The Guardian’s Direct Collusion With Media Censorship By Secret Services Exposed by Thomas Scripps

Minutes of Ministry of Defence (MoD) meetings have confirmed the role of Britain’s Guardian newspaper as a mouthpiece for the intelligence agencies.

Last week, independent journalist Matt Kennard revealed that the paper’s deputy editor, Paul Johnson, was personally thanked by the Defence and Security Media Advisory Notice (or D-Notice) committee for integrating the Guardian into the operations of the security services.

Minutes of a meeting in 2018 read: “The Chairman thanked Paul Johnson for his service to the Committee. Paul had joined the Committee in the wake of the Snowden affair and had been instrumental in re-establishing links with the Guardian.”

D-Notices are used by the British state to veto the publication of news damaging to its interests. The slavish collusion of the mainstream media ensures that such notices function as gag orders.

Johnson joined the committee in 2014 and evidently excelled in his performance. A separate set of minutes from the first meeting attended by Johnson records the Guardian’s close collaboration with military officials.

Under a section detailing “advice” given by the intelligence agencies to the media, the document reads “most of the occurrences and requests for advice were related to further publications by The Guardian of extracts from the Snowden documents. The Secretary reported that the engagement of DPBAC [Defence Press and Broadcasting Advisory Committee] Secretariat with The Guardian had continued to strengthen during the last six months, with regular dialogues between the Secretary and Deputy Secretaries and Guardian journalists.”

The secretary and deputy secretaries were Air Vice-Marshal Andrew Vallance CB OBE, Air Commodore David Adams and Brigadier Geoffrey Dodds OBE. The chairman was Peter Watkins CBE, the MoD’s director general of Strategy, Security and Policy Operations.

Under the direction of these military intelligence handlers, the Guardian played a role in bringing other newspapers internationally to heel. The minutes note, “because of an agreement between The Guardianand allied publications overseas to coordinate their respective disclosures of Snowden material, advice given to the Guardian has been passed on to the New York Times and others, helping guide the disclosures of these outlets.”

In September 2014, the Guardian allowed the former head of GCHQ (Government Communications Headquarters) Sir David Omand to publish an article titled, “Edward Snowden’s leaks are misguided—they risk exposing us to cyber-attacks.”

He declared, “Journalists are not best placed to identify security risks; we have to trust those who oversee the intelligence-gathering.”

In 2016, Paul Johnson used an unprecedented interview with a serving head of MI5, Andrew Parker, to propagandize for the antidemocratic, warmongering interests of British imperialism.

These facts are damning proof of the Guardian’s total integration into the propaganda wing of the MoD following its involvement in the WikiLeaks and Snowden files releases. Indeed, the work of WikiLeaks and its founder Julian Assange has served to expose and confirm the deep ties of the entire mainstream media to the military-intelligence complex.

The Guardian has been viewed historically as the voice of British liberal dissent, critical of the worst excesses of British capitalism at home and abroad. But it has always acted as a political policeman—filtering the news “responsibly” and channelling the resulting anger into impotent moral appeals to the state and other authorities. Its dealings with Assange and Snowden transformed political allegiance into direct subservience. Its liberal, critical pretensions unravelled in a matter of a few months.

When Assange looked to the Guardian and other papers internationally such as the New York Times to publish the Afghan and Iraq war logs and secret US diplomatic cables in 2010, the editors’ main concern was damage control. Within a month of an initial publication of documents, the Guardian had broken off relations with Assange—publishing an infamous December 17 editorial “WikiLeaks: the man and the idea.” It stated that the Guardian had only agreed to publish “a small number of cables” to control the political fall-out from the details of murder, torture, espionage and corruption they revealed and give it the opportunity of “editing, contextualising, explanation and redaction.”

The main purpose of the editorial was to support Assange’s extradition to Sweden on trumped-up allegations of sexual misconduct relating to a trip to that country a few months earlier.

In an op-ed piece published last month by former Guardian editor Alan Rusbridger, he assumes to take the moral high ground by claiming that WikiLeaks issued leaks unredacted, and wanted to continue this practise, in contrast with his “responsible” journalism. An editorial published immediately prior to Rusbridger’s article, again supporting Assange’s extradition to Sweden to face “charges” that don’t exist, stated, “The Guardian disapproved of the mass publication of unredacted documents ... and broke with Mr. Assange over the issue.”

This is a self-serving lie. WikiLeaks has pointed out that the editorial “conveniently leaves out” that it was the Guardian —through a book authored by David Leigh and Luke Harding—that disclosed the password to the digital file Assange had given them in confidence. The book was a hatchet job on WikiLeaks. The rights to it were sold, becoming the basis of a slanderous Hollywood movie.

When NSA contractor Edward Snowden leaked files detailing blanket state surveillance of the world’s population in 2013, the Guardian set out to play the same “responsible” role. Asked afterwards if the paper had held back from publishing anything about GCHQ and UK security services because of “worries about national security,” the ever-pliant Mr. Rusbridger replied, “Yes, we’ve held back a great deal, we’ve published a small amount of what we have read.”

This time, however, the Guardian was told by the security services that even rigorously filtering the Snowden’s revelations was not good enough. It must stop publishing immediately.

The country’s top civil servant, Cabinet Secretary Sir Jeremy Heywood, called the Guardian’s offices to pass on the demands of then Prime Minister David Cameron that the Snowden material either be returned to the government or destroyed. Editors were threatened with legal action if they did not comply.

Rusbridger later explained, “The tone was steely, if cordial, but there was an implicit threat that others within government and Whitehall favoured a far more draconian approach.” This is a masterpiece of understatement. Emails obtained by the Associated Press in 2014 showed that this was an operation conducted in intimate collusion between the government, the British security services and the US National Security Agency, including then Director of National Intelligence James Clapper.

In the end, two GCHQ security officials directly oversaw the Guardian’s destruction of its own material. Three Guardian staff members, including Paul Johnson himself, destroyed the hard drives in the Guardian’s possession with angle grinders and other equipment provided by GCHQ officials.

