When that failed in Congress, the writing was on the wall.
Was the financial meltdown calculated to force working people to pay off the debts of the Wall Street gamblers and cover the potential bond losses of the richest one percent? Probably. Congressional investigations stopped short of accusations that would have resulted in legal prosecutions. And no wonder. Wall Street banks dump millions in campaign donations on senators and congressmen every year. Quite the gravy train. Add to this the suspicion of many traders that Lehman Brothers was allowed to go down because that firm was Goldman Sachs' chief rival on the Street and Treasury Secretary Hank Paulson was a Goldman guy, and you have a picture of likely corruption on all levels.
More shocking still is a recent revelation by Lee Adler, founder and editor of The Wall Street Examiner. His chart (see below) of the SOMA (System Open Market Account) shows that the Fed single-handedly caused the recession, and probably the global financial meltdown that preceded it. It tells us that the Fed withdrew liquidity at the precise moment that it was needed. If true, it is certainly grounds to end the Fed entirely and return currency operations to the Federal government. If true, we can only conclude that the Fed, the investment banks, The White House and the Congress are colluding to rob the middle class of what assets they have and turn them over to the wealthy. Is this class warfare? Yes, only we did not start it. They did.
The Fed Caused the Recession by Lee Adler
Albert Edwards, Head of Global Strategy at Societe Generale, maintains that the central banks of the U.S. and U.K. colluded with legislators to impoverish the middle classes and to redistribute their wealth to the richest one percent. He ponders whether "the US and UK central banks were actively complicit in an aggressive re-distributive policy benefiting the very rich. ".Did central banks, in creating housing bubbles, help distract middle class attention from this re-distributive policy by allowing them to keep consuming via equity extraction? The emergence of extreme inequality might never otherwise have been tolerated by the electorate. And now the bubbles have burst, along with central banks credibility. "
President Obama's recent deal to provide extended tax cuts to the wealthiest Americans - a deal he cut with Republicans without even consulting his own party's Congressional leaders - would seem to lend credence to Edwards' argument. We know who suffered from the banking collapse and bailout: It was the middle class, who lost jobs, homes, savings - all that they had. And we know who gained: the bondholders who lost nothing and who were, coincidentally, members of that top 1% of income earners.
The recent scandals over foreclosure abuses in Florida and Arizona give us a clue as to just how ravenous the banks are to acquire middle class assets. Homeowners who were not even in foreclosure and some who had no mortgage at all were evicted from their homes and dispossessed of their belongings by bank-hired agents. Some major banks - notably Bank of America, Deutsche Bank and JP Morgan Chase - have taken the position that they are entitled to repossess all homes where the homeowner is delinquent, whether they hold legal title to the properties or not.
For the record, the Federal Reserve is not Federal with a capital F. It is composed of a group of private banks, notably J.P.Morgan Chase, and it loans money to the Federal government for which it charges interest. The Fed was enacted into being by a late night vote of the U.S. Senate on December 23, 1913 when 27 senators had already gone home for Christmas recess. The purchasing power of the dollar, which had remained constant for decades since the Civil War, soon began a slow and unrelenting decline, which has lasted until the present day
The wealthiest Americans keep their savings off-shore in any case. So even the outright demise of the dollar would not affect them much. As for the rest of us, the 99% of us who struggle to stay afloat, feed our families and educate our children, we can only assume that the Federal Reserve, the President and a majority of the Congress do not give a rat's ass about any of us - except perhaps as potential slaves.