The Republicans seem to think that low voter turnout, well financed and demagogued elections, and a slim majority in the House as a result, constitute a “Mandate from the people” to cut the budget and do whatever else they want to ordinary people. In other countries we have people revolting against their Governments, largely because their governments chose to pursue the road of corruption, favoritism and oligarchy — and that means high unemployment and desperation for everyone else. I was thinking that these things weren’t really related except in the sense that all of us face similar problems from our officers whether elected or self-elected and “private”.

The reality is that we are in the middle of the third of three swindles

The first Swindle

That is until I heard a writer today pluging his new book, and realized that he wasn’t far off on his central point. I’ve already pointed out that we’ve been swindled twice. What he was noting is that we are actually also in the process of being swindled a third time. The first swindle was when our largest corporations, and the incredibly wealthy men behind them, made calculations that it was easier and more sure to create a real estate bubble, loan people cheap money, and then arbitrage the difference between uninflated value and inflated value. This worked for them, but then they miscalculated the end game as they always seem to do. Many of them swindled themselves even as they swindled foreign countries, investors, house-buyers, pension plans, governments (sovereign funds), and just about the whole world. The paper they sold on top of the bad mortgages they put out, failed to protect them sufficiently because they didn’t bank on the sheer amount of fraud they instigated. That swindle did millions out of their homes and jobs.

The second swindle

So our richest folks, who own our financial system, came to the Government hat in hand and said “bail us out or we’ll dump your economies into a great depression.” They went to Henry Paulson and the chiefs of the Federal Reserve and asked for money. The USA reciprocated by giving them a 700 billion dollar loan. But that wasn’t the real swindle. The real swindle was in the form of behind the scenes bailouts of AIG, foreign banks, and the creation of a zero interest option for the banks to borrow money through their “window.” All told the amount of the bailouts was about 20 trillion in loans, promises from banks, and borrowed money. One reason we seemed to be able to run up such deficits is that those deficits were financing the printing of loans to cover the deficits being run up by our richest investors. Most of these were in the form of IOUs from those governments.

So, our banks, since they own the public trust (other people’s money) were able to convert that money to their own pockets and bail themselves out. In the process they generated IOUs from the very countries that bailed them out. They had no responsibility to actually invest in productive enterprises. At best many of them invested in productive capacity in India, and China, but they’d lost interest in the US market years ago. Mostly they’ve been investing in Gold, leveraging currencies, and speculating even more than they did before they messed up Many of them figured we Americans were too fat, lazy and overpaid and wanted to do something about it. So as soon as they’d gotten the Government to bail them out, they started doing their risk analysis and figured that they’d successfully transfered the risk of their failure to these Governments — but that might be the next issue.

How possibly are the various governments to pay back such massive debt?

The Third Swindle

Now we are in the middle of the third swindle. It should be no surprise that some of our richest kings, our richest businessmen, should be involved so deeply in bending our governing system to their final control:

There is no doubt that we are in the middle of another effort to swindle us. In a good con, the first step is to convince people they have nothing to lose and can trust the con artist [Conservative]. The second step is to put out some bait, and wait while the the mark thinks he/she is going to get easy money and takes the bait. The final step is to spring the trap on the person. Either the person is induced to give money to get money, or some other worthless thing is traded for the persons treasure and life. We bailed out big private for profit trusts, in the process we borrowed money with no real prospect that we could pay it back. In essence we’ve been conned. We are now on the hook for trillions of dollars with a big hole in the middle where the assets should be — but where the first two cons occurred. And guess what? The investors aren’t going to invest their hard earned swindle-money in bailing us out. They are going to insist on getting paid back with real interest, or else they are going to walk. This is what is going on with Greece (where easy money was used to swindle the government there) and it is starting to happen here.

We should have listened to Nouriel Roubini:

What’s been happening is that instead of learning from experience our arrogant and selfish wealthy have continued to speculate, continued to leverage, and are funding the political system to help them run yet another con. They’ve paid people such as the Governor of Wisconsin to point to the massive swindle we just experienced from our business and their pet governmental officers, and point to ordinary government workers, pensions and unions as the “problem.” The balooning debt that is resulting from the successful swindling of millions of homeowners, small investors (your and my 401K plans), and loss of jobs — are being blamed on the poor, retired people, sick people, and everybody but the perpetrators. And we are being hooked into engaging in policies that can only make the real situation worse, while improving their ownership of our society.

When Bush talked about an “ownership society” this is what he meant; the few owning everything and everybody.

This effort to balance the budget without putting poor people to work is part of another monstrous swindle on just about everybody. The power of our wealthy folks is to convert other people’s money to their own pockets and then charge those people to pay back the loans. It represents the triumph of triumphalism, propaganda, faith based economic religion, and just plain bait and switch lies, over reality and common sense.

What did social security or medicare have to do with derivatives or leveraged buy outs? When did the rich become so rich that they could socialize their risk and then charge us for paying it back? That is what is happening.

It is a con and a swindle. And we have to fight back.