The Guardian had been put in a position it never wanted. Its liberal reputation, and previous disclosures, had made it the newspaper of choice for WikiLeaks’ and Snowden’s revelations. But the scale of what had been uncovered threatened the fundamental interests of British and US imperialism. It therefore rolled over when the government told it to cease and desist, before taking its place alongside the rest of the right-wing media on the secret committee responsible for press censorship and propaganda dissemination.

One of Assange’s persecutors-in-chief, Luke Harding, enjoys the most intimate relations with the security services. His notorious November 2018 fabrication, claiming Assange held meetings with US President Donald Trump’s former campaign manager Paul Manafort, was published in the Guardian just two weeks after Johnson was thanked for “re-establishing links” with the MoD. The story was widely cited and formed a keystone of the efforts, spearheaded by the Democrats in the US, to present WikiLeaks and “Russian interference” as the causes of Trump’s 2016 election victory.

Harding played a central role in silencing questions over the UK government’s bogus account of the Skripal affair in mid-2018. These events were the subject of at least one D-notice, issued while Paul Johnson was on the responsible committee.

An unintended but valuable consequence of the WikiLeaks exposures has been to explode the fraud of the Guardian’s claim to any critical independence from the state. The crimes of the major imperialist powers against the world’s population made available by WikiLeaks were so great that they could not be neutralised, even by the Guardian’s professional gatekeepers of the “truth.” Not a word published in this imperialist propaganda sheet can ever be taken at face value.

A Democratic Revolution - Owen Jones

The status quo might be treated as common sense now, but future generations will surely look back with a mixture of astonishment and contempt at how British society is currently organised: the richest 1,000 individuals worth £520 billion, while hundreds of thousands of people have to queue to eat in food banks; a thriving financial elite that helped plunge Britain into a vortex of economic collapse, which was rescued by over £1 trillion of public money but continues to operate much as before; a reigning dogma that treats the state as an obstacle to be eradicated and shunned, even as the state serves as the backbone for private interests; a corporate elite, dependent as it is on state largesse, that refuses to contribute money to the state,; a media that does not exist to inform, educate as well as challenge all those with power, but which serves as a platform for the ambitions, prejudices and naked self-interest of a small number of wealthy moguls. More startling to our descendents will be how this was passed off as normal, as entirely rational and defensible, and how institutions run by the elite attempted, with considerable success, to redirect people's anger to those at the very bottom of society.

This status quo - as irrational as it is unjust - is guaranteed by the Establishment. But there is nothing inevitable about the Establishment: it does not rule Britain because it epitomizes the most effective, efficient and rational way or organizing society. The Establishment represents the institutional and intellectual means by which a wealthy elite defends its interests in a democracy.

The TTP: Priority #1 For US Multinational Corporations by Jack Rasmus

Negotiations on the Trans-Pacific Partnership (TPP) free trade treaty between the U.S. and 11 other Pacific Rim countries were concluded Oct. 5, 2015.
Although the full TPP document is still a secret – to all but the representatives of multinational corporations who chaired the 30 committees and told the government trade representatives what to negotiate – some details of the super-secret deal have been leaking out.
And if the leaks are any indication of what’s to come when full details are released, consumers, workers, and everyone concerned about the growing global “corporatization” of democracy, are in for a big shock.
Some Early Leaks    
One of the most onerous of the TPP provisions leaked involves big pharmaceutical companies. In the U.S. they have been given 12 years of monopoly rights over the sale of certain life-saving drugs. Lower cost generics are banned for that period. That ban on competition has already resulted in runaway price gouging of U.S. consumers desperately in need of life-saving drugs. The accelerating cost of the drugs in the U.S. is also making insurance premiums unaffordable. This multi-year protection from lower cost generic drugs for “Big Pharma” is now embedded into the TPP as well. Those ill and in need of life-saving drugs throughout the other 11 countries – mostly the poor and much of the working classes – will now be denied lower cost alternatives for life saving drugs, as in the U.S.
The minimum years of price protection from generics under the TPP is being reported as between 5 to 8 years. But the 5 to 8 years can be extended up to 11 years. So millions of people throughout the 11 countries, who might have been able to get the generic drug versions, and save their lives, will now go without for more than a decade to come.
Another area is auto parts manufacturing. The U.S. has agreed to allow more Japanese auto parts imported into the U.S. But it will be Japanese auto parts manufactured in Japan’s factories in China. In exchange, U.S. auto companies will be allowed to set up more plants and production in Southeast Asia. Both provisions will result in lost jobs in the U.S.
Another people-killer provision involves the Tobacco companies. Disputes with governments trying to reduce smoking have in the past led to tobacco companies suing governments. Now the disputes must be arbitrated in special TPP courts. That means, at best, token limitations on tobacco sales. In exchange, it also means governments are effectively banned from limiting tobacco product sales by legislation or regulation. They must go to TPP courts to arbitrate efforts to regulate tobacco sales, where the companies will tie up decisions for years while continuing their current practices.
The TPP gives corporations in general even more rights. Under the TPP, they can sue governments to prevent legislation or regulations that contradict the TPP treaty. Want to do something about big Pharma “price gouging,” as in the U.S.? Forget it. Legislation addressing price gouging contradicts the treaty. Want to regulate? Forget it, see you in TPP court.
What the ban on any legislation and regulation contrary to the TPP means is that democracy and national sovereignty does not exist if it does not conform to free trade deals negotiated by the corporations themselves. The TPP thus represents a major leap toward a global corporate political system, where the economic interests of corporations take precedence over national governments, elected representatives, and popular sovereignty.
Selling the TPP    
The Obama administration has publicly declared the TPP will reduce U.S. tariffs on 18,000 exports. This will lower the cost of U.S. businesses trying to sell to the other countries and create more export jobs. But there’s nothing to stop countries from lowering their currencies to more than offset the tariff reductions. Japan and most of the 11 countries have already been doing that and will continue as the global economy slows. Japan has been the biggest currency manipulator, reducing its Yen by more than 20 percent to the dollar. But no one in the U.S. complains. They complain instead about China “manipulating” its currency, even though China’s currency has been pegged to the dollar for years.
The TPP is not primarily about exporting more goods from the U.S. The TPP is about creating more favorable conditions for U.S. corporations to invest in the other countries, and then re-export from those countries at lower costs, and thus higher profits, back to the U.S. without having to pay tariffs. The TPP is also about containing China.
China’s recent global economic initiatives have the U.S. on the economic defensive, challenging its global economic hegemony. China’s recently created Asian Infrastructure Bank, its ‘silk road’ trade initiative, its forming of its own Asian free trade zone, the imminent approval of its currency, the Yuan, as a global reserve and trading currency by the IMF, and its deepening economic relationships with the U.K., Germany and other Euro countries has the U.S. on the economic defensive. The passage of the TPP is thus strategic for the U.S. to counter these China initiatives and its economic momentum. Should the TPP fail, that momentum would no doubt accelerate. That in turn would make the U.S. political and military strategy to contain China even more difficult. The TPP is thus the lynchpin for U.S. policy in general in Asia – economic, political and military.
The TPP and Obama’s Free Trade Legacy    
The TPP is the brainchild of U.S. multinational corporations, who demanded a pacific region free trade treaty as soon as U.S. President Barack Obama took office in 2009. In quick response to multinational U.S. corporate pressure, in early 2010 Obama appointed then-CEO of General Electric Corporation, Jeff Immelt, to head up the administration’s initiatives to expand free trade. Along with recommendations to protect U.S. patents and expand tax breaks for exporters, the Immelt Committee introduced proposals for the TPP in 2010.
Although Obama had campaigned for office in 2008 on the promise of renegotiating existing free trade treaties that were costing U.S. workers millions of jobs, like NAFTA, and promised not to introduce new treaties, he quickly embraced, pushed, and signed new free trade treaties with Latin America (Panama, Colombia) and Asia (South Korea).
In fact, Obama has either initiated or restarted bilateral, country-to-country, free trade negotiations with no fewer than 18 different countries since taking office. That 18 is in addition to free trade negotiations that have been launched with the 28 countries in the European Union, and a similar multi-country free trade negotiation initiated with various Middle East countries.
One of Obama’s dubious legacies therefore will be the recognition that he has been the biggest promoter of free trade in U.S. history – bigger than even his predecessors, George W. Bush and Bill Clinton. That dubious legacy depends, however, on the passage of the TPP first. Should it pass in 2016, which is more likely than not, the TPP will no doubt serve as the “template” for pending deals involving more than 50 countries, which will quickly fall in line once the TPP is ratified. The fight against free trade is therefore only beginning. Lined up behind TPP are free trade deals with scores of other countries.

