints against the omnivorous University of Chicago Hospitals? She resigned from her $50,000 seat on the board of directors of Tree-House Foods, a major Wal-Mart supplier, early in her husband’s presidential campaign. But, once in the White House, the First Lady quickly returned to flaking for Wal-Mart, praising the anti-union “death star” behemoth’s inner city groceries offensive as part of her White House healthy foods booster duties.

She also serves on the board of the Chicago Council on Global Affairs, the corporate foreign policy outfit to which her husband dutifully reported, each year, in his pucker-up to the presidency. The Obamas are a global capital-loving couple, two cynical lawyers on hire to the wealthiest and the ghastliest. They are no nicer or nastier than the Romneys and the Ryans, although the man of the house bombs babies and keeps a kill list. Yet, former “green jobs” czar Van Jones, a convention night chatterer on CNN who was fired by Obama for no good reason, chokes up when he speaks of the Black family that fronts for America – a huge act of national camouflage.

It is as useless to anchor a serious political discussion to this year’s Democratic and Republican convention speeches, as to plan the liberation of humanity during Mardi Gras. Truth is no more welcome at the former than sobriety is at the latter. So, forget the conventions and their multi-layered lies. Here are a few highlights of what Barack Obama has inflicted on the nation and the world:

Preventive Detention

George Bush could not have pulled off such an evisceration of the Bill of Rights, if only because the Democrats and an aroused street would not have allowed it. Bush knew better than to mount a full-court legislative assault on habeas corpus, and instead simply asserted that preventive detention is inherent in the powers of the presidency during times of war. It was left to Obama to pass actual legislation nullifying domestic rule of law – with no serious Democratic opposition.

Redefining War

Obama “led from behind” a 7-month Euro-American air and proxy ground war against the sovereign nation of Libya, culminating in the murder, after many attempts, of the nation’s leader. The president informed Congress that the military operation was not subject to the War Powers Act, because it had not been a “war” at all, since no Americans were known to have been killed. The doctrine was thus established – again, with little Democratic opposition – that wars are defined by the extent of U.S. casualties, no matter how many thousands of foreigners are slaughtered.

War Without Borders

Obama’s drone war policies, greatly expanded from that inherited from Bush, have vastly undermined accepted standards of international law. This president reserves the right to strike against non-state targets anywhere in the world, with whatever technical means at his disposal, without regard to the imminence of threat to the United States. The doctrine constitutes an ongoing war against peace – the highest of all crimes, now an everyday practice of the U.S.

The Merger of Banks and State

The Obama administration, with the Federal Reserve functioning as a component of the executive branch, has funneled at least $16 trillion to domestic and international banking institutions, much of it through a virtually “free money” policy that could well become permanent. This ongoing “rescue” of finance capital is unprecedented in sheer scope and in the blurring of lines between Wall Street and the State. The routine transfer of multi-billions in securities and debts and assets of all kinds between the U.S. Treasury, the Federal Reserve and corporate accounts, has created de facto structures of governance that may be described as institutional forms of fascism.

These are world-shaking works of Obama-ism. Even Obama’s “lesser” crimes are astounding: his early calls for austerity and entitlement-axing (two weeks before his inauguration) and determined pursuit of a Grand Accommodation with the GOP (a $4 trillion deal that the Republicans rejected, in the summer of 2011) reveal a politician intent on ushering in a smoother, more rational corporate hegemony over a thoroughly pacified civil society. Part and parcel of that pacification is the de-professionalization of teaching – an ambition far beyond de-unionization.

Of course, Obama begins with the delegitimization of Black struggle, as in his 2004 Democratic Convention speech (”…there is no Black America…only the United States of America.”) To the extent that the nation’s most progressive, anti-war constituency can be neutralized, all of Obama’s corporate and military goals become more doable. The key to understanding America has always been race. With Obama, the corporate rulers have found the key that fits their needs at a time of (terminal) crisis. He is the more effective evil.

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