State Control over the Economy, Part I: JPMorganChase & Washington Mutual


Attention today (Monday September 29, 2008) has been focused on the House of Representatives in Washington, D.C., which made a “show vote” against “socialism” and government bailout of the financial industry.  Yet everyone over the age of 6 knows that today was just partisan showmanship, and that Congress will rescue the starving billionaires and “small timers” (i.e. mere millionaires) on Wall Street as surely as they will vote themselves a pay raise sometime in the next few years and create more exemptions for fraud or acts of oppression committed by government officials.  No one in the Republican leadership or the 94 Democrats who joined them in voting down the Republican President’s bill admitted that it is GEORGE W. BUSH’S America, the nightmare of corporate welfare and immunity for financial sleight of hand artists, largely envisioned by Daddy George H.W. and implemented by and under William Jefferson Clinton, which is collapsing.  Populism will blame Wall Street, but it was Bill Clinton’s repeal of the Glass-Steagal Act in 1999 and all the concommitant removal other “brakes” places on the rampage of international bankers on cocaine which has led to the current meltdown.  Why is it that we are amazed at the puppet theatre played out in Congress today?  The members on both sides of the aisle are actually clamouring for yet MORE government intervention because we have repeatedly voted for the worst of the worst of both Republicrat and Democan Parties over the past two decades.  The Republican leadership made it pretty clear that the ONLY reason Bill 3997 failed today was because Nancy Pelosi opened her mouth and said a few semi-rational and coherent things about the effects of deregulation and greed on the collapse of the most insane paper-money manufacturing scheme (securitized mortgages) in the history of the world.  But until SECURITIZED MORTGAGES ARE EITHER ABOLISHED or fully regulated like ALL OTHER SECURITIES in this country, the exponentially increasing risks will continue to pile up. 

As of the present moment, I think that insufficient attention has been played to the government’s intervention in the collapse of Washington Mutual.  Late Thursday night, an incredible thing happened: Washington Mutual made known to the government that it was on the verge of collapse, and OVERNIGHT the government brokered a takeover of Washington Mutual whereby 100% (or something very close) to the government insured deposits, loans, credit card accounts, and other “assets” of Washington Mutual were transferred to JPMorganChase while 100% (or something very close) of the corporate liabilities (i.e. equity shares and bonds, implying UNSECURED obligations of the bank) were declared WORTHLESS. $1.8 BILLION in financial manipulation OVERNIGHT. 

Where is the “wall of separation between government and the private sector these days?”  Since when, in a non-Communist, non-Fascistic economy, can the government in effect order a merger of two major businesses without shareholder consent or litigation of any kind?  This is called a “Command and Control” or “Fiat” economy.  Nothing of this level of dictatorial efficiency was ever achieved or implemented in Nazi Germany, the U.S.S.R., or anywhere else to the best of my knowledge.  The Kings of England up through William of Orange, Adolph Hitler, Joseph Stalin, and Mao Tse-Tung all had more constituencies with whom to contend and negotiate than the financial authorities who merged these two gigantic banks—which happen to be the greatest single offenders in the whole securitized “mortgage backed equity/collateral backed obligation” debacle.  The lack of discussion or any widespread dissemination of information regarding the details or the mechanisms of the Washington Mutual/JP Morgan Chase “overnight shotgun marriage” last week was just a prelude to the “show trial” in Congress today, where amateur actors tried to pretend that Congressional approval of the bailout is all but pro forma. 

The Great Leader GWB will, within a few days, achieve the complete reimbursement of his buddies in high finance if he has to do so by (hush-hush) executive orders—I have no doubt of that.  What I wonder is whether Ron Paul or anybody else on the House Floor was thinking how completely content-free the debate really was, and how pointless the show of posed opposition to the implementation of something close to pure communism in the financial sector.  IF the Federal government can, without comment, by mere announcement merge JPMorgan Chase and Washington Mutual OVERNIGHT in one week, there is really no meaningful limit to what the Government and and will do, given a week or two, with or without rubber-stamped congressional approval. 