The New Colonialism: Greece & Ukraine - Dr Jack Rasmus

A new form of colonialism is emerging in Europe.  Not colonialism imposed by military conquest and occupation, as in the 19thcentury. Not even the more efficient form of economic colonialism pioneered by the US in the post-1945 period, where the costs of direct administration and military occupation were replaced with compliant local elites allowed to share in the wealth extracted in exchange for being allowed to rule on behalf of the colonizers.
In the 21st century, it is ‘colonialism by means of financial asset transfer’. It is colony wealth extraction by colonizing country managers, assigned to directly administer the processes in the colony by which financial assets are to be transferred.  This new form of colonialism by direct management plus financial wealth transfer is now emerging in Greece and Ukraine.
Behind the appearance of the recent Greek debt deal is the reality of European bankers and their institutions—the European Commission, European Central Bank, IMF, and European Stability Mechanism (ESM)—who will soon assume direct management of the operation of the  economy, according to the Memorandum of Understanding, MoU, signed August 14th 2015 by Greece and the Troika. The MoU spells out direct management in various ways. In the case of Ukraine, it is even more direct. US and European shadow bankers were installed by US-Europe last December 2014 as Ukraine’s finance and economic ministers. They have been directly managing Ukraine’s economy on a day to day basis ever since.
The new colonialism as financial asset transfer takes several practical forms: as wealth transfer in the form of interest payments on ever rising debt, in firesales of government assets sold directly to the colonizer’s investors and bankers, and in the de facto takeover the colony’s banking system and bank assets in order to transfer wealth to shareholders of the colonizing country’s private bankers and investors.

The Case of Greece
The recent third debt deal signed August 14th 2015 between Greece and the Troika of European economic institutions adds another $98 billion to Greece’s debt, raising Greece’s total debt to more than $400 billion. Nearly all the $98 billion is earmarked for debt payments and to recapitalize the Greek banks. Wealth is extracted in the form of Greeks producing more, or cutting spending and raising taxes more, in order to create what’s called a primary surplus from which interest and principal is to be paid.
The Greeks aren’t going to have their goods produced and sold cheaper to Germany to re-export at higher price and profit—i.e. 19thcentury colonialism.  Multinational corporations aren’t going to relocate to Greece so they can pay cheaper wages, lower costs, and then re-export to the rest of the world for profit—i.e. US late 20th century colonialism.  The Greeks are going to work harder and for less in order to generate a surplus that will return to the Troika institutions in the form of interest payments on the ever-rising debt they owe. The Troika are the intermediaries, the debt collectors, the State-Agency representatives of bankers and investors on behalf of whom they collect the debt payments. They are supra-state bodies and the new agents of financial wealth extraction and transfer.
The Greek-Troika MoU defines in detail the direct management as well as what and how the wealth will be extracted and transferred.  The MoU begins by stating explicitly that no legislation or other action,  however minor, by Greece’s political institutions can be taken without prior approval of the Troika. The Troika thus has veto power over virtually all policy measures in Greece, all legislative or executive agency decisions, and by all levels of government.
Furthermore, Greece will no longer have a fiscal policy. The Troika will define the budget. It will oversee the writing of a budget. The MoU calls for a total restructuring of Greek taxes and spending that must occur in the new budget. Greece gets to write its budget, but only if that budget is the budget the Troika wants. And Troika representatives will monitor compliance to ensure that Greece adheres to the Troika’s budget. Every Greek agency and every Greek Parliament legislative committee will thus have its ‘Troika Commissar’ looking over its shoulder on an almost daily basis.
The MoU states theTroika also has the power to appoint ‘independent consultants’ to the Boards of Greeks banks. Many old bank board members will be removed.  Troika appointees will now manage the Greek banks on a day to day basis, in other words.  Greek bank subsidiaries and branches outside Greece will be ‘privatized’, i.e. sold off to other Euro banks.  The Greek banks are thus now Greek in name only. They will become appendages and de facto subsidiaries of northern Euro banks working behind the veil of the Troika and at the shoulder of their Greek banker counterparts. The several tens of billions of dollars allocated to recapitalize the Greek banks will reside in Luxembourg banks, not in Greece. Greece no longer has a monetary policy; the Troika has.
The World Bank will redesign the Greek welfare system and a new social safety net system. New appointees to run the Labor Ministry, after approved by the Troika, will “rationalize the education system” (i.e. teacher layoffs and wage cuts). The new, Troika vetted Labor Minister will implement the proposals of Troika “independent consultants” to limit ‘industrial actions’ (i.e. strikes) and collective bargaining  and will, following consultants’ recommendations, institute new rules for collective dismissals (i.e. mass layoffs).  Pensions will be cut, retirement ages raised, workers’ healthcare contributions increased, Local governments made more efficient (layoffs, wage cuts), and the entire legal system overhauled.
The $50 billion Privatization of Greek Government Assets Fund will remain in Greece. However, it will operate “under the supervision of the relevant European institutions”, according to the MOU. The Troika will decide what is to be privatized and sold at what (firesale) price to which of its favored investors.  In the meantime, privatization sales in progress or identified will be accelerated.

The Case of Ukraine
In Ukraine’s case, only once US and Euro bankers were installed as Ministers of Finance and Economics last December 2014, were more loans promised to Ukraine. The US and EU put in another $4 billion in January, and the IMF quickly announced the new $40 billion deal in February.  After the $40 billion,Ukraine’s debt rose from $12 billion in 2007 to $100 billion in 2015.
The new $100 billion debt will mean a massive increase in financial wealth extraction in the form of interest payments on that $100 billion.
Another form of transfer will occur in the accelerating of privatizations. No fewer than 342 former government enterprise companies are slated for sale in 2015, including power plants, mines, 13 ports, and even farms.  The sales will likely occur at firesale prices, benefiting US and European ‘friends’ of the new US and European ministers.  So too will the sale of Ukraine private companies approved by the new Ministers. One of every five are technically bankrupt and unable to refinance $10 billion in corporate junk bond debt. Many will default, the best scooped up by US and EU shadow bankers and multinational corporations.
What both Greece and Ukraine represent is the development of new more direct management of wealth extraction, and the transfer of that wealth in the form of financial assets.  In past government debt bailouts, the IMF and other institutions set parameters for what the bailed out country must do. But the country was left to carry out the plan. No longer. It’s now direct management to ensure the colony does not balk or delay on the transfer of financial assets enabled by ever rising debt.

The Piketty Paradigm - A Progressive Global Tax On Capital

Thomas Piketty: "... wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labour. Once constituted, capital reproduces itself faster than output increases. The past devours the future. The consequences for the long-term dynamics of wealth distribution are potentially terrifying, especially when one adds that the size of the initial stake and that the divergence in the wealth distribution is occurring on a global scale."

While virtually all advocacy, transparency and tax avoidance entities focus on offshore financial centres, money laundering and current abuses of the template of capital, the real wealth inequalities exist on the basis of old money and all those forgotten crimes.
For privately educated individuals enhancing their existences via private income in their non-meritocratic NGOs, the critical nature of historical wealth and inheritance is carefully ignored.

Josiah Wedgwood: " Political democracies that don't democratise their economic systems are inherently unstable."

Ponzi Capitalism

Capitalism has been a Ponzi scheme throughout its history - political scientists from Marx to Piketty have understood this fact.

Since 1700, the average annual rate of growth of the global economy has been 0.8%...
... and the average annual demographic growth in global population has been 0.8%.

Growth in income is expected to fall further throughout the 21st Century as the birth rate declines in lockstep across the world whilst, in parallel, systemic issues relating to planetary climatic stability move into primary focus.

The Ponzi scheme is running towards its precipitous conclusion and all that remains is the opportunity for imposition of redistributive policies to prevent the same fools from performing the same self-harming in a world of post-capitalist bliss.

There is only one solution to the first stage of the deconstruction of late capitalism - a markedly progressive tax on the largest fortunes worldwide (targeting both capital and income) to both prevent inheritance trumping meritocracy and to enforce an efficient use of capital for global rather than proprietary benefit.
Additionally, with such a progressive tax in place, the incentive to amass huge fortunes in the first place would be undermined.

Taxing Capital Progressively

Piketty: "... most countries' taxes have (or will soon) become regressive at the top of the income hierarchy. For example, a detailed study of French taxes in 2010, which looked at all forms of taxation, found that the overall rate of taxation... broke down as follows. The bottom 50% of the income distribution pay a rate of 40-45%; the next 40% pay 45-50%; but the top 5% and even more the top 1% pay lower rates, with the top 0.1% paying only 35%."

The annual global returns on capital are conservatively estimated at 5-6% while income growth is expected to struggle above zero this century.
Piketty: "Note, too, that inequality of income from capital may be greater than inequality of capital itself, if individuals with large fortunes somehow manage to obtain a higher return than those with modest to middling fortunes... Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy, it is all but inevitable that inheritance (the fortunes accumulated in the past) predominate over savings (wealth accumulated in the present)."

"... the ideal policy for avoiding an endless inegalitarian spiral and regaining control over the dynamics of accumulation would be a progressive global tax on capital. Such a tax would also have another virtue: it would expose wealth to democratic scrutiny, which is a necessary condition for effective regulation of the banking system and international capital flows."

"There are two distinct justifications of a capital tax; a contributive justification and an incentive justification... The primary purpose of the capital tax is not to finance the social state but to regulate capitalism."

The conventional focus on taxing income and targeting money laundering is merely a part of the jigsaw of fiscal justice - much more importantly, capital needs to be progressively taxed to avoid the inefficient use of such capital, the excessive returns generated by such non-meritocratic wealth and an end to austerity-based matrices of social injustice.