So in short, to those of you who were in favor of the Bill 3997 bailout, I say, “be of good cheer, Big Brother will take care of you whether the Puppet Actors in Congress approve it outloud today, tomorrow or never.”  To those of you who think that Congress struck a blow for economic integrity and allowing the free markets to take care of their own greatest leaders’ failures, I would say: look at JPMorganChase and Washington Mutual merger that took place without application to the Antitrust Division of the DOJ, the Federal Commerce Commission, or anyone else, and tell me that it makes any difference what Congress does.  Look at all the dozen or so mergers of the past couple of weeks and tell me that there is a rule of law or free market economy at work here.  Where were the shareholder votes necessary to approve these mergers?  Where were the bids and white knights and marketplace speculation?  ALL of these things have been suppressed and coopted by the government to hide the failures of the corporate-communistic policies of the past 20 years.  Had the free market or even free discussion of these issues been allowed, all the truth about who is responsible for the present state of affairs, and who authorized the exemption of securitized mortgages from securities fraud regulation (and even private civil litigation complaints or demands concerning such securities fraud).  

Free Market Capitalism is dead.  Socialism is managed by and for the primary benefit of the operators and managers of the major financial corporations.  Even the small private shareholders in financial institutions can be wiped out NOT by the Market but by the Government, in a moment, in twinkling of an eye—but without any trumpets…..

3 responses to “State Control over the Economy, Part I: JPMorganChase & Washington Mutual

  1. Hi. I am a long time reader. I wanted to say that I like your blog and the layout.

    Peter Quinn

  2. I believe you are incorrect in using the term socialism. What we are seeing is fascism, the melding of the corporate and governmental entities. Hat tip to Benito Mussolini for clarifying that for me.

    • charleslincoln3

      I am very familiar with the modern movement towards calling our government “Fascistic” rather than “Socialistic” or “Communist”—Aaron Russo’s “From Freedom to Fascism” is a story of a moneyed elite utilizing the IRS, the Federal Reserve Banking System, and Social Security to impose a fundamentally authoritarian, unconstitutional government in the United States. Ron Paul made some headway trying to deliver this message last year—but frankly, not much. And now Barack Obama just seems poised to deliver for more years of the Bush-Clinton-Bush garbage. But if “labels” are of any value at all, I still think that the United States is headed for Chinese Maoist = “SOVIET-STYLE COMMUNISM” rather than Fascism. Fascism, whether administered by Mussolini or Franco, or some elements of Hitler’s Reich, looked to the mythic and historical past for cultural inspiration, and expressly allowed and glorified private property and the “inequality of man”. Soviet & Chinese Communism creates elites which are simply not acknowledged as such—the old “Communist Party” aristocracy resembled the old Romanov Nobility (or for that matter the French “Second Estate” prior to the Revolution, and was made no less “noble” by the term “communist” which looked at in the harsh light of economic reality and inequality. Likewise, lawyers and career politicians and certain bankers and businessmen have been steadily accumulating wealth and power in the United States and Western Europe, tending to pass their titles and privileges on to their children, and this is not made any less of an aristocracy or set of “titles of nobility” by the issuance of state licenses to lawyers or the ritual of employment applications by government and financial institutions. So in any event, the institutionalization of inequality is a characteristic of all societies, the existence of corporate subgovernmental units is a characteristic of all societies, and so the main differences between Western Capitalist-Democracy, Communism, and Fascism, are most likely to be found in the cultural and ideological, i.e., symbolic, presentation of the oppressive structures, and in that sense, I do think that the Communists WON the Cold war—not the nominally communistic countries, mind you (except for China) but the COMMUNISTS themselves, led by rich, Yale-educated Stalinists like George W. Bush and his daddy, George H.W. Bush. There is really no excuse for the status quo in the United States. There is only the lingering dream of the Constitution and the possibility of restoring a government whose primary purpose is to restore power and liberty to individuals and families away from the State.

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