The most farcical argument against progressive income and capital taxes is that the elite would simply move to more tax-friendly locations. With global tax co-operation and an end to the opacity of offshore financial centres, there would moreover be nowhere left to slink off to.
Anyway - Piketty: "The idea that all US executives would immediately flee to Canada and Mexico and nobody with the competence or motivation to run the economy would remain is not only contradicted by historical experience and by all the firm level data at our disposal; it is also devoid of common sense."

Income Inequality - The Root Of All Financial Crises

National wealth has become markedly privatised in the last four decades.

Furthermore, as Piketty states, "... given the fact that the share of the upper decile in US national income has peaked twice in the past century, once in 1928 (on the eve of the Depression of 1929) and again in 2007 (on the eve of the recession of 2008, the question [does increasing inequality cause financial crisis?] is difficult to avoid."

Currently in the US, incomes are as unequally distributed as has ever been observed anywhere anytime - the top 1% gain 35% of income while the bottom 50% of population earn just 25%.

Piketty: "Effective tax rates (expressed as a percentage of economic income) are extremely low at the top of the wealth hierarchy, which is problematic, since it accentuates the explosive dynamics of wealth inequality, especially when larger fortunes are able to garner larger returns... The goal is first to stop the indefinite increase in the inequality of wealth, and second to impose effective regulation on the financial and banking system to avoid crises."

There are only three tools for getting rid of the current levels of debt in the developed nations - taxes on capital, inflation and austerity.
Austerity isn't a prerequisite, it is an option.

The privatisation of wealth in the last 40 years has seen huge rewards for "super-managers" - such rewards are not commensurate with performance.
Piketty: "... there is no statistically significant relationship between the decrease in top marginal tax rates and the rate of productivity growth in the developed countries since 1980. Concretely, the crucial fact is that the rate of per capita GDP growth has been almost exactly the same in all the rich countries since 1980. In contrast to what many people in Britain and the United States believe, the true figures on growth ... show that Britain and the United States have not grown any more rapidly since 1980 than Germany, France, Japan, Denmark or Sweden."

Of course, the mainstream media, governments and the financial system en masse don't want any focus on private wealth with their collective attempts to get us to pay attention to immediate income rather than long-term capital wealth. But their myopia is complete in that all Ponzi's possess the seeds of their own destruction.
Piketty: "... capitalists do indeed dig their own grave: either they tear each other apart in a desperate attempt to combat the falling rate of profit..., or they force labour to accept a smaller and smaller share of national income, which ultimately leads to a proletarian revolution and general expropriation. In any event capital is undermined by its internal contradictions."
Stiglitz has made a similar point.

Meanwhile, in a parallel sociopathic world, George Osborne increased the inheritance tax threshold this month.

Piketty: "To regulate the globalised patrimonial capitalism of the twenty-first century, rethinking the twentieth-century fiscal and social model and adapting it to today's world will not be enough. To be sure, appropriate updating of the last century's social-democratic and fiscal-liberal program is essential... But if democracy is to regain control the globalised financial capitalism of this century, it must also invent new tools, adapted to today's challenges. The ideal tool would be a progressive global tax on capital, coupled with a very high level of international financial transparency. Such a tax would provide a way to avoid an endless inegalitarian spiral and to control the worrisome dynamics of global capital concentration."

The Clintons And Their Banker Friends by Nomi Prins

[This piece has been adapted and updated by Nomi Prins from chapters 18 and 19 of her book All the Presidents’ Bankers: The Hidden Alliances that Drive American Power, just out in paperback (Nation Books).]

The past, especially the political past, doesn’t just provide clues to the present. In the realm of the presidency and Wall Street, it provides an ongoing pathway for political-financial relationships and policies that remain a threat to the American economy going forward.

When Hillary Clinton video-announced her bid for the Oval Office, she claimed she wanted to be a “champion” for the American people. Since then, she has attempted to recast herself as a populist and distance herself from some of the policies of her husband. But Bill Clinton did not become president without sharing the friendships, associations, and ideologies of the elite banking sect, nor will Hillary Clinton.  Such relationships run too deep and are too longstanding.

To grasp the dangers that the Big Six banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) presently pose to the financial stability of our nation and the world, you need to understand their history in Washington, starting with the Clinton years of the 1990s. Alliances established then (not exclusively with Democrats, since bankers are bipartisan by nature) enabled these firms to become as politically powerful as they are today and to exert that power over an unprecedented amount of capital. Rest assured of one thing: their past and present CEOs will prove as critical in backing a Hillary Clinton presidency as they were in enabling her husband’s years in office.

In return, today’s titans of finance and their hordes of lobbyists, more than half of whom held prior positions in the government, exact certain requirements from Washington. They need to know that a safety net or bailout will always be available in times of emergency and that the regulatory road will be open to whatever practices they deem most profitable.

Whatever her populist pitch may be in the 2016 campaign — and she will have one — note that, in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader.  Though she may, in the heat of that campaign, raise the bad-apples or bad-situation explanation for Wall Street’s role in the financial crisis of 2007-2008, rest assured that she will not point fingers at her friends. She will not chastise the people that pay her hundreds of thousands of dollars a pop to speak or the ones that have long shared the social circles in which she and her husband move. She is an undeniable component of the Clinton political-financial legacy that came to national fruition more than 23 years ago, which is why looking back at the history of the first Clinton presidency is likely to tell you so much about the shape and character of the
 possible second one.

The 1992 Election and the Rise of Bill Clinton

Challenging President George H.W. Bush, who was seeking a second term, Arkansas Governor Bill Clinton announced he would seek the 1992 Democratic nomination for the presidency on October 2, 1991. The upcoming presidential election would not, however, turn out to alter the path of mergers or White House support for deregulation that was already in play one iota.

First, though, Clinton needed money. A consummate fundraiser in his home state, he cleverly amassed backing and established early alliances with Wall Street. One of his key supporters would later change American banking forever. As Clinton put it, he received “invaluable early support” from Ken Brody, a Goldman Sachs executive seeking to delve into Democratic politics. Brody took Clinton “to a dinner with high-powered New York businesspeople, including Bob Rubin, whose tightly reasoned arguments for a new economic policy,” Clinton later wrote, “made a lasting impression on me.”

The battle for the White House kicked into high gear the following fall. William Schreyer, chairman and CEO of Merrill Lynch, showed his support for Bush by giving the maximum personal contribution to his campaign committee permitted by law: $1,000. But he wanted to do more. So when one of Bush’s fundraisers solicited him to contribute to the Republican National Committee’s nonfederal, or “soft money,” account, Schreyer made a $100,000 donation.

The bankers’ alliances remained divided among the candidates at first, as they considered which man would be best for their own power trajectories, but their donations were plentiful: mortgage and broker company contributions were $1.2 million; 46% to the GOP and 54% to the Democrats. Commercial banks poured in $14.8 million to the 1992 campaigns at a near 50-50 split.

Clinton, like every good Democrat, campaigned publicly against the bankers: “It’s time to end the greed that consumed Wall Street and ruined our S&Ls [Savings and Loans] in the last decade,” he said. But equally, he had no qualms about taking money from the financial sector. In the early months of his campaign, BusinessWeek estimated that he received $2 million of his initial $8.5 million in contributions from New York, under the care of Ken Brody.

“If I had a Ken Brody working for me in every state, I’d be like the Maytag man with nothing to do,” said Rahm Emanuel, who ran Clinton’s nationwide fundraising committee and later became Barack Obama’s chief of staff. Wealthy donors and prospective fundraisers were invited to a select series of intimate meetings with Clinton at the plush Manhattan office of the prestigious private equity firm Blackstone.

Robert Rubin Comes to Washington

Clinton knew that embracing the bankers would help him get things done in Washington, and what he wanted to get done dovetailed nicely with their desires anyway. To facilitate his policies and maintain ties to Wall Street, he selected a man who had been instrumental to his campaign, Robert Rubin, as his economic adviser.

In 1980, Rubin had landed on Goldman Sachs’ management committee alongside fellow Democrat Jon Corzine. A decade later, Rubin and Stephen Friedman were appointed cochairmen of Goldman Sachs. Rubin’s political aspirations met an appropriate opportunity when Clinton captured the White House.

On January 25, 1993, Clinton appointed him as assistant to the president for economic policy. Shortly thereafter, the president created a unique role for his comrade, head of the newly created National Economic Council. “I asked Bob Rubin to take on a new job,” Clinton later wrote, “coordinating economic policy in the White House as Chairman of the National Economic Council, which would operate in much the same way the National Security Council did, bringing all the relevant agencies together to formulate and implement policy… [I]f he could balance all of [Goldman Sachs’] egos and interests, he had a good chance to succeed with the job.” (Ten years later, President George W. Bush gave the same position to Rubin’s old partner, Friedman.)

Back at Goldman, Jon Corzine, co-head of fixed income, and Henry Paulson, co-head of investment banking, were ascending through the ranks. They became co-CEOs when Friedman retired at the end of 1994.

Those two men were the perfect bipartisan duo. Corzine was a staunch Democrat serving on the International Capital Markets Advisory Committee of the Federal Reserve Bank of New York (from 1989 to 1999). He would co-chair a presidential commission for Clinton on capital budgeting between 1997 and 1999, while serving in a key role on the Borrowing Advisory Committee of the Treasury Department. Paulson was a well connected Republican and Harvard graduate who had served on the White House Domestic Council as staff assistant to the president in the Nixon administration.

Bankers Forge Ahead

By May 1995, Rubin was impatiently warning Congress that the Glass-Steagall Act could “conceivably impede safety and soundness by limiting revenue diversification.” Banking deregulation was then inching through Congress. As they had during the previous Bush administration, both the House and Senate Banking Committees had approved separate versions of legislation to repeal Glass-Steagall, the 1933 Act passed by the administration of Franklin Delano Roosevelt that had separated deposit-taking and lending or “commercial” bank activities from speculative or “investment bank” activities, such as securities creation and trading. Conference negotiations had fallen apart, though, and the effort was stalled.

By 1996, however, other industries, representing core clients of the banking sector, were already being deregulated. On February 8, 1996, Clinton signed the Telecom Act, which killed many independent and smaller broadcasting companies by opening a national market for “cross-ownership.” The result was mass mergers in that sector advised by banks.

Deregulation of companies that could transport energy across state lines came next. Before such deregulation, state commissions had regulated companies that owned power plants and transmission lines, which worked together to distribute power. Afterward, these could be divided and effectively traded without uniform regulation or responsibility to regional customers. This would lead to blackouts in California and a slew of energy derivatives, as well as trades at firms such as Enron that used the energy business as a front for fraudulent deals.

The number of mergers and stock and debt issuances ballooned on the back of all the deregulation that eliminated barriers that had kept companies separated. As industries consolidated, they also ramped up their complex transactions and special purpose vehicles (off-balance-sheet, offshore constructions tailored by the banking community to hide the true nature of their debts and shield their profits from taxes). Bankers kicked into overdrive to generate fees and create related deals. Many of these blew up in the early 2000s in a spate of scandals and bankruptcies, causing an earlier millennium recession.

Meanwhile, though, bankers plowed ahead with their advisory services, speculative enterprises, and deregulation pursuits. President Clinton and his team would soon provide them an epic gift, all in the name of U.S. global power and competitiveness. Robert Rubin would steer the White House ship to that goal.

On February 12, 1999, Rubin found a fresh angle to argue on behalf of banking deregulation. He addressed the House Committee on Banking and Financial Services, claiming that, “the problem U.S. financial services firms face abroad is more one of access than lack of competitiveness.”

He was referring to the European banks’ increasing control of distribution channels into the European institutional and retail client base. Unlike U.S. commercial banks, European banks had no restrictions keeping them from buying and teaming up with U.S. or other securities firms and investment banks to create or distribute their products. He did not appear concerned about the destruction caused by sizeable financial bets throughout Europe. The international competitiveness argument allowed him to focus the committee on what needed to be done domestically in the banking sector to remain competitive.

Rubin stressed the necessity of HR 665, the Financial Services Modernization Act of 1999, or the Gramm-Leach-Bliley Act, that was officially introduced on February 10, 1999. He said it took “fundamental actions to modernize our financial system by repealing the Glass-Steagall Act prohibitions on banks affiliating with securities firms and repealing the Bank Holding Company Act prohibitions on insurance underwriting.”

The Gramm-Leach-Bliley Act Marches Forward

On February 24, 1999, in more testimony before the Senate Banking Committee, Rubin pushed for fewer prohibitions on bank affiliates that wanted to perform the same functions as their larger bank holding company, once the different types of financial firms could legally merge. That minor distinction would enable subsidiaries to place all sorts of bets and house all sorts of junk under the false premise that they had the same capital beneath them as their parent. The idea that a subsidiary’s problems can’t taint or destroy the host, or bank holding company, or create “catastrophic” risk, is a myth perpetuated by bankers and political enablers that continues to this day.

Rubin had no qualms with mega-consolidations across multiple service lines. His real problems were those of his banker friends, which lay with the financial modernization bill’s “prohibition on the use of subsidiaries by larger banks.”  The bankers wanted the right to establish off-book subsidiaries where they could hide risks, and profits, as needed.

Again, Rubin decided to use the notion of remaining competitive with foreign banks to make his point. This technicality was “unacceptable to the administration,” he said, not least because “foreign banks underwrite and deal in securities through subsidiaries in the United States, and U.S. banks [already] conduct securities and merchant banking activities abroad through so-called Edge subsidiaries.” Rubin got his way. These off-book, risky, and barely regulated subsidiaries would be at the forefront of the 2008 financial crisis.

On March 1, 1999, Senator Phil Gramm released a final draft of the Financial Services Modernization Act of 1999 and scheduled committee consideration for March 4th. A bevy of excited financial titans who were close to Clinton, including Travelers CEO Sandy Weill, Bank of America CEO, Hugh McColl, and American Express CEO Harvey Golub, called for “swift congressional action.”

The Quintessential Revolving-Door Man

The stock market continued its meteoric rise in anticipation of a banker-friendly conclusion to the legislation that would deregulate their industry. Rising consumer confidence reflected the nation’s fondness for the markets and lack of empathy with the rest of the world’s economic plight. On March 29, 1999, the Dow Jones Industrial Average closed above 10,000 for the first time. Six weeks later, on May 6th,  the Financial Services Modernization Act passed the Senate. It legalized, after the fact, the merger that created the nation’s biggest bank.  Citigroup, the marriage of Citibank and Travelers, had been finalized the previous October.

It was not until that point that one of Glass-Steagall’s main assassins decided to leave Washington. Six days after the bill passed the Senate, on May 12, 1999, Robert Rubin abruptly announced his resignation. As Clinton wrote, “I believed he had been the best and most important treasury secretary since Alexander Hamilton… He had played a decisive role in our efforts to restore economic growth and spread its benefits to more Americans.”

Clinton named Larry Summers to succeed Rubin. Two weeks later, BusinessWeek reported signs of trouble in merger paradise — in the form of a growing rift between John Reed, the former Chairman of Citibank, and Sandy Weill at the new Citigroup. As Reed said, “Co-CEOs are hard.” Perhaps to patch their rift, or simply to take advantage of a political opportunity, the two men enlisted a third person to join their relationship — none other than Robert Rubin.

Rubin’s resignation from Treasury became effective on July 2nd. At that time, he announced, “This almost six and a half years has been all-consuming, and I think it is time for me to go home to New York and to do whatever I’m going to do next.” Rubin became chairman of Citigroup’s executive committee and a member of the newly created “office of the chairman.” His initial annual compensation package was worth around $40 million.  It was more than worth the “hit” he took when he left Goldman for the Treasury post.

Three days after the conference committee endorsed the Gramm-Leach-Bliley bill, Rubin assumed his Citigroup position, joining the institution destined to dominate the financial industry. That very same day, Reed and Weill issued a joint statement praising Washington for “liberating our financial companies from an antiquated regulatory structure,” stating that “this legislation will unleash the creativity of our industry and ensure our global competitiveness.”

On November 4th, the Senate approved the Gramm-Leach-Bliley Act by a vote of 90 to 8.  (The House voted 362–57 in favor.) Critics famously referred to it as the Citigroup Authorization Act.

Mirth abounded in Clinton’s White House. “Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the twenty-first century,” Summers said. “This historic legislation will better enable American companies to compete in the new economy.”

But the happiness was misguided. Deregulating the banking industry might have helped the titans of Wall Street but not people on Main Street. The Clinton era epitomized the vast difference between appearance and reality, spin and actuality. As the decade drew to a close, Clinton basked in the glow of a lofty stock market, a budget surplus, and the passage of this key banking “modernization.” It would be revealed in the 2000s that many corporate profits of the 1990s were based on inflated evaluations, manipulation, and fraud.

When Clinton left office, the gap between rich and poor was greater than it had been in 1992, and yet the Democrats heralded him as some sort of prosperity hero.
When he resigned in 1997, Robert Reich, Clinton’s labor secretary, said, “America is prospering, but the prosperity is not being widely shared, certainly not as widely shared as it once was… We have made progress in growing the economy. But growing together again must be our central goal in the future.”  Instead, the growth of wealth inequality in the United States accelerated, as the men yielding the most financial power wielded it with increasingly less culpability or restriction. By 2015, that wealth or prosperity gap would stand near historic highs.

The power of the bankers increased dramatically in the wake of the repeal of Glass-Steagall. The Clinton administration had rendered twenty-first-century banking practices similar to those of the pre-1929 crash. But worse. “Modernizing” meant utilizing government-backed depositors’ funds as collateral for the creation and distribution of all types of complex securities and derivatives whose proliferation would be increasingly quick and dangerous.

Eviscerating Glass-Steagall allowed big banks to compete against Europe and also enabled them to go on a rampage: more acquisitions, greater speculation, and more risky products. The big banks used their bloated balance sheets to engage in more complex activity, while counting on customer deposits and loans as capital chips on the global betting table. Bankers used hefty trading profits and wealth to increase lobbying funds and campaign donations, creating an endless circle of influence and mutual reinforcement of boundary-less speculation, endorsed by the White House.

Deposits could be used to garner larger windfalls, just as cheap labor and commodities in developing countries were used to formulate more expensive goods for profit in the upper echelons of the global financial hierarchy. Energy and telecoms proved especially fertile ground for the investment banking fee business (and later for fraud, extensive lawsuits, and bankruptcies). Deregulation greased the wheels of complex financial instruments such as collateralized debt obligations, junk bonds, toxic assets, and unregulated derivatives.

The Glass-Steagall repeal led to unfettered derivatives growth and unstable balance sheets at commercial banks that merged with investment banks and at investment banks that preferred to remain solo but engaged in dodgier practices to remain “competitive.” In conjunction with the tight political-financial alignment and associated collaboration that began with Bush and increased under Clinton, bankers channeled the 1920s, only with more power over an immense and growing pile of global financial assets and increasingly “open” markets. In the process, accountability would evaporate.

Every bank accelerated its hunt for acquisitions and deposits to amass global influence while creating, trading, and distributing increasingly convoluted securities and derivatives. These practices would foster the kind of shaky, interconnected, and opaque financial environment that provided the backdrop and conditions leading up to the financial meltdown of 2008.

The Realities of 2016

Hillary Clinton is, of course, not her husband. But her access to his past banker alliances, amplified by the ones that she has formed herself, makes her more of a friend than an adversary to the banking industry.  In her brief 2008 candidacy, all four of the New York-based Big Six banks ranked among her top 10 corporate donors. They have also contributed to the Clinton Foundation. She needs them to win, just as both Barack Obama and Bill Clinton did. 

No matter what spin is used for campaigning purposes, the idea that a critical distance can be maintained between the White House and Wall Street is naïve given the multiple channels of money and favors that flow between the two.  It is even more improbable, given the history of connections that Hillary Clinton has established through her associations with key bank leaders in the early 1990s, during her time as a senator from New York, and given their contributions to the Clinton foundation while she was secretary of state. At some level, the situation couldn’t be less complicated: her path aligns with that of the country’s most powerful bankers. If she becomes president, that will remain the case.

Who Regulates The Regulators?

The Ponzi pyramid of self-justification that underpins all free market structures is always a part of the problem rather than a part of the cure.

Who guards the guardians?
Who governs the governors?
Who moderates the moderators?
Who regulates the regulators?

The Financial Conduct Authority (FCA) is not fit for purpose.
Nine out of 12 board members were simply parachuted across from the board of the disbanded FSA - that's the FSA that failed to suitably regulate the banks prior to and during the 2007/08 crash.
The FSA's regulatory style was so light touch as to be reiki.
Reiki regulation!

The FSA was a prime example of regulatory capture - a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating.

In response, the FCA must be seen to be regulating with the utmost integrity.
Some hope.
Bizarrely, the FCA created a false market in major insurers' shares after botching a press briefing - the share prices of major insurers plunged after the Telegraph published the story.
A 225 page report released this week goes further: "The strategy and manner in which [the media strategy] was pursued was... high risk, poorly supervised and inadequately controlled. When it went wrong, the FCA's reaction was seriously inadequate and fell short of the standards expected of those it regulates."
The regulator tilted the markets!

And the FCA response is to repay some executive bonuses received in an extended window of self-justification and to immediately rush out a long delayed report into the mis-selling of annuities in a blatant display of exactly the sort of public relations and branding that regulatory bodies should not be in business of needing to undertake.

But this is the norm - other recent examples include OFWAT mistakenly overestimating water companies' capital costs when setting price levels and then refusing to impose London Stock Exchange disclosure requirements on non-stock market listed companies, or PricewaterhouseCoopers selling tax avoidance on an industrial scale with the strategy only coming to public knowledge via internal leaks.

Why is it nearly always whistleblowers and (Wiki)leakers but very rarely regulatory bodies and institutional self-policing that reveal the financial miscreants?.

The big picture is one of pure Randian psychopathy - there's minimal red tape to act as an obstacle for the steady flow of sociopathic outsiders to join the psychopathic insiders as cowboy capitalism races to the bottom of its barrel...
... but in the world of football, the situation is worse - neo-Randian!.

Nothing is regulated on any primary level of operation and there are supportive and corrupted flow networks integrated globally to prevent any hope of integrity rearing its head.

All six of the primary bodies allegedly looking into football integrity and matchfixing are compromised in their purpose via their ownership.
Indeed, in certain cases, a more motley crew of interested parties could not have been created even if one had set out explicitly with such purpose!
Fragmented cartels of corruption!

Football governance verges on the non-existent and, even at best, is merely a branding and self-justification process.

Certain entities and structures are systemically corrupt...
... in fact, I'll rewrite that sentence - there are very few bodies and networks in global football that are not systemically corrupt!
Regulation is invisible or malleable self-regulation that equates to no regulation at all - agents, dark pools, betting markets, insider trading, matchfixing, money laundering, third party ownership, mainstream media compliance in a restricted narrative while, once again, whistleblowers and (Wiki)leakers expose, bottom-up, what any decent system would implement top-down.

Inversion capitalism - asset stripping and financial profiteeering from the monetising of a brand, tax avoidance and evasion, antisocial competition practices with minimal regulation (for self-justification), alongside state punishment for 5th Estate types who get in the way - the Obama administration has started more prosecutions against whistleblowers than all presidents combined over the last century.
20 whistleblowers have been murdered in India in the last five years.

And the corrupt operations in the distorted infrastructures attract disproportionate investment as investors understand that increased returns are gained by psychopathic control in a lightly regulated marketplace, compounding up the cycles of corruption over time.

FIFA, the FCA, UEFA, PwC, the Premier League, Barclays, the Glazers, the FA Sports Betting Integrity Unit, Gestifute, Goldman Sachs, all these oil companies from interesting geopolitical locations that are buying up British football teams, private equity, dark pools, the control of whistleblowing bodies by those who should be whistleblown, derivatives markets, offshore financial centres and markets, NGO-lite structures etc - pure neo-Bayesian corruption entities beyond the reach of any economic theory as such theory may only be reactive to this juggernaut of inversion free-marketry where there are no rules.

Who regulates the regulators?